Assembly Standing Committee on Budget

All right. Good morning, everybody. Welcome to the Assembly Budget Committee. Today's informational hearing will focus on SB100 and its identical counterpart AB100, which are our early action budget bills. We expect to vote on one of these bills later this morning on the Assembly floor. For today's hearing, Erika Li at the Department of Finance will present the bills.

Our Legislative Analyst Gabe Petek and his team are here for questions and Christian Griffith and the Assembly budget team are here as well. After that presentation, we will turn to Member questions and comments and then open up to public comment.

However, due to Assembly floor session, we will need to adjourn this hearing no later than 9am Let me say a few brief words about the substance of these early action bills. Most importantly, these appropriations will benefit communities across California by investing in wildfire prevention and forest resilience.

They will provide needed funds to ensure that hospitals and providers can receive timely payment and Californians can access the health care they need and rely upon. And this Bill will continue our commitment to help with the recovery and rebuilding of communities in Los Angeles devastated by the Eaton and Palisades wildfires.

We will have more work to do on all of these issues in the June budget, but today's early action is an important first step forward to help move California forward. And with that, I will ask our Vice Chair if he has any opening comments. All right.

We are moving along at a brisk pace here, so we will now open up to the Department of Finance.

Good morning. Good morning, Chair Gabriel, Vice Chair Flora and Members of the Budget Committee Erika Li with the Department of Finance to present on SB 100, a budget Bill junior that amends the 23, the 2023 and 2024 budget acts.

This Bill includes an increase in expenditure authority of 2.8 billion General Fund and 8.3 billion matching federal funds for the Medi Cal program. This Bill also amends control sections from this year's enacted special session bills which provided 2.5 billion for use by state departments and entities for cost resulting from impacts of Southern California wildfires.

Specifically, this Bill authorizes augmentations to provide funding to be dispersed to Los Angeles County or cities within the county for unmet response and recovery needs resulting from damage caused by the Eaton and Palisades fires.

It requires the Executive branch and any local entity receiving funding pursuant to these sections to seek the maximum amount of reimbursements from the Federal Government and requires that any federal reimbursements received be deposited back into the General Fund.

It also authorizes augmentations to backfill property tax revenue lost in 2024-25 and 25-26 by cities, counties and independent special districts as a result of damages caused by the Eaton and Palisades fires.

This Bill also augments Cal Office the California Office of Emergency Services or Cal OES's reimbursement authority by 7.65 million to continue through June 30th 30th of 2026 a contract for an operational observer to monitor covered utilities implementation of measures that mitigate the risk of wildfire ignitions from utility infrastructure and reduces the use, scope and duration of public safety power shutoffs.

It also restores 2023-24 funding for the California Nonprofit Security Grants Program that was not encumbered before the appropriate appropriations of avail availability expired, providing a 20 million General Fund augmentation.

This Bill also adds a provision to allow the state controller to use existing funding from the Property Tax Postponement Fund to pay for approved applications related to manufactured mobile homes in the 24-25 fiscal year.

It provides an Administrative Procedures act exemption for 2 million General Fund for the Farmer Program Existing farmer funding has an exemption from the Administrative Procedures act already, so the California Air Resources Board would not be able to allocate this funding without this exemption.

It provides an additional 17 million from the enhanced Fleet Modernization sub account to provide additional funding to local air districts for the Clean Cars for All program.

It also authorizes the Department of Finance to approve expenditures up to 2 million from the Foster Family Home and Small Family Home Insurance Fund to address claims paid on behalf of foster family homes, small family homes, resource families and tribally approved homes.

It reappropriates 1 million 1 time Proposition 98 General Fund to the Fiscal Crisis Management and Assistance Team to provide technical assistance to local educational agencies impacted by the LA wildfires.

It provides an increase of 250,000 Teacher Credential Fund Authority to the Commission on Teacher Credentialing to cover an authority shortfall in 24-25 due to a larger than anticipated number of cases that must go before the Office of the Attorney General and the Office of Administrative Hearings.

It adds control Section 15 to the Budget Act of 2024 to appropriate certain Proposition for climate bond dollars including the full amounts allocated to six state conservancies for grants and projects related to wildfire and forest resilience and $10 million to the Department of Forestry and Fire Protection Fund training center infrastructure for a fire resiliency Center for the Kerak Tribe.

