RE: Oppose Medi-Cal and Healthy Families Budget Cuts and Recommendations for Program Savings
January 31, 2011
Honorable Holly J. Mitchell
Chair, Assembly Budget Subcommittee on Health and Human Services
Capitol Building, Room 6026
Sacramento, CA 95814
Dear Assembly Member Mitchell:
Disability Rights California, a non-profit advocacy organization mandated to advance the human and legal rights of people with disabilities, opposes the governor’s proposed cuts to Medi-Cal and the Healthy Families program and offers recommendations on increasing revenue and savings state costs without harming the low-income Californians who rely on Medi-Cal. These items are set to be heard in the Assembly Budget Subcommittee on Health and Human Services on February 1, 2011.
The Governor’s budget proposes deep and harmful cuts to the Medi-Cal and Healthy Families programs, which many thousands of low-income Californians with disabilities depend on as their only source of healthcare. These proposed cuts come at a time when California’s safety net programs have already been repeatedly slashed; while at the same time the need for them has grown. If enacted, the cuts will make it more difficult, if not impossible, for people with disabilities to live independent and productive lives in their communities. While Disability Rights California understands there is an ongoing fiscal crisis in the state, it is important to consider the cumulative impact of multiple cuts in multiple programs. People with disabilities who use Medi-Cal or Healthy Families are in many cases the same people who will face cuts in other programs such as IHSS, SSI/SSP, and ADHC, programs that have already faced multiple and increasingly severe cuts in the past few years.
We also understand the need for cost savings and appreciate Governor Brown’s more balanced approach that includes potential additional revenues, rather than relying on cuts alone. However, budget reductions to safety net services will cost more in other line items of the Medi-Cal budget, which includes higher instances of costly institutional care and more frequent and more severe health problems being handled by emergency rooms. We urge the legislature and the governor to recognize these cost shifts and give careful consideration to the real costs of these proposed cuts. Further, we urge you to consider the human suffering caused by multiple, severe cuts that have already been enacted. The legislature must take a more prudent approach to program savings and explore other avenues for funding and efficiencies to minimize the impact of the governor’s proposals.
Below, see Disability Rights California’s recommendations, which are described in more detail at the end of this letter.
Recommendations:
1) Issue directions to counties about how to use state and local funds up to a Medi-Cal share of cost for California Children Services (CCS) in order to bring in more federal Medicaid funds.
2) Require that the Consolidated Omnibus Budget Reconciliation Act (COBRA) notices issued in California:
a. provide information about the Health Insurance Premium Payment (HIPP) program for Medi-Cal recipients to cover the premium costs of COBRA benefits when cost effective to do so, and
b. advise that getting the 11-month disability extension does not require that you qualify for Social Security benefits.
3) Look to the experience of the State of Connecticut in ensuring that costs of long-term care are not prematurely shifted from Medicare to Medi-Cal.
4) Exercise a more vigorous and proactive role to “pay and chase” after private health plans that shirk their obligations to children with disabilities covered under their parents’ group plans.
5) Perform a study to determine the costs shifts from one part of the Medi-Cal budget to other parts of Medi-Cal or elsewhere in Health and Human Services.
6) Reduce state Medi-Cal expenses by requiring that private insurance companies cover the full cost of wheelchairs and other medical equipment without arbitrary costs caps.
7) Promote children under age 26 obtaining coverage under a parent's private insurance.
8) Explore ways to increase federal financial participation by accessing veterans’ pharmacy benefits.
Medi-Cal Cuts - OPPOSE
Medi-Cal is California's Medicaid health care program. This program pays for a variety of medical services for children and adults with limited income and resources, including people with disabilities. For many this is the only health care program they can afford. The proposed cuts would severely limit benefits and completely eliminate benefits for some, forcing them to use emergency rooms or give up their lives in the community and be institutionalized in nursing homes, where they could still receive these services. Disability Rights California opposes the following cuts:
Limits on Use of Services. The proposal sets a yearly dollar cap on hearing aids ($1,510), durable medical equipment ($1,604), incontinence supplies ($1,659), urological supplies ($6,435), and wound care ($391), limits prescriptions (except life-saving drugs) to six per month, and limits the number of doctor visits to ten per year. Hard caps on drugs and services are arbitrary and have no correlation with the needs of beneficiaries and will lead to unnecessary institutionalization and emergency room visits.
