Summary of FY2012-13 Health Budget Proposals
|January 6, 2012||Posted by Lucien Wulsin under Health Financing||
1. MRMIB will be eliminated and its programs (Healthy Families, AIM, MRMIP and PCIP) will be shifted into the Department of Health Care Services (DHCS). Roughly 457,000 children will lose Healthy Families eligibility and shift to Medi-Cal in 2012-13. Managed care reimbursement rates will be cut by 25.7%.
2. DMH (Department of Mental Health) and DADP (Drug and Alcohol) will be eliminated and most community and county mental health and substance abuse programs are shifted into DHCS. Actually, under realignment, these services are shifted to the counties, but state oversight shifts from DMH to DHCS.
3. Every Woman Counts (Breast Cancer Screening and Treatment), Prostate Cancer Screening and Treatment, and Family PACT will shift from Department of Public Health (DPH) to DHCS.
4. The Medi-Cal caseload will grow to from 7.7 to 8.3 million, a growth of 612,000 eligibles, primarily due to the shift of Healthy Families children.
5. Medi-Cal managed care will grow as Medi-Cal patients in 28 small rural counties will move from fee for service Medi-Cal into Medi-Cal managed care (a combination of 2 plan models and COHS systems). Savings are $8.8 million in 2013-14.
6. Dual eligibles (those with Medi-Cal and Medicare coverage) in the state’s largest counties will also shift from fee for service into managed care.
7. IHSS (In Home Support Services) and nursing home care will also shift from fee for service into managed care.
8. The General Fund savings from the shift from fee for service to managed care will be nearly $680 million in 2012-13 and nearly a billion in the following budget year.
9. Managed care will shift to annual open enrollment where a beneficiary can change plans only once a year.
10. FQHC reimbursements for community clinics will be reformed for a savings of $28 million in 2012-13 and $58 million thereafter.
11. IHSS to the elderly and disabled will be cut by $292 million as hours are cut 20% and eligibility would be eliminated for recipients with other family members living at home. The remaining program ($1.4 billion General Fund) will be moved into Medi-Cal managed care.
12. CalWorks eligibility for very low income parents and children will be cut by 45%; eligibles will decline from a projected 597,000 families to 324,000 families.
The state budget context: the 2011-12 budget closed the state’s budget deficit from over $20 billion to about $4 billion through realignment to counties, elimination of redevelopment agencies, cuts in programs, such as reductions in CalWorks grants to less than their 1987 levels, cuts in reimbursements to some providers of 10%, etc. This year’s 2012-13 budget deficit is projected at $9.2 billion. The Governor proposes to close it with $4.2 billion in new program cuts and $4.4 billion in temporary new taxes. Of the new cuts, $946 million would come from CalWorks, $842 million from Medi-Cal, $164 million from IHSS, $544 million from schools and $447 million from child care programs. The new revenues are from a temporary increase in the state income tax on high earners, ranging from 1-2% and a temporary increase in the state sales tax of 0.5%. These proposals would appear on the November 2012 ballot for voter’s decisions. The temporary revenues are for the most part dedicated to funding public safety realignment to the counties and to school funding. K-12 education General funds would increase by 11.8% to $38 billion after many years of cuts. Higher education funding would increase by 11.4% to $8.7 billion General Fund after several years of state cuts and tuition hikes. Health and Human Services funds would be cut by 1% overall to $26.4 billion General Fund on top of several years of state funding cut.
The economic context: The state and national economy are slowly recovering from the financial crisis of 2008 and the Great Recession. Job growth is slowly recovering. Most of the job and income gains are in the high wage, high tech sector, and the construction and housing sector are still in serious trouble due to foreclosures and falling home prices.