County braces for health care reform’s funding shift

As expected, Governor Jerry Brown’s revised state budget proposal increases school spending and – also as expected – it withdraws county health care funding that’s been in place since 1991.

Governor Brown announced his revise of his January budget proposal the morning of May 14 and later that day, County Administrative Officer Phillip Smith-Hanes briefed the Board of Supervisors on it.

He highlighted the budget revision’s plan for implementing federal health care reform. Health care funding scenarios will change when the Affordable Care Act’s directives begin in January.

Smith-Hanes said the state will “take away” funding for health care programs that has been provided since the 1991 realignment of health and human services programs from the state to the county. Brown’s proposal describes the shift as one that will be conducted fairly and equitably. But Smith-Hanes used a different description.

“I would phrase it as the state proposes to intrude into our local decision-making, determine the amount of savings that we have accrued attributable to health care reform and force us to re-direct those resources to human services programs,” he said.

Counties use the 1991 realignment funding for indigent medical care and public health care services. Those services will be covered by federal funding once health care reform begins and Smith-Hanes reported that Brown proposes to phase out the realignment funding over a three- to four-year period.

The California State Association of Counties (CSAC) has taken a stance against the proposal and David Finigan, its president, released a statement that argues the redistribution of funds should be based on “actual savings” rather than an “arbitrary number.” His organization doubts that the withdrawal of funding will match what’s being saved.

“Unfortunately under the formula outlined today, the money will be taken too soon and the ‘true up’ formula will come too late,” he said in the statement.

County Health and Human Services Director Phil Crandall told supervisors that the state isn’t acknowledging the impacts counties have absorbed with other realigned programs. “Counties have endured over a decade of massive reductions to health and human services programs,” he said, adding that mental health services funding has been reduced by 50 percent.

Crandall said “inadequate resources” have been provided for public safety prison realignment and “we’re seeing the impacts there – there were no subsidies for expanded health care costs, general assistance costs or police response.”

The amounts counties will save with the implementation of health care reform is unknown, he continued, and the state will be getting 100 percent of the federal money to fund the first three years of the new health care system.

The county will have additional administration costs that won’t be funded, said Crandall. Enrollment for the new system begins in October and Crandall said “the state hasn’t ramped up their system to communicate” and the county is looking at “a massive amount of administrative work to get people enrolled.”

On the upside, Smith-Hanes said that Brown’s revise does include an additional $72 million statewide for county probation departments.

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