Share in the Cost of Services. The Governor’s proposal includes a $5 co-payment on physician, clinic, dental, and pharmacy services ($3 on lower cost preferred drugs). It also calls for a $50 co-payment on emergency room services and a $100 per day and $200 maximum co-payment for hospital stays. The governor proposes to eliminate over-the-counter cough and cold medications and oral nutritional supplements as Medi-Cal benefits as well. Many people who use Medi-Cal cannot afford any co-pay or afford to pay for drugs and supplements. These cuts will lead to unmet preventative healthcare needs and, ultimately, healthcare crisis.
Elimination of Adult Day Health Care (ADHC). Adult Day Health Care provides a variety of health, therapeutic, and social services for those at risk of being placed in a nursing home, for half the price of nursing homes. Elimination of this program would give people no choice but to be institutionalized to receive the same services they could have received in their own communities. This violates the ADA and the integration mandate of the Olmstead decision, and will put the employees of about 330 ADHC centers out of work.
Reduction of Medi-Cal Provider Payments by 10 Percent. The budget reduces provider payments by 10 percent for physicians, pharmacy, clinics, medical transportation, home health, and certain hospitals. This proposal will make it more difficult for people with disabilities to access healthcare, as payments will not be sufficient enough to foster provider participation. This issue will be particularly acute in rural areas, where providers are few and far between. We oppose this provider payment cut to all providers, except skilled nursing facilities covered under AB 1629.
Healthy Families Program Cuts- OPPOSE
Healthy Families is low cost insurance for children and teens. It provides health, dental and vision coverage to children who do not have insurance and do not qualify for free Medi-Cal. Disability Rights California Opposes the following cuts to the Healthy Families Program:
Elimination of the Vision Benefit, Increase in Premiums and Co-pays. The Governor proposes to eliminate the Healthy Families vision benefit. This service provides testing, eye refractions to determine the need for corrective lenses, and care for injuries. The proposal would also eliminate the separate vision coverage for children participating in the program, which covers eyeglasses and other specialized services. The budget would increase monthly premiums for healthy families, affecting approximately 565,000 children. Premiums would increase for those who have income levels that are 150 to 200(1) percent of poverty by $14 per child. It would increase the maximum premium limit for a family with three or more children by $42--from $48 to a family maximum of $90. For families with incomes from 200 to 250(2) percent of poverty, premiums would increase by $18 per child, and increase the maximum premium limit for a family with three or more children by $54, from $72 to a family maximum of $126. No increase is proposed for families with incomes under 150 percent of poverty. The governor proposes to increase co-payments for emergency room visits from $15 to $50. He proposes a new in-hospital stay co-pay of $100 per day, with a maximum of $200. Previously, there was no co-pay for hospital stays. He plans to increase co-payments for emergency room visits from $15 to $50 and inpatient stays from $0 to $100 day/$200 maximum.
The Healthy Families safety net program is imperative for low-income families to keep their children, including children with disabilities, healthy. These proposals would inhibit preventative care and result in greater instances of emergency room use and longer, more costly hospital stays.
The Governor’s proposals ignore the harsh consequences that will occur for many seniors and people with disabilities if they are enacted. Unrealistic and arbitrary caps and limits on needed supplies and care will cause worsening health conditions, joblessness, increased emergency room visits, and immeasurable human suffering. In some cases, such as the governor’s proposal for annual benefit caps, it would make it impossible for a person with a disability who needs one to obtain any electric wheelchair, a piece of equipment they may need to maintain employment and health. Limits on the number of prescriptions would force some people with multiple medications to decide which medications they will no longer take, causing conditions to worsen and increasing future healthcare needs. Co-pays for emergency room visits and hospital stays would put Medi-Cal and Healthy Families out of financial reach for many individuals who have no other means to access healthcare services.
Details of Recommendations:
- Many children served in CCS programs also qualify for Medi-Cal with a share of cost. The Social Security Act directs that costs paid for by state and/or local governmental funds are to be counted against a share of cost.(3) To maximize the amount of federal funds going into the CCS program, many counties use state and local funds up to what would be the Medi-Cal share of cost for the month in which a high-cost service or equipment is provided in order to draw down Medi-Cal funds for the balance. Additional federal funds could be drawn into the program if the Department of Health Care Services issued directions on how to access Medicaid funds by complying with the Social Security Act, to address the concerns of those counties that are not doing so now.
