Don't Forget Health Reform in the Context of California Budget Cuts and the May Revise

[courtesy of California Progress Report]

By Anthony Wright
Executive Director of Health Access California

In Schwarzenegger's presentation on the budget last Wednesday, when being grilled by the media on the specifics of his lottery proposal and other elements of his budget, he made a point to invoke his "don't forget health reform" pitch: he indicated it was a shame it didn't pass earlier in the year, and how he is still committed to doing health reform in his term:

"As you know, we have made severe cuts in health care. And when it comes to health care, what is even more painful is that we didn't get health care reform done, because that would have given Medi-Cal an additional $4 billion dollars. So we are going to go and continue staying on that subject of health care reform, and continue working with the stakeholders together to get this done."

Some, especially those in the Senate, used the budget crisis as an excuse to stall AB x1 1, the negotiated plan between the Governor and the Speaker, saying it wasn't the right time for such an ambitious effort in the middle of a budget crisis. Others, especially in the Administration, stated that the budget deficit only reinforced the urgency of health reform.

My take: Passing health reform would not have prevented the tough choices presented by the budget crisis, but it would have provided additional--and better--options for a solution.

What would have happened if the plan passed? AB x1 1 and its companion ballot measure would have raised $15 billion in new revenues for health care coverage expansions and provider rate increases.

There's no doubt that the cuts announced last week and back in January take us in the absolute opposite direction--a cut of $2 billion plus in both state and federal funds. Instead of raising $15 billion with AB x1 1, we are facing gruesome cuts:

• Instead of expanding Medi-Cal coverage and broadening the eligibility rules, the Governor has proposed restricting eligibility.

• Instead of raising provider rates, the Legislature and the Governor has already cut those rates, so millions now have less access to doctors and hospitals.

• Instead of streamlining and simplifying these programs, the Governor proposes making them more bureaucratic and cumbersome.

• Instead of bringing in more federal matching funds, the Governor proposes making cuts and thus losing those matching funds, leaving even more federal money in DC.

• Instead of dramatically reducing the number of uninsured Californians and the resulting "hidden tax" on the health system as a whole, the Governor's proposal would markedly increase the rate of uninsurance, for children and families.