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Think Tank

Post-Election Prognosis for California Health Care

Now that voters have resoundingly rejected lawmakers’ proposals for shrinking the large hole in the state budget, what’s next for California? If the five losing measures had passed, the state would be facing a deficit of about $15 billion. Instead, the hole is about $21 billion and could grow larger if the economy continues to falter.

California Healthline asked four leaders to share their perspectives on what voters’ decisions in the May 19th special election and new budget proposals mean for health care services in the state:

Ingenuity From Counties Needed Now More Than Ever

Paul McIntosh
Executive director, California State Association of Counties

Counties serve as the front line of defense against threats of widespread disease and illness and promote health and wellness among all Californians. All Californians reside in a county, and each county in California plays a role in the health care services provided to its residents, whether it is running hospitals or clinics, managing public health programs to inoculate children from deadly diseases, or providing mental health services.

In this current economic recession, counties — like the state — are deeply impacted by the decline in revenues. The revenues that counties use to support health services — sales tax, vehicle license fees and property taxes — are declining precipitously. Counties already have cut clinic hours and services, mental health services and public health services. All of this comes as county hospitals and clinics are seeing more uninsured patients because people are losing jobs and, with them, their job-based health insurance.

The February budget package included cuts to health programs for low-income and uninsured individuals. On July 1, the state will reduce services for Medi-Cal beneficiaries, such as dental and optometry benefits, and cut funding for public hospitals.

And there are more cuts looming to health services.  The governor put far-reaching health cuts on the table on May 14 as part of his May Revision proposals.  A budget gap of the magnitude being faced by California, and with revenue increases unlikely, makes cuts unavoidable. The cuts at the state level likely will be permanent — with no restorations in the foreseeable future.

The only bright spot on the horizon is the possibility of national health reform. However, with state and local governments in fiscal crisis, it will be difficult to secure matching funds for Medicaid expansions or other federal opportunities. Counties repeatedly have shown their innovation in creating and supporting local health programs; this ingenuity will be immensely necessary in the coming years if services are to be preserved for the state’s 38 million Californians, who need these services now more than ever.

Vote Makes Crisis More Challenging

Sen. Denise Ducheny (D-San Diego)
Chair, Senate Budget Committee

In a broad sense, California funds three things: prisons, schools (including higher education), and health and human services.  The rest of the budget is almost entirely supported by special funds.

Voters approved Proposition 98 in 1988, mandating that the state spend approximately 40% on K-14 education.  In addition, a series of voter-approved initiatives have mandated spending on public safety programs, including sending more people to prison for longer terms.  Corrections now accounts for a greater share of the state budget than all of higher education combined, more than 10%.  Health and human services accounts for approximately 25% of our general fund costs, nearly all matched dollar for dollar by the federal government. 

Access to affordable health care services is one of California’s most urgent goals, but these services are most at risk in tough budget times.  The more costs grow in areas like corrections, and the less taxes Californians pay as their wages and hours are reduced in tough economic times, the fewer dollars we have to invest in health and education.

We can no longer set our budget priorities one initiative at a time.  We must acknowledge that voting to set aside resources for one goal means taking funding away from another.

Given this context, why did we ask voters to approve yet another series of ballot measures to help us balance the budget?  

The answer is simple: Once voters make spending in one area a constitutional mandate, only they can make adjustments. Californians rejected Props 1A—1E.  While they acted to preserve local funding for mental health and some services for children up to five years of age in Props 1D and 1E, the result will be drastic reductions to core health and human services provided to our most vulnerable populations, including young children.

We are all too aware that we are witnessing the worst economic forecast since the Great Depression, both in our national and state economies.  Unfortunately, while more of us are facing tough times, the state will be even less able to provide critical services. 

Last week’s vote did not create the crisis, but made its resolution more challenging.  My hope is that we can face this crisis together and together find the solutions that help us protect our neighbors and communities. 

State Must Set Priorities

Sen. Sam Aanestad (R-Grass Valley)
Member, Senate Health Committee

The message from California voters is loud and clear. By rejecting all ballot measures except one during the special election, they’ve told legislators to do the job they were elected to do in the first place. The same message holds true with the two health care-related ballot initiatives.

Voters do not trust government when they are forced to pay higher taxes for overspending. Why do we think they would trust government on health care?

Bad policy and toxic government interference have consequences.  When bureaucrats make decisions based solely on dollars, people get hurt.

One of the best examples is Medi-Cal, California’s single-payer system for the poor.  It does what every socialized medical system in the world has to do — delay and ration care, limit access, remove patient choice, and balance itself on the backs of patients and the doctors and hospitals that care for them.

In today’s budget crisis, the first cuts the governor tried to make were to health care.  With current reimbursement rates, almost 60% of patients with Medi-Cal report difficulty finding a doctor to care for them.  California currently ranks dead last in the U.S. for the percentage of doctors participating in the program.  Access is delayed and denied.

All Californians are impacted when the Legislature chooses to make health care a low priority in the state budget.

Insured patients find their local emergency department swamped with Medi-Cal patients seeking routine care because no doctor can afford to see them in outpatient clinics.  Hospitals trying to stay open cut costly but critical technology, leaving entire communities without services.

With government-funded health coverage, our standard of care will drop with every budget crisis.

There is an alternative.  Rather than allowing irresponsible spending sprees during good fiscal years, our state can do what every family on a budget has to do — set priorities.

Instead of squandering taxpayer dollars on “feel good” measures that make tuition for illegal immigrants a priority over children’s health care, preserve California’s EDs and clinics.  Make women’s health more important than Delta smelt and convicted felons.

Balancing the California budget on the backs of doctors, hospitals, nursing homes and patients is a sure way to make Californians sick.

California Decisions Have National Implications

Jean Ross
Executive director, California Budget Project

The May 19 election is over. The votes are counted. It is too early to assess the impact of the election and the failure of the five budget-related ballot measures.

While the governor’s political strategist, Adam Mendelsohn, was quick to state, in an interview with Capitol Weekly, that the governor “carries a mandate to cut the California budget down to the bone,” the facts support alternative assessments of voters’ sentiments.

Consider, for example, that California voters have rejected limits on state spending twice within the last four years. It is hard to view a vote against diverting dedicated tax dollars — tobacco tax dollars that support early childhood programs or “millionaire” tax proceeds dedicated to mental health programs — as an endorsement of deeper budget cuts.

So what do voters want? Quality public services and government that responds to their needs, including a strong health care safety net at this time of economic stress.

Despite the pre- and post-election spin to the contrary, there’s plenty of evidence that voters support additional taxes, carefully targeted, to fund these services. There’s also reason to believe that voters want, and are ready for, an honest dialogue over how to fundamentally address California’s recurring budget crises, something none of the measures on the May ballot could claim to do.

California’s near-term budget picture is bleak — and would have been regardless of the outcome of the May election. The May ballot measures simply borrowed time, literally with a proposal to borrow against future lottery proceeds, hoping that time, economic growth or a miracle would minimize the tough choices needed to restore the state’s fiscal health.

Over the next few weeks to months, lawmakers will seek to close yet another budget gap. For health care, the challenges are particularly daunting. The governor has proposed changes that could result in more than 1.2 million Californians losing access to publicly supported health programs.

These changes would require congressional action to waive provisions of the American Recovery and Reinvestment Act designed to ensure that states receiving federal aid maintain a minimum level of public services. A million-plus more uninsured Californians would also significantly increase the challenge of national coverage.

For all of these reasons and many more, the resolution to California’s current budget crisis has critical implications not only for the 38 million individuals who call the state home, but also for the nation and the future of the nation’s health care policy.