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01/28/2013

Proposed budget expands Medi-Cal eligibility

Governor’s budget doesn't restore optional benefits, such as adult dental

Acknowledging that California’s economy is improving but still uncertain, Gov. Jerry Brown on Jan. 10 released a 2013-14 budget proposal that calls for expanding Medi-Cal eligibility as part of national health care reform, but makes no move to address calls from legislative leaders to restore optional benefits, such as adult dental, that were cut in prior years in response to fiscal crises.

The governor’s budget proposal launches a dialogue with the legislature that will not conclude until at least June 15, the official constitutional deadline for budget passage.

In addition to maintaining the status quo with regard to optional benefits, the governor’s budget proposal also presumes that the state will prevail in the ongoing litigation over the 10 percent Medi-Cal provider rate reduction approved in March 2011, and estimates nearly $500 million in resulting savings from future reductions and an additional $500 million in retroactive payment recovery. CDA has participated in a coalition challenging the reductions in court; in December, a three-judge panel of the 9th U.S. Circuit Court of Appeals overturned an earlier injunction against the cuts, but the coalition intends to request a hearing before a larger Ninth Circuit panel. In the meantime, the state will not begin implementing the cuts until the latest court ruling is final or any appeals are resolved.

CDA is hopeful that the improving economic climate in California will begin to allow for a renewed discussion with the governor and legislature about restoring adult dental benefits to Medi-Cal. Interest by key legislators is growing, as evidenced by the statement to The Sacramento Bee by Sen. President Pro Tem Darrell Steinberg (D-Sacramento), following release of the governor’s budget proposal, that "…we can't forget and won't forget mental health, dental care and subsistence for the elderly and disabled and other related issues as the year progresses."

While the governor’s budget proposal does not call for increasing dental benefits or Medi-Cal reimbursement rates, it does call for implementing an optional expansion of Medi-Cal eligibility that was included in the federal Affordable Care Act. In general, the changes will increase income eligibility for Medi-Cal from 100 to 138 percent of the federal poverty level, while also making childless, non-disabled adults eligible for the first time and relaxing various asset and other tests of eligibility. The governor leaves open for future discussion whether the expansions will be implemented at the state level or by counties (many of which have already implemented the changes at the local level).

Budget negotiations are not expected to begin in a serious way until May, when the governor will release a revised version of his proposal (the so-called “May Revise”).

CDA will continue to be actively engaged in these discussions and will keep members informed of future developments.