At a Joint Legislative Budget Committee hearing Tuesday, Department of Finance Chief Deputy Director Ana Matosantos laid out Gov. Arnold Schwarzenegger's (R) plans to address the state budget deficit in part by cutting state spending on Medi-Cal and eliminating Healthy Families, the Sacramento Bee reports
Medi-Cal is California's Medicaid program, and Healthy Families is the state's version of the Children's Health Insurance Program (Yamamura, Sacramento Bee, 5/27).
The proposal is intended to help the state cover a fiscal year 2009-2010 deficit now estimated at $24.3 billion. The estimate includes the governor's proposal for a $2 billion reserve fund.
Aides to the governor said they would present plans for an additional $3 billion in cuts by the end of the week (Myers, "Capital Notes," KQED, 5/26).
Health Care Cuts
Schwarzenegger's budget proposal calls for cutting state spending by $247.8 million by eliminating Health Families. The move would result in a loss of about $500 million in federal matching funds (Yi, San Francisco Chronicle, 5/27).
To save $34 million in the upcoming fiscal year, the proposal calls for eliminating Medi-Cal coverage of:
- Dialysis;
- Breast and cervical cancer for women over 65; and
- Nonemergency care for undocumented immigrants (de Sá, San Jose Mercury News, 5/26).
The governor's proposal includes other cuts to Medi-Cal, and KQED's "Capital Notes" reports that many of them would require federal action to avoid losing federal economic stimulus funds ("Capital Notes," KQED, 5/26).
Schwarzenegger also advocates cutting $55.5 million from state spending on the AIDS Drug Assistance Program and other state Office of AIDS initiatives. The cuts would result in:
- AIDS patients bearing more of the cost of their medications; and
- The reduction or elimination of counseling, monitoring, educational and other HIV/AIDS services (San Francisco Chronicle, 5/27).
Democrats Hesitant
Democratic committee members pledged to consider the governor's plan this week, but the Bee reports that many reacted with "expressions of shock" at some of the proposals.
Assembly Budget Committee Chair Noreen Evans (D-Santa Rosa) said it would be more responsible to increase taxes than cut spending so deeply (Sacramento Bee, 5/27).
Sen. Denise Ducheny (D-San Diego) said eliminating Healthy Families coverage for children could result in higher emergency department costs (Young, AP/San Diego Union-Tribune, 5/26).
Assembly member Roger Niello (R-Fair Oaks) said, "I think everybody here would agree, Republicans and Democrats alike, that we would not want to make these drastic reductions that we're going to be making if we didn't have to." He added, "But the unfortunate fact is, we have to" (Sacramento Bee, 5/27).
SEIU Heads to Court
In related news, the Service Employees International Union has filed a lawsuit seeking to block the governor's proposal to reduce the state's contribution to In Home Supportive Services workers wages to $8 an hour. The suit alleges that the cuts would violate federal laws by discriminating against the elderly and disabled (Rothfeld/McGreevy, Los Angeles Times, 5/27).
The state's contribution to IHSS wages was at the center of a recent debate over California's eligibility for federal stimulus money for Medi-Cal (California Healthline, 5/21).