Budget Cuts at the Poor

From our friends at the Western Center on Law and Poverty:

Governor Brown signed California’s budget on June 30, 2011, retaining many of the deep cuts to core social service programs. While the Legislature now has the authority to pass a budget on a majority vote, a two-thirds super-majority is still required to increase revenue, which led the Governor and Democrat majorities to produce a budget that is largely based on cuts and hopeful revenue assumptions. However, a “trigger” mechanism is included in the budget, meaning that should revenues fall short of projections, additional cuts would automatically go into effect. Trigger cuts would include additional cuts to Developmental Services, In Home Supportive Services, and Medi-Cal managed care health plan rates, among others.

Governor Brown made $23.8 million in accompanying “blue-pencil” line-item vetoes; see details below for poverty impacts. For more budget detail, follow these links: Line-Item Vetoes; Enacted Budget Summary; Enacted Budget Detail Pages.


In total, $1.6 billion was eliminated from Medi-Cal and $30.5 million from Healthy Families. The final health budget included:

  • Mandatory co-payments for all beneficiaries. This includes $3-5 for prescriptions, $5 for doctor and clinic visits, $50 for emergency room visits, and $100-200 for one or more nights in the hospital. These co-pays require federal approval.
  • A cap of 7 doctor or clinic visits per year, unless the visit is deemed “medically necessary” by the provider. This requires federal approval.
  • Elimination of enteral nutrition products for non-tube fed beneficiaries.
  • A cap of $1,510 annually for hearing aids.
  • Elimination of Adult Day Health Care (ADHC), with some funds transferred to transition ADHC beneficiaries into alternative services.
  • Maintaining a 10% rate reduction for Medi-Cal providers.
  • Increasing Healthy Families monthly premiums for children above 133% of the Federal Poverty Level.
  • Increasing Healthy Families co-pays to reflect the same co-pays for Medi-Cal hospital and emergency room visits.
  • Reducing vision coverage in Healthy Families.
  • $448 million in unallocated General Fund reductions to Medi-Cal and Healthy Families.
  • A shift of $860 million from Prop. 63 mental health funding into the Early Periodic Screening Diagnosis and Treatment program, Medi-Cal Specialized Mental Health Managed Care, and mental health services to students in Special Education.
  • Expiration of taxes on Medi-Cal managed care rates and hospital fees that have been matched for federal Medicaid reimbursements.

In addition to the cuts, the final budget reflects the Governor’s May Revise proposal to move all children in the Healthy Families Program to Medi-Cal.  While this was reflected in the state’s spending plan, it is moving on a slower timeframe than originally anticipated.

The Trigger: Should the Governor’s revenue projections fall short, a “Trigger” action would go into effect. Additional cuts would include across-the-board reductions to Developmental Services and In Home Supportive Services, and a 15% rate cut to some Medi-Cal managed care health plans.

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