Assembly Budget Subcommittee No. 1 on Health

Good evening. Earlier, my talking point said good afternoon. So I want to say thank you to all of you for patiently waiting. We're going to call this hearing to order and welcome you to the Assembly Budget Subcommitee Number One on Health.

Today is the first of two hearings, possibly three, dedicated to reviewing the Governor's May revision on healthcare proposals. It is actually the ninth hearing overall for the Health Budget Subcommitee. And before we begin, I want to thank my fellow Subcommitee Members.

I see Assemblymember Bonta here from our Health Budget Subcommitee, as well as a number of other Members who have come to join and listen in and ask questions and, and want to say thank you to all of you for joining us on the dais.

And this is incredibly important issue to each of you, I know, and we want to make sure we give you the time that you need to ask questions. I also want to thank our presenters who will be with us, particularly DHCS Director Michelle Baass and her team.

We know that there's a lot of disagreement around the May revision, May revision, but also recognize that a lot of diligence went into crafting this very, very difficult document and proposal. I also, most importantly, want to thank Members of the public and stakeholders and advocates who have taken their time, many hours, to be here today.

And we know that we are making decisions that shape real lives, that affect real care, and that affect real communities. And, and we're here not just to focus on fiscal stewardship, which is our job and is critically important, but to do this with empathy and a commitment to every single Californian.

And so, you know, we are facing deep cuts with the Governor's May revise. And those cuts are set against a very surreal and dangerous federal background that we simply can't ignore.

Early, earlier Congress proposed sweeping changes to the federal Medicaid program that would kick tens of millions of beneficiaries off of health insurance that covers more than 71 million low income Americans. And as I've stated before, federal funds are critically important to California. We're a donor state. That means we give more in federal taxes than we get back.

But federal funds make up more than 50% of California's Medi Cal budget. And without those funds, it's very likely for our healthcare system to crumble.

And so as we move through this, we also want our federal representatives to hear how devastating this could be to our public health clinics, to our reproductive centers, and to others who have already faced cuts under the Federal Government.

You have heard us talk about the $1.0 billion that was cut from public health earlier this year as well as the Title 10 funding that was already taken away that's had devastating effects.

Additionally, California is facing challenges due to a newly destabilized economy caused by erratic action at the federal level due to newly created market volatility, because of erratic federal action and due to the impacts of federal tariffs that have caused a lot of problems for our California economy.

And now we have to navigate proposed $12 billion in budget reductions that drastically and disproportionately are going to affect our health care system, including health care for older Americans on Medi Cal and those who need the program of All Inclusive Care for the Elderly, or pace, including deep changes to undocumented adults and Medi Cal coverage, including harm to federally qualified health centers, the elimination of benefits including dental long term care and certain prescription drugs, and dental rollbacks.

And this is particularly important to me on the Central coast, where certain payments have been in place that really increased our dental providers by almost 30% and now are facing drastic rollbacks. And then, of course, wildly concerning to many of us on the dais is the $500 million in family planning funding that's at risk.

We're also concerned about the lack of transparency surrounding Proposition 35. We know that voters overwhelmingly approved Prop 35 at the ballot box to increase payments to doctors and providers, 68% of voters, actually.

And if those payments are not increased, a district like mine, my own district, stands to lose close to $131 million in promised provider rate increases that will have an effect on people's ability to access care.

But what is incredibly alarming, and I think that's why you see so many people on the dais that aren't always at these budget sub hearings, is that the May revision appears to be balanced on the backs of the poor, the elderly, immigrants, women and frontline healthcare workers who serve with care and with dignity.

And so as we go through this evening, we're going to be focused on creating some solutions that are fair and balanced and worthy of the people of California. I do want to pause there and lay some ground rules. We're not going to use this hearing as a platform for politics.

We will have an opportunity for public input, but this is really about public accountability, asking honest questions and doing fact finding in the interest of building a responsible budget that reflects California values. And so we do expect respectful conduct where Members treat witnesses and staff and one another with professionalism and courtesy.

And I know that all of my colleagues agree with that kind of behavior. We're going to ask for no interruptions of witnesses no personal attacks and very focused participation.

And so in the interest of time, I am going to allow Members, if they have opening comments, but I'm going to ask them to make those comments quickly so that we can get to testimony. So if there are any other Members on the dais who would like to make an opening statement, we'll allow you to do that. Assembly Member Bonta

Thank you Madam Chair for convening such a crucial hearing. At this point in time we which provides us an opportunity to weigh in on these proposed budgets. I'm happy to see so many advocates here to make their voices heard because this isn't one person's budget.

This is our budget for everyone for California, home to so many, and we have a responsibility to make sure that it reflects California's values. As Chair of Assembly Health Committee, I don't think it does currently. I do not believe balancing our budgets on the backs of everyday Californians reflects the values of this state.

These proposed cuts are targeting the most vulnerable of our neighbors, those already working multiple jobs to provide their families for their families, and those who may not be able to take time out of their day to come to a hearing or call their Legislator and share how these cuts would impact them. But we know that they're there.

However, the data is clear. Denying coverage, imposing premiums and adding hurdles to access care will not only harm our most vulnerable communities, but also increase emergency room visits, acute care and even potentially increase financial strain.

I hope today we can come together to take a better look at the problem we are trying to solve and why our health and human services programs have received the majority of these deep cuts.

While I understand the difficulties ahead for this upcoming fiscal year, many of the most far reaching cuts proposed would not go into effect until many years later.

We don't know what our actual deficit in these out years will be and yet we are setting the table with cruel, damaging cuts to health care to some of the state's most vulnerable people. What we are seeing from the federal levels is hate through budgeting and we cannot afford to echo that at the state level.

Chaos and uncertainty are hallmarks of the Trump Administration and it would be unwise to trust that our projections will not change. We should ensure we are doing what we have to do and not taking preventative measures proactively for an outcome that may never happen.

I'm grateful to all of my colleagues for their support as we dive into how we can maintain our commitment to health for all as we prepare to make a three party agreement on this budget. Thank you Chair.

Thank you. I have Assemblymember Lee, then Assemblymember Ortega, then Schivo, then Solache, then DeMaio and Madam Majority Leader.

Okay, well, thank you so much, Madam Chair, and thank you for having me guest on this budget sub. I think you put it very well. And your leadership is always very much appreciated in this realm of protecting health care, especially for most vulnerable Californians.

You know, of course we cannot ignore that the Federal Government is trying to wipe out almost $1.0 trillion of Medicaid and Medicare spending right now. But I just wanted to quickly flag for some some issues I have seen in the May revise which compound some of those cuts and further exacerbate harms to working class families.

Of course, I'm very concerned about wide sweeping disinvestment in reproductive health care and also of course, kicking off immigrant families from Medi Cal.

But I wanted to also flag for the Committee something small that I think is of interest that the API Caucus has historically also flagged as an issue is that the elimination of the acupuncture optional Medi Cal Benefit.

While it is only $5.4 million in the budget, only 13.1 million ongoing, we do remain kind of concerned that it could be an element of medical racism.

We want to make sure that Eastern medicine is valued just as on par with Western medicine and to make sure that in so many ways and so many elements of the budget that we should not be cutting small things of prevention to just save on the front end right now on the fiscal management.

When we cut prevention, we could ex harms down the line. And there are many elements of the May revise that are red flags to me in that regard.

And so I look forward to working with the budget sub and the leadership of the Chair to continue to make sure we invest in prevention and making sure there's health care for all.

Thank you, Assembly Member Ortega.

Thank you Chair for allowing me to be a guest today. Earlier, as a Vice Northern California Vice Chair of the Latino Caucus, we held a press conference in response to the proposed May Revision.

In particular, we are concerned with the cuts that would undermine California's commitment to equality and justice, but also they would be physically, physically, fiscally irresponsible. Particularly when it comes to singling out one specific group of taxpayers and making them pay for a public service that no one else has to pay for California.

6.1 million immigrant workers play work hard and play an essential role in our economy and communities. Undocumented immigrants pay $8.5 billion in state taxes every year. These are hardworking people who contribute to our economy and communities. Let me state that number one more time. Undocumented immigrants pay for 8.5 billion in state taxes every year.

We cannot claim to lead the nation while singling out a certain group of taxpayers for second class care. I urge my legislative colleagues to reject a logic that singles out taxpaying residents of the state. These are not California's values.

Thank you Assembly Member. I think it was Assembly Member Schiavo next.

Thank you Madam Chair. I you know, acknowledging that this is a difficult budget and a year ahead of us, along with the Hostile Federal Administration that is jeopardizing California's fiscal stability, it's more important than ever that we really prioritize the resources towards protecting the most vulnerable and setting ourselves on a sustainable path forward.

That said, the may revise proposal to eliminate Prop 56 funding and divert funding voter approved health care funds from Prop 35 concerned me deeply. Last year California voters by a large margin approved medical provider rate increases with Prop 35.

So it concerns me that this budget proposal disregards the will of the voters to allocate the managed care organization tax towards provider rate increases so doctors and healthc care providers can keep their doors open for our most vulnerable patients.

And additionally, the Medi Cal and IHSS cuts threaten to balance the budget on the backs of those struggling the most, seniors, the disabled. On the elimination of Prop 56 funding at a time when the Federal Administration and Congress is trying to effectively defund abortion and Reproductive Health Care Services at the national level.

I am again deeply concerned that we would be doing the same thing at the state level and undermining our ability to to provide STI testing and treatment, cancer screenings and abortion services. I'm looking forward to hearing from and working with the Administration on our shared priorities and implementing a budget and policies that truly reflect our common values. Thank you.

