Officials Say U.S. Bailout of County Hospitals at Risk

The $364-million federal bailout that Los Angeles County is counting on to keep all its hospitals and health centers open is “at risk” in the congressional plan to overhaul the federal Medicaid program, state and local analysts said Tuesday at a special Assembly committee hearing.

Local officials, while conceding that the desperately needed money has been left out of the Medicaid funding bill, said it is too early to panic because the legislation will be the subject of lengthy negotiations between Congress and President Clinton, who has promised the money to the county.

In other testimony, the committee heard that the legislation to overhaul Medicaid would reduce health care spending in the state by $17 billion over seven years and knock large numbers of Californians off the eligibility rolls, leaving them without any insurance.

Medicaid, the nation’s health care program for low-income, disabled and other needy Americans, is known in California as Medi-Cal. About 5.5 million Californians are enrolled in the program.

The proposal in Congress would lump all current Medicaid payments to the states into block grants and leave it up to states to rewrite eligibility requirements and define the kind of health care services that would be provided.

The problem for the county is that the money it needs to keep its hospitals and clinics open is not part of the block grant package, legislative budget analyst Jeanette Michalczuk told the special committee, chaired by Assemblywoman Barbara Friedman (D-Los Angeles).

Walter Gray, an assistant director of the county Department of Health Services, agreed. “Unless they give us some concessions, it basically eliminates [special federal grants] across the country,” Gray said, adding that he is hoping for a compromise.

After the hearing, Burt Margolin, a former legislator who was instrumental in putting together the bailout plan, said: “I personally don’t believe that the funding is at risk because there continues to be very strong support from both the Clinton Administration and the Wilson Administration.”

But Margolin conceded “there is still a long way to go” before the county gets the money.

Support for the plan clearly is not universal in Sacramento.

Assemblyman Brett Granlund (R-Yucaipa), the freshman legislator who is chairman of the Assembly Health Committee, said he will oppose the special funding deal for Los Angeles County unless all California counties share equally.

He vowed to bottle up in his committee any “preferential treatment and funding” legislation for the county.

“L.A. County has been given preferential treatment over and over again over the years. They are going to have to learn to live within their means like every other county in the state,” Granlund said. As for the threat that county hospitals would close without the money, Granlund said: “Let them close them. There are plenty of private hospitals.”

Margolin downplayed Granlund’s comments, saying the $364-million plan does not require approval by the state Legislature.