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California State Budget

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California State Budget

The Governor’s 2013/2014 budget proposal allocates $20.3 billion to health programs which represents a 3.4% increment from the 2012/2013 budget. Out of this fund, $354 million has been proposed to Medi-Cal Program, a move that suggests major adjustments are to be made on enrollment eligibility to the Medi-Cal Program. The Medi-Cal health care program is a version of the state’s health insurance program in California. Medicaid was introduced as a safety measure for low-income children and the disabled. This program serves approximately 8 million people; this is one out of every five people in California. The health programs are mainly offered by several departments which are under the state level in California.  The Medi-Cal program is administered by the Health Care Services department and it offers several benefits to members, especially those of funding health care services and offering public health services.


The governor argues that even though the expansion seems to increase the state’s spending, it will considerably help the counties saving through the use of these two options: state-based approaches and a county-based approach. Currently, Medi-Cal is funded using a combination of the two approaches but the proposed expansion suggests funding from either. Implementation of these reforms will help in focusing on how the state and counties relate. This way, it will be easy for the state to act fairly on counties through consideration of risks and strengths of a county.

The Governor proposes that the state-based approach will concentrate on direct enrollment of newly eligible persons into the program with a short-term (3 years) full funding and long-term funding of 90% of the Medi-Cal benefits. According to the proposal, for the state to deliver this kind of program, it will use part of the county’s savings and this will encourage its commitment to responsibilities in human services programs. The county-based approach is set to concentrate on building the already existing Low Income Health Program. However, the approach is required to perform under the rules by the state on eligibility requirements. Currently, counties conduct the Low Income Health Program on federal waiver whereby low-income uninsured adults benefit from the temporary federal funds given to the program. The Governor’s proposal requires the federal waiver to come from the county’s savings to encourage operational and financial responsibility by the counties.

Other proposals on the Medi-Cal Program include;

  • Medi-Cal makes it a requirement for enrollees to choose a health plan and stick to the plan for a year. According to the Governor’s proposal, this will help cut General Fund spending by at least $1 million every year.
  • To save on General Fund by $310 million, the hospital fee will be increased on expiry of the current one, which is on December 2013. This increment in fee will fund children’s health coverage and other hospital needs.
  • Still, on making more savings on General Fund, the gross premiums tax applied to care plans will be reinstated permanently and it will be backdated from July 1, 2012. The revenues which will be collected will be used to fund the Healthy Families Program and Medi-Cal Program.
  • To cut General Fund by $135 million, the budget also proposes the introduction of procedures, which will ensure better management of Medi-Cal that will belong to categories as ‘unspecified efficiencies’.
  • Hold the implementation of CCI until September 2013 so that General Fund spending will go down by $170.7 million. During this delay, beneficiaries will have to use a single health plan instead of dual eligibility that is provided by Coordinated Care Initiative (CCI).

Concerning the 2011 legislation enactment on healthcare providers pay cut, the Governor postulates that the pay cut will be by 10% and this will reduce General Fund spending by $488.4 million. The payment cut is yet to effect due to litigation although the federal government consented to the plan (California Budget Project 5). Generally, the Medi-Cal expansion proposal aims at simplifying enrollment, retention, and eligibility of persons into the program. Presently the total spending on Medi-Cal is at 27% of the state spending and this is the greatest share on Medicaid cover on national coverage. Over the last few years, Medi-Cal cost has been increasing rapidly by at least 7% per year a situation that has been pointed to results from health care inflation and the growth of caseload. The cost has increased since it implies that more individuals have been enrolled in the program consequently, the level of benefits has increased as well as the rates given to healthcare providers. Therefore to control the program, the budget proposal has concentrated on these areas especially on the eligibility of enrollment.

The Medi-Cal program is highly appreciated by citizens because it enables low-income people to access basic services such as family planning and inpatient services at a considerably low cost or no cost (Howitt 2013). This means that the expansion of the program by revising enrollment eligibility and more importantly by increasing funds allocation will benefit a very crucial group in California (Southern California Public Radio Airtalk).

The kind of funding that has been allocated to Medi-Cal is a clear illustration of the significance Medi-Cal will have in health and human services in California. It is also a suggestion that many public health programs may resolve to join Medi-Cal due to its possible influence on health care programs. If the payment cut on doctors comes into effect, it would affect the provision of health services because many doctors may not be willing to be employed by the government (California Elders’Law Center).

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