CHA Blog

California’s budget situation is growing worse with the budget deficit now projected at over $24 billion. Yesterday, on May 26th, Governor Schwarzenegger proposed over $5.5 billion in new massive, permanent spending cuts – all in addition to the cuts he proposed on May 14th. He will also propose over $3 billion additional cuts on Friday, May 29th. No action on the Governor’s proposals are expected until at least mid June.

Legislative analysts have said that even if California adopted all of the Governor’s proposed cuts, the budget deficit for the 2010-2011 State Budget year would still be over $15 billion.

Included in yesterday’s proposed reductions is the proposed elimination of the state’s welfare to work program, CalWORKS, that serves over 500,000 people, including many with special needs, and critical senior programs. The Governor also proposed elimination of several essential community-based senior programs under the Department of Aging including the Multipurpose Senior Services Program (MSSP). 

The Governor also proposed the elimination of the Healthy Families program, which provides with matching State Children’s Health Insurance Program (SCHIP) federal funds, health insurance for over 900,000 children from low income families

Also proposed are even deeper cuts to Medi-Cal to slow the growing use of services, eliminate certain Medi-Cal state funded only programs, and cut state funds for the Community Care Licensing program. See below for details.

The non-partisan Legislative Analyst Office (LAO), who works directly for the Legislature and provides analysis, recommendations and review of budget issues, estimates that if California’s budget shortfall and cash flow crisis is not resolved soon, the State may not be able to pay its bills after July 1st.  

Below is a summary of several of the Governor’s additional cuts proposed on May 26th. This summary is edited from the California Disability Community Action Netork’s (CDCAN) latest alert.

Summary of Governor’s Proposed Cuts as of 5/26/09 

Multipurpose Senior Services Program (MSSP) – ELIMINATE

Proposed elimination of the Multipurpose Senior Services Program and senior Community-Based Services programs.  Funding for Adult Day Health Care would continue in support of the California Department of Aging’s responsibility for Medi-Cal certification of providers.

• 2009-2010 State Budget Year:  $24.2 million cut (state general funds)
• 2010-2011 State Budget Year: $35.3 million cut (state general funds)

Mental Health Managed Care Services and Early Periodic Screening, Diagnosis and Treatment Services (EPSDT) – REDUCE FUNDING

Proposes to reduce funding for these services but would retain funding for Mental Health Managed Care services for acute inpatient services and prescription drugs for Medi-Cal enrollees only.  EPSDT reduction would result from eliminating State general fund money for county programs identified as new programs in 2007-2008 and 2008-2009.

• 2009-2010 State Budget Year:  $92 million cut  (state general funds)
• 2010-2011 State Budget Year:  $92 million cut (state general funds)

Medi-Cal – ADDITIONAL $250 MILLION CUT

The Governor has proposed an additional cut of $250 million to the Medi-Cal program, adding to the already $750 million of cuts proposed in the May 14th budget. This means a total of $1 billion in unspecified cuts to Medi-Cal, through a negotiation with the federal government to cut eligibility. If approved, these cuts could deny coverage to nearly 1 million California children, parents, seniors and people with disabilities. 

Medi-Cal – ELIMINATE Certain State Only Programs

Proposes to eliminate certain “state-only” programs that don’t get federal funds, thus denying coverage to specific populations for breast and cervical cancer treatment, postpartum care, dialysis, and non-digestive nutrition. 

• 2009-2010 State Budget year:  $34.4 million cut (state general funds)
• 2010-2011 State Budget year:  $57.8 million cut (state general funds)

Medi-Cal – SUSPEND Skilled Nursing Facility Costs of Living Increase 

Proposes to suspend an estimated 5% cost of living increase effective August 1, 2009 for skilled nursing facilities.

• 2009-2010 State Budget year: $67.1 million cut (state general funds)
• 2010-2011 State Budget year: $109.8 million cut (state general funds)

Community Care Licensing – ELIMINATE STATE FUNDING

Proposes to eliminate state funding for the Community Care Licensing program. According to the Governor, the reduction would be off-set by a fee increase to maintain “critical health and safety standards.”

