The Senate Starts Making Tough Budget Decisions…

HEALTH ACCESS UPDATE
Thursday, February 17, 2011

SENATE BUDGET COMMITTEE APPROVES SEVERE HEALTH CUTS,
REJECTS HARD CAPS; MORE PRELIMINARY DECISIONS TO COME

REVENUES, TO PREVENT EVEN WORSE CUTS, DEPENDENT ON VOTERS IN JUNE

* Senate Budget Committee approves increased costs, reduced access to providers for nearly 8 million Californians; rejects the most severe hard caps on care
* Assembly Committee to vote soon on limits on care; increased costs; reduced access to providers for Medi-Cal patients

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Today, the Senate Budget Committee adopted nearly $1.5 billion of cuts to 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.

But the Committee rejected $200 million of cuts that the Budget Committee Chair, Senator Mark Leno (D-San Francisco) described as the “most untenable, most cruel-hearted” cuts, including hard caps on the number of doctor visits and prescription drugs that Medi-Cal patients may get, or the dollar amount of medical equipment or medical supplies.

This hearing marked the beginning of preliminary decisions on budget cuts, after a few weeks of an expedited set of hearings of proposed cuts by the Assembly and Senate Budget Subcommittees on Health and Human Services. Consumers and advocates have given heart-wrenching testimony, with advocates explaining the health and financial consequences to families, as well as broader impacts on the health system and the economy.

Even those who proposed the cuts admitted the life-and-death implications of cutting off coverage for necessary medical treatment after ten doctor visits and restricting patients to six prescriptions per month. The proposed hard cap on doctor visits would apply to kidney dialysis, chemotherapy, and other regular treatments that would run out in weeks, leaving patients to die.

While hearing the staff presentation about the proposed hard cap on physician visits, Senator Leno asked “does this action make us a death panel?” The Committee ultimately did reject that specific proposal, but made other severe cuts to Medi-Cal and Healthy Families.

Committee members agreed that none of the cuts were desirable, but the severity of the budget crisis required sacrifice. Senator Leno sighed about the “breathtaking actions” the Committee was taking right before voting to impose mandatory and higher co-payments on Medi-Cal patients under the poverty level. Senator Huff led his Republican colleagues to vote for Governor Brown’s proposed cuts–even those that Democrats voted to reject–in part because he did not know what the Democrats were proposing to cut instead.

Before considering the proposal to fully eliminate vision coverage for the nearly one million children in the Healthy Families program, Senator Leno even recounted his own “vivid memory” as a 4th grade student, suddenly being able to see again after a visit to an eye doctor and receiving glasses. For that cut, the Democratic majority voted to reject the $11 million proposal to eliminate vision coverage, but to instead restrict coverage for $3 million in budget savings.

Ultimately, even with all the statements of regret, the Senate Budget 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 SENATE BUDGET COMMITTEE:

· Reduce Medi-Cal provider rates, including 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.

· 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 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).

CUTS REJECTED BY SENATE BUDGET COMMITTEE:

· Limit care and coverage for 7.7 million Californians with Medi-Cal coverage including millions of low-income families, seniors, and people with disabilities and chronic illness, including:
o Limit doctor/clinic visits to 10/year.
o Limit prescription drugs to 6 per month (with no exceptions unless for life-saving drugs).
o Establish maximum benefit dollar caps on medical supplies (e.g., wound care, catheters, incontinence supplies) and durable medical equipment (e.g., wheelchairs), impacting 20,000 patients/year.

* Eliminate vision care for nearly 1 million children covered by Healthy Families, including coverage for eyeglasses. (An alternative proposal was adopted to yield partial savings by restricting coverage.)

In discussions with his Republican counterparts, Committee Chair Mark Leno expressed a commitment to reaching the Governor’s proposed reduction target numerically and to following the broad architecture of that proposal. Though Leno estimated that Democrats would reject 10% of Governor Brown’s proposed cuts to “soften the roughest edges”, but he promised to propose alternative solutions, including ongoing cuts to achieve the same amount in savings.

Next Steps

The Senate Budget Committee will continue deliberations today, and the full Assembly Budget Committee will begin hearings tomorrow. The goal is to complete the budget process by early March so that a revenue package and related budget proposals can go to the voters by June 2011.

CALL-IN ACTION: The HHS Network, of which Health Access California is a leader, has been asking Californians to call their state legislative leaders to be a champion for these programs, to reject the worst of the cuts. Click here to start to call legisators TODAY!

DAY OF ACTION: A day of action is scheduled for next week in Sacramento. For more information and to get involved in the HHS Network, contact Jessica Rothhaar at jessicar@health-access.org.

For more information, contact the author of this report, Linda Leu, at lleu@health-access.org. As always, more information on the budget and health reform is available on our website at www.health-access.org.

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