Medi-Cal cuts are budgetary fake

Medi-Cal — the state’s indigent-patient Medicaid program — absorbs $15 billion from the general fund and is California’s second-biggest expenditure, after education.

In February, the Legislature concluded that making a midyear 10 percent rollback in payments available to physicians treating Medi-Cal’s 6.7 million poor, elderly and disabled would be a hard-nosed but practical way to quickly save an estimated $568 million, starting this summer.

But the always-rational Elizabeth Hill, the nonpartisan state legislative analyst, quickly listed the ways this is a thoroughly bad idea: For one thing, more than half of Medi-Cal funding comes from the federal government. So every dollar the Legislature takes away from Medi-Cal means the program loses approximately $1.25 more from U.S. matching funds.

Even more damaging, unless the low-income Californians unable to obtain Medi-Cal treatment simply decide to lay down in the streets and wait to die, they have only one reasonable alternative. They must wait for hours at locally funded public health clinics or, more likely, the overburdened emergency rooms of not-for-profit hospitals and county medical centers such as San Francisco General Hospital and San Mateo Medical Center — where treatment costs three or four times more.

So the Legislature’s Medi-Cal cuts are simply another budgetary shell game, shifting state health care expenditures onto already-hard-pressed local jurisdictions and onto private hospitals, which then boost costs to privateinsurers that in turn raise prices to consumers. In 2005, a Blue Cross study estimated its average client family pays an extra $950 yearly because of this.

It is almost startling, but approximately one out of seven San Franciscans is a Medi-Cal client. Nearly 115,000 residents are on Medi-Cal, according to the California Department of Health and Human Services. So the pending 10 percent funding cut could lose The City an estimated $9 million. Not to mention that Medi-Cal access is already falling drastically statewide, with more and more physicians refusing to accept patients on the program.

Mayor Gavin Newsom was in Sacramento on Tuesday announcing that he is prepared to file a lawsuit to roll back the Legislature’s 10 percent Medi-Cal cuts. More often than not, making budget policy in the courts is a bad idea.

But with San Francisco now facing its own $338 million deficit, we cannot see that Mayor Newsom has any other alternative except to fight as hard as he can stop the state from playing its latest trick on the counties.

Meanwhile, San Francisco Unified School District SuperintendentCarlos Garcia has already threatened to sue California in order to force long-term funding stability. The state can expect many more of these lawsuits until it finally gets serious about reworking the grotesquely flawed budgeting process.

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