Twelve Key Health and Human Services Issues in the 2015-16 Budget Debate: Which Way Forward?

With just two weeks remaining until the Legislature’s June 15 deadline for passing a budget bill, state policymakers are at odds over whether — and by how much — California should boost funding for an array of health and human services in 2015-16, the fiscal year that begins this coming July 1.

Relying on projections from the Legislative Analyst’s Office, lawmakers assume that the state will receive about $3 billion more in revenues in 2015-16 than Governor Brown estimates. In separate budget plans adopted last month, the Assembly and Senate each committed to using a large share of these additional dollars to strengthen services and supports that are largely targeted to individuals and families with low incomes. In some cases, the two houses adopted a unified position that conflicts with the Governor’s approach. In other cases, the Assembly and Senate are divided. These differences will be aired and ironed out through the two-house budget conference committee process that gets under way today.

This blog post looks at a dozen significant issues on which state policymakers have staked out divergent positions — and the key policy questions that are on the table as lawmakers and the Governor move toward finalizing the 2015-16 state budget package.*

Strengthening Services and Supports for Families With Children

CalWORKs is the cornerstone of California’s services and supports for families with low incomes, providing modest cash assistance while helping parents find and keep jobs. In addition, the state’s early care and education system provides access to affordable child care and preschool for many eligible children and their working parents. Together, these supports and services are essential to fostering families’ economic security as well as ensuring our state’s future prosperity. Yet, recession-era cuts to CalWORKs and early care and education remain in place, leaving many families in precarious circumstances as they try to make ends meet during this uneven economic recovery.

Key questions in this year’s budget debate include whether state policymakers will:

  • Boost CalWORKs cash assistance? State policymakers made deep cuts to CalWORKs grants during and following the Great Recession and, beginning in 2010-11, eliminated the annual cost-of-living adjustment (COLA) for grants. Despite the modest increases included in the two most recent state budgets, CalWORKs cash assistance remains below the deep-poverty level — 50 percent of the federal poverty line — hampering families’ ability to afford adequate housing and other basic necessities. The Assembly provides a COLA for CalWORKs grants effective January 1, 2016. The Senate and the Governor do not address this issue.
  • Repeal the CalWORKs “Maximum Family Grant” rule? This rule denies additional cash assistance for any child who is conceived and born while the family is receiving aid. Research shows that this two-decade-old rule, which is also known as a “family cap,” doesn’t affect women’s decisions to have children. Instead, it pushes families deeper into poverty by denying additional support to newborns and their families. Both the Assembly and the Senate propose to repeal the family cap rule, effective October 1, 2015. The Governor does not address this issue.
  • Expand efforts to move CalWORKs families out of homelessness and into stable housing? The state budget package for the current fiscal year (2014-15) included $20 million for a new Housing Support Program designed to move homeless CalWORKs families into housing. The Assembly provides $30 million on top of the $20 million already budgeted for these efforts in 2015-16. Neither the Senate nor the Governor provides an increase.
  • Increase support for early care and education? State policymakers substantially reduced funding for subsidized child care and preschool during and following the Great Recession. Despite a modest funding increase included in the most recent state budget, annual support for early care and education slots is roughly $1 billion below the 2007-08 level, after adjusting for inflation. Both the Assembly and the Senate boost state support for child care and preschool by hundreds of millions of dollars in 2015-16, with the Assembly’s proposed increase ($605 million) nearly double the Senate’s ($330 million). The Governor makes only minor new investments in early care and education.

Strengthening Services and Supports for Seniors and People With Disabilities

Historically, California has funded a robust set of services and supports for seniors and people with disabilities. These include Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants; personal care and domestic services provided through the In-Home Supportive Services (IHSS) Program; and community-based services that assist Californians with developmental disabilities. State policymakers reduced funding for these services and supports in order to help close budget shortfalls during and following the Great Recession.

Key questions in this year’s budget debate include whether state policymakers will:

