Wall Street Journal Looks at California Budget Crisis, Health Care Impact
CAL/AAEM News Service
pottsbri@yahoo.com
Fri, 10 Jan 2003 11:59:22 -0800 (PST)
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-----Original Message-----
From: California Healthline [mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM]
Wall Street Journal Looks at California Budget Crisis, Health Care Impact
01/10/2003
The Wall Street Journal today looks at California's $35 billion budget gap over the next 18 months, a financial crisis that indicates "painful cuts in spending for education, health care and the poor are almost certainly on the way." In the first round of cuts, proposed by Gov. Gray Davis (D) in December 2002, eligibility rules for Medi-Cal, the state's Medicaid program, would become more stringent (Thurm/Rundle, Wall Street Journal, 1/10). Under the plan, the state would reduce income eligibility limits for families enrolled in Medi-Cal to 61% of the federal poverty level. The proposal also would require Medi-Cal beneficiaries to reverify their eligibility each quarter rather than each year. In addition, the plan would eliminate optional Medi-Cal benefits, such as dental care and medical supplies. The plan also would reduce Medi-Cal reimbursement to physicians and other providers by 10% ( http://www.californiahealthline.org/members/basecontent.asp?contentid=47447&collection!
id=3&program=1 California Healthline, 12/9/02). The <http://www.cbpp.org/> Center on Budget and Policy Priorities, a think tank in Washington, D.C., projects that the changes would eliminate some 500,000 "mostly low-income working parents" from the Medi-Cal rolls. The Journal notes that much of today's budget crisis stems from the massive tax cuts and spending increases that took place during the "stock-market and technology boom of the 1990s." B. Timothy Gage, Davis' finance director, said that "simply reversing boom-era largess" will not be "enough" to repair the state's budget deficit, but the governor will try to "minimize damage to the most vital programs." Davis is set to announce his spending plan for the next fiscal year, beginning July 1, today (Wall Street Journal, 1/10).
States Seek Help
In related news, Democratic governors yesterday submitted their $157 billion economic stimulus proposal, "castigating President Bush's new economic plan as a blow to state governments reeling from their worst fiscal crises in 50 years," the <http://www.washingtonpost.com/wp-dyn/articles/A35155-2003Jan9.html> Washington Post reports (Weisman, Washington Post, 1/10). Medicaid and other health care costs account for 30% of states' spending, and those expenses rose 13% last year, the largest increase in a decade ( http://www.californiahealthline.org/members/basecontent.asp?contentid=47358&collectionid=3&program=1 California Healthline, 11/26/02). The governors' plan calls for $75 billion in tax cuts, $13 billion for schools, roads and homeland security, $19 billion for unemployed workers and low-income senior benefits, and $50 billion in "direct aid" for the states. States faced a combined $60 billion to $70 billion in budget deficits for the next fiscal year, and by law most mu!
st close the deficits through spending cuts and tax increases, according to Iris Lav, an economist at the Center on Budget and Policy Priorities. At the same time, Bush's plan could cost states $4 billion this year and $45 billion to $50 billion over the next decade by cutting taxation of investment dividends, according to Harley Duncan, executive director of the <http://www.taxadmin.org/> Federation of Tax Administrators. Lav said that "even a modest hit to state coffers" could lead to cuts in health care, as well as education and other state programs, according to the Post (Washington Post, 1/10).
Brian Potts
Managing Editor, CAL/AAEM News Service
MS-IV, UC Irvine
MD/MBA candidate
pottsbri@yahoo.com
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<P>-----Original Message-----</P>
<P>From: California Healthline [</FONT><A href="mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM"><U><FONT color=#0000ff size=2>mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM</U></FONT></A><FONT size=2>] </P>
<P>Wall Street Journal Looks at California Budget Crisis, Health Care Impact </P>
<P>01/10/2003 </P>
<P>The Wall Street Journal today looks at California's $35 billion budget gap over the next 18 months, a financial crisis that indicates "painful cuts in spending for education, health care and the poor are almost certainly on the way." In the first round of cuts, proposed by Gov. Gray Davis (D) in December 2002, eligibility rules for Medi-Cal, the state's Medicaid program, would become more stringent (Thurm/Rundle, Wall Street Journal, 1/10). Under the plan, the state would reduce income eligibility limits for families enrolled in Medi-Cal to 61% of the federal poverty level. The proposal also would require Medi-Cal beneficiaries to reverify their eligibility each quarter rather than each year. In addition, the plan would eliminate optional Medi-Cal benefits, such as dental care and medical supplies. The plan also would reduce Medi-Cal reimbursement to physicians and other providers by 10% ( </FONT><A href="http://www.californiahealthline.org/members/basecontent.asp?content!