Thank you Assemblymember I believe it was Assemblymember DeMaio next. And then Assemblymember Solache and then Assembly Member, then the Madam Majority Leader and then Assemblymember Patel.

Thank you, Madam Chair. Where to begin? There's a lot of rhetoric around this budget, a lot of misinformation. Let me start first with an admonishment. I would admonish the Governor, but I've given up. Not a word out of his mouth is truthful. It's misinformation. But I will admonish the California media. Last week, you got it wrong.

You got it dead wrong. And this is your chance to get it right. When we actually open up the budget, Dig deep, look at the numbers. What you see is that the Governor lied. The Governor last week said that he was going to cut illegal immigrant health care payouts. The budget does not cut anything.

It actually increases from 9.5 billion in the current budget year to $12.1 billion for illegal immigrant free health care. In my district, a family of four has to pay $16,000 for a Covered California bronze plan. But if you're here illegally, you can get your coverage for free at taxpayer expense.

Second, the Governor says that he was going to freeze enrollment of illegal immigrants, the Medi Cal system.

Well, then why does his budget not only increase the cost of coverage, but his own budget admits that we will have a 100,000 person increase in the number of illegal immigrants getting free health care under Medi Cal from 1.6 million to 1.7 million. That is not a freeze. It is not a pause.

When you take a look at who pays, it's not just the taxpayer that's paying. Because this budget, in order to Fund free health care for illegal immigrants to the tune of $12.1 billion, which is one out of four General Fund Medical Dollars, is being handed to an illegal immigrant. Where's that money coming from?

Well, take a look at the cuts. Cuts to seniors, cuts to the disabled community. Cuts to even those who are dying and their families at a time when they are struggling with great pain.

There is a rule that the Governor is trying to implement to save a little bit of money on the front end, which is no hospice for people who are in their final hours before death.

Instead of giving families the grace of bringing their loved one home for a much more affordable, much more comforting environment at home where they can die. With hospice, this budget says no, stay in the high priced hospital. This is insanity.

We also have no provision in this budget for what we expect to see rightful, lawful, necessary, clawbacks by the Federal Government for federal Medicaid dollars. Misappropriated, misspent on ineligible populations, illegal immigrants by the State of California. The Health and Human Services Department has announced that they have a war room that they have started.

Assemblymember, I don't mean to interrupt you, but if you don't mind wrapping up, we're trying to keep it to two minutes so that everyone on the dais gets their time and. . Allow the public to weigh in. . Thank you.

Those clawbacks are not accounted for in this budget. Again, when they happen, you're going to hear it's Trump the Administration to blame. We know that the State of California is under investigation and under an audit for misappropriation of these Medicaid Dollars.

We should, if we're being responsible, if we want to protect care for the disabled, for seniors, for those dying citizens, we have to make sure that we have a Reserve because of what has happened in Medi Cal with the undocumented recipients. Final point. The Federal Government is looking at a work requirement.

I don't know if they're going to pass this legislation, but I think it's awfully important that this Committee consider that Medicaid dollars could come with strings attached in terms of a work requirement. I think that's a very real possibility that we should ask the Administration to factor in plans and. And how that might impact the budget.

I will note that that only covers federal eligible Medicaid eligible population. If that does happen, illegal immigrants will have no work requirement, whereas US Citizens in California to get Medi Cal would have a work requirement. That inequity has to be explained. Thank you.

Thank you, Assembly Member Solache.

Thank you, ma' am. Thank you. Madam Chair, first and foremost want to say thank you to everyone for participation in this budget process. I think the advocacy part is really crucial. Crucial, especially as we are in these difficult times. You know, California.

We cannot forget that responsibility to protect our most vulnerable communities, especially considering the uncertainty and speculation at the federal level and the economic pressures that we are facing. We make. We make these decisions. My mind is with communities in my district and other underserved communities.

We must protect our most vulnerable, like our undocumented communities, our children and our seniors, along with protecting fundamental rights and reproductive healthcare. In my district, people rely on federal qualified health centers for their health care. And many seniors depend on service like pay centers for important medical centers. So I look forward to this discussion.

I look forward to hearing from the public. And we must unite to protect our communities, especially those that are most vulnerable. And I look forward to more discussion today. Thank you, Madam Chair.

Thank you. And Madam Majority Leader.

Thank you, Assemblymember Addis for encouraging Members of the LWC Legislative Women's Caucus to attend this hearing today. I'm grateful for your partnership. We're here to say we strongly support our state's clinics that provide women's reproductive health. The largest is Planned Parenthood.

And we're deeply concerned about the proposed half $1.0 billion funding Committee cut for family planning and abortion services in the 2025 may revise. We understand that there are hard decisions to be made in this budget, but this proposal breaks promises made to Californians.

Californians who voted for Proposition 56 to support health care access for folks covered by Medi Cal and Proposition 1 to constitutionally protect reproductive freedom. Recent data shows that the safety net providers like FQHCs can't easily replace Planned Parenthood, especially in California where they operate more than 100 health clinics.

With Congress and the federal Administration proposing to defund Planned Parenthood nationwide, California needs to step up to protect funding for reproductive health care so Californians can continue to get the care they need. As a reproductive freedom state. Planned Parenthood and our other providers are irreplaceable parts of the state's health care system.

Our constituents rely on Planned Parenthood health centers for the full spectrum of reproductive health care, including birth control, cancer screenings, wellness and preventive health care, STI testing and treatment, and abortion and more. One in four Californians have received care at Planned Parenthood alone. That's one in four.

Their health centers provide more than a million patient visits annually for people from all 58 counties and 85% are patients enrolled in Medi Cal and Family Pact. While I sadly expect this federal Administration and Congress to attack providers of women's health and family planning, I didn't expect our state to join in.

It concerns me that while the Governor is speaking out against national threats to abortion access like RFK's juniors plan to target abortion medication. The May revise proposes deep cuts to the very same services here in California.

If the May revision's proposal To/ProP56 Supplemental Payments for women's health and family planning make it in the final budget, it will reduce California planned parent affiliate revenues by 1/3.

And because these services bring in bring a 9 to 1 federal match, making these cuts at the state level means leaving hundreds of millions in federal dollars on the table. The effect of this. Excuse me. The effect of this cut will leave Californians without access to health care closing 40 clinics in the Planned Parenthood Network alone.

We'd like to see a final state budget that keeps intact Proposition 56 funding for family planning and the women's health services that our constituents want and they need.

We look forward to being able to pass a budget that delivers on the promises made to families and providers across the state, one that sets health care providers like Planned Parenthood up for success to continue serving the healthcare needs of Californians. A budget that truly reflects California's values. I really want we all to remember promises made. Thank you.

Thank you. And Assemblymember Patel.

Thank you, Madam Chair, for welcoming me as a guest on the budget sub one Budget sub of health. What we know is that if you want to look for what a state stands for, you look at its budget. We all know that our state budget reflects our state's values.

Earlier this afternoon, I introduced ACR 78 on the Assembly floor, drawing attention to maternal mental health, an important matter that still faces stigma today and will be harmed by the budget. That's being the May revised budget that was released on Thursday.

In California, we have led the nation on access and protection of reproductive health care and for us to defund these programs and is equivalent to us turning our backs on women and families who relied on us. We're turning our backs on those in other states who are looking to see how California will lead.

And we are turning our back on the will of the voters who clearly staked their position with the passage of Prop 1. We also, as a state passed Prop 35 to increase reimbursement rates for medical providers. Californian support more affordable, accessible and equitable healthcare.

We have shown that time and time again as healthcare advocates, practitioners and policymakers, we know that investing in preventative care and early intervention will make a long term investment that pays back invaluable dividends to our communities. We can and must do better.

We must stand for our values and stand for reproductive health care and and for healthy communities. I ask that we push back on this budget and have the Governor return with a more equitable budget. Thank you.

Thank you, Assemblymember. Before I go into housekeeping, I'm just going to repeat our expectations for the hearing that we're not going to use this hearing for political theater. And it's at a very minimum, this is an opportunity for public accountability, honest questions and fact findings.

We're going to ask for all Members to treat our witnesses, our staff and one another with professionalism and courtesy. We know that disagreement is part of the process, but disrespect absolutely is not. We're going to ask for no interruptions, no personal attacks and focused participation. Particularly in the interest of time.

I'm going to ask Members if they keep their questions to questions rather than to lengthy statements or General commentary. So we're going to cover three issues as listed on the agenda, the May Revision Overview and Medi Cal proposals, Proposition 35 and the proposed spending plan and Proposition 56 and the proposed budget solutions.

The agenda is available online on our Committee's website, and physical copies are available in the hearing room. And at the end of each panel presentation on each issue, we will take questions first from Members and then comments from the public.

A public comment will be taken in person at the end of each issue and should pertain specifically to that issue. We will have public comment for items not on the agenda at the very end of the hearing.

But because we have a large number of people in the audience, I am going to ask you to keep your public comment to name organization, specific issue and your position on the issue.

So I'm going to ask you not to make speeches during public comment, but just to tell you who you are, who you're with and what your position is on the specific issue that we've covered in the budget hearing. And if you're unable to attend this hearing in person, you may submit your comments via email to ASM Budget.

And so we're going to move right into our first issue, the DHCS May Revision Overview and Medi Cal proposals. The Background as our witnesses are coming up, the background for this item is on page two of your agenda. And we welcome DHCS Director Michelle Baass, the Department of Finance and the Legislative Analyst Office.

We're asking the Department to provide a brief overview of the May revision proposals, including changes to the Medi Cal program that are being proposed. And I know that staff has advised you on your time limit. I am going to set a timer and give you a gentle reminder if needed, just because it's late.

