Senate California Budget Hearings Find: Big Medi-Cal Cuts, Big Mistake

[courtesy of California Progress Report]

• Quarterly Status Reports: hundreds of thousands to ultimately lose coverage
• Proposal to eliminate adult dental care could increase ER use, hurt clinics
• Children on Healthy Families would also face cuts

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

At a public hearing Monday, the Senate Budget Subcommittee, which oversees state public programs, postponed decisions on a number of Gov. Arnold Schwarzenegger’s proposed cuts to the Medi-Cal and Healthy Families Program. The two programs, along with all state departments, are under pressure to cut 10 percent across-the-board in an effort to close the state’s $14 billion shortfall. The two programs provide coverage to nearly 7 million Californians – nearly 20% of the state.

Monday’s hearing was part of the normal budgeting process for the 2008-09 fiscal year, which begins July 1. Lawmakers prefer to delay decisions on major items until after the governor releases his May revision of the budget, which reflects the latest number on income taxes to the state. The Legislature and Governor have already approved a $1 billion mid-year emergency cuts package in February, which included a 10% rate reduction ($544 million reduction) to Medi-Cal providers.

As lawmakers heard testimony for proposals that raised premiums for the poorest residents in the state and capped their coverages, Sen. Alex Padilla commented on the bad timing and irony: “In tougher economic times, the demand for services and workload goes up and here we are debating cuts to services.’’

BIG CUTS, "BIG MISTAKE"

By far, the biggest ticket items considered by lawmakers was the reinstatement of quarterly status reports for both children and adults on Medi-Cal and the elimination of adult dental benefits from Medi-Cal.

Quarterly Status Reports: The savings behind the increased administrative burden of quarterly status reports (which require recipients to verify income every three months, rather than one year or six months) is that recipients would not return paperwork in time and fall off the rolls, in spite of being eligible. State officials said tactic would save $83.5 million. The cuts would also cause the state to lose an equal amount in federal matching funds.

The state has estimated that approximately 150,000 children and about 14,000 adults would lose coverage through this tactic, though children’s advocates say that twice as many children--nearly 300,000--would lose coverage over a two-year period, when taking into account the cumulative impact.