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Major Health Program Proposals in May Revision

The governor released the May Revision to the FY2011-12 state budget on Monday, outlining several proposals to address the state deficit. Despite newly adopted solutions by the Legislature, the state’s budget deficit remains at a daunting $9.6 billion, down from $26.6 billion. The operating shortfall is projected to remain near $10 billion, which is about 10% of expected General Fund revenues. The state plans to streamline health services by eliminating the Managed Risk Medical Insurance Board (MRMIB) as well as the Department of Mental Health (DMH) in the coming years. The governor’s realignment plans remained largely unchanged.

Major proposals to HHS programs/departments include:

  • Shift Healthy Families children into Medi-Cal: $31.2 million in General Fund savings
  • One year extension of the hospital fee to be used for federal matching dollars: $320 million in Medi-Cal savings
  • Cuts to the AIDS Drug Assistance Program (ADAP): $17 million in General Fund savings
  • Reductions in claims paid to providers through the Every Woman Counts program: $9.4 million in General Fund savings
  • Shift responsibility for mental health services from counties to school districts

MRMIB, which oversees the Healthy Families program, posted an open letter in response to the governor’s proposal to express “grave concerns” and the potential “impact on the almost 900,000 children and adults served by [MRMIB’s] programs.”

The May Revise is available for download, as is the summary by the Legislative Analyst’s Office.