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Governor Davis’ Budget Will Increase Number Of Uninsured Californians

Monday, May 20, 2002

Budget Cuts Will Make it More Difficult for Californians to Gain and Keep Health Insurance Coverage

California Governor Gray Davis’ revised budget eliminates critical funding to assist the more than 1.1 million eligible but uninsured children and their families enroll in the state’s Medi-Cal and Healthy Families insurance programs. At the same time, the Governor’s budget enacts stricter eligibility requirements and onerous reporting burdens for those already enrolled in Medi-Cal. Together, these proposals will result in more Californians going without essential health insurance coverage.
“Not only will fewer eligible families and children secure healthcare coverage as a result of the Governor’s proposal, but many Californians currently covered by Medi-Cal will lose their benefits,” said Earl Lui, Senior Staff Attorney for Consumers Union’s West Coast Regional Office. “Balancing the budget on the backs of the poor and uninsured is not the answer to California’s fiscal challenges.”
Hundreds of thousands of families have turned to local community-based organizations and schools for assistance in enrolling in Healthy Families and Medi-Cal insurance programs over the past few years. These organizations have been instrumental in helping the state gain the trust of underserved communities and boost enrollment in the two programs. But under Governor Davis’ proposal, state grants to 66 community and school-based organizations will end abruptly on June 30, closing the gateway for accessing and navigating an otherwise complicated healthcare system for potential enrollees.
“The infrastructure created by these outreach contracts has been absolutely vital to reaching and enrolling eligible children in state-sponsored health insurance programs,” said Lark Galloway-Gilliam, Executive Director of Community Health Councils. “By cutting off funding for these outreach activities, the state is limiting access to health coverage for those in greatest need.”
Last year, Governor Davis signed legislation that eliminated the quarterly status report that families on Medi-Cal were required to submit to maintain their coverage. Davis’ new budget reinstates this requirement, which creates an administrative barrier that makes it harder for families to keep their insurance. The Governor’s budget analysis indicates that a estimated 247,000 Californians will lose their health insurance coverage as a result of these stricter reporting requirements.
Governor Davis’ budget also makes it more difficult for newly applying two-parent working families to qualify for Medi-Cal coverage. Under the Governor’s proposal, families may earn no more than 68 percent of the federal poverty line in order to qualify for Medi-Cal. Current state law extends coverage to families earning up to 100 percent of the federal poverty line. This proposed change would prevent an estimated 146,000 parents from becoming eligible for Medi-Cal. Finally, Governor Davis’ budget reduces Medi-Cal dental coverage for children and eliminates dental services for parents.
In a letter sent to the Governor and key lawmakers working on the state budget, more than 300 community and school-based organizations announced their opposition to the budget cuts. The groups called on the Governor and state lawmakers to reinstate funding for outreach activities, eliminate the Medi-Cal quarterly reporting requirement, continue Medi-Cal eligibility for working families earning up to 100 percent of the federal poverty line, and restore dental benefits.
“We recognize that the state faces a significant budget deficit, but we cannot sacrifice the progress California has achieved to expand health insurance coverage to those in need,” said Lui. “We support efforts to address the deficit through appropriate and fair revenue measures so that California’s most vulnerable citizens won’t bear the brunt of the state’s fiscal crisis.”

Consumers Union: 415-431-6747
Lark Galloway-Gilliam, Community Health Councils
Consumers Union, publisher of Consumer Reports, is a nonprofit testing and information organization serving only the consumer. Consumers Union is a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1935, our mission has been to test products, inform the public, and protect consumers.