Highlights from the Governor's May Revision to the Budget

DATE:  May 12, 2006
TO:      Delegate Agencies, Board of Directors, Advocates and Staff
FROM:  Jennifer Sigafoos, Director of Public Policy
RE:       Highlights from the Governor's May Revision to the Budget

On January 10th, Governor Schwarzenegger released his proposed 2006-07 budget for the State of California.  Today, the Governor released his revised plan, the May Revise, which builds upon the $125.6 billion spending plan put forth in January.

The State’s Fiscal Outlook

California has collected more than $5 billion in unexpected revenue from surging tax receipts.  A strong stock market, business gains, and a robust housing market have all contributed to record tax collections this year and the unexpected growth in state revenue.
 
May Revise

The following are the pertinent changes and highlights from the Governor’s May Revise.

--Restoration of Managed Care Plan Rates.  The May Revise contains $65.4 million for half-year costs beginning January 1, 2007, to restore the 5% provider rate reduction that has been imposed on Medi-Cal managed care plans.

--Other Medi-Cal Managed Care Rate Increases.  The May Revise contains $61.2 million for rate increases to the following plans:  Central Coast Alliance for Health, Community Health Group, Contra Costa Health Plan, health Plan of San Mateo, Partnership Health Plan of California, and Santa Barbara Regional Authority.  Rate increases were determined through a financial review of all Medi-Cal manage care plans by DHS

--Financial Support for Counties to Cover Uninsured Children.  The May Revise proposes $22.8 million (in General Fund) to assist counties with enrolling 24,000 uninsured children who are currently on counties’ waiting lists for health coverage.

--Expansion of Disease Management Pilot Project.  The May Revise includes $1 million to add HIV/AIDS to the Disease Management Pilot Project.

The Medi-Cal  & Health Families

The May Revise includes total Medi-Cal expenditures of $33 billion a decrease of $502.5 million from the Governor’s January budget.  This is due to an expected decrease in caseload.

---The May Revise proposes that Certified Application Assistants (CAAs) receive an additional $25 per successful application filed using the electronic Health e-App.  Also, CAAs receive increased payment of $50 from $25 for the Annual Eligibility Re-determination assistance.

Public Health Programs

---AIDS Drug Assistance Program:  The May Revise includes $258.8 million to fully fund ADAP and an increase of $3 million for the ADAP Rebate Fund.

---Genetic Disease Screening Program: The Genetic Disease Screening program’s funds will be increased by $8.6 million due to an increase in caseload and costs for follow-up, counseling, and diagnostic services in the newborn and prenatal screening programs.

---Breast Cancer Early Detection Program:  Every Woman Counts:  The May Revise includes an increase of $6.7 million in Prop 99 funds for the program.

Managed Risk Medical Insurance Board

---AIM Program:  The May Revise reduces the funding for the program in the Governor’s January budget by $2.1 million.  This is a reduction from $117.4 million to $115.3 million.  The reduction is due to a decrease in caseloads than originally estimated in the Governor’s January budget.

These are some of the changes and highlights in the Governor’s May revise budget.  CFHC will continue to monitor issues of importance to clinics and women’s health.  We will alert our membership with regard to these issues as the budget process continues.