Schwarzenegger Releases Revised Budget Proposal That Eliminates Some Health Care Cuts
Gov. Arnold Schwarzenegger (R) on Thursday released a revised version of his fiscal year 2004-2005 state budget proposal, which in "a stunning reversal" withdrew proposals that would have denied "hundreds of thousands" of residents access to health coverage and "restricted health care to millions more," the San Diego Union-Tribune reports (Ainsworth, San Diego Union-Tribune, 5/14). Schwarzenegger's original $99.1 billion budget proposal would have reduced state funding for health care programs by more than $900 million (California Healthline, 5/13). Schwarzenegger called his revised $102 billion budget, which includes no new taxes, a "compassionate budget" (Halper/Salladay, Los Angeles Times, 5/14). The governor said that when the state became aware of an increase in revenue, he began to eliminate some proposed health care spending cuts (San Diego Union-Tribune, 5/14). The San Francisco Chronicle reports that health care costs "continu[e] to climb" under the governor's revised budget proposal (Russell, San Francisco Chronicle, 5/14). However, the revised budget "leaves in play proposals that reflect a shift toward a more conservative social policy as well as the state's financial needs," the Sacramento Bee reports. Summaries of some of the health care-related provisions in the proposal are provided below.
Medi-Cal: The new proposal eliminates a plan to reduce by 10% Medi-Cal reimbursements to providers (Benson, Sacramento Bee, 5/14). Former Gov. Gray Davis (D) last year approved a 5% rate reduction that would have saved the state $462 million (California Healthline, 1/12). However, a federal judge ruled that the state could not legally reduce the rate it pays providers to care for Medi-Cal beneficiaries. The Schwarzenegger administration is appealing the decision (Sacramento Bee, 5/14). In addition, Schwarzenegger's revised budget proposal retains a proposal to reduce Medi-Cal reimbursement rates for community clinics by 20% (Silber, Contra Costa Times, 5/14).
Healthy Families: The plan eliminates proposed enrollment caps, but the governor is still "proposing some adjustments to the program," the Union-Tribune reports. The proposal would increase copayments for families whose household income exceeds 200% of the federal poverty level, or about $2,544 per month for a family of three. The proposal would increase copays from $9 to $15 per month per child and from $27 to $45 per month for a family with three or more children (San Diego Union-Tribune, 5/14). Schwarzenegger's previous proposal would have capped the program's enrollment at its current level of about 732,000 children for a savings of about $31.5 million (California Healthline, 1/12).
- Prenatal programs: The revised budget proposal eliminates plans to limit enrollment for programs that provide prenatal care for undocumented immigrants.
AIDS Drug Assistance Program: Schwarzenegger's budget proposal eliminates recommendations to limit enrollment in the state ADAP (San Diego Union-Tribune, 5/14). Schwarzenegger had proposed limiting enrollment in the program at 23,900, the level as of Jan. 1 (California Healthline, 3/9).
- In-home services: Schwarzenegger's updated budget proposal also eliminates plans to reduce funding for the In-Home Supportive Services Program, which helps seniors and disabled Californians live at home. However, the proposal retains a provision that would reduce in-home workers' wages to the minimum wage rate (San Diego Union-Tribune, 5/14).
- IMPACT: The plan reinstates funding for the Improving Access, Counseling and Treatment for Californians with Prostate Cancer (Sacramento Bee, 5/14). The Department of Health Services eliminated contracts for IMPACT, which provides treatment for low-income, uninsured men with prostate cancer, in December because of $1.1 billion in funding cuts. The Assembly Budget Subcommittee on Health and Human Services in March voted to maintain funding for the program using money that had been allocated to it in previous years but had not been spent (California Healthline, 3/16).
- Prison health care: The governor's revised budget introduces a range of funding cuts to the state prison health care system, such as using nurse practitioners rather than psychiatrists for certain mental health services, the San Jose Mercury News reports. In the long term, Schwarzenegger is considering contracting with the University of California to assume management of the entire health care system for youth and adult prisons (Gladstone, San Jose Mercury News, 5/14).
In related news, Schwarzenegger said Thursday that he plans to unveil on Aug. 2 a plan to reorganize Medi-Cal, which he said would reduce state spending on the program by $400 million beginning in 2005 (Los Angeles Times, 5/14). According to the Chronicle, the governor "is banking on Medi-Cal redesign to contain costs in future budget years" (Russell, San Francisco Chronicle, 5/14). Anthony Wright, executive director of advocacy group Health Access, said, "The thing we have feared the most is the Medi-Cal redesign because of its far-reaching impact," adding, "You don't get [savings of $400 million] without denying people care in some way, shape or form" (Contra Costa Times, 5/14).
Wright said, "The big stuff has been withdrawn. [Schwarzenegger] heard the opposition, and properly and sensibly withdrew the proposals. But, we're still worried" about his future plans for Medi-Cal reform (Russell, San Francisco Chronicle, 5/14). Some Democrats criticized Schwarzenegger's "firm opposition to new taxes," saying that the "inflexibility will only postpone the real fiscal pain for state taxpayers until next year," the Chronicle reports. Assembly member Mark Leno (D-San Francisco) said that Schwarzenegger is "balancing this budget through more borrowing, more funding shifts, deferring payments and one-time savings" (Marinucci, San Francisco Chronicle, 5/14). Assembly Budget Committee Chair Darrell Steinberg (D-Sacramento) said, "There are a lot of questions about the ... impacts of this proposal and a lot of assumptions in here for which there is some uncertainty" (Quach, et al., Orange County Register, 5/14). However, Senate Minority Leader Dick Ackerman (R-Tustin) said, "We'd suggest more cuts in health and welfare," adding that the governor should try to resist Democrats who "want to expand programs. Their goal is to spend more money" (Marinucci, San Francisco Chronicle, 5/14).
Links to additional coverage of Schwarzenegger's revised FY 2004-2005 state budget proposal are provided below.
- "Governor's Budget Set, Lawmakers Worry About Future Debts" (Chorneau, AP/Chico Enterprise Record, 5/13).
- "Budget: Tough Cuts, No Tax Hikes" (Marimow, Contra Costa Times, 5/14).
- "Deal-Cutting Schwarzenegger Opts To Put Off the Pain" (Nicholas, Los Angeles Times, 5/14).
- "Revised Budget Boosts Spending" (Mendel, San Diego Union-Tribune, 5/14).
- "Revised Budget Backs Off Cuts" (Bluth, Sacramento Bee, 5/14).
Analysis: Governor Rejects Idea He Bowed to Pressure (Talev, Sacramento Bee, 5/14).
Revised Spending Plan: Some Health Programs Saved, Taxes Not Raised (Gledhill, San Francisco Chronicle, 5/14).
Analysis: Balanced Budget That May Not Be (Berthelsen, San Francisco Chronicle, 5/14).
Schwarzenegger Sticks to His Guns as Times Get Tough (Nissenbaum, Contra Costa Times, 5/14).
- Calif. Fiscal Plan Leaves Taxes Alone (Sanchez, Washington Post, 5/14).