And finally, this Bill makes other additional technical changes. That's the end of my presentation, but I am joined by colleagues and we're prepared to answer any questions the Committee might have. Thank you.

Thank you very much. Now let me invite our Legislative Analyst to offer any comments.

Good morning Mr. Chair and Mr. Vice Chair Gabe Petek, Legislative Analyst Office and I'm here with my staff in case there are questions for us. No, no pre prepared comments.

Thank you very much. With that, we will bring it back to the Committee. Are there any questions or comments from Members of the Committee? Assemblymember Tangipa.

All right. Well, thank you. Thank you for joining us this morning. I just have some quick clarifying questions on on this. How much do we typically pay per month for Medi Cal?

Let me ask a colleague to come up for further assistance on.

Laura Ayala. Department of Finance. Roughly the monthly cost. Is between 11 and 15 billion per month for Medi Cal.

Okay, perfect. Could you, for what we've done in this past month, could you clarify what both the loan and the early action that we took earlier, totaling 6.24 billion, were necessary and what were the primary drivers behind that need?

The $3.4 billion loan that was provided earlier in the spring was to meet cash flow needs. So the Medi Cal program, unlike many other of our programs, runs on a cash basis. And so dollars that come in, dollars come in, dollars leave, and the balance of the Fund changes from day to day, honestly day to day.

And so cash flow needs. The $3.4 billion loan was necessary to meet cash flow needs. However, at the Governor's Budget, we also presented to this body that we were experiencing higher than forecast costs in this program. And so it was also to meet some of that need as well.

This $2.8 billion is on top of that $3.4 billion loan. And we believe with that combination we will be able to make payments timely to our providers in the current year.

Okay, so the 2.8 is on top of that recent loan and that's what's going to carry us all the way to June?

That's correct.

Okay. To what extent did the expansion on Medi Cal coverage to undocumented individuals contribute to the increased costs that we're seeing? And was that some of the primary shortfall to why we don't have the cash flow?

I would say that as I noted in January that the overall cost of the program, of the Medi Cal program is increasing. So not just the population that you mentioned, we're seeing higher than expected pharmacy costs. We're seeing higher enrollment, particularly among seniors, and we are seeing higher take up amongst the undocumented immigration population.

So in combination, all of that has increased the Medi Cal program cost that we initially thought at the 2024 budget as well as at the Governor's Budget.

And the main reason why I asked that is because when I look at the Department of Finance's 2024 budget for undocumented medical coverage, it was nearly off by about 40%, you know, and we're over budget by over 1,000%.

And what I would ask is, how confident is the Department of Finance that no additional loans or emergency funding will be needed before the end of this fiscal year?

We are certain that we won't need an additional loan. There's no manner in which we would get an additional loan. We don't have that authority. We've already exercised that authority. And the 2.8 billion request that is before you today is what we believe will take us through this year.

And I think that the broader point maybe is that the cost of the program is more than anticipated. It is unsustainable. We are looking at ways to curb those costs into the budget year.

And so I think that's the point I'd like to make to this body, is that we realized even at the Governor's Budget, that these costs were higher than we could sustain ongoing. And so we do have to make some changes to the Medi Cal program.

We also have to look at the broader budget as a whole because other programs are also increasing in expenditures at a faster pace than we anticipated.

So you're saying because of the trends that we're seeing right now and the increase in payments, that changes to Medi Cal are probably needed before we fall off a financial cliff.

I would say that Medi Cal is one of those programs, and we are looking at several programs that are also increasing in their cost beyond our forecast.

Okay. And with the proposed budget that we're about to appropriate, the 11.1 billion, 2.8 billion from the General Fund, the 8 billion in federal funds to cover all of these medical payments through June. Is any of this current payment going back to pay that loan that we took out just a month ago?

Those are costs for the program at this point, and so we will have to pay back that loan.

Is this allocation paying back that loan?

This allocation is not paying back. This is just on top of program costs and again, cash flow needs.

And the expectation is that the Federal Government reimbursements will come in and fulfill the loan that we took out a month ago while we carry on all the way till June.

No, it's going to be the state that repays itself. So we are not anticipating the Federal Government to cover the $3.4 billion loan.

