California Enacts $2 Billion in Additional Health Care Cuts - August 3, 2009

On July 28, California Governor Arnold Schwarzenegger (R) signed a revised budget that cuts $2 billion in health care funding, including $1.4 billion in reductions to the state’s Medicaid program, Medi-Cal. These cuts are intended to close the state’s budget gap for the fiscal year that began July 1. Some of these cuts are part of the $489 million in line-item cuts imposed by the Governor at the bill’s signing. Among the line-item veto cuts is a $60.5 million reduction in funding for counties to cover the cost of administering Medi-Cal. The budget also cuts $178.6 million ($50 million from line-item cuts) from the state’s Children’s Health Insurance Program, which is expected to result in a loss of coverage for up to 450,000 children. The Governor has suggested that roughly $1 billion of the Medi-Cal cuts could be restored with new federal Medicaid funds, if the federal government agrees to provide the funds.