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The Recession’s Double-Edged Sword

The real irony, tragedy in fact, of major downturns in the economy is that the impact is felt by our most vulnerable populations not once, but twice.

First, it is the working-poor and those employed in the lowest social-economic strata that most feel the effects of recessions. They are the most likely to get laid off from their jobs before others, and they are the least likely to have sufficient savings or resources to ensure they own basic survival (rent, food, clothing, health, etc.) for an extended period of time.

Second, it is during recessions that states see big dips in tax revenue. Policy-makers, required to pass balanced budgets, often respond with major cuts to programs and services. Such is the case in California. Over the past three years, California’s budget shortfall has been filled largely by cutbacks to education, welfare-to-work programs, food stamps, and health & human services.

In health care alone, we have seen deep cuts since 2008-09, including among many others: elimination of optometry and dental services in Medi-Cal, cuts to provider rates in Medi-Cal, waitlists in the Healthy Families Program, increased premiums and cutbacks to benefits in Healthy Families, and much more. There are additional, significant health cuts proposed in the 2011-12 budget as well, including more rate cuts, new or increased premiums and co-pays, and limits on doctor’s visits and prescription drugs. Correspondingly, these programs offer less services, attract fewer providers, and require more financial contribution from patients.

Ultimately, it is during these toughest of times, moments when unemployment is 7%-9% higher than normal, that the safety net — the very programs and services designed to catch us when we fall — is being shredded. It is a sad irony that is affecting millions of Californians every day.

A Picture of the Recession’s Effects

Earlier this month, the California Health Care Foundation‘s Center for Health Care Reporting partnered with the Modesto Bee to profile access and coverage issues in Stanislaus County. This impressive series of stories included profiles of some of those affected, as well as extensive analysis of policy and local records.

Be sure to spend some time reading this very compelling series.

Health Reform’s Impact

All hope is not lost. In many ways, the Affordable Care Act was designed to provide states like California resources to help strengthen the health safety net. Among thousands of policies, the ACA makes more than 2 million will be newly eligible for Medi-Cal and 3.2 million Californians eligible for premium subsidies in the Health Benefits Exchange. All of this new investment will be paid by federal dollars.

Unfortunately, the ACA’s coverage expansions, benefit protections, increased reimbursements, and other investment incentives — all fully federally-financed — will be built on top of our existing system. With the safety net already stretched thin and more cuts looming this year, it is imperative the state work to keep the existing foundation as strong as possible to support the incredible opportunities and investment that the ACA provides in 2014 and beyond.