But we're not paying ourself out of this 2.8 billion.

Correct.

Okay.

Thank you, Dr. Jackson and then Assemblyman Bennett.

Thank you very much, Mr. Chair. If folks are not. I made that mistake before. If folks are not on Medi Cal and they have no other way to have health insurance and they go to a clinic, they go to a hospital and they go to the emergency room. Who pays for that?

Typically, if a patient goes in and can't cover that, it's the hospital and the county's indigent care Fund that takes care of that cost.

So if I have, if I have a distressed hospital or distressed health system in my district, in my region, wouldn't I want as many people to be on Medi Cal as possible?

I think. I think that is correct.

Because then You are not bearing that brunt and you don't have to worry about closing down hospitals. You don't have to worry about health care deserts. Am I correct in that?

Yes. And this body, as well as the Administration, has prioritized access to health care.

So technically this is a good problem to have because we are making sure that local communities are not bearing the brunt on the people who are working every day. I'm for one, am more of a humanist, so I don't see the distinction between citizens and non citizens.

We're talking about human beings here, and we want as many human beings to make sure that they're as healthy as possible so they can continue to be contributors to this society. And so what I'm more afraid of and disgusted by is the possible cuts to Medicare and Medicaid.

Doesn't that provide more of an existential threat to us than what we're talking about today?

Yes, the federal cuts to either program would be devastating for people, but I would also say on a fiscal level would be very disruptive to our budget.

Did you.

Yeah. Jason Constantouros Legislative Analyst Office Just to really sharpen that point, the Legislature did take several actions to expand eligibility for Medi Cal. And as you know, it's bringing more people onto the Medi Cal program even more than was sort of originally anticipated. And depending on your perspective, that can be good news.

That means that more people have access to comprehensive care under Medi Cal. It also potentially takes pressure away from other parts of our healthcare sector. On the other hand, you're looking at some fiscal constraints.

Either there are projected deficits in the in the state budget and you're trying to plan for a heightened period of uncertainty given sort of the changing federal landscape. These are all sort of key issues that the Legislature is having to weigh right now, but these are some of the key trade offs that you're sort of facing.

Okay. Thank you, Senator Bennett.

Thank you, Mr. Chair. I just wanted to 0.1 thing out for the benefit of everybody and. That is the Prop 4 funding comes with significant restrictions in Prop 4. And so I think some people view it as there's $10 billion there and we should just rank from the highest priority to lowest priority.

Our current thoughts when in reality you have to take each one of the. Subsections and it's restricted so you're only. Ranking within the restrictions of that Prop 4 bond. So just wanted to pass that on to people to as we're getting some more questions coming in about Prop 4. Thank you.

Thank you very much Assemblymember and I just wanted to thank you. I neglected to do this in my opening remarks for helping us to think through all of these issues so that as we put forward the early action today, we know we have some good dollars in there for wildfire prevention and resiliency.

And so thank you for your efforts on that. On that front especially I think Assemblymember Alvarez thank you.

I have a question about the allocation for the clean cars for all. So we are augmenting that from $2.0 million $2.8 million allocation to 19.8 a $17 million additional allocation. I'd like to know more about this allocation, the decision to allocate more and who this is going to serve. So let's start with Tell me about the Clean Cars for all Program.

Shy Forbes Assembly Budget Committee so that $17 million is intended for local air districts that are projected to run out of money through this fiscal year. So it's a small amount of money to ensure that they can keep their programs up and running. There's five air districts that have local air district based programs.

One is San Diego South Coast South Coast Air Manager Air Quality Management District San Joaquin in the Central Valley, the Bay Area I think that was five and Sacramento and it's only for low income Californians believe it's 300% of the federal poverty level who's eligible for that program And San Diego I believe still only does disadvantaged communities as defined by. The ...

And are we Seeing there like an over subscription? Is that why you you anticipate that the funding will run out? There's more people Requesting what's the dynamic on the ground with actual individual people?

I believe it is more people are subscribing. But also as we're getting more used electric vehicles and hybrids on the used market, that means there's more vehicles for those individuals to purchase. Before the program, there were just very limited number of those vehicles on the used market.

Okay. And the encumbrance is allowed for up. To. The way this is phrases for liquidation, which I assume means it could be used up until 2029. So it's not just through this year. It'S for a few more years.