And we do want Members of the public to have their opportunity to give public comment before it gets too late for them. So Director Baass, welcome to our hearing and please start when you're ready.

Good evening. Michelle Baass, Director of the Department of Healthcare Services. I'm going to start just a very brief overview of the Department of Health Care Services. We administer Medi Cal. It's the department's largest program, covering about just under 15 million Californians. We also administer Community Mental Health and Substance Use Disorder Program programs and services.

We have our Indian Health Program, American Indian Maternal Support Services, and Tribal Emergency Preparedness program and run a variety of other family health programs related to genetically handicapped Persons Program, California Children's Services, and the Every Woman Counts program.

The 2025 May revision proposal for DHCS includes a total of 200.6 billion 45.2 billion General Fund this includes 199.3 billion in Local Assistance to Support program cost and 1.4 billion in support for state operations. The May revision reflects 4,749 positions for the Department and the agenda outlines our budget change proposal requests associated with the May revision.

Given the state's significant fiscal challenge, facing a 12 billion General Fund shortfall in the budget budget year, the Administration is proposing options to reduce General Fund expenditures and achieve General Fund savings. As just noted, the Department's General Fund expenditure of about 45 billion represents about 20% of the state General Fund spend.

Without the solutions that I will be walking through, our General Fund growth compared to current year would be an increase by 30%. These decisions and proposals are difficult and not put forward lightly.

We recognize that these are proposals and that the Administration and the Legislature and our stakeholders will work together over the coming weeks to achieve a balanced budget to serve Californians.

The May revision proposes several solutions related to individuals with unsatisfactory immigration status and this is a term used by the federal CMS to describe individuals who are not eligible for federally funded full scope Medicaid services. I'm just going to go through these quickly and then move on.

So the first is to freeze enrollment for Medi Cal Expansion 19 and older. So effective no sooner than 1-1-2026, we propose to implement a freeze on new enrollment to full scope state only coverage for new applicants who are aged 19 years and older and do not have satisfactory immigration status or are unable to establish satisfactory immigration status status including those under the five year bar, individuals claiming procall or presiding under color of law and pregnant individuals.

We are proposing monthly premiums for adults with unsatisfactory immigration status. This would go into effect no sooner than January 1, 2027 and these would be to implement $100 monthly premiums for individuals 19 and older.

If an individual does not pay their monthly premium, they would be removed from full scope coverage and moved to restricted coverage which covers emergency services and pregnancy related services. We are proposing the elimination of dental for our undocumented excuse me, unsatisfactory immigration status age 19 and older and long term care for age 19 and older.

These would go into effect for July 1 for the elimination of dental and January 1 for the elimination of long term care services. We are proposing to eliminate the prospective payment system or what we call pps, the WRAP payments that we pay to our federally qualified health centers and rural health clinics.

This would be for individuals with unsatisfactory immigration status no sooner than January 1, 2026. And then finally, in regards to proposals related to unsatisfactory immigration status, we are propos to implement a rebate aggregator so that by October 1, 2025 we can receive Drug Supplemental Payments on our US population.

For the expenditures in the pharmacy space all summed together, I didn't go through the savings for each of those, but those are about 5 billion in General Fund savings in the budget year with related to the pharmacy cost drivers.

As noted in previous conversations, one of the big drivers of costs over the last year has been our spend in the pharmacy space.

We have multiple proposals related to that as I just mentioned, the ability to secure state rebates on our pharmacy spend for our UIS population, additionally eliminating certain drug classes effective no sooner than January 12026 including over the counter antigen COVID 19 antigen tests over the counter vitamins, first and second generation over the counter antihistamines.

This proposal targets drug classes that include products with high utilization and thus higher total pharmacy cost. This results in General Fund savings of about 3 million in the budget year and 6 million thereafter. We are proposing to eliminate GLP1 for weight loss for all populations.

This change will result in high cost GLP1s products being used for weight loss to be removed from the Medi Cal fee for service pharmacy benefit and promote more effective and efficient use of state and federal resources.

Over the course of the Last couple years 2022 to 2024, we've seen over 200% increase in utilization of these drugs given their popularity.

Also proposing to implement prior authorization for continuation continuous continuation of drug therapy effective January 12026 we will require Medi Cal Members to obtain drugs not on or removed from the contracted drug list to go through prior authorization process rather than allow Members to continue obtaining those drugs based on their prior use.

This results in General Fund savings of about 62 million in the budget year, in the budget year and 125 million thereafter.

We are proposing to implement various utilization management changes or UM changes, including prior authorization requirements to enhance Medi Cal rx coverage and reimbursement policy to promote continued access to high quality pharmacy benefits while ensuring more effective use of state and federal resources.

We estimate savings of $25.0 million in General Fund in the budget year and 50 million in ongoing savings. Finally the last proposal related to pharmacy is related to step therapy protocols. We intend to introduce step therapy protocols no sooner than January 1, 2026. These are common in the commercial coverage space.

And as a result of this, we would really drive utilization through a step process based on drugs on our contracted drug list. This is an estimated savings of 87.5 million General Fund in the budget year and 175 million thereafter.

With regard to General eligibility and benefits cost containment proposals, we are proposing no sooner than January 1, 2026 to reinstate the MEDI Cal asset limit test to consider resources including property and other assets when determining Medi Cal eligibility. The asset limit for a household of one will be 2,000 and 3,000 for a couple.

The savings for the reinstatement of the asset test is estimated to be 940. Excuse me. 94 million in the budget year. And then finally a couple more. With regard to, as previously mentioned, the elimination of acupuncture optional benefit in Medi Cal.

We are proposing to eliminate this optional benefit for all populations and this would go into effect no sooner than January 1, 2026. This is a General Fund savings of 5.4 million, 2025 and 13.0 thereafter. We are proposing to repeal existing statute that prohibits utilization management controls for outpatient hospice services.

This would allow the Department and our Medi Cal managed care plans to implement utilization management controls for hospice services. This this is an opportunity for our plans to review the utilization of the services, ensure that the appropriate use of Members receiving these services and not losing access to other care.

Estimated savings of 25 million General Fund in the budget year and 50 million thereafter. We are also proposing related to in the financing space implementing a increase to the minimum medical loss ratio or mlr. Under current law, Medi Cal managed care plans are required to achieve a medical loss ratio of 85%.

We are proposing to increase that to 90% so that 90% of all dollars we paid to our managed care plans are spent on direct care with increase.

We anticipate an increase in remittance from our plans who do not pay 90% of their use 90% of their dollars for direct care and anticipate a General Fund savings of 200 million in 2028 and 29. We are proposing to limit payments for our pace providers.

We develop pace capitation rates in accordance with actuarially standards, actuary standards, leveraging actual costs and utilization experience reported by PACE organization.

Each year we develop a rate range and we're proposing to essentially set the rate range more toward the midpoint than the high point, thereby saving 15 million General 13 million excuse me, General Fund in 2526 and 30 million thereafter. And then two more proposals in the healthcare financing space.

First, the elimination of School Skilled Nursing Facility Workforce and Quality Incentive Program, or WQIP. This was established in 2022 and it provides nursing facilities which meet workforce and quality benchmarks. Directed payments through the Medi Cal Managed Delivery System. This would achieve about 130 million General Fund savings and then also suspend the SNF Backup Power system requirement.

Bill SB 1511 and 2024 require skilled nursing facilities to have alternative source of power for no fewer than 96 hours during any type of power outage. And we're proposing to suspend this requirement until dollars are appropriated for this Quick. Overview Happy to answer Questions Phenomenal job.

Is there anything from the LAO or DOF?

Jason Constantouros, LAO, Good Evening Committee. I first wanted to note that we did recently release an analysis of the May revision proposals for Medi Cal. They should be distributed to the Committee. I won't go through the handout in great detail just for the sake of time, but I will reference some pages in my testimony.

Now, you have a lot of moving pieces this year in Medi California, but we think you can kind of boil down what's going on into three key issues as you're sort of exploring the Medi Cal proposals. The first key issue is the revised Medi Cal estimated spending in the current year and budget year.

If you turn to page six of our analysis, you'll see a table that just very quickly summarizes the Medi Cal budget that was under the Governor's Budget and then now the revised budget under the May revision and then the change between the two.

And what you would see is that the General Fund spending level is about $2.5 billion higher in the budget year relative to the Governor's Budget. Now importantly though, this revised estimate is net of series of proposed budget solutions that you just heard in the previous testimony.

If you don't include those budget solutions, the revised spending level is actually much higher. It's more than $7 billion in the budget year. Now it is typical for medical to have mid year spending revisions, but these appear to be somewhat higher revisions than that is sort of typical.

When we looked through the sort of estimates, what we found is that it appeared that a lot of the growth was really due to higher per enrollee costs. If you turn to page eight of our analysis, we give you a quick summary of the change in caseload which can be a key driver.

And then also the change in estimated per General Fund General Fund spending per enrollee. Now, we've had some conversations with the Administration. We understand that there are lots of things that could be driving sort of the upward revision in per enrollee spending, for example, higher pharmacy costs.

You know, that said, this is an area that we think the Legislature could work with the Administration to better understand, in part to assess the, you know, projections in the estimate, but also to understand the long term implications for medi Cal spending, which a lot of the proposed solutions aim to help address.

The second key area of focus we think the Committee could focus on is are the budget solutions. Now you've already heard the budget solutions. I won't go through them again. You had quite an extensive introduction there did want to know three things about the budget solutions.

One is a lot of them are very much focused on a couple of key areas, for example, related to the undocumented population or to pharmacy spending, for example.

