Governor Postpones Overhaul of Medi-Cal

Gov. Arnold Schwarzenegger has put off a proposed overhaul of the state’s healthcare program for the poor that had been expected to dominate legislative debate leading up to the November elections.

Administration officials announced that the plan to save $400 million by restructuring the Medi-Cal program was incomplete and needed more study. The plan is now expected to be part of the budget for next year, which will be released in January.

“Restructuring a program as complex as Medi-Cal is no simple task, and we want to do it right,” said a statement from Kimberly Belshe, secretary of health and human services.

Changing the Medi-Cal program has been high on the governor’s agenda since he took office in October. Administration officials say the program has grown by 41% over the last five years, costing the state more than $3 billion annually.

The program serves 6.7 million low-income Californians. The cost of the program is split between the state and federal governments. California is hoping to save hundreds of millions of dollars by getting the federal government to lift some of its requirements for matching funds.

But the plan has aroused concern among scores of healthcare advocates who caution that the only way the state can get the kind of savings sought by administration officials is to remove people from the program.

Even making a change like asking participants to pay a monthly fee, advocates say, could have far-reaching consequences. According to advocacy groups, such fees in Oregon resulted in half the people in the state’s healthcare program being dropped.

“I think the administration anticipated there would be a lot of opposition,” said Jean Ross, executive director of the California Budget Project. “They were moving in the direction of making a number of very controversial proposals.”

Legislative Democrats were not supportive of the proposal. Senate President Pro Tem John Burton (D-San Francisco) said restructuring Medi-Cal “means by and large you take medical care away from poor people.”