I believe that is accurately the deadline, unless finance has a different thing to jump in. Typically the funding is spent before that and they just have that for sort of longer drawdown.

If money does come back, let's say a person who's expected to get the credit is unable to purchase a vehicle and that money would come back, they would then have ability to loan that out again.

I'm assuming that either Natural Resources or. The Air Resource Board has a portal on the utilization of this so that there's public information on that. Is that correct?

Yes. So the California or Andrew March with The Department of Finance, the California Air. Resources Board does have information on this. We're happy to provide some highlights level numbers if interested. Okay, thank you.

Thank you very much, Assemblymember Schiavo.

I just wanted to go back to the discussion around possible Medicaid or medical funding cuts from the Federal Government. And you know, I mean this. They're talking about cutting $880 billion out of the federal Medicaid funding. We know that many billions of dollars could be California's share of that.

And so the impacts not just to Medi Cal but to our whole budget are extremely concerning. And I think, you know, one of. I think it's important for us to. And I know this was discussed in our. In our health budget Subcommitee. You know, part of the reason.

There's a lot of reasons going into why there's a cost overrun here basically. Right. And part of that is that we did what we were supposed to do, especially during a global pandemic. We made sure that people stayed on Medi California. We didn't kick seniors and disabled folks off Medi Cal and make them reapply and requalify.

We kept them safe and healthy and having access to care during a global pandemic where millions of people were dying. And that's actually what we should have done. And through the reauthorization, which is once again forcing people to reauthorize and make sure that they qualify. Again, we're finding that they all qualify. Right.

And so in some ways, you know, we're spinning our wheels and spending kind of resources on something that doesn't seem to be getting a lot of gains in terms of savings, is my understanding.

And correct me if I'm wrong, but, you know, I think the point that my colleague was making earlier, when people come in uninsured, uncovered by Medi Cal, then that cost is borne on the hospital.

And we know that there are a lot of hospitals on a very thin line right now, and many hospitals are at least 30% Medi Cal and some are 70%. Children's Hospital of Los Angeles is 70% Medi Cal.

So when these hospitals are reliant on Medi Cal funding, and that is cut significantly, either through funding cuts at the federal level or through pushing people off of it at the state level, then what would logically happen is that those folks are covered by the hospital. The hospital has to make up that money somewhere.

And that means that insurance rates are going to go up for everybody paying for insurance. So that cost is going to be borne by Californians in one way or another. It's much more expensive to bear it through higher insurance rates and covering the cost of care in emergency rooms than through primary care and preventative care.

And so, you know, I know in our, in our budget process, it's hard sometimes to get a holistic view of, of the impacts of the many budget decisions that we make.

But I think the ripple effects of this are going to hit Californians in the pocketbook if we end up being the ones paying for uncovered care in ERs or having to try to scrape together to cut to cover these massive multibillion dollar potential federal cuts to our system.

And so I don't know if you can talk a little bit more about the, you know, what we did during COVID not requiring reauthorization, all the other kind of pressures that have put us here, but really, in some ways, our success story that we kept people alive, we kept them covered, and we did what we should have done as a state to make sure that our communities are healthy.

Sure, I can talk a little bit about that. The COVID flexibilities that were allowed by the Federal Government, I think, is one thing that you mentioned that we provided to Californians throughout the pandemic that has been extended through the end of this year.

And that's partially why we're seeing higher caseloads, because more people are on as well as we're seeing older, sicker people. And so that that's also more expensive. There are other changes to the Medi Cal program, such as the asset limit test. We removed that. And so a lot of and of course the expansion to undocumented immigrants.

So a lot of changes to the program were occurring at the same time. We're trying to project what those numbers would be in the future. And projections are always more art than science, whether it's revenues or caseload for these programs. And I would say that a lot of that contributed to where we are now.

It's not a good place to be. But I think the reality is there was a lot of movement, a lot of things were occurring that made forecasting, caseload, understanding how those numbers would fluctuate, or perhaps not as we were going forward. So those are some of the examples that I would bring to this Committee.

If I may, also Gabe Puttock from the lao, in addition to what my colleague from Department of Finance said, which I think those factors contributed to both of our offices having some challenges this year with forecasting the Medi Cal budget.