The second thing is many of these solutions are ongoing and this is a bit different than what you've maybe seen in previous budgets where a lot of the solutions were more limited term. And that's because the Administration is aiming to address both a budget problem in the short run, but also help curb sort of long term spending.

Then finally, the budget solutions also ramp up over time. And that's largely because of a lot of the solutions involving the undocumented population which results in declines in caseload over the long term.

Now, you know, overall our key message when thinking about solutions is we think there's some logic to the overarching structure of the budget which focuses on budget solutions including long term solutions. That's because the state does have an estimated budget problem.

And also as this Committee has heard before, the budget is projected to have long kind of a structural deficit in the out years. And so we recommend taking that overarching structure into consideration.

That would mean that if the if there are significant concerns with particular budget proposals, the Legislature would want to find a like amount of savings elsewhere in the budget. That said, also though, we think the Committee could explore alternatives to some of the budget solutions and find ways to improve their design.

One example is the proposed freeze on enrollment for undocumented beneficiaries. Under this approach, undocumented existing beneficiaries would still have access to comprehensive coverage in medi Cal, but new enrollees would not have access to comprehensive coverage. We think this approach could raise some equity concerns.

That's because, you know, the existing enrollees would continue to have access, including those on the sort of higher end of the income distribution, whereas some new enrollees who are on the lower end of the income distribution would not have access to comprehensive coverage.

So we think as one alternative to consider, the Legislature could adjust the income thresholds for this population. That would be a more targeted approach to ensure resources are targeted to the most low income beneficiaries. We have a variety of other considerations that we raise too. Our assessments messages start on page 13 of our handout.

The final key area of focus involves the changing federal policy landscape. Now this is also a topic this Committee has discussed before. What's changed is that more detailed information has come out.

Just before the release of the May revision, there is a new proposed rule from federal administrators that involving provider taxes, which are a key source of support for Medi Cal. And then Congress has also been contemplating various policy changes. Some of these were referenced in the opening comments so you're aware of them.

And these policies could have fiscal implications for the state. Now nothing's been finalized yet and so that means the Legislature is in a somewhat difficult position of adopting a budget without also facing some uncertainty in sort of the federal policy landscape. We recommend the Committee recognize some of that uncertainty when it's adopting its final budget.

That could mean recognizing that whatever decisions are made today, the Legislature may have to come back in the following budget process and revisit things further once of policy changes are finalized. With that, thank you.

Thank you. Anything from the Department of Finance?

Good evening Chair Members of the Committee Megan Sabbah, Department of Finance I have some opening remarks that will underscore what my fellow panelists have noted, particularly on the fiscal level and hopefully we'll address some of the concerns that we hear heard in your opening comments about why we're seeing solutions in the Medi Cal budget.

So at Governor's Budget, both the Administration and the Legislative Analyst Office noted that baseline expenditure growth was outpacing revenues. This is our third consecutive deficit budget. The prior deficit budgets largely focused on one time allocations that were statewide, but those are now largely exhausted.

The current $12 billion budget shortfall has forced us to look deeper to balance the budget. As you know, the Administration had to request a supplemental appropriation Bill of $2.8 billion in March because the Medi Cal program was seeing higher than projected costs compared to budget act.

For the May revision, we looked at the major drivers of the cost increases which we've stated include increased caseload, increased pharmacy costs and higher costs in managed care and fee for service. Although the May revision includes difficult proposals we rather would not have to make.

It also proposes a greater amount of solutions that don't directly impact Medi Cal Members and that includes numerous pharmacy related solutions totaling approximately $1 billion aimed at controlling pharmacy cost increase increases. We fully recognize that there are difficult reductions proposed in this budget and this is in order to maintain coverage, not drastically reduce eligibility.

To put this in perspective, the Medi Cal budget makes up one fifth of the overall state General Fund budget and that includes Proposition 98 General Fund the May revision. This May revision is the first time that the Health and Human Services General Fund state spending is more than K12 education spending.

Even with the solutions currently proposed, the May Revision still proposes $45 billion General Fund for Medi Cal in the budget year, which is nearly double compared to the Medi Cal appropriation just six years ago. We recognize that this is a difficult situation for all of us to be in. This is just the beginning of a conversation.

We hear your concerns and the Administration plans to work collaboratively with the Legislature to consider any alternatives. That concludes my remarks. Thank you.

Thank you. I have a number of questions. I know my colleagues have a number of questions as well and then we will go to public comment.

But first and foremost wondering if you can, Director Baass, if you can respond to the LAO's comments around adjusting income thresholds instead of instituting a freeze or using income thresholds instead of just the flat co pay that will disproportionately. Both of those will disproportionately and inequitably affect people.

I think as I opened, you know, here to kind of work through solutions and other alternatives to what we've proposed. So happy to engage in those conversations.

So you haven't looked. Have you looked at those yet or have thoughts about the.

No, we haven't modeled any kind of difference besides what we have presented to you as part of May revision.

Okay. How did you get to the freeze and the $100 co pay then?

I think part of it was really thinking about what was the General Fund shortfall that we were solving for and how do we put forward proposals that kind of address the growing cost in the Medi Cal space.

Okay. I would certainly encourage you to do put a finer tooth on this. I sort of have similar questions then around to some of the other cuts that you're proposing. For example, how you selected the elimination of dental and long term care for undocumented people.

So those are optional benefits even in the federal Medicaid space. And so were proposing those and they also in Effect mirror kind of what the Medicare benefit is. Medicare doesn't cover dental. It does cover the first 90 days of long term care. But trying to think about other models out there and mirroring the benefit package.

Have you modeled other ways to do this so that people wouldn't wholesale lose access to dental care?

We have not modeled different approaches on the dental benefit package, no.

Okay. I guess same line of questions then around the asset test. It seems like we've gone from a very flexible asset test to a very, very stringent back to the 2022 asset test. That's really going to hurt a lot of people. So have you explored alternate approaches on the asset test?

When the first elimination of the asset test had two phases. And so there is also the, you know, that is also a proposal that could be entertained as well. I think it's a matter of how much General Fund are we looking to kind of save as part of our proposals.

Have you modeled though, looking forward, have you modeled going back to something, you know, that other third or a different asset test or just the.

We have not modeled a different asset test. I don't have the numbers in front of me of what that first phase, but we do have that information.

Okay. And then on the PACE capitation payments, what's the expected impact and how are you looking at that? And have you looked at other alternatives? I mean I've talked to a number of PACE folks who are incredibly concerned about this. Everyone I've talked to is concerned about all of this, everything that I've mentioned.

But PACE in particular is going to seems to be like a double whammy on our seniors.

So for the PACE organization, by setting that midpoint for our managed care organizations, we actually pay at the lower bound. Of the actuarial rate range. Today our PACE organizations are paid throughout that range. And this would just put a point. On average for those that are paid. Above, it would be approximately a 3% reduction.

Okay. I will say I'm concerned by the lack of modeling of different scenarios. This feels like a very blunt approach. Approach. But I will pause my questions and go through our Committee Members. I see. I'm going to just write you down so I make sure to call on all of you. I saw DeMaio, Ortega, Patel, Bonta, Aguiar Curry, Schiavo. Okay.

Okay, let's go with Assemblymember DeMaio. And I will just say I tried to- I tried to model just asking a question, not giving a speech, moving through quickly, giving our- giving our staff time to respond and then moving on to the next Member, given the number of people we have in the Committee room.

You modeled it well. And I will try to emulate it. Because the night is long and our time is short, my questions are just for the Director of the Department of Healthcare Services, since you are program implementer for Medi-Cal. And yes or no answers are preferred.

The Governor referenced making a cut in funding and the cost of illegal immigrant health care, but is it not true that the actual cost of budgeted for illegal immigrant health care in the January budget was 9.5 billion for illegal immigrants. It's now estimated to be above 10 billion as we end the fiscal year.

And next year, you're going to increase the funds allocated in the budget for illegal immigrant coverage to $12.1 billion. Is that correct?

Those are the updated numbers for May revision.

Point of order, Chair. It's pretty difficult for our agencies to answer that question, I think with the terminology of illegal immigrant, which actually is not recognized at all in this budget and is, quite frankly, inflammatory and gross.

Point well taken. Assemblymember DeMaio, if you would either be able to use the terminology in the report or undocumented.

Okay, so the second question. For undocumented individuals, the Governor promised that he would pause enrollment this year, but the numbers seem to suggest enrollment's going to increase from 1.6 million undocumented coverage to 1.7 million. How does a pause in enrollment lead to 100,000 projected increase in the caseload?

The Governor's budget assumed a decline in the UIS population, reflecting changes in the Federal immigration policy and kind of a chilling effect in terms of new enrollment. We have not seen that. Actually, we have not seen that caseload decline. We're projecting caseload to grow through June and then leveling off through the remainder of the year.

But it is still an increase of 100,000 in your budget?

Correct.

Assemblymember, if you can let staff finish without interrupting, please.

I'm just trying to get it quickly established on record.

I feel you.

Trying to cut down on time.

The third question, and I'm sorry to put you on the spot, are you aware of any request by federal investigators for documents or information from your department regarding use of federal funds for ineligible populations that your office has received or is working on?

So we are working with the Federal Government with regard to how we do our claiming and our state assistant, State Medicaid Director Lindy can also clarify even more information. But it is a regular process by which we submit our claims and we go through Q&A with them on the information that we, that we share with them.

And based upon their queries and the intensity of their queries. Do you have concerns about financial exposure on your reimbursements from the Federal Government, that they may either decline reimbursement or even claw back? Are you growing concerned about financial risk in your budget assumptions?

