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Jerry Brown, legislative analysts differ on healthcare costs

Jerry Brown, legislative analysts differ on healthcare costs
Applicants sign up for low-cost healthcare programs in March. New estimates show higher enrollment than expected, which is creating higher costs for California taxpayers. (Justin Sullivan / Getty Images)

Last week Senate leader Darrell Steinberg (D-Sacramento) said his caucus would "kick the tires" on Gov. Jerry Brown's calculation that higher healthcare costs would gobble up a large portion of California's surplus tax revenue.

If the governor's estimates were too high, Steinberg said, that could free up more money for other government services. The goal is to "add up $50 or $100 million at a time" until there's enough cash for other programs he wants to fund, like preschool for poor children.

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Now the nonpartisan Legislative Analyst's Office has issued a new report saying Brown's estimates on healthcare costs may be $300 million too high.

The crux of the difference is not enrollment numbers — both administration officials and legislative analysts agree that many more Californians than originally expected are signing up for Medi-Cal, the state's healthcare program for the poor.

However, legislative analysts say that each patient won't be as pricey as estimated by the Brown administration — $139 per month instead of $369 per month. The lower assumption is "a more reasonable estimate," the report says.

On Tuesday, Brown administration officials defended their numbers, saying that they reflect a more realistic view. Over the last several months, they said, fewer patients than expected were enrolled in managed healthcare plans.

That means more people are using Medi-Cal to pay for individual treatments at higher cost, necessitating higher estimates in the budget.

"Our projections are not an assumption," said H.D. Palmer, spokesman for Brown's Department of Finance. "They're data driven."

For his part, Steinberg said he  will be factoring the legislative report into discussions on state spending.

"With the LAO's respected track record and nonpartisan credibility, their analysis should be considered seriously in budget negotiations," he said in a statement.

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