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Remember the Year of Health Care? Schwarzenegger’s Budget Cuts in Medi-Cal Would Increase Uninsured and Lose More in Federal Aid than it “Saves”

California already spends less in Medicaid than all states except Louisiana and Georgia

By Frank D. Russo

This is not something that makes one’s breast swell with pride about the state of California in the 21st Century. Governor Schwarzenegger has rolled out the “Year of Education” and proposes to cut needed spending, so our educational system will only worsen and the future for our kids will be dimmer. You’ve read about this here and in all newspapers in the state--the resulting pink slips to cherished teachers, stories about other states recruiting those who will not have jobs with these cuts, and the outpouring of parents, kids, teachers, and busineses who need a trained workforce who have been appearing in their local communities where the cuts are felt.

But still within memory of last year’s blockbuster “Year of Health Care” directed and produced by our Governor, his budget would increase the numbers of uninsured in our state--including children--cut hospitals and access to medical care for millions of Californians, and end up costing us more in the loss of Federal dollars than it “saves us.” You’ll be reading more about this as the budget moves forward.

A new report out from the California Budget Project, Governor’s Proposed Health Cuts Would Increase Ranks of Uninsured, Reduce Access, provides this jarring information as we enter the week of the May Revise of the Governor’s proposed state budget with even more cuts predicted on top of this.

This is what they have to say:

“The Governor's Proposed 2008-09 Budget includes sharp reductions to state-funded health coverage programs that provide access to needed health services to more than 7 million Californians. The proposals are designed to decrease the number of Californians covered by Medi-Cal and Healthy Families, reduce access to services for those who keep their coverage, and increase the amounts families must pay. Altogether, the proposals would increase the number of uninsured Californians by more than half a million when fully implemented. The proposals would result in state savings of $1.1 billion, but also would cause California to forgo $1.2 billion in federal matching dollars that could help the state weather the current economic downturn.”

So, if the governor gets his way, we will be shifting Healthy family costs to families, resulting in an estimated 50,000 or more children losing coverage. But it gets worse—for those who still hae coverage, there are increased copayments for such frivolities as prescription drugs, eye exams, and doctor visits to treat illnesses—which will deter these families from getting this care for their kids. But that’s not all—the Governor proposes to reduce payments to managed care plans—by another 5% which will make it harder to find medical care providers who accept Healthy Families coverage and in some counties will leave families without any providers at all. Pretty nifty trick in the year after the year of health care in California—make doctors endangered species and further out of reach for the neediest.

If you need more proof, take a look at this chart showing California spends less per capita on our Medi-Cal payments than all but two states spend in Medicaid. Are we trying to pass Louisiana and Georgia in our race for the bottom?

A little background from the CBP report: Medi-Cal is California's version of Medicaid. This is a federal-state health insurance program for low-income individuals who cannot afford or who do not have access to private coverage. Medi-Cal provides health care services to 6.6 million low-income children, parents, seniors, and people with disabilities. Medi-Cal insures about one out of three children in California, covers the majority of people living with AIDS. It also pays for two-thirds of all nursing home care, fills in gaps in Medicare coverage for low-income people who are elderly and people with disabilities, and is an important source of funding for public hospitals and other safety net providers. The state and federal governments each pay about 50 percent of most Medi-Cal costs.

Are you proud that these are the folks on whose backs the California budget is proposed to be balanced?

California’s low reimbursement rates limit the number of providers who accept Medi-Cal patients. A few morsels from the California Budget Project report:
• Medi-Cal payments to physicians are 59 percent of what Medicare pays.

• More than nine out of 10 primary care physicians (93 percent) and 100 percent of rural medical and surgical specialists surveyed state that Medi-Cal reimbursement rates are inadequate.

• Fewer than six out of 10 primary care doctors in California’s urban areas (56 percent) had any Medi-Cal patients in their practice in 2001, and fewer than half of some specialists – such as those practicing internal medicine and endocrinology – participated in Medi-Cal.

And then there’s the sneaky proposal buried in the Governor’s budget proposal to increase paperwork requirements and make them stricter than those of all the states except North Dakota—and to kick off a number of families and kids by this hurdle. Take a look at this chart from the CBP report:

Not only is there a cost of processing all this paperwork to the state and counties—and a cost of re-enrolling those kicked off the program, this will worsen the health of those children and adults who do not meet the new requirements, costing us more in the long run. In 2001, California began to provide “continuous eligibility” to children for a year in order to reduce the number of uninsured children and promote continuity of care. People who are sporadically insured are less likely to get timely access to care.

Remember those going backwards commercials the Governor ran against Phil Angelides in the 2006 election? Who’s walking backwards in education, health, and so many other ways on terra firma here in California while those who go out to sea in their yachts get special tax dispensations?

Posted on May 12, 2008

Comments

Public Policy Institute of California has been talking about this problem for YEARS. Below is part of the press release talking about this BEFORE Arnold was in office.

SAN FRANCISCO, California, June 16, 2005 — Over the next ten years, state Medi-Cal costs are projected to grow at a faster annual rate than state revenues, according to a study released today by the Public Policy Institute of California (PPIC). The analysis also reveals that most Medi-Cal spending is concentrated among a small number of recipients. This means policymakers face the challenge of containing the costs of these very expensive cases – which are dominated by elderly and disabled enrollees who require nursing home or hospital stays.

In 2003, 5 percent of fee-for-service Medi-Cal enrollees incurred more than 60 percent of all costs. Even if expenses were cut in half for the 75 percent of enrollees who cost the least, the total savings would be less than 3 percent. For substantial savings, the analysis finds that the state would have to lower the cost of long-term care for the elderly, services for the disabled, and hospital stays for the seriously ill.

Only three strategies to address it, "The state can raise taxes, cut Medi-Cal spending, or take money from other programs and move it into Medi-Cal."

I sure don't want new taxes. So you can cut or move money. We are out of money, CA is spending it faster than we make it. So what to do? What to do?

Posted by: Jeff at May 12, 2008 05:06 PM

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