Stimulus Funds Will Not Let State Avoid Medi-Cal Cuts, Tax Hikes
About three million Medi-Cal beneficiaries will lose some benefits because California leaders determined that the state will not receive sufficient funds for budget relief from the federal economic stimulus package to sidestep provisions of the state budget deal approved in February, KPBS' "KPBS News" reports (Goldberg, "KPBS News," KPBS, 3/27).
As part of the budget agreement approved last month, Treasurer Bill Lockyer (D) and Finance Director Mike Genest had until April 1 to determine whether California will receive at least $10 billion in stimulus money that can be applied to the state general fund through mid-2010 (California Healthline, 3/18).
On Friday, Lockyer and Genest concluded that the state will get $8.2 billion in stimulus funds for its general fund (Yi, San Francisco Chronicle, 3/28).
Because the state has not met the $10 billion mark, personal income tax rates will increase by 0.25 percentage points and government services will be cut by an additional $948 million (Bailey, Los Angeles Times, 3/28).
What It Means for Health Care
The decision by Genest and Lockyer will result in:
- The elimination of Medi-Cal coverage for dental care, eye exams, podiatry, chiropractic services, speech therapy and other services; and
- A 10% reimbursement reduction for public hospitals (San Francisco Chronicle, 3/28).
The cuts are slated to take effect July 1 (Yamamura, Sacramento Bee, 3/28).
In a letter to Gov. Arnold Schwarzenegger (R) and legislative leaders Friday, Lockyer urged them to reconsider the elimination of dental coverage for adult Medi-Cal beneficiaries and a pay cut for in-home care workers (Zapler, San Jose Mercury News, 3/27).
Lockyer wrote, "I consider the suffering that would be caused by these particular cuts to be both severe and compelling" (Lin, AP/San Francisco Chronicle, 3/27).
Lockyer said that the effect of the cuts could be amplified by the loss of matching federal funds for the services (San Jose Mercury News, 3/27).
Assembly Speaker Karen Bass (D-Los Angeles) voiced support for reconsidering the cuts (Los Angeles Times, 3/28).Â
Health Care Stakeholders' Response
On Friday, union members and activists gathered in Oakland to protest the cuts.
The protesters said cuts would negatively affect Californians, particularly poor families, seniors and the disabled, and asked legislators to reverse the additional cuts, including the ones to health care and home care (Oakland Tribune, 3/27).
Anthony Wright, executive director of Health Access California, a consumer health care advocacy group, said of the cuts, "Millions of Californians will either go without care, or go into debt to get basic services" (AP/San Francisco Chronicle, 3/27).
The state currently faces a deficit of $8 billion because of declining tax revenue, according to Legislative Analyst Mac Taylor (Sacramento Bee, 3/28).
The state's deficit could increase if voters reject ballot measures in a May 19 special election. The proposals would generate $6 billion to help balance the budget that begins in July (Los Angeles Times, 3/28).
Medi-Cal Rule Changes ApprovedIn other stimulus-related news, Gov. Schwarzenegger on Friday signed legislation that changes eligibility verification requirements for children enrolled in Medi-Cal. The changes were required for California to qualify for funds from the stimulus package (San Francisco Chronicle, 3/28). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.