But when we look back over time, there is variability that is not uncommon between the budget and the actual expenses.

Adding to those factors that my colleague mentioned, the cost of some of these Newer Pharmaceuticals, the GLPs, the Anti Inflammatory medications that are hitting our budget differently than before because in 2022, the state switched back to a fee for service model for paying for pharmaceuticals instead of the managed care approach, which means that any volatility in the pricing of these drugs goes straight to the state budget rather than being absorbed by the MCOs.

And so that's just one additional factor that I thought I would mention.

Thank you.

Thank you very much, Assemblywoman. I just want to jump in if I can here because I think that this context is really important for the conversation we're having today. And I know that Ms. Addis and her sub had a very robust conversation about all these issues.

And obviously we're going to need to think carefully about health care as we think about all aspects of this budget. I mean, that is something that's going to be true across the budget in this challenging budgetary environment. But to ground the conversation, I think I heard Assemblymember Tangipa say something like we're 1000% over budget.

My understanding is that when you look at the numbers, we're about somewhere in the single digits, maybe a cost overrun around 6%. And that when you actually look at that as the General Fund cost overrun is about 1.5% of the state's overall Medi Cal program budget. And as the LAO said, it's not uncommon.

This has happened, as I understand it, over years, that forecasts are not an exact science and that there's a lot of factors here. And to me, what was a very salient point here is that this is also a national story. This is not a California specific story. You are seeing healthcare costs rise across the country.

And my understanding is that there's a lot of other states, Colorado, Indiana, Nebraska, Pennsylvania, Connecticut, Maine that are facing similar challenges with their medical program.

So to me, it's important to understand we have a challenge here and it's one that we've got to look at and think about carefully, as we do with every expenditure in every part of the budget. But I want to ground it in reality. So I just want to ask you, are we 1000% over budget here? Mr. LAO?

Well, and I have a point of clarity. Yeah, that was specific. In one area that I was talking about, the allocated funds towards medical for undocumented immigrants is $500 million. What was told to us earlier is $9.6 billion is the actual that was spent. So we're actually not just 1,000% over budget.

We're 1,000 plus percent over budget on the undocumented immigrant allocation of 500 million and we're actually spending $9.6 billion.

So, Mr. Tangipa, I appreciate that. Next time I'm going to ask you to ask to be recognized because this is my time and so I'm going to have a conversation here. You already had the opportunity to have your time, but and I just want to make sure that we're grounding our conversation in reality here.

And again, so I guess my question to LAO, is it true that healthcare costs are rising nationally? Is it true that other states are facing challenges with Medi Cal and is it true that we do not have, we are not 1000% over budget for our Medi Cal program?

Yeah, I think I'm in the, I'm most prepared to sort of speak to the Medi Cal program, so I'll start there. So in the Governor's Budget, General Fund spending is 7 1/2% higher than what was budgeted last year. And on a total funds basis, it's more about eight and a half percent.

That's reflecting other special funds and federal funds as well, you know, and generally in terms of, you know, what's driving that. And this, I think goes back to some other questions that were raised earlier. Fundamentally what we're talking about here Is Medi Cal costs coming in higher than what was sort of initially budgeted for.

And as you've heard, there just is a lot more uncertainty in the medical budget kind of moving forward. That's a number of reasons for that. The changing federal landscape and policy changes. This happened before the most recent Administration.

And also kind of following some more recent discussions that you've all been tracking, There have also been a number of recent state policy changes that were difficult to accurately predict at the time due to limited data. And then as my colleague mentioned, also additional pharmacy costs, which can be quite volatile.

So moving forward, you are sort of grappling with more budget uncertainty as you're sort of preparing the budget. The other thing I wanted to note in the Governor's Budget, it's seven and a half percent higher. But as the Administration has noted, they're tracking data that might suggest that costs could be even higher than expected.

That's not something that we have access to at the moment. That's usually something that comes at may revision. So that'll be something to keep an eye on. And then also wanted to note, we did look back and see what other revisions looked like.

Every year there's a, there's a change in, you know, what is budgeted for medical and what is actual. And this does seem to be a bit on the, on the higher end of a revision. That said, it's not, you know, the revisions tended to fall within the, you know, more in the 5% range.

