On May 14th, Governor Jerry Brown (D) released his May revision to the 2013-14 State Budget. Legislative leaders praised the revised plan as being fiscally responsible and sound plan. Republican leaders lauded Brown for exercising restraint and demonstrating that there is “common ground” between the Governor and legislative Republicans. Assembly Speaker John Perez (D-Los Angeles) also praised the proposal indicating that there are no “major areas of disagreement that cannot be resolved.”
The May Revise includes some clarification on state initiatives resulting from ongoing negotiations with federal partners and settled lawsuits. Most important among those is the continued implementation of the Affordable Care Act, which implements several key provisions will be established this year. As you may recall, the Affordable Care Act (ObamaCare) expands Medi-Cal coverage to all persons within 138 percent of the federal poverty level. The Governor’s January 2013 budget proposals failed to extend long-term care services and supports (LTSS) to this expansion population. The May Revise reverses that proposal and extends LTSS to these new beneficiaries. The state hopes to revive the Medi-Cal assets test which is not part of Medi-Cal managed care.
A new move by the administration on its expansion of Medicaid to those at 138% of the federal poverty level would now include long-term care benefits. The inclusion of long-term care services is dependent on a yet to be approved asset test. Little details were available as of press time, but more information is expected in the coming weeks.
The Governor’s Coordinated Care Initiative (CCI) will be extending its enrollment start date from October 2013 to January 2014. Secretary Diana Dooley noted that the Centers for Medicare and Medicaid Services (CMS) refused California’s request to share the Medicare savings resulting from the eight county demonstration. The requested 50/50 share savings of Medicare was not accepted by the Centers for Medicaid and Medicare Services (CMS). As a result, managed care plans will be charged a higher tax (from 2.35% to 4%) to help fund the initiative. The rollout of the CCI in the eight counties will be phased in. Los Angeles County will phase-in beneficiaries over 12 months subject to discussions with the federal government. San Mateo County will enroll beneficiaries over three months. The remaining counties (which include Orange, San Diego, San Bernardino, Riverside, Alameda and Santa Clara) will be phased in over 12 months.
The May Revise also includes the provisions of the IHSS settlements (in the Oster and Dominguez class action lawsuits) that repeal wage and service reductions, including the 20 percent across the board reduction. The settlement included an 8 percent across the board reduction effective July 1, 2013 and 7 percent in future years.
The legislature will now review the May Revise in its various budget committees. The constitutional deadline for the passage of the budget by the Legislature is June 15.
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