Previewing the California budget and the year ahead

Tomorrow, Governor Brown will release his proposed 2013-14 budget for the state of California.

We expect and look forward to the first budget in a long time without significant health care cuts being proposed. Governor Brown and the voters wisely and thankfully secured revenues to start to balance the severe cuts made in previous year and ultimately balance the budget.

We hope and expect that we will not see major health care cuts in the forthcoming budget–the Administration fully appreciates that health and human services has taken the brunt of cuts last year and previously.

In just the past few budgets, California has lowered provider payments in Medi-Cal to some of the lowest rates in the nation, eliminated benefits like dental coverage for three million adults in Medi-Cal, and shut down whole programs like Healthy Families and Adult Day Health Care. In health care, we have long since hit, if not gone past, base minimum standards for core programs, to the point where some enacted cuts have been rejected by the federal government or the courts.

A POSITIVE HEALTH REFORM AGENDA FOR 2013: After years of tough cuts, rising costs, a growing uninsured population, there’s now hope for a greatly improved health system, not just because of a more stabilized budget but for the historic opportunities under the Affordable Care Act. Health care will take center stage at the state level this year—as California works to put in place major improvements in our health care system, including signing up a few million Californians into new options and benefits starting in October 2013.

Under the proposed Medicaid expansion alone, California can dramatically expand coverage, draw down billions of federal dollars, and create jobs—all with minimal state costs, according to a new University of California study. In the budget, the Governor must embrace this opportunity for our families, for our health system, and for our economy.

By all accounts, California has led in taking advantage of the opportunities and benefits of Obamacare—implementing key consumer protections early, being first to set up an Exchange where people can easily and affordably buy coverage, and implementing an early expansion of Medicaid to over a half-million Californians—the largest in the nation by a factor of over ten. Because of its size and scale and complexity, California still has to scramble to be fully ready in less than nine short months, so that Californians maximize the benefit.

California has key choices to make in the next year. Rather than just do the minimum, California can continue to work to maximize the benefit of the Affordable Care Act for California families, to draw down as many federal dollars as possible into our health system and economy, and to make improvements to our health system that are not just incremental but transformational.”

With relatively small investments, we can get significant matching funds to make big improvements in our health system. For example, California should seek not just an expanded Medi-Cal but an improved one, one that dramatically improves the health system we all rely on. While these investments have always made sense, given the federal matching dollars, there is more incentive now, as the newly eligible are 100% federally funded for the next three years—and with no less than a 9:1 match in 2020 and beyond. California can and should make key decisions in the next few months to maximize the benefit:

·         The ACA requires that we streamline our eligibility and enrollment processes in Medicaid in specific ways—but the state can go further to make signing up simpler, so that more Californians can get coverage and care.

·         The new Exchange, Covered California, will get federal funds to do outreach and education campaigns about the new option and benefits, but any comparable effort for the lower-income Medi-Cal will need to be partially state-funded. A small investment can pay off: every month a Californian is not enrolled means we are leaving federal dollars in Washington, DC, rather than coming into our struggling health system and economy.

·         Each state gets to decide the benefit level for the newly-eligible Californians. Since this population is entirely federally funded for the first three years, there’s an incentive to provide benefits at least as good as current Medi-Cal benefits, and maybe more so. In fact, it should be an opportunity to relook at benefits recently eliminated, like Denti-Cal, given any restoration will be fully funded for the newly-eligible.

·         The ACA federally funds a major increase in primary care reimbursements for the next two years. Given California’s particularly low rates, our state disproportionately benefits from this change, with an increase that more than doubles the rate. We may need restorations to take advantage of this specific opportunity, but there’s a need to improve provider rates in general, to build capacity as a time of greater demand. Raising targeted revenues that can go to improved rates would draw federal matching funds, give us double the impact in economic stimulus, and could go a long way to ensure that once people are covered, they have access to the doctors and specialists they need.

These improvements are what we need to make health reform work as successful as possible. In short, California can use this opportunity to build a health system for the future, making this as transformational a moment for our state as the building of the railroad or our university system.

This discussion starts anew tomorrow with the Governor’s budget.

Health Access California promotes quality, affordable health care for all Californians.
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