So being good stewards of federal and state taxpayer dollars is a priority for the department. So we work hard every day to ensure that we are following...we are following state and federal rules with regard to how to claim for federal financial participation for the various population.

And to the Chair's question, which again I'd like to, I think all of us would like to see more granularity about your assumptions here. Like how did you come up with the cost saving numbers? Because we're adopting a budget based upon presumed savings. $100 per month for premiums is what you're going to charge undocumented individuals.

How much are you estimating that will raise? Have you factored in a drop off effect of when you start asking people to pay for premiums that perhaps they'll say "Oh, I thought it was free," and so would there be cost savings associated with that? And have you scored that?

And do you have a customer service desk to collect premiums? Because I'm not aware of any state Medicaid program in the country that you know has will have something as large as this for such a large population for premium collection.

So as part of our proposal in the budget year, we actually have a cost of 30 million to procure a vendor to do the premium collection for us because we don't have the capacity to do that today.

So we would contract with the vendor to do the premium collection and then work with our eligibility systems to essentially program the rules to disenroll an individual when they do not pay their premium.

So the budget assumes in the budget year plus one, since this policy would go into effect January 1, 2027 a savings of $1.1 billion as individuals are disenrolled because they do not pay the premium.

Do you have a score for the revenue?

I don't have that in front of me. It's that, that was the, that's the net, I don't know the breakout.

It's a, it's a combination of both the premiums collected as well as reductions in costs for non-payment of premiums.

So, and I'm getting to the Chairwoman's point, it sounds like you're guessing. And I think, let's be honest, you're guessing because you don't know how many people will disenroll because they're not paying the premium.

I don't know about you, but 1200 bucks for health insurance is dramatically less than what anyone can get on Covered California if you're just simply trying to get regular coverage. So I don't know if the Committee can bank those savings from the $100 disenrollment side.

I think you may be able to bank the revenue because I think people would love to have a $100 payment for health coverage per month. That's a, that's a bargain in the State of California.

So I think that we're at high risk if we just simply take that, what, $1.1 billion savings number into account for this year's budget. I have a lot of other questions. I'll have my staff ask them offline.

But I share your concern, Madam Chair, that we need to have big justifications and this is where the Legislative Analyst Office needs to intervene. I don't, I don't buy the numbers. I don't have any confidence in these numbers.

And so you need to be asking these tough questions as to how they came up with these cost saving scores because it sounds like it's a dart being thrown at the board. And worse, we're talking about a program that has been...

Wrap up, Assemblymember.

A program that has a really bad history of being wildly off on your estimates on this program and now taxpayers are left holding the bag. This is not a partisan issue. If you're going to make the decisions you're going to make, you guys have the votes.

But if we're going to make a decision, let's be damn sure we know what it ultimately is going to cost because otherwise we're going to be back at this Committee in 3, 6, 9 months with additional worse problems than had we planned for it. Thank you, Madam Chair, for your indulgence.

Thank you, Assemblymember. Assemblymember Ortega.

I will definitely try to model the chair. Department of Finance I have a simple question. Can California businesses charge undocumented immigrants more for goods or services?

Paula Fonacier Tang with Department of Finance. We can only speak to what's included in the health budget so I wouldn't...

Well it's included in the health budget. So we're asking a certain group of people to pay for an amount that we're not doing anywhere else. I want to ask again, can California businesses charge undocumented immigrants more for goods or services?

I think if you're speaking in terms of the premiums, then our understanding is yes, that they can. That we can charge premiums for the undocumented population.

Then the State of California doing something that no other business in California can do. Correct?

I mean, I think if you're, if you're speaking about the Equal Protection Law, then this is. These are state funds, not general, not federal funds. And so in terms of charging a premium, that is something that the State of California can do.

So if there's a. Is a private insurer able to charge an undocumented worker for a higher premium than a regular member? So is Kaiser able to charge someone more for insurance based on the fact that they're undocumented or they are.

Again, in the, with our proposal that Administration is setting forward in terms of the full scope Medi-Cal expansion, the the State can charge $100 premiums for this population.

So the state can. But no other business in the State of California can do that.

I can't speak to any other business.

Because we have discrimination laws because we have price transparency and we have protection of consumers. Thank you.

Thank you, Assemblymember. Assemblymember Patel.

Thank you for your witness testimony and helping set the stage on this very difficult conversation we're having. I have a very specific question, something that caught my eye in this budget. It's regarding the weight loss drugs. I understand the need to introduce cost controls for prescription drugs.

My question is surrounding the overall cost reduction we would benefit from as an overall system if we support medically supported weight loss in our patient populations that are experiencing obesity.

We know that there are significant medical conditions that stack with obesity, such as musculoskeletal issues, cardiac issues, reproductive health issues, and if we can help people reduce weight, then a lot of these conditions have some level of resolution.

So I wanted to ask whether the actuaries or the people who do projections looked at the overall cost savings versus the cost of the medic-, the prescription drugs for weight loss and balance that out over time. Have we looked at that cost-benefit analysis at all?

We have not. I appreciate your comments, but as part of this proposal, we did not look at future savings for kind of the conditions you mentioned. We did not.

So that wasn't part of your consideration of specifically targeting this one class of medication.

We looked at utilization and the significant growth in both the members and utilization and claims and recognizing that close to 100 additional drugs are on the market or are in kind of the testing to kind of fill this space, recommending this as a proposal for savings.

Okay, are there any other classes of medication we eliminate like this based on cost?

So hi everyone, my name is Yingjia Huang. I'm the Deputy Director for Healthcare Benefits and Eligibility at DHCS. So happy to answer your question. So we are also looking at eliminating as part of the May revision, over the counter multivitamins and that type of thing, as well as like antihistamines.

These are drug classes that are optional, just like the weight loss indication, but just kind of adding on to what Director Baass was sharing, that there were kind of two levers as we look at in terms of cost containment for pharmacy.

One is related to rebates, which she kind of talked about in her overview about the rebate aggregator. And the second lever is looking at and reviewing the types of optional kind of drug classes that under the Medicaid program that we can look at in terms of looking at utilization and just kind of ongoing maintenance of the program.

However, I think Assemblymember Patel, you asked about GLP1s as it relates to certain types of medical conditions. I think it's very important for us to note that medical necessity is still evaluated.

And in these medical conditions, if the patient or the member requires such a need, there is, we could go through what we call medical necessity, a prior authorization review by our clinicians kind of review that. And under state law it's reviewed within 24 hours.

So just want to provide that assurance to the Legislature that we have not chosen many of these drug classes to eliminate because these are things that are on the table, but because one, they're optional.

We have an ability to look at it and review utilization, but also use our medical necessity utilization management controls that are available to us to kind of evaluate the need.

Thank you. I appreciate that clarification. But certainly just for the record, I want to put out there that over the counter vitamins are very different from the GLT1 drugs. Those are prescription required and are still on patent. So want to make sure that we don't compare apples to oranges when we talk. Thank you.

Oh, go ahead. Thank you.

I just also wanted to just to add a little more clarity to the, you know, for Medicaid, pharmacy as a whole is an optional benefit. But once states choose to offer pharmacy as a benefit, and all 50 states do offer pharmacy as a benefit, most drug classes have to be covered.

And this is part of a federal law that requires states to cover drugs that participate in the federal drug rebate program. There are some limited exceptions where they're optional. And so that's what the Administration is saying. There are, they're. They're targeting drug classes that are. That are optional.

Most of them are probably not huge sort of contributors to pharmacy spending. The exception there are GLP1s. They've hit the market more recently and they're relatively more expensive. So just wanted to throw that context in there too.

Let's keep an eye for when they go off patent.

Thank you. I'll turn it over to Assemblymember Bonta.

Thank you, Chair. So I wanted to first just ask some questions about the enrollment freeze for full-scope Medi-Cal expansion for adults 19 and older. Can you all give us an estimate? Because these numbers are...

...you've given us budget numbers, but can you give us a sense of how many people would actually essentially be off of Medi-Cal should these proposals be accepted?

Yes. So for the freeze on enrollment for Medi-Cal expansion, adults 19 and older, in the budget year, we estimate a reduction of 32,000 individuals. Budget year plus one 230,000. Budget year plus two 451,000. And budget year plus three 672. And this is accumulating.

So at the end of budget year plus three, it will be 672,000 individuals.

It's, so we should be adding the 32,000 plus 230,000 plus 451,000 plus 672,000.

No, the 672 is the accumulation of all the years. At the end of, yeah, budget year plus three, it will be 672,000.

Okay, so 672,000 people, should we accept this proposal, would be kicked off of Medi-Cal.

So they would. This is really freezing enrollment so that many individuals would not be able to join Medi-Cal. So we're freezing enrollment and no new, new members into the undoc expansion 19 and over. So that's the estimated people who would not become enrolled with the enrollment freeze.

So should a person for a couple of months have an income qualification that would release them from Medi-Cal? You know, they're currently on Medi-Cal. They are able to do a crazy thing like get a job that they can actually afford to perhaps be on another plan or their employer provides another plan. That job ends, they would need to get on Medi Cal again. It's frozen. They're frozen out.

They are frozen for full scope, they would be eligible for emergency and pregnancy related services.

Okay. I just wanted to get some clarification as well on who is that who we're actually talking about when we talk about unsatisfactory immigration status. There's an exception for qualified non-citizens, permanent - if I'm correct - permanently residing under color of law, pregnant individuals. Is that correct?

And those with temporary protected status, those under deferred enforcement departure, and those who are spouse or child of a United States citizen whose visa protection has been approved, and applicants for asylum.