So this, this is a little bit higher that. That is excluding the pandemic where there was a lot more budget uncertainty and a lot more substantial revision. And then we have heard other anecdotes from the Department of Healthcare Services of other states that have had sort of similar uncertainty.

Again, some of the uncertainty is very specific to California because we've had a number of policy changes. The way we pay for drug costs. Some of them are things that other states grapple with. For example, the, the states, the Federal Government's unwinding of its pandemic policies.

This created a lot of uncertainty with projecting caseload, and that's one of the reasons why caseload has come in higher than sort of initially expected.

Thank you very much. I think. Assembly Member Hadwick

I just wanted to. Express my thankfulness for the Prop 4 money going towards my district. Sierra Nevada Conservancy does great work on the ground for fire mitigation. And, and I'm very appreciative of including my budget request for the Karuk Tribe for their fire resiliency Center. So I just wanted to express my thanks.

Thank you very much, Assemblymember. And you wrote an excellent letter to the Budget Committee. So we are happy to Fund that worthwhile investment. Mr. Vice Chair.

Thank you. Mr. Chair, I just want to clarify, is it safe to say we're having a lot of conversation about Medi Cal, but through the pandemic, we grew Medi Cal roughly about 9, almost 10%. Is that correct?

Are you saying in total spending?

Just as population, we're covering the number. Okay. Expanding that into new populations.

So you're asking overall caseload or the. Expansions that we prior to the pandemic and then what after.

When we came out of the pandemic, we were about 9-10% higher than what we came into the pandemic with. Correct.

Overall, prior to the pandemic, we were about 12 million for Medi Cal caseload. And currently we're approximately at 15 million.

Okay. So I think some of these expenditure increases that we're seeing. Right. Are because of that expanded caseload, correct?

Yes, definitely. And that's associated with, like my colleague mentioned earlier, the flexibilities that the Federal Government allowed that we have maintained.

Yeah, thank you for clarifying that for me. And I think to my colleague's point as well, you know, we bring people on to Medi Cal, which is obviously what we're trying to do here. The state picks up the burden of that, the majority of that burden, if. They come directly into the ER.

Isn't it correct to say that the Federal Government has a higher reimbursement rate if they come directly into the ER versus going on to Medi Cal?

Are you referring to individuals who are undocumented or referring overall? Because my statement regarding the 12 million. Versus 15 million, that 3 million caseload increase is not associated with just individuals who are undocumented. I want to clarify that that includes individuals across California who became eligible because. Of their income and for specifically for. The population who's undocumented.

The Federal Government does Fund a share of their emergency related and pregnancy related costs.

I appreciate that my concern is not honestly necessarily with the undoc, just trying. To get to the bottom of why. We have such a massive increase in the medical funding, why this is such. A huge issue for us. Because I think the number was like. 1.9 million on undocs and then the.

Rest is coming out of just folks. Like you said, that have became eligible for Medi Cal. So I think that there's just a. Dynamic here that we're not quite getting. To the Bottom of. Of why through the pandemic we have roughly a, you know, $14 million increased. Population on Medi Cal and why that's.

More expensive and kind of to the Laos, you know, comments like there was a lot of programs that we've improved or, you know, voted on that kind of expanded Medi Cal and people that are eligible, which with that there's a significant increase of cost. So just simply want to thank you for your time.

All right. Would you like to speak or something more?

I wasn't going to speak really, but just to that note, could you just talk about who Medi Cal covers? The kinds of folks that Medi Cal covers in terms of income level and kind of life situation.

Yeah. The Medi Cal program broadly serves individuals who are low income. It's set as a percent of the federal poverty level generally is about 138% of the federal poverty level. There are different income limits for some populations. It's a bit higher for children, for example.

And these are, these are people who generally are at or near the federal poverty level, sometimes meet other eligibility requirements like have a disability.

Could you remind us of what those incomes might look like?

What would someone's income be? You know, I'm sorry, I don't have the federal poverty level in front of me. It's a 15,000. So it's 100% is about 15,000 for an individual. So it'd be about 20,000 for. At 138% for an individual. That goes up as you. As a household size increases.

So we're talking about people with incredibly, incredibly limited incomes. Correct. These are people who are on the. On the lower side of the income distribution. And they live where they live where.

