Statement From Chris Hoene on the New LAO Forecast: “California Must Continue to Reinvest”

Yesterday, Chris Hoene, executive director of the California Budget Project, released the following statement in response to the new long-term fiscal forecast from the Legislative Analyst’s Office (LAO):

“The new budget forecast from the Legislative Analyst’s Office is encouraging on some key fronts, with the economy continuing to recover and the state regaining its financial footing. California’s public K-12 schools and its community colleges are expected to see additional dollars, both in the current budget year and looking ahead to 2015-16.

“We also see in this forecast that state policymakers have the opportunity to significantly rebuild support for other vital public services, while continuing to save for a rainy day and pay down state debts. Especially in light of a recovery that has failed to reach so many individuals and families, California must continue to reinvest in child care and preschool, the CSU and UC systems, support for low-income seniors and people with disabilities, and the other foundations of a strong economy and healthy communities.”

Medi-Cal in the Governor’s Proposed 2014-15 Budget: Health Care Reform Boosts Enrollment and Federal Funding

Medi-Cal — the Medicaid Program in our state — provides health care coverage for millions of low-income Californians, primarily children, youth, and women. Last year, state policymakers approved expanding Medi-Cal — as authorized by federal health care reform — to extend coverage to more than 1 million low-income adults who had not previously been eligible for the program and made other changes intended to increase enrollment.

A new CBP analysis — the latest in a series of briefs on key components of Governor Brown’s proposed 2014-15 budget — looks at the Medi-Cal Program. This brief shows that 1.5 million Californians are projected to enroll in the program due to implementation of health care reform, bringing total Medi-Cal enrollment to slightly more than 10 million. This boost in enrollment is projected to increase federal funding for Medi-Cal by more than $10 billion through June 2015.

At the same time, however, the Governor’s proposed budget largely maintains a 10 percent cut to Medi-Cal payments for doctors, dentists, and other providers, which could hinder enrollees’ access to care.

This CBP brief on Medi-Cal in the Governor’s budget proposal can be found — along with the full series of briefs, which covers education, human services, corrections, and other topics —  on our website.

— Steven Bliss

Creating Greater Well-Being for Women and Girls in California

As we’ve published and blogged about, women in California — especially low-income women — have been especially impacted by recent years’ state budget cuts and by the Great Recession and its aftermath. However, the right public investments and policies can play a critical role in helping women and girls thrive in school, career, and life.

On January 16, the Women’s Policy Summit at the Sacramento Convention Center — hosted by the California Center for Research on Women & Families (CCRWF) — will take a close look at how public policies can improve the health and well-being of women and girls in California and will discuss what state legislators and leading advocates see as the top priorities for the coming year.

The 2014 Women’s Policy Summit: Advancing Women’s Health, Wealth & Power will cover a wide range of topics, including: Women, Poverty & Economic Empowerment; Constructing a Vision for California’s Child Care and Early Education System; Women and Health Care Reform; Health Disparities & Gender; and many others. The summit also will feature a luncheon keynote address from social justice advocate and attorney Sandra Fluke on the future of reproductive rights in California.

CCRWF is hosting the summit with support from The California Endowment. The event is co-sponsored by the Legislative Women’s Caucus and the California Commission on the Status of Women and Girls, as well as by the California Budget Project and other organizations.

For questions or additional information, contact Summit Event Coordinator Cathy Murnighan at summit@ccrwf.org. Full registration information will be posted by November 11 on the CCRWF website.

— Steven Bliss

So Long, Healthy Families Program

Next month, following a 15-year run, the curtain will go down on California’s Healthy Families Program (HFP), which has provided low-cost health, dental, and vision coverage for children in low- and moderate-income families. As part of the 2012-13 state budget deal, lawmakers adopted Governor Brown’s proposal to transfer children enrolled in the HFP to Medi-Cal, California’s largest publicly funded health coverage program for low-income residents. In addition to providing coverage for children transitioning from the HFP, Medi-Cal now covers all newly enrolling children who were previously eligible for Healthy Families, up to 250 percent of the federal poverty line ($48,825 for a family of three in 2013).

