The Schwarzenegger administration released its revised 2006-2007 budget proposal. The $131.1-billion spending proposal released on Friday includes substantial funding for statewide disaster and pandemic preparedness. The budget proposal also allocates funds to increase enrollment in county-based children’s health care initiatives.

Although the state’s fiscal outlook is positive, the budget does not include a long-overdue rate increase for fee-for-service Medi-Cal providers.

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

Disaster and Pandemic Preparedness: The revised budget proposal includes $400 million in one-time funding for disaster and emergency preparedness. This forward-looking plan would help prepare California for a major public health emergency, including pandemic flu, bioterrorist attack, earthquake, flood, or tsunami. Much of the money would go to increase hospital surge capacity, stockpile anti-virals, and pay for medical supplies and equipment, including ventilators and masks for first responders. The proposal would also pay for two self-contained mobile field hospitals and the development of a statewide registry of health professionals.

Children’s Insurance Coverage: The budget proposal includes $23 million to provide health insurance to about 22,000 children on waiting lists for county-based children’s health care initiatives, which serve uninsured children whose families currently earn too much to qualify for federal or state programs.

Medi-Cal Managed Care: The revised budget includes $65.4 million to provide a 6-month, 5 percent rate increase for Medi-Cal managed care plans to “restore the 5 percent provider rate decrease that was imposed in 2003.”

The proposal also includes $61.2 million to increase rates for local Medi-Cal managed care plans (Central Coast Alliance for Health, Community Health Group, Contra Costa Health Plan, Health Plan of San Mateo, Partnership Health Plan of California and the Santa Barbara Regional Health Authority).

Fee-for-Service Medi-Cal : CMA is extremely disappointed that the governor did not include a rate increase for fee-for-service Medi-Cal providers in his revised budget proposal. CMA and its coalition of more than 70 consumer, patient, and provider advocacy groups will continue to push for a 15 percent Medi-Cal provider rate increase in the 2006-07 budget. This long-overdue pay raise is critical to preserving and improving access to care for the state’s most vulnerable populations. There has been just one general Medi-Cal physician rate increase in the last 20 years, and per-patient Medicaid spending by California ranks last among the 50 states.

Click here to read a statement from CMA CEO Jack Lewin, M.D., on the governor’s revised budget proposal.