In our state, it serves Californians living in every part of the state. And then Medi Cal Dollars, this was mentioned. But Medi Cal Dollars go to keeping hospitals open, is that right?

Included in Medi Cal are hospital services. Hospitals are paid various rates for the services they provide.

And we've heard from a number of hospitals around the state that they may close if Medi Cal Dollars were cut. Have you heard that information as well, anyone on the panel?

I couldn't speak to any sort of specific stakeholder claims, but generally Medi Cal is a sizable share of hospital revenue. And so if that revenue were to notably decline, that, that would sort of, that could raise questions for some hospitals on their operations. Particularly some hospitals serve primarily Medi Cal patients for.

So for those hospitals that, that could. The issues there could be particularly significant.

And then could you Talk about just demographics of the population. We've talked about income, we've talked about where folks live. But children, seniors, people with disabilities. Do you have the demographics on that? What percent are children? What percent are seniors that need care? What percent are people with disabilities?

Well, you know, I have some numbers in front of me. I don't have them as percents. I'm always cautious to do mental math at the table. zero, go ahead. Defer to my colleague, actually.

Thank you, legislative office. I do happen to have those figures at hand. So of the total Medi Cal population. Of approximately 15 million or so, the breakdown is families are 43% of the population, seniors are 9%, persons with disabilities are 7%.

And the ACA optional expansion, which is essentially, that's the Affordable Care Act and extending Medi Cal essentially to low income childless adults, and that is 34% of the population.

I just want to encapsulate, and this is more of a comment than anything else, I just want to encapsulate the way I've been thinking about this as the chair of the health budget.

We've got 15 million Californians who may be making, I think you said, as low as $15,000 a year families, numerous children on the program, numerous people with disabilities, and numerous seniors with disabilities. And what we're really talking about today, and that we, excuse me, we'll be voting on later, is a 2.1.0 billion allocation.

When I did the math on that, we've talked a number of different ways to look at that Money. That's about 1.5% of the total Medi Cal budget.

So very, very small amount of the total Medi Cal budget to keep health care for people who truly need it in a situation where we've had hospital closures, maternity Ward closures, and huge lack of access to Californians across the board.

And as we're making these decisions, we know that the Federal Government is looming over, threatening to cut care even farther, which if that happens, will raise the cost of uncompensated care as well as potentially raise insurance rates for folks that are paying out of out of pocket insurance costs.

So I think what we're doing today is very modest. It's been described to me as very modest.

And it's the way that I look at it in terms of funding California's values that have been laid out and really worked out over time in this body is how can we make sure that the folks most in need in our state that live in every district, red or blue, geographic diversity, but that make the most and need our help.

How can we do that in a modest way? And I think that's what today's decision is about. So thank you so much for your clarity.

Thank you very much, Assemblymember. And I just want to thank you for those questions and for the comments and for the thoughtful way that you have been approaching all this.

To me, one of the most important things that we can do as we have a conversation about this issue and about every potential investment we may make in the budget is have a conversation that is grounded in facts, that is grounded in data, that is grounded in the lived experience of communities across the state.

And so, you know, we've heard stakeholders and others throwing out claims about what we're doing or we're not doing.

And I just want to make sure that as we consider all of these issues and we're going to dig into them, and I know you've been doing that work that we dig into them in a way that is grounded in truth and reality. So I want to thank you for that.

And I also want to encourage all the Members of the Committee and really everyone here listening if, if you have questions about these issues, if you want to understand them. But I would really encourage you to go talk to Assemblymember Addis, talk to Assemblymember Banta. They have deep expertise in this area.

They have been thinking a lot about these issues. There are people in every one of your districts that are going to be deeply impacted by the choices that we make. Seniors, children, families, people with disabilities, communities that all of us want to serve. And so this is an important conversation.

I would really encourage you to watch their hearings and to go have conversations with them because they are digging into these issues in a deep and thoughtful way. With that, I want to turn us to public comment.

We only unfortunately have a brief opportunity for public comment since all of us have to go over to the Assembly floor for four session. But before I do that, let me thank the Department of Finance, let me thank the lao, let me thank the Assembly Budget Committee staff and of course the Sergeants.

And again, thank you to Assemblymember Bennett for your help in crafting the Wildfire Resilience and Climate piece of today. And with that we will open it up to public comment.

