Governor Plans to Put Federal Children's Health Money into General Fund

Gov. Jerry Brown's May budget revision released on Thursday included about $381 million in health care revenue that wasn't in the previous January budget proposal. Health care advocates wondered which programs might be funded by the new federal money, but the governor has proposed absorbing it into the general fund.

The estimated $381 million comes from the federal Children's Health Insurance Program (CHIP).

The state budget proposal calls this money "$381 million in savings."

"They're not demonstrating where they're spending that money, especially for children's health care. And that's where it's supposed to be spent," said Kathryn Dresslar with The Children's Partnership.

"That's a lot of money. We would like to see the administration make some kind of effort to address the serious questions of access for children, particularly dental access," Dresslar said.

That's being done, state officials said.

"It is in the health budget," said Diana Dooley, Secretary of California HHS. "In broad terms, the Medicaid budget is $95 billion this year, and it's a big expenditure. We have increases and reductions based on a variety of issues, and the funding is not specific to the source. So if we have savings in one place, we have spending in another."

Dooley said there may still be some shuffling of funding as the Legislature takes up the debate next week.

"We will be having conversations with the Legislature about … modifications, about places we would rather spend money," Dooley said. "But we will live within the means."

Advocates say the budget picture looks a lot brighter than 2011, when the governor and Legislature came up with a series of cuts to health care programs, including a 10 percent Medi-Cal provider rate reduction.

At the least, they say, the federal money for children's health that has been added into the May revision should go to children's health programs.

Lobbying efforts for new funding have included:

• Restoration of the 2011 Medi-Cal provider rate reduction
• A hike in provider rates for the top 10 dental procedures, to bring them in line with the national average
• Strengthening the early learning and child care system in California
• Providing health care to undocumented immigrants

The governor indicated he would veto legislation to extend full-scope health benefits to the undocumented, if SB 4 by Sen. Ricardo Lara (D-Bell Gardens) was passed by the Legislature and appeared on his desk.

"This is the governor's May revise, there's still time," Dresslar said. "The Legislature ultimately decides where the money goes. We'll make our pitch."