Despite Medi-Cal ‘Cuts,’ Program Keeps Getting Bigger

The popular belief seems to be that California has been gutting its health insurance program for the poor because of the state budget problems. Budget figures tell a much different story.

Gov. Arnold Schwarzenegger has proposed increasing Medi-Cal spending next year, from the current $28.7 billion to $31.2 billion. Based on comments made by influential lawmakers, the Legislature seems likely to add even more money to Medi-Cal’s budget.

During the past decade, spending on the Medi-Cal program has gone through the roof — from $16.5 billion in 1994 to $28.7 billion this year. During that same period, the program’s caseload grew from 5.4 million people to 6.5 million, so the spending increase is equivalent to about $11,000 for each person added to the rolls.

There have been only two years since 1994 in which Medi-Cal funding actually fell compared to the previous year.

The first cut occurred in 1997-98, when Medi-Cal spent $18.3 billion, down $100 million from the prior year. The reduction made sense, since the program’s caseload also decreased that year by 200,000 people.

The second cut was last year, when spending was reduced $400 million even as the number of Medi-Cal recipients grew by 100,000.
These numbers are easier to follow when viewed in sequence:

1994-95 — $16.5 billion
1995-96 — $16.5 billion
1996-97 — $18.4 billion
1997-98 — $18.3 billion
1998-99 — $20.2 billion
1999-00 — $22.3 billion
2000-01 — $24.3 billion
2001-02 — $27.0 billion
2002-03 — $29.1 billion
2003-04 — $28.7 billion
2004-05 — $31.2 billion (proposed by the governor)

Clearly, the problem isn’t that the government has been stingy with its money. In fact, a good argument could be made that past governors and state lawmakers have been far too generous with Medi-Cal dollars.

Consider, for example, that Medi-Cal money pays for emergency treatment and prenatal care for illegal aliens — people who would be deported before such needs arise if this country’s immigration officials were doing their jobs.

According to census figures, there are about 2 million illegal aliens living in California, a good many of whom are poor and therefore receive Medi-Cal coverage. Actual figures are hard to come by, but it’s clear that Medi-Cal spends a tidy sum on care for people who break the country’s citizenship laws.

State lawmakers also have made it easier for people to qualify for Medi-Cal even if they aren’t poor. That’s right, the “safety net” medical coverage for low-income residents also covers people who can afford to pay for their own care.

With a good lawyer or financial planner, a person can qualify for Medi-Cal to pay for nursing home care regardless of financial need. In a Q&A section on one financial planner’s Web site, the question is posed, “How much money can I have and still qualify for Medi-Cal?” The answer: “Usually unlimited, however call our office for explanation.”

That could be considered hiding assets were it not for the fact that the government has gone out of its way to accommodate such schemes. It’s not hiding if nobody is seeking.

As this year’s budget debate heats up, keep all these facts and figures in mind. Remember that Medi-Cal funding has been increasing for years, with no significant cuts.

And remember that if serious reductions are proposed, the cuts don’t have to result in the suffering of poor seniors. Instead, spending on illegal aliens and the non-poor could be cut immediately, at a huge savings, if state officials had the desire to do so.


David Kline is a Sacramento native who has been writing about seniors' issues since 1991. He has served as Spectrum's editor for the past five years — a period that has seen the paper receive awards from the California Newspapers Publishers' Association and National Mature Media Awards program.

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