A Big Mess In California

The 2002-2003 state budget winds blow cold in sunny California for low-income families, elderly, and disabled residents.

The state was riding the crest of a financial wave until the collapse of the dot-com economy which caused stocks to dive and wiped out a part of the California tax base reducing state revenue. Texas billionaires in the utility business stole about $30 billion from California to pay for power they never delivered for a power shortage which never existed.

So now poor people are about to pay a bigger price — loss of health care and other vital social services to make up for a part of the $23.6 billion state budget shortfall. $23 billion is roughly the equivalent of 30% of the state’s General Fund budget.

Manipulations of the California utility market have been confirmed. The Enron rape of the California energy market turns out to be only the tip of the royal corporate screw.

Perot Systems (as in Ross Perot, former Presidential candidate) has also been implicated as pushing a plan to exploit the newly deregulated California energy market (LA Times 6/8/02, B-1). A California Senate investigation states that Perot Systems designed ways to “game” the energy market and then made a marketing pitch of its plan (specifically to Reliant Energy Co) in 1998 which contained details on ways to extract the highest price possible from the state of California.

To balance the California state budget, Democratic Governor Grey Davis who did not use the power of the state to stop these energy scam artists (could have nationalized these corporations) has proposed budget cuts which will make up for some losses by gutting Health and Human Services programs. Davis’ May revision of the 2002-03 budget proposes and additional $1.1 billion reduction in Medi-Cal expenditures alone.

Health care advocates have decried that the health care cuts proposed by Davis would “devastate the state’s ailing health care system” (Rojas, Sacramento Bee, 5/16/02) Under Davis’ plan, state payments to Medi-Cal would be cut by $758.3 million, fees hospitals pay the state for administering the federal Disproportionate Share Hospital program would increase by $86 million making the total take away $136 million.

Hospital officials predict that if the cuts go through, many of the program’s 6 million enrollees would be forced to go without care or wait longer hours in overcrowded emergency rooms. That is, if the emergency rooms are still there for them. The increased take aways from safety net hospitals threatens their very survival, with advocates predicting they may be forced to close their doors in an already teetering health care system.

Access to health care would be reduced significantly. Medi-Cal reimbursements to doctors, for example, would go from $20 to $16 and would lead to fewer physicians being willing to take Medi-Cal patients. It would make California’s Medicaid payments the lowest of all fifty states. The whole system may collapse as more providers refuse to take Medi-Cal payments.

Advocates for universal care who have pursued expanding Medicaid to more of the uninsured as an answer to the uninsured problem take note. All progress can be arrested by a state budget shortfall and politicians willingness to slash public health care rather than tax the rich to make up the difference.

The governor’s plan is to roll back the proposed expansion of Medi-Cal to two-parent working families with incomes up to 100% of the federal poverty level saving the state $184.2 million. Healthy Families to parents of enrolled children would be delayed affecting about 300,000 adults. The state would postpone “express lane eligibility” whereby schools can enroll children who are in the National School Lunch and Food Stamp programs into Medi-Cal.

In addition, Davis’ change of the Medi-Cal administration process would require adults to fill out forms every quarter to remain on the program, a move which the state coldly calculates will result in fewer persons on the program.

The LA times stated in early May that all changes would reduce enrollment in Medi-Cal by about 490,600 persons. (LA Times 5/5/2002) but the May revision increases that figure and increase the numbers of uninsured in the state, already at 7 million.

The proposed budget would ration the existing Medi-Cal program by eliminating selected optional benefits for a savings of $526 million. Dental, chiropractic, podiatry, acupuncture, occupational therapy, psychological, rehabilitation, and certain medical supplies which are not entitlements will be gone.

The disabled population would be especially hard hit by the proposed cuts in the Governor’s plan.

Mental health advocates say that the proposed $95 million cuts to mental health services will result in more mentally disabled persons winding up in jails, hospitals and prisons just as the movement has been working to see that supports exist for people to live in the community and receive appropriate services to enhance their lives.

Shutting down rehabilitation services is also a big concern. Bob Roberts director of the Marin Center for Independent Living remembers the doctors strike back in 1974.

“Everyone in Independent Rehab Centers ended up in nursing homes in one week,” Roberts explained. “Thousands of people were sent anywhere that would take their warm body — it was a sad day for many and the birth of many group homes.”

Disability activists have fought long and hard to see community living replace institutional imprisonment. That includes having enough in home workers available to hire with tasks of daily living which in turn means decent wages with benefits. The governor, however, plans to knock out the $1.00 an hour wage increases for in home (IHSS) workers.

Many IHSS workers in the state are stuck at near minimum wage salaries with only a few counties paying more per hour. There is already a dire shortage of workers and this promise of a state-wide $1.00 wage increase is long overdue.

Activists are also especially concerned about the Supplemental Security Income / State Supplementary Payment, the SSI/SSP program, which is the sole source of money for living expenses for many disabled persons. The proposed budget would eliminate both state and federal portions of the SSI/SSP Cost of Living Adjustment (COLA). The governor plans to suspend the COLA in the SSP(state) portion and also to not pass though COLA from the SSI (federal) portion. The federal portion would go into the general fund rather than to disabled persons it is intended for.

Despite employment anti-discrimination legislation, two thirds of disabled persons remain without jobs and rely on public benefits for their basic support.

Chris Elms, President of Californians for Disability Rights wrote to the state legislature:

“This federal COLA was intended by the federal government to be passed along to SSI recipients to help offset increases in the cost of necessities such as rent, food and utilities. While the state’s budget situation is very difficult, does it justify forcing this vulnerable population to choose between food and heat, or to possibly lose their home, so the state can divert the money to another purpose?”

All this just so the Democratic Governor so adept at lining his campaign coffers does not have to risk his re-election by making the wealthy Californians – and there are plenty of them – to pay higher taxes. Instead group is pitted against group, in some cases for their very survival.

Will some people’s health care be rationed to accommodate uninsured persons coming onto the Medi-Cal program? This is the nasty game being played out now across the nation.

Since the state legislature is controlled by Democrats, those Democrats opposed to balancing the budget on the backs of vulnerable populations as their governor has proposed are up against members of their own party. The outcome is unknown as of this writing.

Politics aside, without health care poor people are going to die. It is just that simple.

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