Health & Welfare | Daily Report

Gov. Jerry Brown is counting on fewer Medi-Cal users seeing the doctor, visiting the emergency room or spending the night in the hospital - by charging those low-income patients a co-pay of as much as $100.

In other words, what's bad for the patient, might be good for the state budget.

The expected drop in "utilization" – budget code for people who fail to take advantage of government services because of various roadblocks - is just one of the ways that Brown expects to carve $1.7 billion from Medi-Cal, the state health insurance program for the needy.

Brown barely finished his 46-minute budget press conference today before protesters, bundled up in the cold Sacramento morning, began shouting down the proposal. Their ire was directed at a wide array of cuts meant to close a $25.4 billion budget gap.

"These are not affluent people," Brown said at a press conference, when asked about his social services cuts. "It's very difficult, but that's where we are."

The governor proposal to cut $1.7 billion from Medi-Cal levels another blow to a program that has taken hits in the past, as the non-profit Health Access detailed in this report. The plan unveiled today includes one significant addition: an extra $2.1 million will be spent on 17 employees charged with implementing federal healthcare reform.

Part of $1.7 billion cut, though, is expected to come from the pockets of Medi-Cal beneficiaries. They will be expected to share new costs and face limits on service usage. The cost-sharing is expected to save the state $557 million and the caps might save $234 million. Among Brown's proposals:

• Beneficiaries will be asked to pay $50 for emergency room visits. $100 for each day of a hospital stay, and $5 for doctor, clinic, dental and pharmacy services. “Mandatory co-payments will achieve savings by reducing the amount the state pays for services … and decreasing utilization,” the budget plan said. Currently, the state has optional $1 and $5 co-pays for Medi-Cal patients.
• Other limits will only affect Medi-Cal recipients who are in the top 10 percent of device users, based on how much the state pays for them. Annual limits will be at $1,510 for hearing aids, $1,604 for medical equipment such as wheelchairs, and $1,659 for adult diapers.
• Beneficiaries will not be allowed to go to the doctor more than 10 times in a year or get more than six prescription drugs per month.

Here are other ways the plan proposes to cut Medi-Cal costs:

• Cutting nursing home, doctor, clinic, pharmacy and medical transportation rates by 10 percent is expected to save more than $900 million by the June 2012.
• Banking on courts to approve cuts that had been proposed in prior budget sessions could save $537 million.
• Eliminating adult day health care could save $177 million

The budget also includes some money-moving to the Medi-Cal program. The governor’s budget estimates that counties are sitting on $2 billion in First 5 early childhood development funds, and seeks for half of it to go toward basic health care funding for children age 5 and younger. The change would require voter approval, the budget document says.

Additionally, the budget proposes to extend a hospital fee of $160 million. The fee is an accounting gimmick meant to draw in additional federal funding for hospitals. The California Hospital Association supports the move, according to a statement released Monday.

The non-profit Health Access group quickly issued a statement decrying the cuts and also adding detail about how many people will be impacted. About 27,000 people who visit 330 adult day care centers are projected to lose coverage, the group estimates. And about 7.7 million Californians will be affected by the caps on services and doctor visits.

"The sickest Californians will have the number of doctor visits and prescriptions arbitrarily capped," Anthony Wright, executive director of Health Access, said in a statement, "and when their coverage runs out, there will be real consequences for people's health."