California Governor’s Revised FY 2003 Budget Would Reduce Health Spending To Cover Overall Deficit
California Gov. Gray Davis (D) on May 14 released his revised fiscal year 2002-2003 budget proposal, which would cover the state's $23.6 billion budget deficit in part by raising taxes on cigarettes and making "deep cuts" in spending for health care and other programs, the Los Angeles Times reports (Tamaki/Bustillo, Los Angeles Times, 5/15). The plan would cover the shortfall with $11.7 billion in "revenue shifts and transfers," $2.1 billion in increased taxes and fees and $7.6 billion in budget cuts (Benson, Wall Street Journal, 5/15). The proposal also would increase the fee that hospitals pay the state for administering the federal Disproportionate Share Hospital program by a total of $86 million. The plan also calls for delaying a proposed expansion of Healthy Families, the state's CHIP program, to parents of enrolled children (Ornstein, Los Angeles Times, 5/15). In addition, programs for mental health services would be cut (Payne, Santa Rosa Press Democrat, 5/15).
Impact on Medicaid
Davis' plan also would cut general fund payments to Medi-Cal, the state's Medicaid program, by $758.3 million, which would result in a loss of $350 million in federal matching funds (Ornstein, Los Angeles Times, 5/15). The state would save $47 million by reducing the reimbursement rate physicians receive for treating Medi-Cal patients (Maxwell, Fresno Bee, 5/15). Average physician payments would drop from $20 per office visit to $16, the lowest rate in the nation, according to the California Medical Association (Lucas et al., San Francisco Chronicle, 5/15).
