Schwarzenegger Signs Budget; Medi-Cal Payments on the Way

On Tuesday, Gov. Arnold Schwarzenegger (R) signed a package of budget bills, enacting a spending plan for the state a record 85 days in to the fiscal year, the Orange County Register reports (Joseph, Orange County Register, 9/23).

With a budget in place, Controller John Chiang (D) said that $3.6 billion in payments to Medi-Cal providers will go out within 48 hours.  Medi-Cal is California's Medicaid program (Robertson, Sacramento Business Journal, 9/23).

Payments to vendors and other state creditors will be issued shortly after the Medi-Cal payments are made, the New York Times reports (Steinhauer, New York Times, 9/24).

Until a budget was approved, California could not disburse funds to health care institutions, schools and other entities (Yi, San Francisco Chronicle, 9/24).

Budget Overview

Under the budget, the 10% cut to Medi-Cal provider payments would be in effect until March 1, 2009, when smaller payment cuts would take effect.

In addition, a provision included in the budget package would require children enrolled in Medi-Cal to verify their eligibility every six months, rather than once a year.  Children with disabilities and pregnant teenagers would be exempt from the requirement.

Premiums for Healthy Families -- California's version of the State Children's Health Insurance Program -- will increase under the plan.

Schwarzenegger said the Legislature likely would call a special election for 2009 to seek voter approval for elements of the budget proposal dealing with the state reserve fund and borrowing against lottery revenue (California Healthline, 9/22).

Line Item Vetoes

Before approving the budget plan, Schwarzenegger used his line item veto authority to cut about $510 million from the budget (Rau, Los Angeles Times, 9/24).

The last-minute cuts eliminated another $153 million from health and human services programs (Orange County Register, 9/23).

The cuts eliminated $277,000 for prostate cancer treatment, and cut $3.86 million from California's prescription drug discount program (Miller, Riverside Press-Enterprise, 9/23). 

The cut to the drug discount program is the second consecutive appropriation for the 2006 program that the governor has eliminated.  The effort was intended to negotiate prescription drug discounts for Californians, but the state has not announced that the law has yielded any discounts from drugmakers (Los Angeles Times, 9/24).

Legislation