California Budget Conference Committee Closes Out Most Health Items--For Now

[courtesy of California Progress Report]

• Democratic-supported budget would largely restore Medi-Cal rate reductions
• California Discount Prescription Drug Program continues
• Semi-Annual Reports and Healthy Families premium increases still in negotiations
• Conference Committee could close down as early as this Sunday, July 6th

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

The Budget Conference Committee, led by Senator Denise Ducheny and Assemblyman John Laird, met this Thursday afternoon and reached agreement on a number of items of note to health advocates.

These decisions largely reflect current agreement between the Democratic majorities in the legislature; no budget decisions are final until the Legislature approves a budget by a two-thirds votes, which requires Republican votes, and the Governor signs the budget. However, these decisions shape the parameters of the budget negotiations this summer. The issues addressed today include:

PRESCRIPTION DRUG DISCOUNTS: The California Prescription Drug Discount Program, AB 2911 (Nunez), supported by Health Access California and a broad "Rx Coalition" of consumer, labor and senior groups, was passed and signed into law in 2006. The program would allow up to five million Californians with no or inadequate prescription drug coverage to buy prescription drug at prices 40 to 60 percent below the sticker price. The discounts would be achieved through contracts with pharmacists and negotiations with drug manufacturers.

The program, though, has not yet been implemented due to budget constraints. The program was in danger of being deferred yet another year until a compromise on the measure was reached Thursday. Under the compromise, the program would be started and implemented in the budget year, but the state would defray the costs to administer the program with a small portion of the manufacturer rebates.

MEDI-CAL RATE REDUCTIONS: The Committee also voted to restore most of the 10 percent rate reductions which took effect two days ago. The higher rates will take effect September 1, 2008. Any services provided between July 1 and August 31 will be reimbursed at the lower rate. The partial rate restorations are all contingent upon a budget agreement that includes revenues.