No Significant Health Care Cuts in Revised Budget Proposal
[Posted 05/16/05]

The Schwarzenegger administration has released its revised2005-2006 budget proposal. The spending proposal does not cut Medi-Cal physician reimbursement or contain any direct cuts to Medi-Cal eligibility or benefits.

Despite CMA opposition, the budget proposal released on Friday by the governor continues to propose expanding the Medi-Cal managed care program and requiring monthly premiums from more than half a million beneficiaries at or above the federal poverty level.

Below are details of the budget proposal as it relates to health care.

Medi-Cal Managed Care: Despite CMA’s strong and continued opposition, the governor stuck with his plan to expand the Medi-Cal managed care program. The plan would expand Medi-Cal managed care into 13 new counties, affecting more than 250,000 enrollees. The proposal would also require an estimated 550,000 new elderly and disabled beneficiaries to enroll in the managed care program.

Although CMA does not oppose the idea of expanding Medi-Cal managed care, the association is concerned that the governor’s plan as currently written would disrupt long-standing physician-patient relationships, further restrict patient access to specialists, and place unsustainable financial burdens on physicians who provide care to children, the disabled, and the elderly poor.

Monthly Premiums: Despite strong opposition from CMA and others, the administration refused to back away from its plan to require 550,000 Medi-Cal patients to pay monthly premiums beginning in FY 2006. Premiums would be $10 for adults and $4 for children, with a family cap of $27. Premiums would not be imposed on beneficiaries with family incomes below the federal poverty level ($16,090/year in 2005 for a single mother and two children) or elderly and disabled beneficiaries with monthly incomes less than the Supplemental Security Income/State Supplementary Payment (SSI/SSP) program levels ($812/month for an individual, $1,437 for a couple).

CMA is concerned that the new premium program would reduce enrollment, forcing people to delay care and not get checkups, while increasing use of emergency rooms by the uninsured. The administration has estimated that 110,000 beneficiaries would lose coverage for failure to pay premiums. About 6.6 million Californians are eligible for Medi-Cal.

One-Time Public Health Funding: Due to an increase in tobacco tax (Proposition 99) funds, the revised budget proposal augments funding for public health programs including tobacco control and smoking prevention ($4 million) and asthma management ($4 million).

Steve Thompson Loan Repayment Program: Despite a Senate budget subcommittee recommendation to provide $3 million for the Steve Thompson Physician Corps Loan Repayment Program, the governor hasn’t allotted funding for this program, which repays loans for young physicians who agree to practice in medically underserved communities. CMA will continue to work with the administration to find a permanent funding source for this very important program.

Contact: Lisa Folberg, 916/444-5532 or lfolberg@cmanet.org.