• 2009-2010 State Budget Year:  $19.5 million cut (state general funds)
• 2010-2011 State Budget Year:  $39 million cut (state general funds)

AIDS Drug Assistance Program – REDUCE FUNDING

Proposes to reduce funding for the AIDS Drug Assistance Program (ADAP) and for other Office of AIDS programs.  Specific proposals include: expanding client cost-sharing and limiting the formulary in the AIDS Drug Assistance Program; reducing and eliminating other HIV/AIDS programs such as HIV Counseling and Testing, Epidemiologic Studies/Surveillance, Therapeutic Monitoring Program, and Home and Community-Based Care.

• 2009-2010 State Budget Year:  $55.5 million cut (state general funds)
• 2010-2011 State Budget Year:  $58.9 million cut (state general funds)

CALWORKS Program – ELIMINATE

Proposes to eliminate California’s “welfare to work” program formally called the California Work Opportunity and Responsibility to Kids program, that includes thousands of children and parents with special needs.  Program serves over 500,000 people.

• 2009-2010 State Budget Year:  $1.31 billion cut (state general funds)
• 2010-2011 State Budget Year:  $1.77 billion cut (state general funds) 

Healthy Families Program - ELIMINATE

Proposes to eliminate funding for this program and assumes that the program phases out “as quickly as possible” after providing notice to those persons in the program.  Program serves over 900,000 children.

• 2009-2010 State Budget Year:  $247.8 million cut (state general funds)
• 2010-2011 State Budget Year:  $322.4 million cut (state general funds)

Community Clinic Programs — ELIMINATE FUNDING

Proposes to eliminate state funding for Indian Health, Seasonal and Agricultural and Migratory Workers, Rural Health Services Development, and Expanded Access to Primary Care (EAPC).

• 2009-2010 State Budget Year:  $34.2 million cut (state general funds)
• 2010-2011 State Budget Year:  $34.2 million cut (state general funds)

Submit Your Comments!

For the first time, the Budget Conference Committee is receiving public comments on these proposals. If you’re not able to come to a hearing in person, submit your written comments to: 

Assemblymember Noreen Evans, Chair

Assembly Budget Committee – Budget Conference Committee

State Capitol

Sacramento, CA 95814

Be sure to include your complete name and address.  Also send a copy to the vice chair of the Budget Conference Committee, Senator Denise Ducheny (she is also the chair of the Senate Budget and Fiscal Review Committee).

Sen, Denise Ducheny, Chair

Senate Budget and Fiscal Review Committee

State Capitol

Sacramento, CA 95814

Earlier this year President Obama declared his resolution to enact comprehensive health care reform by the end of 2009. (Read a live blog from the event here) The Administration is conducting forums, igniting conversations, ideas and solutions with health care leaders, professionals, employers, academic researchers, and rural and urban communities across the country. Each community, geographic region, ethnicity, gender, age group have their own experiences, challenges, opinions and ideas on how to reform our health care into a system that works for all. Part of the conversation is highlighting what doesn’t work. For example, the typical elderly couple may have to save nearly $300,000 to pay for health costs not covered by Medicare alone (see The Costs of Inaction at HealthReform.gov). Also, in the U.S. Health and Human Services Department’s 2008 National Healthcare Quality and Disparities Reports, a few highlights on what’s not working include:

• 40% of recommended care is not received by patients.
• Only 40% of diabetic patients received 3 recommended diabetic preventive exams in the past year, and this rate has not improved over time.
• Disparities in health care persist. Minority patients receive disproportionately poor care compared to Caucasian patients. At least 60%of quality measures have not improved for minorities compared to Caucasians in the past 6 years. (See our recent article on health care disparities in Medicare beneficiaries’ end-of-life-care.)
• 1 in 7 hospitalized Medicare patients experience one or more adverse event.
• Only half of obese adults and children are given advice to exercise more and eat a healthy diet.
• 7 out of 10 adults with mood, anxiety, or impulse disorders received inadequate treatment or no treatment at all.
• Patient safety measures have worsened by nearly 1% each year for the past 6 years.