The shift of children from Healthy Families to Medi-Cal began this past January 1 — when about 850,000 kids were enrolled in the HFP — and has proceeded in several stages. By the end of September, nearly 730,000 children had been transferred to Medi-Cal, although tens of thousands of children did not make the transition because they lost eligibility for Healthy Families prior to their scheduled transfer date. (Children can be removed from the HFP for a number of reasons, including if their families do not pay monthly premiums or they reach their 19th birthday and “age out” of the program. It’s likely that at least some of these children found — or eventually will find — their way onto Medi-Cal by applying for coverage through their county human services offices.) The final group of children — more than 20,000 — will transfer from Healthy Families to Medi-Cal on November 1.

Once the transition from Healthy Families is complete, nearly half of all California children will be enrolled in Medi-Cal, according to state estimates. Ultimately, the success of this transition will hinge on whether children in Medi-Cal are able to access the health care services they need. In this regard, state officials have more work to do. For example, many children with autism lost access to critical behavioral health services when they were shifted from Healthy Families to Medi-Cal. Another concern: Doctors, dentists, and other Medi-Cal providers are bracing for — or have already felt the impact of — a 10 percent provider payment cut that the state has begun implementing, although primary care doctors will be largely shielded from this reduction through 2014 due to a provision in the federal Affordable Care Act. It’s too early to tell whether these payment changes will, on balance, have a positive or negative impact — or no impact — on provider participation in Medi-Cal and thus on children’s access to care. State officials should closely monitor the situation in the months ahead to ensure that all of the more than 8 million Californians enrolled in Medi-Cal — children and adults alike — have timely and adequate access to needed care.

— Scott Graves

The ACA Will Temporarily Shield Some Medi-Cal Providers From the State’s 10 Percent Cut

Doctors, dentists, and other health care providers who participate in Medi-Cal (California’s Medicaid program) are bracing for — or have already felt the impact of — a 10 percent payment cut that the state has begun implementing, as we reported last month. However, thanks to the federal Affordable Care Act (ACA), this reduction will not apply — at least through the end of 2014 — to many primary care services provided by family physicians, internists, and pediatricians. In fact, these physicians will see a substantial increase in their Medi-Cal payments starting this fall. This is because the ACA requires states to boost their Medicaid payments to the federal Medicare level for nearly 150 primary care services during 2013 and 2014, with the federal government paying the entire cost of the increase. (This increase applies to services provided on or after January 1, 2013, but the state’s implementation has been delayed. Therefore, doctors will receive retroactive payments for qualifying services provided since the beginning of this year.)

This payment boost is welcome news for primary care physicians who participate in Medi-Cal, since they currently receive exceptionally low reimbursement rates relative to their peers in other states. California’s Medicaid payments for ACA primary care services were the third-lowest in the US in 2012, when measured as a percentage of Medicare payments for the same services (see chart). Once the ACA rate increase takes effect, California’s Medicaid payments for primary care services will more than double, rising by an average of 136 percent, according to the Kaiser Family Foundation.

Based on state estimates, the ACA increase will bring an additional $1.2 billion in federal Medicaid funds to California during the 2013-14 fiscal year — dollars that will support the work of primary care physicians who serve very-low-income Californians through the Medi-Cal Program. Moreover, because primary care doctors are largely shielded from the payment cut that the state is currently rolling out, they will receive roughly $250 million that they otherwise would have lost during 2013-14, with half of these dollars coming from the federal government and the other half from the state. Taken as a whole, these additional dollars, although temporary, could help to boost primary care doctors’ participation in Medi-Cal as the state prepares to implement a major expansion of the program in January 2014.

Still, it’s worth bearing in mind that the Medicaid payment increase is set to expire at the end of 2014. At that point, primary care doctors not only would lose the temporary rate bump provided by the ACA, but also would be fully subject to the rate cut that the state is currently phasing in. Such a steep drop in payments could cause at least some primary care physicians to rethink their participation in Medi-Cal in 2015. In order to head off that possibility — and provide greater fiscal certainty for other Medi-Cal providers — state policymakers should consider repealing the 10 percent cut for all providers as part of next year’s budget debate.

— Scott Graves