Medi-Cal funding targeted in new bills

A move to capture billions of dollars in federal stimulus money for health care has begun in the Legislature, where Democrats hope to fend off potential Republican opposition with special-session legislation that requires only a simple-majority vote.

At stake is at least $10 billion, perhaps more, that is expected to flow to Medi-Cal, California's health care program for the poor. Medi-Cal, financed with a mix of state and federal money, has a $38 billion budget and serves 6.7 million people.

But California can't get the money – which could be $11.23 billion over 27 months — unless it agrees to make changes in Medi-Cal eligibility rules.

The current rules, controversial requirements that were adopted last year, require parents to formally reaffirm their children's eligibility every six months in order to assure they receive care. The move was seen as a way of saving the state money, an estimated $25 million the first year, $92 million later and still more in years down the line.

This week, Sen. Elaine Alquist, D-San Jose, authored legislation, SB26 3x that would keep the coverage continuous for 12 months, instead of six. Her special-session bill is intended to meet the demands of the federal government that California loosen its eligibility requirements as a condition of receiving the money. There are essentially two conditions attached to the funds — the state is not allowed to rollback earlier eligibility requirements and the state can't take money from the counties.

The money comes from the $787 billion economic stimulus package that President Obama signed last month.

Democrats control both the Senate and Assembly, but lack the two-thirds votes to approve the state budget and urgency bills that take effect immediately. But the Alquist bill could be approved in a special session with a simple majority vote and then take effect 90 days after it was signed into law. A special session already exists targeting the state's fiscal problems.

Gov. Schwarzenegger is all but certain to sign the legislation: Last December urged then-President-elect Obama to consider increasing California's percentage of funding for Medi-Cal dollars.

Alquist also has put together a regular-session bill, SB337, which would require a two-thirds vote to take effect immediately. An initial Rules Committee hearing on the bill was canceled and rescheduled for next week. Similar legislation exists in the Assembly.

The rules must be changed and in place by July 1 in order for California to qualify for the money. If the bill was approved and signed immediately, it would take effect in the first week in June.