Those are the people who are categorized as UIS.

Other UIS. Right.

Okay. So if a pregnant woman goes into a hospital on Medi-Cal - should we accept these proposals - has a child, is still in the hospital, is no longer pregnant, would they be covered by Medi-Cal?

They will be covered through their postpartum period, which is actually one year.

So for one year, one additional year, they would have coverage. Okay. At least we're not churning them out in the hospital after they give birth. I want to.

According to this proposal, I just wanted to dive a little bit more deeply into the statement that the LAO made about focus on declines in caseload and utilization. So I think Director Baass made that point.

The real focus is how do you make sure that we're getting fewer people to be a part of that caseload and changing utilization. And you've kind of identified ways to be able to supposedly save money by decreasing utilization. And that's all to be able to basically supposedly save us less.

A lot of this is driven by higher per-enrollee costs. Right. Have other ways of looking at cost drivers associated with health care been considered? We talked about higher pharmacy costs. There's a piece in there.

Have you analyzed or done anything to look at the additional things that drive up the cost of health care so that we are not basing these cuts based on just looking at caseload and utilization?

Assemblymember, I think we are broadly looking at where can we make significant reductions to meet the requirements of the budget that we had. And so we consistently are looking across the board at are there ways that we can control cost just broadly. But these were the proposals that we were able to bring forward.

Because the primary proposals that you're bringing forward have to do with caseloads and utilization. Did you at all consider the behavior of employers as well as something that is a cost driver? So an employer who chooses to keep their employee on as a halftime so that they don't qualify for...

...so that they don't qualify for health insurance through the employer, ends up on Medi-Cal. Right. Are there any proposals or have you thought about ways to be able to hold employers accountable for making sure that they're actually providing health care because that's also a subsidy that the state is providing to employers.

I know this has come up in previous conversations. We do not have a proposal in that space. I think it's beyond our authority in terms of regulating employers and what, what employers can and should do. And so. But I appreciate the kind of the point and we did not consider it as part of the department's proposals.

And did you at all think about the fact that there's 20 to 25% excess in costs, as we know related to health care to be able to look at other factors besides caseloads, which are people and utilization?

One of the proposals that we do have is the elimination of the prospective payment system or the PPS wrap what we pay our federally qualified health centers and rural health clinics for the UIS population.

That is really, it is, it is a reduction to what we pay our clinics and community centers, but recognizing that they will still get paid the, the amount that a managed care plan gets, we pay the managed care plan and that they as a provider would get as a clinic.

And so this is the elimination of that RAP that's federally required for the federal Medicaid population. But looking at opportunities to kind of address cost in a different way beyond benefits and utilization and caseload.

One of the other ways is the inclusion of raising the minimum MLR on our managed care plans to ensure that the funds are going towards the healthcare costs.

Yeah, I have a thank you for raising the issues around the federally qualified healthcare centers because have you all done any analysis of the specific ability for federally qualified healthcare centers to provide the care to the number of individuals that they are able to. With this transition around the rap.

We have not done an analysis.

We've looked at what, what we pay in terms of the rap payment and that was one of the kind of the cost drivers over the course of the last year in terms of increased fee for service spend on the UIS population and recognizing that prior to the undoc expansions, FQHCs received no managed care rate or no funding from the state for those services.

So wanting to provide a kind of a consistent level of funding compared to how other providers are paid, recognizing just again looking for solutions to the state's General Fund shortfall.

Yeah. I would suggest that you provide some deeper analysis around what the impact to care and service and access to service would be for our FQHCs.

Particularly given the fact that we are creating a situation of decreasing the ability for our undocumented, or our UIS, according to this language, to be covered as well as kind of doing a double whammy with then reducing the number of people that can be covered by our federally qualified or served by our federally qualified healthcare centers.

I just also want to ask a question about. Well, so many. You know, I'm going to stop there. I will ask. Well, okay, thank you. I want to ask one question around the step therapy protocols. So we've had a lot of pieces of legislation.

So can you describe a little bit more the proposal that you all have regarding the step therapy protocols and the ways to be able to manage utilization through.

Absolutely. So the step therapy encourages our prescribers or kind of directing the utilization to what we call the Medi-Cal contract drug list, which is kind of a mechanism for Medicaid agencies to obtain state supplemental rebates.

So previously, what could have happened is individuals may be prescribed drugs that may not be on this contract drug list, meaning that we are not able to obtain both obtain state supplemental rebates for.

So step therapy, I know has been an ongoing kind of conversation from a clinical perspective within the Department, but I think taking a step back after kind of the stabilization of the pharmacy benefit after it being carved out from the managed care plans a couple years ago, we think there's clinical evidence.

And secondarily kind of looking at a lot of the cost drivers in terms of pushing our driving people to an equally clinically appropriate drug on the contract drug list as kind of the first step in terms of their therapy.

And if that doesn't work, we will have a second alternative. And we believe with the step therapy, besides the clinical component, we believe that there is kind of additional kind of negotiating and purchasing power on behalf of the Medicaid agency as it relates to drug rebates.

So additional dollars to the state with this mechanism and also with step therapy. We also looked at several other. Several other Medicaid agencies that also do this. So New York, the State of New York also does this.

A lot of the commercial insurers also utilize step therapy as part of not only kind of a pharmacy cost containment mechanism, but also I think equally kind of looking at it from a clinically appropriate perspective. We think that's the time is right.

There's clinical evidence to the contrary of what you've just said, actually. So you all are aware of SB 40, Wiener's Bill, to prohibit some step therapy for insulin in the commercial market. AB 554, Gonzalez and Haney, would prohibit step therapy for HIV prevention drugs. Dr. Arambula has a Bill as well to clamp down on step therapy.

Other states have passed for commercial entities the elimination of step therapy. Why is California moving in a direction of actually adopting something that is known to be something that other states are not doing and this Legislature in particular has recognized as a challenge in actual provision of care?

Yeah, I think. Thank you for your question. I think as we have kind of looked at it internally as well, I think we do have some clinical support in terms of kind of our in-house clinicians as it relates to step therapy.

And secondarily, I think just from our experience with drug rebate negotiations as well, the additional cost component in evaluating this as a proposal that we're going to put forward as an Administration just in terms of the value we'll be able to get from state supplemental rebates as we drive a lot of the utilization to the similar clinically appropriate drugs on the contract drug list.

I want to just ask my last question as a follow up to Assemblymember Ortega's question. Does the State of California have to abide by the Equal Protection Clause in the Federal Constitution?

So again, this is a state only program. The full- The- The full scope expansion for undocumented individuals. It doesn't receive federal funding. Citizensh- Citizenship status is not a protected status under- under federal law. But we can provide more detail at a later time.

Yeah, that is a completely, I just want to say that is a completely inadequate response. The state doing something and not having to be accountable to our federal constitution is just, is- is something that is just incredibly specious.

You cannot separate something and say because it's a state action, it doesn't have- it doesn't have the burden of qualifying for what is constitutionally legal or required under the federal constitution and quite frankly the state constitution as well.

So in additional hearings that we will have, I really hope that you all come up with a better answer to that because that is completely inadequate. I will stop my questions for now.

We've got the Madam Majority Leader, Assemblymember Shiavo, Assemblymember Arambula and it looks like Assemblymember Ortega. We can come back to you.

Thank you. And thank you for being here today. I know there's a lot of questions we have and I could be here forever, but I just have a couple of them for you today.

With the proposed elimination of Prop 56 supplemental payments, what is the total amount of state funding that would be cut from the family planning and women's health providers and Medi-Cal and Family PACT Program?

An Assembly Madam Majority Leader. We're going to cover that in our third topic. We'll allow- We'll ask them to answer the question very briefly and then we're gonna go into the to--

That would be great.

-pic more deeply.

So the- the total amount related to Proposition 56 supplementals for our. Did you say for family planning? Was about--

Family planning and women's health- women's health. Yes.

And then we'll go into this more deeply. Yeah, I know, I know, I know. If you have a brief answer to it, then we'll come back.

It's just under 500 million total funds that reflects both General Fund and federal dollars.

Okay.

These are General Fund Dollars, not Proposition 56 dollars.

But the total, we can go back--

Just about 500 million.

Okay, thank you. I'll come back to my other questions along this line then.

Thank you. Assemblymember Schiavo.

Thank you. So I just wanted to clarify in the department's proposal to target seniors and people with disabilities and the asset test reinstatement of $2,000, that amount hasn't been updated since the 1980s, is that correct?

That's correct.

So the Administration is saying that people can survive today on the same amount as you could survive in 1980.

The proposal is to go back to the asset test limits that were in place prior to the- the elimination of it. So that- that's just going back to the old rules.

Okay, well, I think probably, judging by the chuckles in the room, everybody agrees people cannot survive on that. And it's, you know, it's not really an appropriate standard. I wanted to raise one of the concerns that was brought to me by-

I don't- I'm not sure if they're a constituent or not, but someone who felt like this asset tax or asset test would unfairly disqualify them for basic support and services that they rely on. They are in a situation where they have to.

It would make them choose between access to health care and maintaining their transportation, as the asset tax test would disqualify them, making it impossible for them to transport their two children with autism that they care for to and from doctor's appointments and therapy sessions.

So, you know, because to allow their family to function, they have to have a car to- a second car to be able to transport their autistic children. Are we thinking that we're creating savings by putting more barriers by reinstating the asset test?

I think in response to that assemblymember, I think as Director Baass have shared, we are reinstating the older rules, understanding that in the circumstance that you just share, the second car will not be exempt under the asset test.

It will be counted towards their eligibility.