In taking a good look at what is currently happening – what is working and what isn’t – we have a foundation to reshape our current system. 

To facilitate this reform, the Obama Administration has a website, HealthReform.gov. Here you can find a wealth of information, perspectives and reports on what’s happening in health care nationally and locally. 

In addition, KQED’s Healthy Dialogues program recently launched a blog, Healthy Ideas: Californians Weigh In on Health Care Reform, where a group of thought-leaders, health care professionals and reform advocates share their ideas on how best to reshape our health care, from a California perspective. Our state has over 6.6 million uninsured people and over 4.4 million people on Medicare; both of these groups are larger in Californina than in any other state in the nation. California’s input in shaping our health care reform is unique and essential for Washington to hear. 

New articles are posted each week and are open for public comments. You can visit the blog and add your thoughts, ideas and contributions to reshaping the health of our nation. Healthy Ideas is an 8-week project ending July1, 2009.  Article topics include:

• covering the uninsured; 
• eliminating health disparities; 
• improving quality access; and 
• slowing costs. 

Our country’s health care reform is projected to lower costs and ban insurance companies from denying coverage based on pre-existing conditions.  Much is on the table for discussion, and the goal is to offer all Americans access to affordable quality health care .

For more information on our nation’s health care reform, visit:

• HealthReform.gov — See what other Americans are saying about health care reform, read research findings, and find the latest news on reform from the Administration.
• White House Agenda on Health Care — Describes the Administration’s goals for health care reform.

For the first time in more than three decades, Social Security beneficiaries will not get any increase in their benefits next year, according to forecasts from the Obama Administration and Congressional Budget Office. This will affect over 49 million Americans receiving Social Security benefits nationwide, 4.5 million of whom live in California. 

Social Security typically increases benefits annually to keep up with rising prices of consumer goods. This year, in 2009, the increase was 5.8%, and beneficiaries have received an automatic increase every year since 1975. The current economic recession, however, coupled with other factors such as decline in energy prices, has resulted in low inflation, which likely will result in the lack of a cost-of-living increase for at least the next two years, possibly three. The Obama Administration and CBO estimate a modest 0.8-1.4% increase for 2013.

Federal law mandates that most Social Security beneficiaries cannot have their Medicare Part B premiums increase by more than the dollar amount of the cost-of-living increase in their Social Security checks. Since there will be no COLA increase, about 75% of Medicare beneficiaries’ Part B premiums will remain the same ($96.40) for 2010. 

However, about 25% of Medicare beneficiaries are not protected by this law and could see their premiums increase. CBO estimates the basic premium will rise to $119 next year, $123 in 2011 and $128 in 2012 for those not protected by the law. Beneficiaries who aren’t protected by this law include:

• New enrollees in Part B (because they did not have the premium withheld from their Social Security benefit in the prior year),
• Higher-income enrollees who are subject to an income-related premium (see our chart on Part B Premiums for more info), and
• Individuals who do not have the Part B premium withheld from their Social Security checks, nearly all of whom have their premiums paid by Medicaid (Medi-Cal in California).

In addition, millions of beneficiaries also may experience higher premiums for drug coverage under Medicare Part D because there are no laws that prevent such an increase. If such an increase in Part D premiums does occur, beneficiaries will see their Social Security checks reduced for the first time.

For more information, see the following articles from the Congressional Budget Office (CBO):

• Why CBO Projects No Social Security COLA for 2010 to 2012 Under Current Law
• Effect of a Zero Social Security COLA on Part B Premiums in Medicare

Four of our Medicare fact sheets are now also available in Vietnamese:

1. Original Medicare: An Overview (PDF)
2. 2009 Premiums, Co-insurance & Deductibles (Original Fee-for-Service Medicare) (PDF)
3. Medicare Part D: An Overview (PDF)
4. Extra Help for Part D Costs (PDF)

Several other fact sheets are also available in Chinese, Spanish, Russian and Korean. See our fact sheet page to download.