State Not Required to Fund Indigent Care, Court Rules

The state Supreme Court reversed a ruling by the state Court of Appeal Friday as it handed down a decree that could prevent counties from receiving hundreds of millions of dollars in state funds for medical programs for the working poor.

The Supreme Court found that the appeals justices erred 19 months ago when they unanimously ruled that the state must provide up to $400 million a year for indigent medical care because it had illegally shifted the burden for such care to the counties.

Attorneys representing indigent plaintiffs have argued that since 1982 the state has reduced its share of the cost of health care for the working poor from 70% to 40%. For the most part, the programs provide services for people who earn too much to qualify for Medi-Cal but cannot afford medical insurance.

The Supreme Court decision means that Los Angeles County may not receive $150 million to $200 million for programs for the medically indigent, according to Irving Cohen, assistant director of the county Health Deparment.

“It would have made up for some of the under-funding over the years,” said Cohen, “and improve services for the indigent that we are supposed to care for.”

The 5-2 Supreme Court decision handed down in San Francisco found that the indigent plaintiffs in the case had no legal standing to sue because a special commission exists to hear local government complaints over allocations of state funds. The so-called Gann Commission was set up after voter approval of the 1980 Gann Amendment to the state Constitution that set spending limits for government agencies.

A number of counties have sought restoration of the state health funds before the commission and were turned down. They sued in Los Angeles Superior Court and won, but the state is appealing the decision.

The Gann Amendment prohibits the state from bypassing the spending limits by shifting costs of new programs or higher levels of services to local government.

The Supreme Court decision, written by Justice Marvin R. Baxter, also found that “there is no source of funds available” to comply with the appeals court decision other than from the Department of Health Services. “Payment from those funds can only be at the expense of another program which the department is obligated to fund,” the decision said. “No public policy supports, let alone requires, this result.”

In a dissenting opinion, Justices Allen E. Broussard and Stanley Mosk found that the plaintiffs are “the persons most directly harmed” by the state’s cuts in medical funding and “have standing as citizens to seek a declaratory judgment. . . .”

The suit originally was filed in Alameda County Superior Court. Broussard referred to expert testimony in the case, stating that, “Because of inadequate state funding, some Alameda residents are dying and many others are suffering serious diseases. . . . “

The plaintiffs turned to the appeals court when the Alameda County Superior Court, like the Supreme Court, ruled that they had no legal standing.