Steep Cuts for Health Care in Governor’s New Spending Plan

The California Health and Human Services Agency faces a mid-year budget cut of $950 million and the prospect of a $3 billion cut for fiscal year 2009-2010 under a proposal that Gov. Arnold Schwarzenegger (R) presented on Thursday, according to the Eureka Reporter (Harrison, Eureka Reporter, 11/6).

The spending reductions came as part of Schwarzenegger's call for an emergency session of the Legislature to address the state's growing budget deficit, now projected to exceed $11 billion for the current fiscal year (Garcia, San Jose Mercury News, 11/6).

The governor's plan would eliminate Medi-Cal coverage of dental, podiatry and psychology services for adult beneficiaries (Yamamura, Sacramento Bee, 11/7). Vision benefits also would be eliminated for adult Medi-Cal beneficiaries.

In addition, the governor has resurrected a plan to require some adult Medi-Cal beneficiaries whose annual incomes are between 72% and 100% of the federal poverty level to "pay for a portion of their Medi-Cal coverage," according to the Los Angeles Times (Halper/Rau, Los Angeles Times, 11/7).

Part of a Larger Proposal

Along with more than $4.5 billion in spending cuts, the governor offered proposals to increase state revenue by $4.7 billion, in part by raising the state sales tax and broadening it to apply to some services and activities.

The governor also announced a series of plans aimed at stimulating California's economy (San Jose Mercury News, 11/6).

Among his economic stimulus proposals, Schwarzenegger called for modifying some environmental regulations to expedite some hospital construction and other public works projects (Wiegand, Sacramento Bee, 11/6). The changes would aim to streamline the permit and plan review process for non-structural hospital construction projects estimated to cost less than $2 million (Robertson, Sacramento Business Journal, 11/6).

Next Steps, Prospects

The Senate and Assembly met briefly on Thursday but did not act on the governor's proposals (Miller, Riverside Press-Enterprise, 11/6).

Democratic legislative leaders voiced doubts that lawmakers would reach an agreement before Dec. 1 when new legislators are sworn in, and some Republican leaders remain opposed to tax increases (Los Angeles Times, 11/7).

Assembly Speaker Karen Bass (D-Los Angeles) praised elements of the proposal but said the cuts to health and human services programs were "a non-starter" (Sacramento Bee, 11/7).

Meanwhile, health care advocates and other groups have begun mobilizing against elements of the proposal (Los Angeles Times, 11/7).