Budget Subcommittee Hearings on May Revision

The Senate and Assembly Budget Subcommittees on Health and Human Services held the first of two hearings on the Governor’s May Revision on Monday, May 18. These hearings follow dozens of hearings that were held the past couple months on the Governor’s January budget proposal and proposals for reinvestment. See the Senate and Assembly subcommittee agendas for details about the items heard.

In her opening remarks, Subcommittee Chair Senator Holly Mitchell said, “We heard you,” referring to the hundreds of advocates and constituents that have appeared before the committee. “The budget decisions we make in health and human services,” she added, “have real life and death impacts on hundreds of thousands of Californians.”

Noting that the Governor’s May Revise includes a proposal for a state Earned Income Tax Credit, Sen. Mitchell said, “But we need to look at a broader, more strategic approach if we’re going to reduce the number of Californians living at or below poverty… I believe the Legislature has a responsibility to reinvest in the human services and safety net programs that offer families, seniors, and Californians living with developmental disabilities a fighting chance to live beyond the desperate demands of the moment and invest in California’s future.”

The budget subcommittees of each house heard the following May Revision issues:

  • Medi-Cal: County Administration Funding: The May Revision proposes to increase Medi-Cal county administration funding by $150 million, the same amount given last year, for supplemental funding for eligibility determination workload related to the ACA. Counties believe the proposed level of funding is insufficient to meet the workload demands and have asked for $300 million, along with expediting the adoption of a new funding methodology. Health Access spoke in support of the counties’ need for sufficient resources to do eligibility determinations and provide eligible people with meaningful access to Medi-Cal. Both the Senate and Assembly subcommittees held this issue open pending further conversations.
  • Medi-Cal: Impact of President’s Executive Order: The May Revision includes funds to provide full-scope Medi-Cal to newly qualified individuals as a result of the President’s Executive Order on immigration. The funding includes $41.5 million in 2015-16 and $206 million on an ongoing basis. Health Access testified that the Administration’s estimates are both too high and too low. The estimates are too high because the enrollment phase-in is likely to take longer than estimated by the Administration; and they are too low because our experience with DAPA and DACA show that more people will likely enroll in Medi-Cal than estimated by the Administration. Both subcommittees held this issue open pending further conversations.
  • Medi-Cal Enrollment Application Assistance Payments: The State has received a series of grants from the California Endowment to help Medi-Cal beneficiaries apply for, and stay on Medi-Cal. One of the grants provides in-person enrollment application assistance payments of $58 per approved Medi-Cal application to certified insurance agents and enrollment counselors. DHCS needs to transfer about $2.5M in unused funds to county outreach and enrollment grants effective June 30 of this year. Health Access and other health advocates testified to the need to ensure that community-based organizations are able to access these funds after the transfer. The Senate adopted placeholder trailer bill language to keep the conversation going, while the Assembly held the issue open.
  • Health Home Program: Two years ago Senator Mitchell authored AB 361 to create, upon federal approval, an ACA Health Home Program to serve Medi-Cal beneficiaries with multiple chronic conditions who are frequent utilizers of services and may benefit from more care management and coordination. The May Revision proposes trailer bill language to allow DHCS to allocate federal dollars and private grants to implement AB 361. Health Access supported AB 361 and spoke in support of the proposed trailer bill. The Senate budget subcommittee adopted placeholder trailer bill language to keep the conversation going while the Assembly budget subcommittee held the issue open.
  • High Cost Drug Proposal – Hepatitis C: The May Revision proposes to allocate about $275 million in funding to various state agencies (health care services, corrections, state hospitals, public health) for Hepatitis C treatment. The May Revision also indicates the California Health and Human Services Agency will convene two workgroups on clinical and procurement issues with the goal of developing a proposal for the 2016-17 budget. In our public comments, Health Access stated that any proposal to address high cost drugs should include efforts to reduce the number of new infections. Both Committees held this item open to allow for additional time to study the issue.

What’s Next?

Both budget subcommittees will meet again on Thursday to take additional actions and report their actions to the full budget committees of their respective houses.
• Friday, May 22: Full Senate Budget Committee hearing
• Wednesday, May 27: Full Assembly Budget Committee hearing
• End of May/early June: Budget Conference Committee
• June 15: Deadline to pass State Budget

Scott Graves of the California Budget and Policy Center wrote a helpful blog about the budget process between now and June 15.

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