Budget Backs Off More Health Care Cuts

From a health care point of view, yesterday’s passage of the budget was notable for what was missing from it:

• Transition was delayed for moving 870,000 kids from Healthy Families into a Medi-Cal managed care program;
• Elimination of the Managed Risk Medical Insurance Board also is on hold for now;
• In a plan that includes an additional $10 billion in budget corrections, there were no new cuts to health-related programs.

“It’s fairly minimal damage,” according to Tom Riley, legislative director for the California Academy of Family Physicians. “I’m perplexed by some of it. And it’s good to have that absence [of new cuts].”

Riley was surprised that the Legislature did not include moving almost a million kids in Healthy Families to a different program — since both the Assembly and Senate subcommittees approved the plan.

“Don’t get me wrong, it’s a good thing and I’m enthused about that,” Riley said. “We wanted them to go slow. We told [the budget subcommittees] that you need to shine a bright light on this and slow down.”

The Legislature also backed off from Governor Brown’s request to eliminate MRMIB, which manages the Healthy Families program.

It’s unclear what role MRMIB will have in the eventual transition of children to Medi-Cal managed care programs, and the board may fulfill other roles, such as administering the MRMIP (Major Risk Medical Insurance Program) and PCIP (Pre-Existing Condition Insurance Plan) programs.

Details about the Healthy Families transition are expected to be heard in committee sometime around the end of June. Riley said he’s not sure exactly why the Legislature backed off from passage, though he’s happy that’s the case.

“So much was at stake for these people. In some cases, their only option is these programs. It’s their lifeline,” Riley said. “This now gives us time to go through the committee process, and for staff to focus on it, instead of being burdened by the budget, they can concentrate on this issue and we can ask the hard questions and they can see how this might work.”

One possible reason for the lack of cuts in this round of budget moves, he said, is that there aren’t many optional health care programs that haven’t already been cut.

“What’s left? What else can they dig into that’s painful?” Riley asked. “We may be at a point where policymakers are realizing that the consequences are going to be felt months from now, that it’s going to have a backlash. And a stance of no new taxes is going to pale in comparison to the backlash felt with these cuts.”

Also yesterday:

The California Health Benefit Exchange Board sped up its process in applying for a federal establishment grant. Instead of its original September deadline, the board now hopes to get a final version of the application approved by its next meeting, toward the end of July.

Tomorrow, Capitol Desk will examine the board’s outline for setting up California’s new insurance  exchange.