The Cuts from the Conference Committee

HEALTH ACCESS UPDATE
Thursday, March 3, 2011

CONFERENCE COMMITTEE APPROVES BUDGET WITH SEVERE HEALTH CUTS;
PACKAGE NOW GOES TO FLOOR VOTES NEXT WEEK

* Medi-Cal patients would face caps on doctor visits; increased costs; and reduced access to providers; Those on Healthy Families would face higher premiums and co-payments.
* Adult Day Health Care eliminated, but $85 million set aside for reborn, scaled-back program.

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Today, the Budget Conference Committee of both Senators and Assembly representatives approved a package of $12.5 billion in cuts, and that relies ona vote of the California electorate for $12 billion in revenues to fill a remaining state budget deficit.

Assemblyman Bob Blumenfield, chair of the Budget Conference Committee, repeatedly stated how tough the cuts were, and how far “out of our comfort zone” he and his fellow Democrats were going. To make the point, he said he was “so far out of my comfort zone, it’s like Charlie Sheen at a rehab clinic, times ten.” He said those who don’t recognize these as “real cuts” to the safety net and other vital programs “should not deny the misery these cuts will cause.”

Health and human services were significantly cut, including the state’s Medi-Cal program, which provides coverage to 7.7 million Californians, largely low-income children, parents, seniors, and people with disabilities. The cuts included a steep 10% reduction to already-among-the-lowest-in-the-nation Medi-Cal provider rate reimbursements; big increases in cost sharing, including $50 emergency room co-pays and $100 hospital stay co-pays for Medi-Cal patients under the poverty level; and reductions in other benefits.

Looking for additional savings, the Committee revisited a previously-rejected proposal to place caps on the number of doctor visits that Medi-Cal patients may get. The original proposal would place a hard cap on doctor visits of 10 a year, with no exceptions. The approved budget puts in place a “soft cap” of seven doctor visits a year, but allows more if a doctor certifies them as medically necessary. The expectation is that the proposal will reduce the number of doctor visits that Medi-Cal pays for in a given year by 15%.

The budget also includes a major cut in Adult Day Health Care. The Governor had proposed full elimination, and the Senate and Assembly made major cuts–but of different scales. The final compromise was to formally eliminate the program, but to recreate the program in a scaled-back, less costly form with $85 million–an amount that split the difference between where the two legislative houses proposed.

Ultimately, even with all the statements of regret, the Budget Conference Committee approved a number of proposals that will undoubtedly lead to worsened health outcomes, worsened quality of life, financial harm, and more.

CUTS ACCEPTED IN BUDGET CONFERENCE COMMITTEE:

* Reduce Medi-Cal provider rates by 10%, including doctors, hospitals, nursing homes and intermediate care facilities, despite California having one of the lowest Medicaid provider rates in the country (47% of Medicare rates), and that nearly half of doctors already don’t take new Medi-Cal patients.

* Limit doctor visits to seven/year for 7.7 million Californians with Medi-Cal coverage including millions of low-income families, seniors, and people with disabilities and chronic illness, unless additional visits are specifically certified by a doctor as medically necessary.

* Raise the cost of care for Medi-Cal patients, the vast majority of whom are under the poverty level and have monthly incomes below $900, including:
o $100/day for a hospital stay, up to a maximum of $200.
o $50 copayment for emergency room visits.
o $5 copayment for doctor, clinic, dental, and pharmacy visits and prescriptions.
* Eliminate Medi-Cal adult day health care, impacting 27,000 patients and 330 centers statewide–and replacing it with a scaled-down program.

* Eliminate Medi-Cal coverage for over-the-counter drugs
* Limit coverage for hearing aids and enteral nutrition products for adults.

* Increase monthly premiums for Healthy Families coverage for children in families between 200 and 250 percent FPL by $18 per child, an increase of 75%, (with a family maximum of $126); and for families between 150-200% FPL by $14/child by nearly 100%.
* Raise emergency room co-payments for Healthy Families coverage for children in families from $15 to $50 and raising hospital inpatient services co-payments of $100 per day with a $200 maximum ($0.7 million).

Next Steps

The budget now goes to floor votes in both the Assembly and the Senate, expected for next week. Governor Brown is actively seeking a 2/3 vote for this “comprehensive” package, including from some Republicans. In fact, the head of the Chamber of Commerce indicated there may be support for a “comprehensive” package today, suggesting momentum on this effort. The goal is to complete the budget process by mid-March so that a revenue package and related budget proposals can go to the voters by June 2011.

In related news, dozens of organizations sent a letter, organized by the HHS Network, to the Legislature in support of the revenues in the budget. You can read the HHS Network’s sign-on letter in support of the Governor’s proposed revenue package, along with the list of organizations signed on, by clicking here. If your organization would like to sign-on to the letter and join the HHS Network in calling on legislators to support the Governor’s revenue proposals, please e-mail the HHS Network at hhsnetworkca@gmail.com.

As always, more information on the budget and health reform is available on our website at http://www.health-access.org/. We also post breaking news on our Twitter feed, at www.twitter.com/healthaccess.

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