California Health Budget: Small Gains, Advocates Look to Nov. Ballot for Big-Ticket Items

The $122.5 billion state budget approved last week by California lawmakers will fund a variety of health-related efforts, including training of primary care physicians, dental care for schoolchildren and medical interpreters for Medi-Cal, the government-funded insurance program for people with low incomes.

But big-ticket health items such as higher payments to Medi-Cal providers and potential Medi-Cal coverage for undocumented adults didn’t make it into the budget agreement for next fiscal year that’s now awaiting the governor’s signature.

“Investments are minor but could be important for individual consumers,” said Anthony Wright, executive director of the consumer advocacy coalition Health Access.

Wright said the most notable health funding item in the budget was the rollback of a policy to recover assets of deceased Californians who received basic health care services through Medi-Cal — a reversal consumer advocates had been pursuing for years.

“It was inequitable, and it was counterproductive,” said Wright, adding that the policy discouraged low-income people from signing up for Medi-Cal for fear their loved ones might lose family homes. Under the terms of the new budget, California may only recover assets to reimburse itself for Medi-Cal spending on long-term nursing home care. This reimbursement for nursing home care is required by federal law.

The budget includes:

• About $100 million over three years for primary care physician residencies in medically underserved areas.

• $5 million for efforts by the Department of Public Health to prevent sexually transmitted disease prevention efforts.

• $4.4 million to restore Medi-Cal acupuncture benefits that were cut during the recession.

• $3.2 million to restore school-based dental programs for low-income children that were cut during the recession.

• $3 million to pay interpreters for non-English-speaking Medi-Cal recipients.

Having failed to get some of their most desired policies through the Legislature, advocates are now turning to voter initiatives, a common political procedure in California.

Ballot Initiative to Raise Tobacco Tax

The California Medical Association, the state’s primary physician lobbying group, sponsored a ballot proposal that would increase cigarette taxes by $2 per pack. The CMA collaborated on the measure with other groups, including health worker unions.

Signatures for the initiative are still being verified. If the proposal qualifies for the ballot and is passed by voters, it could initially raise up to $1.6 billion in fiscal year 2017-2018, mostly for payments to health care providers, according to California’s secretary of state.

Raising doctor rates for Medi-Cal, the state’s Medicaid program that now covers more than a third of Californians, has been a priority for supporters since state lawmakers cut rates by 10 percent in 2011. Undoing those cuts would cost at least $250 million a year, supporters estimate.

The CMA last year led a coalition called “We Care for California” to raise payments for doctors and other providers. CMA says Medi-Cal payments are among the lowest of any state Medicaid program in the nation — as low as $16 for an office visit. But the coalition hasn’t been meeting regularly, according to the California Hospital Association.

“While increasing Medi-Cal reimbursements rates remains a top priority for CMA, the administration has thus far not been supportive of broad-based provider rate increases, preferring targeted investments to improve access to care,” CMA officials said in a written statement.

“Because of this, CMA decided to focus on other means of improving access through this budget, such as directing funds to train more primary care physicians. Each additional primary care physician can see approximately 600 patients per year during training alone, thereby making a dramatic improvement in areas of the state that lack access to these providers.”

Ballot Initiative to Extend Tax on Higher-Income People

Another ballot initiative would extend Proposition 30, a tax on higher-income Californians that funds education and could funnel up to $2 billion in some years to the agency that manages Medi-Cal, according to the secretary of state.

Health consumer advocates say passage of the tobacco tax and Prop. 30 measures could provide the money needed to increase Medi-Cal reimbursement rates and restore other recession-era cuts.

Immigrant rights groups say the measures could also provide some of the funding needed to extend Medi-Cal coverage to undocumented adults, should the Legislature pass that proposal. A bill to compel the state to expand Medi-Cal to unauthorized adults was introduced this year but is not expected to be taken up again until 2017.

Health care advocates who are neutral on the issue of raising Medi-Cal provider rates say there are practical reasons why proponents are using the initiative process instead of the budget process.

“The governor ... made it very clear that ongoing spending was something that he had concerns with,” said Linda Nguy, policy advocate at the Western Center on Law and Poverty.

Nguy says advocates may be holding off on a renewed push for higher Medi-Cal provider rates until after the state convenes a working group this fall to evaluate how easily Medi-Cal patients can obtain the care they need in a timely way.

If the work group can link low Medi-Cal payments to patient access problems, the evidence could provide a stronger case for increasing provider rates, said Senate Health Committee Chairman Ed Hernandez, D-San Gabriel Valley.

“Access is really tied into rates. So if we can address that, [we can] have a more serious conversation next year,” Hernandez said.