Immigrants Hit Hard by Governor’s Planned Medi-Cal Cuts, Changes

What a difference five months and a skidding economy can make.

In January, Californians were talking about a major overhaul of the state’s health system that would bring affordable coverage to almost everyone in the state. Instead, the state now faces deep cuts in Medi-Cal that many say will swell the ranks of the state’s 6.7 million uninsured and could inflict lasting damage to the system.

Medi-Cal is California’s Medicaid program.

All told, Gov. Arnold Schwarzenegger’s (R) plans to cut $1.3 billion in Medi-Cal spending would result in “a cumulative impact of 800,000 Californians being denied basic coverage,” according to Anthony Wright at Health Access California.

Reshma Shamasunder — director of the California Immigrant Policy Center, which helped establish some of the Medi-Cal programs now on the chopping block — said the proposed cuts “will be taking us back 10 years.

“We need to be talking about raising revenues, not trying to balance the budget by cutting programs for the poorest people in the state,” Shamasunder said.

Carmella Castellano-Garcia, president of the California Primary Care Association, said the new plan amounts to an about-face in the march toward health care reform.

“One of the things that makes it so difficult is that just a just few months ago we were talking about health coverage for everybody,” she said.

“Now we’ve gone 180 degrees in the other direction and we’re targeting the most vulnerable segment of our population. The patients we represent are going to be just devastated,” Castellano-Garcia said. Her organization represents more than 600 not-for-profit community clinics and health centers providing care for low-income, uninsured and underinsured Californians.

State officials say cuts are needed to make up a $15.2 billion budget deficit. The governor hopes to build in a $2 billion cushion, bringing the total that the governor is seeking in cutbacks and new revenues to $17.2 billion.

“There are definitely some painful proposals in the May revisions as well as those announced earlier but, unfortunately, the fiscal situation in the state requires that cuts be made,” said Anthony Cava, spokesman for state Department of Health Care Services.

“With Medi-Cal being the second-largest general fund expense, it has to absorb some of the cutbacks,” Cava said. Education is the largest state-funded program.

Immigrants Targeted

A few of the governor’s Medi-Cal suggestions – some announced earlier this year, some included in his revised budget proposal this month — take aim at immigrants. Schwarzenegger wants to:

  • Eliminate most nonemergency services for documented immigrants who have been in the United States five years or less;
  • Eliminate most non-emergency services for undocumented immigrants receiving benefits under the “Permanently Residing in the U.S. Under Color of Law” standard;
  • Limit undocumented immigrants’ eligibility for emergency services; and
  • Require more frequent proof of eligibility for kids and families receiving Medi-Cal coverage, a stipulation that many health advocates say will cause more kids to go without care in the state.

“This budget will really decimate the population that has no choice but to rely on Medi-Cal,” said Al Hernandez Santana, executive director of the Latino Coalition for a Healthy California.

Hernandez Santana, whose 16-year-old organization is dedicated to improving health conditions for Latino Californians, said at least one of the suggestions reneges on a long-standing agreement.

“By taking away regular health services for those legal immigrants who have resided in the U.S. five years or less, the state would be breaking the deal that even conservative politicians have made with our immigrant community: namely, ‘If you play by the rules to get here legally and contribute to our society, we will take care of you.'”

Nora Vargas, executive director of the statewide Latino Issues Forum, said that the governor’s revised budget proposal “rolls back many of the efforts to begin the discussion of expanding health care to all Californians. These drastic cuts to social services target the most vulnerable participants — children and immigrants.”

Noting that Latino children and families represent about half the state’s Medi-Cal beneficiaries, Vargas said “the proposed program changes and reductions go in the wrong direction toward helping families become self-sufficient.”

Although it is not a cutback in and of itself, the governor’s plan to require quarterly verification of eligibility will save an estimated $43.3 million a year by thinning the ranks of recipients.

“This will negatively impact Latinos’ access to health care,” Vargas said. “Stigma, complications and language barriers have all prevented thousands of eligible Latino children and families from enrolling in Medi-Cal and other health care programs. They will be the first to drop out of the program, not due to ineligibility, but because of the onerous task of reporting.”

Political and Fiscal Decisions

Some of the governor’s proposals deal with “state-only” provisions of Medi-Cal. Federal regulations require states to offer specific parts of the Medicaid program to receive federal funds. States may elect to offer “state-only” provisions, which do not receive federal money in the Medicaid partnership.

As a result of the national welfare reform act of 1996, some formerly mandatory Medicaid rules – including providing comprehensive health coverage for new immigrants and limits on the number of hours a recipient could work each month — were no longer mandatory.

California elected to maintain – and pay for — many of the pre-reform provisions in Medi-Cal. The fact that no federal money will be lost by cutting back on these benefits makes the decision easier, politically as well as financially.

“It’s not so much a political issue as it is fiscal,” Cava said. “The state will save $42 million with the nonemergency reform for new immigrants and about $87 million with the other reforms for immigrants permanently residing in the state,” Cava said.

Indirect Consequences

Although not aimed specifically at immigrants, other proposals in the budget released last week by the governor would have a significant impact on the immigrant population. They include:

  • Lowering income eligibility levels for Medi-Cal. For two-parent households, it would be 61% of the federal poverty level ($13,542 for a family of four). For single-parent households, income could not exceed $8,540 to remain eligible for Medi-Cal;
  • Reinstating a rule that limits Medi-Cal eligibility to families in which the primary wage earner does not work more than 100 hours per month;
  • Eliminating dental benefits for adult Medi-Cal beneficiaries; and
  • Eliminating Medi-Cal coverage for audiology, optometry, podiatry, speech therapy, psychology, chiropractic care and other nonmandatory services.

Hernandez Santana from the Latino Coalition said the 100-hour work limit will be particularly hard on immigrants.

“The 100-Hour Rule, as it’s called among policy wonks, was the last remnant of the old AFDC (Aid to Families With Dependent Children) welfare system, which we as health advocates fought tooth and nail to eliminate, finally succeeding back in 2000,” Hernandez Santana said.

Calling it a “disincentive to work,” Hernandez Santana said the 100-hour limit, along with new income limits, will make it “almost impossible for any working person to qualify for Medi-Cal under this proposal.”

Related Topics

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