More Medi-Cal Cuts Threaten Healthcare Statewide

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The State Capitol is still buzzing over Governor Schwarzenegger's plan to leverage the lottery to help close a $15 billion deficit. But Wednesday, a State Senate committee will examine a deficit reduction proposal that has doctors and hospitals worried. The Governor wants deeper cuts to the Medi-Cal program - the state program that provides care to California's poorest patients. KPCC's Julie Small has the story.

Julie Small: The governor's proposed Medi-Cal cuts go deeper than the ones he suggested back in January.

Governor Arnold Schwarzenegger: No one wanted to do this, but because Health and Human Services is the second largest part of the budget, this is where a lot of the cuts had to come from.

Small: The governor wants to reduce the number of people on Medi-Cal and the reimbursement rates the state pays to providers. Hospitals could take a quarter of a billion dollar hit.

That's on top of more than a billion dollars in Medi-Cal cuts lawmakers already passed a few months back. They'll take effect in July. Jan Emerson with the California Hospital Association says if both cuts go through...

Jan Emerson: Californians across the state are going to witness a meltdown of the health care system.

Small: Emerson says, as the state pays providers less and less to treat Medi-Cal patients, more and more doctors and dentists will turn them away.

Emerson: People who have Medi-Cal are going to have no other place to turn but the ER. And then there's the question of even whether the ER's will still be there.

Small: Emerson says the combined Medi-Cal cuts will force some smaller rural hospitals to close their doors. The state's independent legislative analyst Elizabeth Hill opposed the governor's plan to trim back Medi-Cal.

Elizabeth Hill: We had a point of view of trying to protect primary health services, so that's why we did not accept the Medi-Cal rate reduction, and that's why we did not accept most of the recent proposals in the May revision.

Small: Hill's opinion could carry some weight with lawmakers as they try to plug the state's giant budget deficit.