Good morning. Linda Nguy with Western Center on Law and Poverty. Pleased to support A.B/S.B. 100 particularly around the Medi Cal budget. As noted, the increase in caseload is a sign that the program is acting as intended and that people are getting needed care.

So called expansions are actually elimination of exclusions Prior low income Californians were treated differently merely because of their immigration status. In addition, older adults and people with. Disabilities were subject to a lower income eligibility threshold and we're the only ones subject to an asset test. We support full Medi Cal funding and.

Protecting coverage gains that were significant in reducing California's uninsured rate. Thank you.

Thank you very much.

Christine Smith with Health Access California. We also support this important work in AB100. Just noting, as was noted during the hearing, rising health care costs are a challenge across the the country, which is why Health Access is working to support the Office of Health Care Affordability's cost containment goals.

We support funding for medical programs and urge the Legislature to continue their commitments and oppose any threats to cut eligibility or services in Medi Cal to ensure all family and we must ensure all families and communities who have come to rely on our safety net can continue to do so. Thank you.

Thank you.

Good morning Chairmembers. Beth Malinowski, the SEIU California I want to second the remarks made by my colleagues at West Center Law and Poverty. And at Health Access. I want to really appreciate the sentiment and deep conversation here today on the. State of affairs with our Medicaid program.

The actions you're taking today really help stabilize the program right now and want to appreciate while we've been sitting here. This morning, further action has been playing out in D.C. that further destabilizes program. Over the long term. SEIU along with health Access, our health. Coalition, doing everything we can the federal. Level to make sure we're defending this.

Program, keeping it stable for the long term and again appreciate the work happening. Here today to stabilize us in the short term. Thank you so much.

Thank you.

Morning Mr. Chair Members. Janice O'Malley with AFSCME California I'd like to echo the comments of the previous individuals, but I also want to remind folks that having reliable health insurance has been linked to improved financial well being, including reduced debt, fewer bankruptcies, higher credit ratings and access to credit.

Health insurance is a basic need along with food and shelter. And according to the ppic, the Public Policy Institute of California, when insurance coverage is factored in, the resources families require to remain out of poverty increase by nearly 60% overall.

Any reduction in Medi Cal funding impacts much of the work that our Members do from our healthcare providers, emergency management service workers, our public health doctors, physicians assistants and our social service providers. So really appreciate the budget action today and look forward to having ongoing conversations about how we can preserve this Medi Cal funding.

Thank you very much.

Good morning. Kim Lewis representing Aspirinet. And we appreciate the inclusion of funding for the FISH Fund and would just note that this helped support our FFA resource families. And there's an ongoing crisis for FFAs. We're up to nine that have closed and we hope the may revise will include some resources to help us get to the tiered rate structure. Thank you.

Thank you. Good morning, Mr. Chair. Members Marcus Detwiler with the California Special Districts Association here to express our support for subdivision g of Section 27, both AB100 and SB100.

This is the language that relates to the Department of Finance's authority to augment state appropriations to provide backfills to affected taxing agencies who could demonstrate demonstrate property tax revenue losses connected to the fires in LA County.

We are hopeful that this funding can make its way to all the taxing agencies that can satisfactorily demonstrate an impact from the fires on revenues as it relates to the fires impacts on properties and property owners. Thank you.

Thank you. And Assemblymember Bennett always loves a subsection site, so well done.

Thanks. Mr. Chair, I'm Jean Hurst here today on behalf of the Altadena Library District and independent Special District serving the community of Altadena in Los Angeles County. The burn area of the Eaton Fire is nearly coterminous with the district's boundaries and about half the parcels in the district were destroyed by the fire.

And so we're here today in support of the provisions of SB AB100 that allow for the backfill of the property tax losses associated with the Eaton fire. This is a really important first step in ensuring that the library can continue to provide services and supports to its community.

Nearly all the all of the Library District revenues come from the property tax and from a parcel tax. Property tax deferrals and losses associated with the fire have created significant uncertainty for continuing district operations.

And we greatly appreciate the property tax backfill included in this early action measure to help restore some certainty for the district through the current and budget year. Thank you very much.

Thank you very much. Seeing no other comments from Members of the public, we want to thank all the Members of the Committee and this hearing is adjourned.