Moving Too Fast for Reductions To Last

The Legislature’s two-house Budget Conference Committee will begin working Monday on reconciling differences between the Senate and Assembly budget plans. Most of the significant reductions to health spending in the Governor’s May Revision – including copayments for people enrolled in Medi-Cal and increasing premiums for children with Healthy Families Program coverage – have so far been rejected by both houses. One significant proposal, however, remains open for debate. This proposal would require approximately 432,000 seniors and people with disabilities to enroll in Medi-Cal Managed Care. The Governor has projected that such a move would reduce state General Fund spending by $178.7 million.

Both the Assembly and the Senate have kicked the issue to their respective health committees for further deliberation. In the meantime, the Senate Committee on Budget and Fiscal Review has assumed all the savings estimated by the Administration. This may be a risky assumption. The Administration’s estimates are based on an aggressive 12-month implementation schedule that would shift hundreds of thousands of the most frail and infirm Californians into managed care plans beginning February 2011. Meanwhile, there is little evidence to suggest that the state can accomplish the task in such a short amount of time. In fact, an effort that began in 2005 to enroll seniors and persons with disabilities in managed care in just 13 counties is still not complete five years later.

The Assembly and Senate health committees will be asked to review the merits of this concept in the coming months, but the Conference Committee – in the coming weeks – will have the opportunity to debate the reality of the Governor’s assumed General Fund reduction. Senator Denise Moreno Ducheny, chair of the Senate budget committee, has diligently pointed out – at every opportunity – the many budget reductions in the 2009-10 Budget that have been blocked by the courts, thereby adding to the current shortfall. This latest spending reduction risks adding to the list of unachieved savings and continuing to overpromise budget reductions.

– Hanh Kim Quach

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