- Require that COBRA notices issued in California (a) provide information about the HIPP program for Medi-Cal recipients to cover the premium costs of COBRA benefits when cost effective to do so, and (b) advise that getting the 11-month disability extension does not require that you qualify for Social Security or SSI benefits to get that determination, and that Social Security will make that determination when needed for COBRA extension purposes. The 11-month extension is particularly important for children with severe disabilities, many of whom qualify for Medi-Cal through institutional deeming under the Developmental Disabilities waiver or the Nursing Facility/Acute Hospital waiver or through Sneede rules, but would not financially qualify for SSI, so that the majority of their health care costs can continue to be provided by private health plan coverage rather than through Medi-Cal.
- Look to the experience of the State of Connecticut in ensuring that costs of long-term care are not prematurely shifted from Medicare to Medi-Cal. We understand, for instance, that although Medicare should cover the initial costs of sub acute care for dual eligible people transferred to the sub acute from hospitals, it is not happening.
- Work to Have Private Insurance Cover Children with Disabilities' Healthcare Needs. The state should exercise a more vigorous and proactive role to “pay and chase” after private health plans to cover children with disabilities under their parents’ group plans. We often see plans, directly or via the medical director of an individual practice association to which the risk has been shifted, affirmatively working to move the expensive child from the plan to Medi-Cal for all or part of the services. A vigorous and proactive “pay and chase” program would involve CMS, to identify denials that should have been approved by applying community standards applicable to children. It would also involve understanding the protections in Employee Retirement Income Security Act of 1974 regulations barring discrimination based on “health factors.”
- Study the increased utilization of emergency rooms, hospitals, primary care and specialty services resulting from the termination of Medi-Cal optional services to determine if, in fact, there have been savings to the Medi-Cal program from these cuts. For instance, the cost shift involved in eliminating dental benefits that would have covered a “drill and fill” for a cavity could lead to infection and the necessity of costly emergency room services.
- Reduce state Medi-Cal expenses by requiring that private insurance companies cover the full cost of wheelchairs and other medical equipment without arbitrary costs caps. Approximately 11% of people on Medi-Cal have private insurance; Medi-Cal pays for services which private companies deny, not for lack of medical necessity but because of cost caps so low as to be equivalent to no coverage at all. DHCS reported spending approximately 6 million dollars in one year on durable medical equipment for people who are on Medi-Cal but also have private insurance, presumably because the equipment exceeded the $2,000 cap which over 90% of California insurers impose on DME coverage.
- Promote children under age 26 being covered under private insurance. Under PPACA adult children under the age of 26 can continue on a parent’s policy and if not on now, can request to be put on. We recommend that a notice go out to SSI recipients on Medi-Cal – particularly to those who did not also qualify for SSI prior to age 18 – advising them of the option, to shift some or all of the Medi-Cal costs for eligible young adults to private insurance. This notice could be incorporated into a regular mailing to Medi-Cal recipients. The mailing should include information (a) about qualifying under a parent’s policy at age 26 years of age and beyond if a dependent, and (b) about the Medi-Cal HIPP Program for the extra cost. Our experience is that the extra cost is minor and families usually have no problem covering it without asking for HIPP program assistance. Including information about covering adult dependent children under private health plans including Knox-Keene health plans is another strategy to ensure maximum coverage under PPACA.
- Explore ways to increase federal financial participation by accessing veterans’ pharmacy benefits.
Please feel free to contact our office if you have any questions or would like to discuss these proposals in more detail.
Cordially,
Brandon Tartaglia
Legislative Advocate
Disability Rights California
CC: Honorable Members of the Assembly Budget Subcommittee
on Health and Human Services
CC: Nicole Vazquez, Consultant, Assembly Budget Subcommittee
on Health and Human Services
CC: Andrea Margolis, Consultant, Assembly Budget Subcommittee
on Health and Human Services
(!) 150 percent of percent of poverty is an annual income of $21,855 for a family of two and 200 percent of poverty is an annual income of $29,140 for a family of two.
(2) 200 percent of poverty is an annual income of $29,140 for a family of two. 250 percent of poverty is an annual income of $36,425 for a family of two.
(3) Section 1902(a)(17)(D) of the Social Security Act – 42 U.S.C. § 1396a(a)(17)(D)