Governor's California May Budget Revision Makes Deeper Health Cuts

[courtesy of California Progress Report]

• Health budget keep January proposed cuts, goes further in directly denying coverage
• Hundreds of thousands of the poorest working families would lose coverage

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

Gov. Arnold Schwarzenegger released the revised version of his budget proposal today, which makes deeper cuts in health and human services programs in order to address the state’s shortfall, which has grown by nearly $3 billion since he first released the budget in January. Altogether, the $100 billion general fund budget is $17.2 billion short.

“The crisis is very real and it is very serious,’’ the governor said. His proposal would attempt to bring in $11.7 billion in new money ($3.5 billion from deficit bonds of years past), and another $5 billion by selling the lottery’s income to Wall Street. Schwarzenegger would cut an additional $12.5 billion from state programs, on top of the $1 billion that was cut earlier this year to help minimize the deficit.

“We had to make very difficult cuts. No one wanted to do this. But because health and human services was the second largest part of the budget, this is where we had to cut,’’ Schwarzenegger said. Twenty percent of the cuts imposed come from Health and Human services, reported Director of Finance Mike Genest. Deficit aside, Schwarzenegger restored funding to some of his original cut proposals in January and will now keep parks open and will not release inmates nearing their release date early.

View the full May Revision at the website of the Department of Finance here: www.ebudget.ca.gov.

The Health and Human Services Agency has their summary of the health and human services cuts here.

THE CUTS

CUTS ALREADY MADE (PROVIDER RATES): Health programs were already dealt a blow earlier this year. Medical providers that treat Medi-Cal recipients will see their reimbursement rates cut by 10% as a result of a budget cut package already approved earlier in the year. Already California ranks near the bottom for reimbursement rates for doctors caring for Medi-Cal patients. That cut -- saving the state $544 million (and losing an equivalent amount in federal matching dollars) -- will begin July 1st.