Countdown to 2011-12: Deep Cuts to Health Programs Looming

In recent days, we have been highlighting reductions that will take effect in 2011-12 to underscore the depth and breadth of the cuts. Today, we’ll focus on Medi-Cal and Healthy Families, the state’s two health coverage programs that have experienced cuts of roughly 10 percent and nearly 25 percent, respectively, from 2010-11 funding levels. These cuts will profoundly affect the lives of the 8.3 million Californians who rely on this coverage. Specifically, the Legislature:

  • Increased premiums for about 565,000 children in Healthy Families. Beginning July 1, 2011, premiums for children in families with incomes between 151 percent and 200 percent of the federal poverty line will increase from $16 to $30 per child per month, up to a maximum of $90 per family. Premiums for children in families with incomes between 201 percent and 250 percent of the poverty line will rise from $24 to $42 per child per month, up to a maximum of $126 per family. This policy change requires federal approval, though. In recent months, federal regulators have issued guidance indicating that the Affordable Care Act of 2010 may preclude implementation of this increase.
  • Increased and imposed new copayments in both Medi-Cal and Healthy Families. Medi-Cal patients will be required to pay $5 for physician office visits, dental visits, and brand-name prescription drugs and $3 for lower-cost drugs. Both Medi-Cal and Healthy Families patients will be required to pay $50 for emergency room visits and $100 per day for hospital stays, up to a maximum of $200 per person per year. This policy change also requires federal approval.
  • Reduced payments to Medi-Cal health care providers by 10 percent. California’s provider payments are among the lowest in the country and have been faulted, in part, for low provider participation in Medi-Cal, making it more difficult for patients to find a doctor. In 2008, 68 percent of physicians responding to a statewide survey reported accepting Medi-Cal, compared to 92 percent of physicians who reported accepting private coverage. Prior years’ budgets have included provider payment cuts ranging from 1 percent to 10 percent, most of which have been blocked by the courts. The US Supreme Court has agreed to consider this issue, and the state assumes that the Court will reverse lower court rulings this fall, allowing the cuts to take effect.

This list of cuts is in addition to reductions made to these programs in recent years, the cumulative effects of which are documented in our fact sheets here and here.  These reductions have left California’s health coverage programs ill-equipped to cope with the ongoing impact of the Great Recession and the challenges of rising inequality and a growing population.

— Hanh Kim Quach