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CA Healthcare Budget Adjustments Could Cost Counties $4.4B

News  |  By Doug Desjardins  
   January 23, 2017

The proposal eliminates state funding to counties for In-Home Supportive Services for dual-eligible Medicare-Medicaid patients.

This story originally appeared in California Healthfax.

The California State Association of Counties (CSAC) is hoping to reach a compromise with state officials over a budget proposal that eliminates state funding to counties for In-Home Supportive Services (IHSS).

The $122.5 billion state budget unveiled by Gov. Jerry Brown on January 11 calls proposes phasing out elements of the state's Coordinated Care Initiative (CCI), including an IHSS program that provides funding to counties.

The CCI plan provides managed care for 114,000 dual-eligible Medicare-Medicaid patients in the state.

Phasing out the MOE "would add an estimated $625 million to county costs for IHSS in fiscal 2018 and an estimated $4.4 billion over the next six years," according to the CSAC.

'Devastating to Counties'

"This would be devastating to counties all over the state," said CSAC President and Alameda County Supervisor Keith Carson. "We undoubtedly would have to make cuts to other vital social services to cover these costs."

The shift represents "the single largest change in the budget from last year and unfairly burdens counties with costs they cannot control nor afford," according to a CSAC statement.

CA Budget Could End Coordinated Care Initiative

IHSS costs have increased sharply since the program began five years ago, driven by a hike in the state's minimum wage, new paid-sick-leave provisions for IHSS employees, and federal overtime regulations, CSAC officials said.

"Counties will have to find a way to pay for these additional costs, because the program is much more expensive now than it was five years ago," said Farrah McDaid Ting, a CSAC legislative representative.

"It will probably mean that counties will have cut health and mental health programs to deal with the additional costs, or take money out of the general fund."

The CSAC is hoping to work with state officials and legislators to develop a compromise plan that would provide counties with financial help for IHSS. "We're hoping to come up with legislation that will create a cost-sharing program to help counties with the added expense," said McDaid Ting.

The main component of the CCI program—Cal MediConnect—will remain in place because the program has demonstrated cost-savings. The budget proposes to extend the Cal MediConnect program and continue mandatory enrollment of dual-eligible members.

Cigarette Tax Funds

Some healthcare advocates have raised concerns about how the budget proposes to spend funds from a new cigarette tax. Proposition 56, which levies a $2-per-pack tax on cigarettes and an equivalent tax on e-cigarettes, was approved by voters last November.

The law will go into effect on April 1 and could generate as much as $1.2 billion in revenue in fiscal 2018.

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Brown's budget proposal commits Proposition 56 revenue toward the General Fund and states that details on spending will be worked out with state legislators.

The California Medical Association (CMA) said that cigarette tax revenue was intended for Medi-Cal and smoking prevention programs.

"We're disappointed that Governor Brown's budget ignores the will of voters who supported Proposition 56 by proposing to offset general fund obligations with tobacco tax revenues rather than investing in the overburdened Medi-Cal system to improve access to care," said CMA President Ruth E. Haskins, MD.

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