Governor Calls for Special Legislative Session To Address Health Spending

Gov. Jerry Brown (D) last week issued a proclamation to convene a special legislative session on health care spending on the same day he agreed to a state budget that had many of its health-related provisions negotiated away.

Financing the Medi-Cal program may not be sustainable, Brown said, given its expansion over the past two years and the looming loss of the managed care organization tax, which could cost the state about $1.1 billion.

Medi-Cal, California’s Medicaid program for low income and disabled people, covers about 12.3 million Californians, slightly under one-third of the population of California. More than half of the state’s children are Medi-Cal kids.

The budget agreement includes $40 million for full-scope Medi-Cal benefits to undocumented children, with limited funding to possibly include some undocumented adults.

That program was significantly trimmed from its original “Health for All” intent to cover all of the state’s remaining uninsured.

The new budget agreement nixed restoration of a 10% Medi-Cal provider rate reduction from 2011, though $30 million was included to restore the cut in Medi-Cal provider rates for dentists. It also jettisoned the idea of removing a cap on welfare payments for new mothers.

The legislative special session will look at:

  • Overall financing of the Medi-Cal program as the state readies to pay a slightly larger share of expansion costs — the federal portion of payment for expansion shifts from 100% to 90% between 2017 and 2020;
  • The impending loss of the MCO tax, which has been nixed in its current form by federal officials and has provided about $1.1 billion to the state;
  • Paying for the court-ordered restoration of a 7% cut in In-Home Supportive Services, which was included in this year’s budget. The governor wants to discuss paying for that in future years; and
  • Restoration of cuts or increases to Medi-Cal provider rates, including possible increase of rates for providers of services for the developmentally disabled. The special session was established June 19 by the proclamation. Legislative leaders have not yet set a timetable for when that special session will start.

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