So they would--

And so they would no longer be eligible is what you're saying.

Potentially, yes, with the second car.

Okay, so, you know, these. I think this speaks to why the 1980 asset test is probably not appropriate. Needs some updating. So for that example, for this family with disabled children, they would be both kicked off Medi-Cal and IHSS as a provider for their children because they have a second car.

Is that what we're saying?

as it relates to the case? There may be other factors, but I think just for simplicity, again, the- the Medi-Cal the- as it relates to the asset review only exempts one car from the calculation, meaning if you have an additional car that will be counted negatively in terms of your case circumstances.

And I think there is the IHSS component as part of the proposal that administration is putting forward. That will be eliminated as part of. If you're over the asset limit. And in this case, they may potentially be over with the second car.

Okay, that seems unreasonable. And I would say, you know, so what- so I guess my question is, what is the plan?

Because if we are, you know, taking people off of Medi Cal, taking away caregiving through the IHSS piece and we also, you know, we already had a conversation about the asset testing and that surprise, surprise, it didn't get a lot of savings because people who are disabled are still disabled and people who are seniors are still seniors.

So I like, part of me is wondering why do we think we're going to have a bunch of savings from this when we already haven't seen a bunch of savings from this. And the other part of me is wondering, you know, for those people who then are disqualified, what is our plan?

Is it institutionalization where we don't have the institutions for people? We've agreed that, you know, community care is- and home care is better than being institutionalized and cheaper. So where- where are people going to go when- when they no longer qualify and can't afford this care on their own budget?

I think this- it is going back to the asset test rules that were in place a few years ago. And so individuals would lose access to Medi-Cal and would have to find other means to support the needs that they might have. There are institutional deeming rules or other rules for some of these situations.

So it's not kind of a blanket statement. But generally speaking, the asset test rules from a few years ago would go back into effect.

I think the LAO has a comment. Is that okay assemblymember?

So--

Oh please, go ahead.

Yeah, I also thought just some additional information might be helpful. And I did skip over some of our messages on the asset test just for the sake of time and the testimony.

But first I wanted to just note that, you know, we did look into some of the senior caseload trends this year, and one of the things we found is that the asset test was one of the key drivers of sort of recent senior growth. And that- that was a sort of driving up cost.

And that the cost of the asset test elimination, the original estimate was a bit lower than- than what actual costs are coming out to be. And that just reflects kind of the inherent challenges with estimating costs in Medi-Cal. It's a kind of complicated program. It can be very difficult to sort of project utilization.

But we did note that there were some higher costs there. But we also wanted to emphasize that, you know, you- you raised some important questions. We- We also touched on some of those questions too in our analysis.

And you know, it doesn't necessarily, you know, perhaps there isn't just a have no asset limit or have go back to the original one that was added a lot of complexity to the program. Perhaps there's a way to work within federal rules to have a simpler asset.

So that's something the legislature could consider exploring with the administration so that maybe there's a test but not, you know, maybe doesn't look so complicated as it was in the past.

And then the other thing just to emphasize is if there are, you know, with the growth in the senior population generally, we think it would be reasonable for the legislature to work with the administration and explore ways to ensure that beneficiaries have access to home and community based services as an alternative to long term care.

As you note, there are a lot of solutions as you're involving IHSS and long term care. So that- that does raise some questions about implementation. But just wanted to highlight some of those points.

I'm going to do just some quick timekeeping. We've been here about an hour. We've got two more members that would like to ask questions and a whole host of Members from the public that I know are here to weigh in on this topic specifically.

So I just want to clarify what you're saying. Are you saying that the cost increase related to seniors and the asset tax is because of it being costly to implement the asset tax again or test? I keep saying tax. It feels like a tax. Or are you saying that more seniors qualified and so it costs more?

Okay, I see you nodding your head.

Yeah, it resulted in many more seniors qualifying for Medi-Cal than had been originally sort of estimated.

Our original estimate was around 40,000 individuals would become eligible as a result of the elimination of the asset test. And now we're at about 112-115,000. So a significant higher number of individuals became eligible as a result.

Right.

This is a relatively more, you know, seniors are- the costs per senior are- tend to be a bit higher. Seniors use more services and they use more costly services as sort of medically needed when your- when you age. So that also helps drive up sort of spending in Medi-Cal.

If I- If I may just ask one on a totally different topic. And- And as we leave this topic, I'm just going to say, you know, I think this is going to lead to more homelessness of seniors and the disabled and there's- that's what's going to happen. And that will cost our state money too.

And so for us not to calculate that, I think is hugely a disservice to the people that we're supposed to be protecting and supporting, but also to our budget.

So the last thing I just wanted to ask about is the May Revise provides $69.3 million in 2025-26 and on- and ongoing to reflect the addition of the new behavioral health services school site fee schedule.

What exactly are these new ongoing funds going to be put towards and are these going to be towards solely administrative costs or are they going towards ensuring that the fee schedule is fully operational, which has not happened yet.

Those dollars reflect the collection of assessments from our managed care plans to help support the third party administrator and further support the implementation of the fee schedule. There was General Fund that was used to initially yeah.

Thank you.

Thank you. And we'll move on to our former sub chair, Dr. Arambula.

Thank you Chair Addis, for the opportunity to be here tonight and I would have stayed much later and I'm grateful for the opportunity to ask questions. My first one will be for the LAO.

In your analysis on page 10, you speak about the Governor proposing to use a portion of Prop 35 funds to help cover growth in program costs.

I'm hoping you can explain when or what authority the Governor has to be able to utilize this and what limitations there are with the administration in relation to Prop 35 as well as if there are any differences between the budget years 25/26 budget years and budget year plus 1 versus outgoing in 27 when the propositions really sinks in.

And if I could ask you to be brief with your answer because we're going to cover this topic at length. As soon as we finish the Medi-Cal topic and hear public comment, we're going to go do a deep dive into Prop 35. So maybe just a quick answer on that from the LAO.

Yeah, I was- I was thinking we could we- we have been asked by staff to do a- give an overview of Proposition 35. My- Our testimony then might- might speak to some of those questions and we can also provide if they don't, we can sort of follow up then. Does that make sense for the--

Madam Chair, It was with intentionality that I asked between items 1 and 2 as there is an intersection between them. As MCO has evolved over time, there were flexibilities with MCO that allowed us to fund priorities that we had in the legislature before. So there is an intersection.

I hope we can have that conversation right here and just sorry to double check. The- The question is what authority does the a Governor have to sort of use the proposed budget solution--

And limitations.

And limitations.

So the- So the- the measure does have a series of rules that set aside some of the funds for sort of health program augmentations, generally for provider rate increases and then the rest of the funds are available to help cover sort of these existing Medi-Cal program.

The administration's budget solution proposed solution would come out of the a pool for augmentations.

So the administration is proposing to cover program cost growth, you know, in the- in the- with the idea that those, those are augmentations and again, we happy to dig into that more if that's helpful or I feel like we're digging around it a little bit.

So I'm going to lean in because the Department of Finance asked for a spirit of of us working together and figuring out if there were any alternatives, what limitations are there on us from utilizing these funds as what is being proposed are new rates, new expenses on plans that have not actually begun.

And so for many of us, we just would like the information as we're making decisions over these next couple weeks about what limitations there are and what we can and cannot do, as- as that information will be helpful to ensure we are able to make the best decisions.

And if we could address this briefly because we are going to go deeper into it, I promise we're going to go deeper into it in the next topic.

I do see I know a number of people are in this audience specific to the first issue and I just, I do want to make sure we are able to move through their public comment since they've probably been waiting here since 2:30. So if Department of Finance, if you could be brief on this answer and then Dr.

Arambula, we'll take a deeper dive in the next section.

Nick Mills, Department of Finance. So supporting increases in managed care payment rates aligns with Prop 35's requirement that funds be allocated to increase health care services, health care benefits and payment levels above those that existed on January 1st, 2024. These managed care payment increases are in addition to those payment rates that existed at that time.

So maybe then this is a question for the administration, is it normal for us to be expanding rates at the same time that we're capping programs and increasing premiums? Is this traditional for us to be increasing expenses on one hand feels like we're trying to have our cake and eat it too here.

If I may really quickly, as a result of Proposition 35, there are prescribed domains similar to the 2023 term sheet of spending in certain categories. And so we are bound by the proposition for calendar year 25 and 26 by those domains and those spending levels.

And then to your point, in 2027 it is a different formula for how those dollars can be used. We came out with our Proposition 35 expenditure plan last week and had stakeholder committee hearing or meeting this morning going through those different proposals for those Proposition 35 dollars.

And just through the chair, if I can, I would just elevate the voters had no idea that we were going to enter a Trump slide slump. They had no idea that we were going to be facing a $12 billion shortfall this year.

They had no idea that we were potentially going to be capping our Medi-Cal for our undocumented population. So in many ways, variables have changed since voters had an opportunity to participate. We, as a legislature, need to make sure that we are prioritizing what we have worked on for a long time here.

And many of us simply are just trying to ensure we have all the appropriate information and work with finance and the administration to make sure that we can deliver on the promises that we made. Thank you, Madam Chair.

Thank you, Dr. Arambula. Assemblymember Ortega, did you have one more? No. Okay. I want to say thank you. No other questions from members, it looks like. Say thank you. We are going to open up to public comment.

I understand folks from this panel are likely to stay here for the next panel, so thank you for your patience. For those of you that are giving public comment, I'll just give you an example. My name is Dawn Addis. I'm with the State Assembly.

I disagree with X, Y or Z proposal in this budget and then move on to the next person to allow your colleagues in the audience and your neighbors in the audience to be able to have their say as well. So welcome.