id=4"><U><FONT color=#0000ff size=2><A href="http://www.californiahealthline.org/members/basecontent.asp?contentid=47447&collectionid=3&program=1">http://www.californiahealthline.org/members/basecontent.asp?contentid=4</U></FONT></A><FONT size=2>7447&collectionid=3&program=1</A> California Healthline, 12/9/02). The <</FONT><A href="http://www.cbpp.org/"><U><FONT color=#0000ff size=2>http://www.cbpp.org/</U></FONT></A><FONT size=2>> Center on Budget and Policy Priorities, a think tank in Washington, D.C., projects that the changes would eliminate some 500,000 "mostly low-income working parents" from the Medi-Cal rolls. The Journal notes that much of today's budget crisis stems from the massive tax cuts and spending increases that took place during the "stock-market and technology boom of the 1990s." B. Timothy Gage, Davis' finance director, said that "simply reversing boom-era largess" will not be "enough" to repair the state's budget deficit, but the go!
vernor will try to "minimize damage to the most vital programs." Davis is set to announce his spending plan for the next fiscal year, beginning July 1, today (Wall Street Journal, 1/10). </P>
<P>States Seek Help </P>
<P>In related news, Democratic governors yesterday submitted their $157 billion economic stimulus proposal, "castigating President Bush's new economic plan as a blow to state governments reeling from their worst fiscal crises in 50 years," the <</FONT><A href="http://www.washingtonpost.com/wp-dyn/articles/A35155-2003Jan9.html"><U><FONT color=#0000ff size=2>http://www.washingtonpost.com/wp-dyn/articles/A35155-2003Jan9.html</U></FONT></A><FONT size=2>> Washington Post reports (Weisman, Washington Post, 1/10). Medicaid and other health care costs account for 30% of states' spending, and those expenses rose 13% last year, the largest increase in a decade ( </FONT><A href="http://www.californiahealthline.org/members/basecontent.asp?contentid=4"><U><FONT color=#0000ff size=2><A href="http://www.californiahealthline.org/members/basecontent.asp?contentid=47358&collectionid=3&program=1">http://www.californiahealthline.org/members/basecontent.asp?contentid=4</U></FONT></!
A><FONT size=2>7358&collectionid=3&program=1</A> California Healthline, 11/26/02). The governors' plan calls for $75 billion in tax cuts, $13 billion for schools, roads and homeland security, $19 billion for unemployed workers and low-income senior benefits, and $50 billion in "direct aid" for the states. States faced a combined $60 billion to $70 billion in budget deficits for the next fiscal year, and by law most must close the deficits through spending cuts and tax increases, according to Iris Lav, an economist at the Center on Budget and Policy Priorities. At the same time, Bush's plan could cost states $4 billion this year and $45 billion to $50 billion over the next decade by cutting taxation of investment dividends, according to Harley Duncan, executive director of the <</FONT><A href="http://www.taxadmin.org/"><U><FONT color=#0000ff size=2>http://www.taxadmin.org/</U></FONT></A><FONT size=2>> Federation of Tax Administrators. Lav said that "even a modes!
t hit to state coffers" could lead to cuts in health care, as well as education and other state programs, according to the Post (Washington Post, 1/10). </P></FONT><BR><BR><STRONG>Brian Potts <BR>Managing Editor, CAL/AAEM News Service</STRONG> <BR>MS-IV, UC Irvine <BR>MD/MBA candidate <BR>pottsbri@yahoo.com<p><br><hr size=1>Do you Yahoo!?<br>
<a href="http://rd.yahoo.com/mail/mailsig/*http://mailplus.yahoo.com">Yahoo! Mail Plus</a> - Powerful. Affordable. <a href="http://rd.yahoo.com/mail/mailsig/*http://mailplus.yahoo.com">Sign up now</a>
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