Governor’s 2012-13 Proposed Budget Includes Harmful Cuts to Health Care

Governor Jerry Brown’s 2012-13 California state budget proposal includes $10.3 billion in additional cuts and revenues to address the ongoing deficit. The majority of the $4.2 billion in proposed cuts are to health and human services, most notably Medi-Cal and CalWORKS. The budget also assumes the passage of a November 2012 initiative to raise revenues–but if voters do not approve those taxes, then another $5.4 billion in cuts to education and public safety would be triggered.

These cuts further deteriorate the health care safety net, which has seen major reductions in recent years, from the elimination of dental and other benefits, and cuts to doctors and hospitals directly. And the cuts come in an economic downturn when these safety-net programs are even more in demand and when the state is attempting to get ready for health reform. Cuts to health and human services impact not just low-income California families, but our economy, and our health system on which we all rely.


SHIFT OF “DUAL-ELIGIBLES” TO MANAGED CARE: This would shift 1.4 million low-income seniors and people with disabilities who get both Medicare and Medi-Cal (so called “dual-eligibles” of “Medi-medis”) into managed care. Advocates have raised issues about patient populations that have already been shifted, and how access and transition problems would impact this particularly vulnerable population. Budget year savings: $678.8 million general fund.

OTHER MEDI-CAL CUTS: This proposal would grant more flexibility to DHCS to adjust payments, such as reducing laboratory rates and no longer paying for certain services of “limited benefit.” Budget year savings:$75 million general fund.

COMMUNITY CLINIC CUTS: This would change payments to Federally Qualified Health Centers (FQHCs), for a reduction of $27.8 million general fund.

HOSPITAL CUTS: This includes a one year “redirection” of money allocated for public and private hospitals of $42.9 million general fund.

MEDICAL THERAPY CUTS: This would reduce eligibility in the Medical Therapy Program, for families with incomes above $40,000/year.$91 million general fund.

CHILDREN’S COVERAGE CUTS TO HEALTHY FAMILIES: The proposal would reduce Healthy Families managed care plans by 25.7 percent (to align with Medi-Cal rates), impacting access to care for the 875,000 children covered by the program. (The budget proposal would also shift children from Healthy Families to Medi-Cal.) Budget year savings: $64.4 million general fund.

AIDS DRUG ASSISTANCE PROGRAM (ADAP) CUTS: The budget would increase prescription drug cost-sharing, so patients would pay on average from $28 to $385 a month. Net savings projected of $14.5 million general fund.


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