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Medi-Cal cuts hurt everyone, not just the poor, study says
| Friday, Aug 15 2008 6:12 PM
Last Updated: Monday, Aug 18 2008 7:44 AM
The proposed state budget cuts to Medi-Cal and Healthy Families would be felt by more people than the low-income residents the programs serve.
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The reductions will harm the economy and increase health insurance costs for privately insured residents, according to two studies released Friday by Health Access California, a health care consumer advocacy organization.
The $24 million in proposed cuts in Kern alone would cost $62 million to the local economy, $22 million in lost wages and 483 lost jobs, one study found.
Families with employer-based health insurance would see their premiums rise 22 percent — more than $290 per family — according to the other study.
“Health care isn’t free. Someone has to pay,” said Peter Harbage, health care consultant and author of the health premiums study. “The bottom line ... is that when you make cuts to Medi-Cal, that affects everyone.”
Both studies used Gov. Arnold Schwarzenegger’s budget proposal submitted in May for the basis of calculations, said Anthony Wright, Health Access executive director and co-author of the economic report.
The governor’s office did not dispute the claims made in the reports.
“These studies underscore the need for comprehensive health care reform,” said spokeswoman Lisa Page.
On July 1, Medi-Cal reimbursements were cut by 10 percent to help reduce the budget deficit.
Wright hopes the Legislature will repeal the reductions and reject the additional $1 billion in cuts in the governor’s budget to Medi-Cal, the state’s Medicaid program, and Healthy Families, the children’s health insurance program.
The Legislature might vote on a budget this weekend.
INSURANCE PREMIUMS
When a hospital provides care to someone who cannot pay, “the hospital, like any good business, will try to recoup that,” Harbage said.
This cost becomes higher charges to insurance companies, which pass on the cost to customers.
While studying cost shifting with the think tank New America Foundation, Harbage found that 9.6 percent of premiums pay for the uninsured.
This figure was frequently touted by Schwarzenegger during his 2007 health reform campaign as a “hidden tax.”
In his new study, Harbage found this would increase to 11.7 percent if the governor’s budget passes.
“I’ve seen studies suggesting as much as 50 percent,” said Kern Medical Center CEO Paul Hensler. “The need for care isn’t going away.”
COSTS TO THE ECONOMY
Using data from the Centers for Medicare and Medicaid Services, Health Access found the budget cuts would lead to a $1 billion loss in matching funds from the federal government.
Also, it would result in $2.1 billion in lost commerce, wages and jobs statewide. Businesses would see lost productivity with employees taking more sick days to compensate for lack of care; children would miss more school.
“Reductions in Medi-Cal causes increases in costs in other places,” said Sen. Roy Ashburn, R-Bakersfield, who wants the 10 percent cuts restored in the budget. “The fact is that the state underfunds the program.”
None of the other local legislators returned calls for comment Friday.