California Budget Puts Some Health Care Issues on Hold

by George Lauer, California Healthline Features Editor

TOPIC ALERT:

California's budget agreement announced and approved last week puts a couple hotly contested health care issues on hold, making some stakeholders nervous and angry, but for the most part, this year's balancing act is kinder to health and social services than any spending plan over the past half decade, according to legislators and veteran Sacramento watchers.

"I would take this budget over the last five eight days a week," said Darrell Steinberg, Senate President Pro Tempore and one of the budget's main architects.

Steinberg, a Sacramento Democrat long considered a champion of health care in several  camps, acknowledged the budget didn't include all the health care spending advocates hoped it would -- particularly for Medi-Cal provider reimbursement and a certain type of autism therapy. Medi-Cal is California's Medicaid program.

"But overall I'm very pleased with this budget. You have to have some perspective. In 2009 we faced a $42 billion deficit in a $100 billion budget. It was almost half the budget," Steinberg said.

"Crafting a budget among 120 elected lawmakers and the governor is an art of compromise," Steinberg said in an email response to California Healthline questions. "Our goal is to get as much done as we can, and then work toward the next steps to deliver the help Californians need."

Early and in the Black

A week early, in the black and salting some cash away for a rainy day, California's $96.3 billion budget for 2013-2014  -- and consequently the mood in Sacramento -- is markedly different than recent years. For the past several Junes, offices organized betting pools to predict how late the budget would be and how deeply in debt the state would fall.

Thanks to a new tax approved by voters last fall and a recovering economy, the outlook is much brighter this June. The biggest winners in the post Proposition 30 budget are the K-12 school system and low-income working Californians without health insurance. Schools get more money and, perhaps more importantly, a new funding formula. Uninsured Californians who earn too much to qualify for Medi-Cal but not enough to buy health insurance will benefit from the expansion of the state's Medicaid program. Democratic legislators and Democratic Gov. Jerry Brown agreed to grow the Medi-Cal program as much as possible under the Affordable Care Act.

But money in this year's budget to pay for Medi-Cal expansion is ironically tempered by a 10% cut in pay for doctors, hospitals and other providers who treat Medi-Cal beneficiaries. Legislators and the governor decided to leave in place a deep cut made in one of the particularly bleak budget years -- 2011.

"The Medi-Cal rate issue is a very serious access issue," Steinberg said during a budget discussion on KQED radio last week. "You can provide all the insurance you want but if there aren't enough providers to be able to care for people, they're not going to get the health care that they need."

Health care advocates and organizations, including the California Medical Association, the California Hospital Association and the California Pharmacists Association, urged legislators to use higher revenue predictions in the budgeting process as a way to give the state leeway to repeal the 10% cuts made two years ago. Providers and consumer advocates predict that California -- already one of the lowest-paying states in the country for Medicaid services -- will have a hard time recruiting enough providers for the current 7.6 million Medi-Cal beneficiaries, let alone some 1.5 million more under expansion.

Steinberg said this year's balanced budget will give the state a better chance to increase Medi-Cal payments down the road.

"Being able to find the room to compensate doctors and pharmacists and hospitals more adequately is something that we ought to look to do in the future. We have a better chance to do that with the way we handled this year's budget than if we had taken the higher budget revenue estimate and spent more," Steinberg said.

Mental Health, Dental Spending Increased

The budget increases spending for mental health programs and adult dental coverage in Medi-Cal. The plan calls for $206 million to improve mental health care services, including $142 million in one-time general fund money in the coming fiscal year.

It also calls for $16.9 million this year and $77 million the following fiscal year to help partially restore Denti-Cal benefits for adults. Denti-Cal is California's Medicaid dental program.

Both are considered victories for Steinberg, who has been a leader for years in efforts to increase mental health and dental coverage.

"Three million people without dental insurance -- low-income people, mostly working -- are now not going to have to show up at an emergency room to deal with a root canal or abscessed tooth," Steinberg said.

"And mental health, which is always at the bottom of the funding priority list is now at the top with $142 million to build 2,000 crisis stabilization and residential beds so that people don't have to linger in emergency rooms or in jails or on the streets when they're living with a serious mental health issue," Steinberg said.

Steinberg in 'Sophie's Choice Position'

Earlier this month, Steinberg was named an "Autism Hero" by the Autism Health Insurance Project for his efforts in getting insurers to cover a particular kind of autism treatment -- applied behavior analysis -- known as ABA therapy. He has had some success in legislating that private insurers should pay for ABA therapy but his efforts to get the state to do the same fell short last week in budget negotiations.

Advocates in the autism community lobbied legislators to include money in the budget to pay for the treatment no longer covered under subsidized care since the state began dismantling the Healthy Families program, California's Children's Health Insurance Program.

"I feel like the governor put Steinberg in a Sophie's Choice position and that was just not fair," said Kristin Jacobson, president and co-founder of Autism Deserves Equal Coverage. She said not covering ABA therapy "is absolutely penny wise and pound foolish." She said new research shows about one in 50 school-age children in California has some form of autism -- about 2%. The state's decision not to support treatment for "something as serious and as big a public heath crisis as autism shows fundamental lack of understanding,"

Autism advocates said they appreciate Steinberg's efforts "but he's trying to carry the load almost by himself. The rest of the Legislature and the governor's office -- particularly the governor's office -- need to understand the importance of this crisis." Jacobson said.

Steinberg said he'll keep trying.

"Unfortunately this year, there simply wasn't enough room in the budget to fund ABA therapy in Medi-Cal for kids with autism spectrum disorder. I will not give up the fight, however. ABA therapy is the coin of the realm to help these children lead productive lives, and it's at the top of my list to get done next year," Steinberg said.


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