Governor’s plan: Two million would lose health care

What a difference a year makes. It was January of last year that Gov. Arnold Schwarzenegger agreed to a health care reform effort that would raise the revenues needed to secure coverage for all Californians, mostly by expanding public programs like Medi-Cal and Healthy Families.

Now the same Governor is proposing reckless cuts that would deny over two million Californians health coverage—the most profound rollback of coverage in state history. In attempting to close California’s over $21 billion budget deficit, the Governor has ruled out considering taxes or other revenues to protect the very same programs he was seeking to expand a mere year and a half ago.

Astonishingly, he has proposed full elimination of the Healthy Families program, the much-lauded state child health insurance program that covers nearly one million low-income children just over the poverty level. California would be the only state in the nation that doesn’t provide such coverage to these children.

An even bigger proposed reduction would seek to cut Medi-Cal by $1 billion, largely by eligibility cuts negotiated with the federal government. Among other proposals, the Governor wants to revisit previous cuts to the eligibility and enrollment—but which would disqualify California from getting billions of increased Medicaid dollars during the period of economic recovery package (the American Reinvestment and Recovery Act of 2009). While the unspecified reduction is often talked about as the Governor asking for more “flexibility,” the Governor is hoping to get federal permission for his previously proposed cuts, which would undo a decade of progress and deny coverage to nearly a million more California children, parents, seniors and people with disabilities. The cuts could include:

–The elimination of coverage for around 430,000 low-income working parents between 72% and 100% of the federal poverty level, or $13,183-$18,310 for a family of three;

–The imposition of additional paperwork burdens for children and adults with Medi-Cal coverage, with the intent to have around 470,000 children fall off coverage over the course of three years.

–The significant increase in cost sharing for over 70,000 low-income seniors and people with disabilities on Medi-Cal, leaving them functionally without coverage.

Even these Medi-Cal cuts, totaling almost 1 million Californians, would only provide $700 million in state savings—and that’s under full implementation, which takes a few years. That means that barring alternatives, other cuts will need to be made. We hope that our federal representatives do not allow such devastating cuts to our health system and economy, cuts that would undermine President Obama’s goal of health reform this year.

Not that the Governor hasn’t already proposed additional cuts, to private hospitals, community clinics, the AIDS drug assistance program, care for legal immigrants, public health, primary and preventative services, and the “high-risk” pool for those denied by everyone else for pre-existing conditions. The Governor threatens to yank away the safety-net at exactly the time Californians need it.

Most of these health cuts come with a heavy price beyond the significant life-threatening medical consequences. Under the stimulus package, California’s Medi-Cal program is getting an enhanced 39:61 match from the federal government, as opposed to the normal 50:50 match. That means for every dollar we cut from Medi-Cal, we lose over $1.60 in federal funds, and over $2.60 into our health system and economy. Healthy Families provides an even more generous 2:1 match, meaning we lose $2 for every $1 we cut–$3 out of our health system. There’s no tax or revenue source that would have anywhere close to the economic impact as cuts in these programs.

As Health Access details in reports released last week (available on the front page of our website at, these permanent policy changes would not just deny or eliminate Medi-Cal coverage for nearly two million Californians, but would significantly impact the state’s entire healthcare system on which we all rely on–increasing the number of uninsured at a time when over a half-million Californians have already lost coverage due to the economic recession and increased unemployment.

The Governor helped create this budget crisis by cutting billions of dollars of budget revenues by lowering the vehicle license fee upon entering office. At the very least, he should clean up the mess he helped create by establishing new, permanent revenues to prevent the worst of the cuts sustainably. Otherwise, these cuts will be his health care legacy, the reverse of what he sought a year ago. He was willing to support billions in needed revenues to appropriately expand Medi-Cal and Healthy Families—we now need him to revisit those revenue proposals and others to save these programs from termination.

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