State Funding for Health Care Services Examined

The Orange County Register on Tuesday looked at the cost of state health and welfare programs in the first in a series of articles examining challenges to balancing the state budget. According to the Register, state spending on such services could reach $32 billion, or one-third of the state budget, in the next fiscal year. Gov. Arnold Schwarzenegger (R) on Friday is expected to release his revised fiscal year 2005-2006 state budget proposal.

According to the Health and Human Services Agency:

• Medi-Cal costs $34 billion annually, with $13 billion funded by the state;
  
  
• Healthy Families costs $895 million annually, $325 million of which are state funds;
  
  
• Developmental centers for people with disabilities costs $699 million, with $373 million in state funds;
  
  
• Regional centers for people with development disabilities cost $3 billion annually, with $1.9 billion in state funds; and
  
  
• In-home services cost the state $1 billion annually.

According to the Register, challenges to reducing state spending on health care include rising national health costs, an aging state population, slow economic growth, a high number of undocumented immigrants and Medi-Cal expansion.

Schwarzenegger's proposal to reduce spending by $332 million over the next five years by moving some Medi-Cal beneficiaries into managed care plans and increasing copayments in the program would not provide sufficient revenue to address the state budget deficit, according to the Register. Reducing benefits or reducing the number of eligible beneficiaries are "the only ways to substantially reduce costs," the Register reports (Hinch, Orange County Register, 5/10).