Summary of Governor Newsom’s Health and Human Services Proposed Budget for 2020-21.
California will spend $168 billion, of which $47 billion is General Fund and the remainder are federal matching or special tax funds.
· $104 billion is for the state MediCal program, $15 billion is for the In Home Supportive Services (IHSS), $12 billion if for realignment to counties, $9 billion is for Developmental Services, $4 billion for CalWorks, $2.7 billion for SSI, $3.2 billion for public health and $2.3 billion for state mental hospitals. Other programs and departments and realignment add up to $16 billion.
· 12.9 million Californians (one in three) will use the MediCal program, 2 million will use CalFresh (food stamps), 1.2 million will use SSI, 586,000 will use IHSS and 368,000 will use regional centers for the developmentally disabled. The growth in program eligibles will be in CalFresh, MediCal, IHSS and Regional Centers. The enrollment declines will be in SSI and CalWorks.
· The Governor proposes an Office of Health Care Affordability. It will work on price and quality transparency, cost targets for each component of the health care industry and financial consequences for those whose costs exceed their targets. It will advance evidence and value-based payments and administrative simplification.
· He proposes to strengthen California’s public options (Local Initiatives and County Organized Health Systems) and foster their participation in MediCal and Covered California.
· He proposes to reduce the costs of prescription drugs in three ways: best price, rebates and bulk purchasing of generic drugs. Best price refers to negotiating for the best price that drug companies offer in other jurisdictions be made available to all Californians. Rebates refer to extending the price rebates that drug companies extend to MediCal to other purchasers. Bulk purchasing means the state would buy generics in bulk available for all Californians.
· He proposes new taxes ($32 million) on the nicotine in vaping products and using the funds to educate youth about the dangers of vaping and cracking down on the black market vaping products.
· He proposes a Department of Early Childhood Development to integrate and coordinate all the early childhood programs.
· He proposes a Center for Data Insights and Innovation to collect and use all the data collected by state department to drive improvements in the delivery of services.
· He proposes to improve behavioral health integration with physical health and parity for behavioral health treatment. He has created a task force to make recommendations to the Legislature as to how this could be accomplished. He is proposing a MediCal waiver to make MediCal a more seamless system for providers, patients and plans.
o He is proposing an update on Prop 63, the Mental Health Services Act, so treatment dollars can be used for treatment of substance use disorders and for people caught in the revolving doors of mental illness, incarceration, and homelessness.
MediCal is projected to grow from $105 billion to $107 billion ($26.4 billion General Fund) and enrollment by 0.4% to 12.9 million persons (1/3rd of the state’s population. It has seven separate delivery systems: managed care, fee for service, dental, mental, developmental, substance use and IHSS.
· The Governor’s budget expects the Trump Administration to approve the renewed MCO tax to help fund the program.
· The Newsom Administration will be seeking a new §1115 waiver from the federal government to do the following:
o Manage risk and improve outcomes through whole person care and population health
o Make the program more seamless and easier to use by reducing its complexity and increasing flexibility within it
o Improve outcomes through value based initiatives, payment reforms and systems modernization.
o To implement the waiver, if approved, the Administration is requesting $695 million this year, growing to $1.4 billion in each of the next two budget years. It is unclear how this will satisfy federal budget neutrality requirements.
o The budget proposes increases of $45 million in 2020-21 and $42 million in 2021-22 to upgrade County Mental Health data collection and data sharing and care coordination as part of the Behavioral Health Quality Improvement Program.
· The Governor proposes to cover undocumented adults 65 and up through a MediCal expansion. The costs are $80 million in year 1 for 27,000 individuals, but growing to $350 million in 2022-3 and ongoing. All expenses but the emergency care component are General Fund only.
· The Governor proposes a new program to pay for hearing aids and audiology for children with incomes between 266% of FPL (MediCal’s upper limit) and 600% of FPL (Covered California’s upper eligibility limit). This is an important first step in helping kids with hearing impairments; however it should be accompanied by insurance coverage mandates for children’s hearing aids and audiology treatments for all California children with hearing impairments. Without this assistance, hearing impaired children face huge barriers in learning to speak in these critical younger years and lifelong disabilities.
The Department of Social Services proposed budget is $29 billion ($12 billion General Fund) for Cal Works, SSI, Cal Fresh (food stamps), Child Welfare, etc.
· $750 million augmentation to increase affordable housing units and reduce homelessness.
· TANF expenditures of $8.3 billion, divided among CalWorks, Child Care, Child Welfare, Foster Care, etc. Due to the improving economy, CalWorks enrollment has fallen from 587,000 in 2011 to a projected 358,000 in 2020-21.
o Includes a grant increase of 3.1%.
o Savings and reinvestment of $590 million in county indigent health due to the Medi-Cal expansion.
· IHSS expenditures are $15 billion ($5 billion General Fund). Caseload is 580,000 – a 5% enrollment growth. They include $1.1 billion to fund the minimum wage increases and $6 million in this budget year growing to $120 million next year for coverage of undocumented adults 65+.
· SSI/SSP for 1.2 million seniors and disabled will cost the state $2.6 billion for the SSP component in 2021-2. Enrollment will fall by 1.8 in the coming year due to the good economy and grants will be increased by the CPI (1.7%).
· Child welfare programs that include foster care, adoptions, and child protective services will cost $6.4 billion ($600 million General Fund) in the coming year. The Continuum of Care Reforms have reduced institutional care by 40% and shifted care to home-based settings.
The Department of Developmental Services is budgeted for $9.2 billion ($5.7 billion General Fund and serves 369,000 individuals. Their need for services has shifted as the autism spectrum diagnosis has increased by 177% and behavioral health needs by 48%. The administration is reforming financing to improve quality, prioritize outcomes and value in community-based services such as the Regional Centers.
· $78 million to develop and implement a Performance Incentive reimbursement program for better outcomes in Regional Centers, including employment, improved life and more meaningful activities.
· Shut down of all state facilities at Sonoma, Porterville and Fairview
The Department of State Mental Hospitals cares for 6,671 patients at a budget of $2.2 billion in the coming year. There is a growing backlog (800) of persons waiting for their competency to stand trial evaluations.
· $24 million for a community care pilot program in three counties for individuals determined incompetent to stand trial – an effort to reduce the rates of arrests, re-arrests and cycling in and out of the severely mentally ill.
· $40 million for treatment planning and delivery and for improved protective services (at Napa State).
· $10 million to upgrade infrastructure to meet Joint Commission standards.
2011 Realignment Funding of vehicle license fees and a portion of the state sales tax to local government -- $8.6 billion for local law enforcement, community mental health, protective services and behavioral health
Prepared by: Lucien Wulsin
Dated: 1/14/2020