  • Increase the state (SSP) portion of SSI/SSP grants? State policymakers cut the SSP portion of the grant to the minimum level allowed by federal law and, beginning in 2010-11, eliminated the annual state COLA. These changes pushed SSI/SSP grants for individuals below the poverty line, making it harder for seniors and people with disabilities to afford basic necessities, such as housing and food. (Unlike CalWORKs families, SSI/SSP recipients are not eligible for federal food assistance.) The Assembly provides a state COLA to the SSP portion of the grant effective January 1, 2016. The Senate and the Governor do not address this issue.
  • Implement new rules affecting home care workers regardless of the outcome of pending federal litigation? In 2013, the federal Department of Labor (DOL) issued new regulations mandating overtime pay for home care workers and requiring that these workers be paid for time spent in transit between multiple consumers, at medical appointments, and in mandatory trainings. These new rules generally apply to IHSS workers as well as to individuals who provide in-home care to people with developmental disabilities. California was set to implement these new rules this past January, but a federal court prevented the DOL regulations from taking effect. As a result, the Governor delayed implementing the rules in California as allowed by current state law. Although this issue remains under judicial review, California could implement these rules regardless of what the court ultimately decides. Both the Assembly and the Senate propose to implement the rules in 2015-16 notwithstanding the pending litigation, although their actions differ in certain details. The Governor presumes the current delay will continue pending a final court decision and that the new rules would be implemented in California only if the courts uphold the DOL regulations.
  • Boost payment rates for community-based services provided to people with developmental disabilities? Rates for a wide array of such services have not been increased since 2006. Providers and advocates argue that this rate freeze, along with various policy changes, has reduced both the availability and the quality of community-based services and supports that people with developmental disabilities need in order to thrive. The Assembly provides a 10 percent across-the-board rate increase phased in over two fiscal years, beginning on January 1, 2016. The Senate provides a 10 percent rate increase for selected services and a 5 percent increase for transportation services in 2015-16. The Governor does not address this issue.

Strengthening Health Care Services

Since the adoption of federal health care reform in 2010, California has been a leader among states in expanding access to affordable health care coverage for residents with low or moderate incomes. Yet, despite the state’s successes to date, significant gaps remain in California’s system of public health care coverage. Cuts that state policymakers enacted to help close budget shortfalls during and following the Great Recession remain in effect. Moreover, state law generally prohibits undocumented immigrants who live, work, and pay taxes in California from signing up for publicly funded health care coverage, including through Medi-Cal, California’s Medicaid program for low-income residents. Because of these restrictions, many undocumented immigrants in California lack access to affordable coverage.

Key questions in this year’s budget debate include whether state policymakers will:

  • Allow Californians with low incomes to sign up for comprehensive Medi-Cal coverage regardless of their immigration status? Currently, California allows undocumented immigrants to sign up for comprehensive — or “full-scope” — Medi-Cal coverage only if they qualify for a special federal status that allows them to temporarily live and work legally in the US without fear of deportation. Many undocumented immigrants with low incomes currently do not qualify for this status. As a result, they’re excluded from Medi-Cal coverage even though they meet the program’s income guidelines. The Senate provides $40 million as part of a larger effort to expand Medi-Cal coverage to income-eligible Californians regardless of immigration status. (This action assumes that the provisions of Senate Bill 4 will be enacted into law. SB 4, as amended just a few days ago, would make undocumented children automatically eligible for full-scope Medi-Cal and would allow undocumented adults to enroll in Medi-Cal to the extent that sufficient funding is available.) The Assembly and the Governor do not address this issue.
  • Roll back the 10 percent cut to Medi-Cal payments, including for services provided by dentists and certain types of doctors? State lawmakers and the Governor approved this cut in 2011, and implementation began in 2013 following two years of litigation in which the state ultimately prevailed. Providers and advocates argue that this rate cut discourages providers from participating in Medi-Cal or accepting new patients. The Assembly fully phases out the 10 percent cut over the next two fiscal years, beginning on April 1, 2016. The Senate rolls back this cut for dentists only. The Governor does not address this issue.
  • Restore the full range of dental benefits for adults enrolled in Medi-Cal? State policymakers eliminated Medi-Cal dental benefits for adults in 2009, but reinstated some dental services beginning in May 2014. The Senate fully restores dental services for adults effective October 1, 2015. The Assembly and the Governor do not address this issue.
  • Reinstate Medi-Cal benefits that were eliminated in 2009? In addition to dental services, state policymakers eliminated several other Medi-Cal benefits that are not required by federal law: acupuncture, audiology, chiropractic, incontinence creams and washes, optician/optical lab, podiatry, and speech therapy. The Assembly and the Senate propose to reinstate all of these benefits in 2015-16, with the exception of chiropractic services. The Governor does not address this issue.
  • Re-establish school-based dental services? The California Children’s Dental Disease Prevention Program ceased operating after losing all General Fund support — roughly $3 million — in 2009. This program provided school-based dental services, such as sealants and fluoride rinses, to more than 300,000 primarily low-income children each year. The Assembly provides $3.2 million to re-establish these school-based oral health services. The Senate and the Governor do not address this issue.

— Scott Graves

* This blog post’s focus on divergent positions means that the discussion does not address proposals that have broad support among lawmakers and the Governor. These include proposals to establish a state Earned Income Tax Credit and to roll back the current 7 percent cut to authorized hours of care for seniors and people with disabilities in the In-Home Supportive Services (IHSS) Program.