Plan Targets Social Services
Medi-Cal premiums, reduced welfare grants on the table

By Clea Benson -- Bee Capitol Bureau
Published 2:15 am PST Tuesday, January 11, 2005

Although he spent much of the past year talking about the need for government reform, Gov. Arnold Schwarzenegger is relying on straightforward spending cuts instead of dramatic policy changes to slash $1.2 billion in health and human services spending next year.
The Republican governor expects to save most of that by cutting welfare benefits, halting cost-of-living increases for the aged and disabled, and reducing wages for home-care workers.

Schwarzenegger is proposing his biggest policy shifts in Medi-Cal, the gigantic health insurance program for the needy, the aged and the disabled that covers one in six Californians. He wants to start charging monthly premiums to families on Medi-Cal whose incomes are slightly above the poverty level. And he wants to move more aged and disabled Medi-Cal recipients into managed health care programs.
A $1,000 annual cap on dental benefits and a big change in the way hospitals receive Medi-Cal payments are also in the works.

Administration officials described the $27 billion health and human services budget as a balance between controlling costs and maintaining services to the most vulnerable Californians.

"The governor's budget decisions did not come easily, but difficult times require difficult choices, and Gov. Schwarzenegger chose to strike a reasonable and responsible balance between his funding priorities," said Kim Belshé, secretary of the California Health and Human Services Agency.

Advocates for people enrolled in the state's social programs criticized the budget as shifting costs to the poor.

"As we expected, there's a major impact on the most vulnerable," said Anthony Wright, director of Health Access, a nonprofit health care advocacy group. "There are no new taxes, but we're going to impose additional costs on seniors and people with disabilities in order for people to get care."

The governor's plan would charge Medi-Cal premiums to about 550,000 people who make more than the poverty-level income of $16,000 for a family of three. The cost would be $4 a month for children and $10 for adults, with a cap of $27 per family.

At the same time, Schwarzenegger's proposed budget would spend about $6 million to help sign up children for Healthy Families, the health insurance program for families who make up to three times the poverty level. The program aims to enroll an additional 15,000 children in Healthy Families next year, out of the estimated 430,000 uninsured children in the state who are eligible for either Healthy Families or Medi-Cal.

But advocates said charging Medi-Cal premiums could have the effect of causing families to drop out of the plan.

"Four dollars may not seem like a lot, but there are people who don't go to the doctor because they don't have bus fare," said Angela Gilliard, a lawyer specializing in health care issues at the Western Center on Law and Poverty. "If they don't have bus fare, how are they going to have the (premium)?"

Advocates said they also were worried about the governor's other cost-cutting measures. The budget proposal would roll back the state's portion of wages and health benefits for In-Home Supportive Services workers from $10.10 per hour to $6.75.

The governor also would cut welfare grants from $723 a month to $676. And he would freeze Supplemental Security Income payments to the aged, blind and disabled at $812 per month for individuals.

Those grant freezes and cuts, and associated reductions in welfare spending, would save more than $1 billion.