Good evening. Lindsay Imai Hong with Hand in Hand the Domestic Employers Network. We are firmly opposed to any cuts to Medi-Cal access for anyone in California. And I'd like to name the people who are waiting here to testify but had to make the last train.

Their names are Bill Stantley from Oakland, Christina Roma Leffman from San Leandro, Elizabeth Huay Cambura from Modesto, Art Persico from San Francisco, and Gail Chenoweth from Fresno. Thank you so much.

And I live in Emeryville.

My name is Monique Harris and I live in Emeryville.

I live with my son. We are both on Medi-Cal.

I live with my son. We are both on Medi-Cal.

If you cut Medi-Cal, I can't live with you when that happens to you.

If you cut Medi-Cal, I can't live. Would you want that to happen to you?

My name is Julia Feinberg. I'm an Oakland resident. I also receive Medi-Cal and IHSS. If you make cuts to medical and reinstate the asset test, it will devastate my economic future. I just received my doctorate degree to be a therapist and I've worked at the VA for four years. Please do not do this to me.

Thank you.

Hello, my name is Thomas Manley. I live in Oakland, California. My grandson has autism and also condition that gives him very few teeth and very few sweat glands. This would be a life cuts in Medi-Cal would be devastating to his livelihood and I oppose any changes to Medi-Cal. Thank you.

My name is Christine Smith. I'm with Health Access California and we oppose the proposed cuts to Medi-Cal, especially for the undocumented folks and then also oppose the reinstatement of the asset test. Thank you.

Beatrice Hernandez with the California Immigrant Policy Center in support of Medi-Cal funding for undocumented people in the state budget. Thank you.

Good evening. Whitney Francis with the Western Center on Law Poverty. We are opposed to the cruel and discriminatory Medi-Cal cuts targeting immigrant communities, undocumented and lawfully present alike. Specifically the freeze on expansion, population enrollment, $100 premiums and elimination of full scope dental and long term care. Thank you.

Thank you. My name is Monica Kirkland. I'm with Senior Services Coalition of Alameda County. And we oppose the reinstatement of the Medi-Cal asset test limits and the elimination of IHSS full scope Medi-Cal expansion and the long term care and dental for undocumented adults. Thank you.

[inaudible]

Hi, my name is Alexa from Rocklin and I highly oppose the asset limit this week. We are just because we are disabled, we have the right to own- own stuff without our health care being cut. Thank you.

Good evening. Linda Way with Western Center on Law and Poverty. Also opposed the reinstatement of the asset test that's targeted to older adults and people with disabilities and forces- will force them to impoverish them to access Medi-Cal. Thank you.

Hello. Michelle Johnston with the National Multiple Sclerosis Society. And we are opposed to the reinstatement of the Medi-Cal asset limits, the imposition of the step therapy protocols, prior authorization and prescription drug utilization management, as well as the suspension for the requirement of skilled nursing facilities to be able to maintain backup power systems. Thank you.

Good evening. My name is Debbie Toth. I'm the President and CEO of Choice in Aging, a nonprofit organization serving Contra Costa, Napa, Solano and Sacramento counties. We are opposed to the Medi-Cal asset limit test. And I also, when former Assemblymember Cheryl Brown was here, asked me to say she's on the Commission, California Commission for Aging.

She wanted me to tell you that she also is opposed, as is the commission, to the asset test limit. Thank you.

Buenas tardes. Doctorial Seciah Aquino with the Latino Coalition for a Healthy California Executive Director. We keep hearing about how much Medi-Cal expansions cost, but not enough about the cost of cutting them. And that's what push people--

I'm so sorry to interrupt you. If you could do name organization and position on a specific cut or handful of cuts. Just if you notice the line behind you, each person here wants to have their voice heard.

Of course. Of course. The proposed changes to the medical expansion cuts would push people into more expensive emergency care and directly harm the Latino workforce. Just to highlight, Latinos contribute over 83 billion in California State taxes. Immigrants contribute 51.4 billion.

Ma'am- Ma'am. If you could tell us which--

Of course.

I'll just say it again. Which cut you either support or oppose. You can just give us a list of which ones you support and oppose so the rest of your colleagues behind you--

Of course, of course.

-Have an opportunity to speak.

Of course.

We strongly oppose any kind of freeze, any kind of cuts to the expansion and any kind of asset limitation as Medi-Cal, as we've seen, protects our health and our economy.

Good evening. Laura Scheckler with the California Primary Care Association and CPC Advocates. We oppose the broad cuts to Meda- Medi-Cal for undocumented and the UIS populations, including the cuts to PPS for federally qualified health centers and RHC. We also oppose the cuts to the elimination of the acupuncture benefit under Medi-Cal as well.

Angela Pontes, on behalf of Planned Parenthood, affiliates of California who serve patients whom over 80% benefit from medical programs, in respectful opposition to the proposals impacting the ability of Californians, including undocumented Californians, to access Medi-Cal.

Good evening. Yasmeen Peled, on behalf of Justice in Aging, we're strongly opposed to the proposal to reinstate the asset limit for older adults and people with disabilities in Medi-Cal. They would be the only population in Medi-Cal subject to an asset limit. We're also opposed to the cuts to Medi-Cal for undocumented and lawfully present immigrants.

Thank you.

Thank you very much. Vanessa Kahino, on behalf of the California Academy of Family Physicians in opposition to Medi-Cal cuts to undocumented Californians as well as the utilization controls proposed in the May Revise. Also on behalf of the statewide network of promotores and community health workers, opposed to the same cuts to undocumented Californians.

And then lastly for Cal Pace, we oppose the arbitrary and deep rate cut in the May Revise. Cal Pace is also opposed to the state- the reinstatement of the asset test and cuts to undocumented Californians.

Good evening, madam chair and members. Libby Sanchez, on behalf of AltaMed Health Services, want to register our opposition to several proposals in the May Revised urging the committee to reject these proposals.

The enrollment freeze for full scope Medi-Cal expansion population in the 19 and over UIS population, the Medi-Cal premiums for that same population, the elimination of the PPS rates for FQHCs and RHCs for that same population, elimination of long term care for that same population, elimination of dental benefits for that same population, seeing a theme. Reinstatement of the Medi- Medi-Cal asset limit test and want to support the comments made previously by my colleague from the Pace Association.

Thank you.

Good evening madam chair. Carly Stelzer on behalf of the California Behavioral Health Association, want to share our opposition for the medical asset test limit being reinstated as well as the changes in coverage for undocumented Californians. Thank you.

Good evening. Maria Kalina here on behalf of the California Collaborative for Long Term Services and Supports. We're a coalition of providers, community based organizations, consumers and advocates. We strongly oppose the reinstatement of the Medi-Cal asset- asset limit as well as the rollback on our commitment to undocumented community members. Thank you very much.

Annie Thomas on behalf of the California Alliance of Child and Family Services. We support the 1 time 17.5 million for the 998 light lifeline and oppose the proposed Medi-Cal reductions and freezes for undocumented transitioned aged youth and families.

Evening chair, committee members. Bryan Miramontes with American Federation of State County Municipal Employees. We want to register our opposition to the reductions in access to care for undocumented Californians, the reinstatement of the medical assets test and also cuts in funding for F- FQHCs and rural clinics. Thank you.

Thank you chair and members, my name is Sadalia King with United Domestic Workers AFSCME California 3930 and we urge you to adamantly to reject the reinstatement of the Medi-Cal asset test and the enrollment freeze for Medi-Cal expansion for undocumented folks. Thank you.

Good evening, madam chair. Malik Bynum with the County Behavioral Health Directors Association. We are opposed to the Behavioral Health Services Fund offset for the Behavioral Health Bridge Housing program. That represents an elimination of funds, not a restoration and we ask the legislature to reject this proposal. Thank you.

Good evening. Eric Dowdy with the California Dental Association. We oppose the elimination of the dental benefits for undocumented 19 and over.

Nicole Wordelman on behalf of the Children's Partnership in opposition to any sort of cuts to undocumented healthcare.

Omar Altamimi at the California Pan Ethnic Health Network. We're strongly opposed to the proposed Health for All freeze and the $100 per month per adult premiums as cruel measure- measures that will shut the door on healthcare accessibility to undocumented communities. Thank you.

Thank you, madam chair, members, Kathy Sunderling Mcdonald for the California Pan Ethnic Health Network in opposition to the reinstatement of the asset test in Medi-Cal.

Good evening, madam chair and members. Christy Weiss on behalf of Welby Health, an operator of multiple PACE organizations throughout the state, we are opposed to the May Revised proposal which would limit the rates paid to PACE organizations.

Thank you.

Good afternoon. Yvonne Choong with the California Association of Health Facilities. We represent skilled nursing facility providers as well as intermediate care providers for intermediate care facilities for the developmentally disabled. We are speaking in opposition to the workforce and quality incentive program elimination as well as the elimination of long term care services for undocumented individuals. Thank you.

Jennifer Snyder on behalf of Flagstone healthcare, which operates 70 skilled nursing facilities in the State of California. And they are also opposed to the Governor's proposal to eliminate the workforce quality incentive payments for nursing facilities which are essential payments that are used for workforce and services for the seniors and disabled in the State of California. Thank you.

Good evening, madam chair and members. Connie Delgado on behalf of Point Click Care here in opposition to the elimination of the workforce quality incentive program. Thank you.

Buenas tardes. Placencia, pronouns they, them, we, us. With the San Gabriel Valley LGBTQ Center, a home for trans and queer people in the San Gabriel Valley. We strongly oppose cuts to Medi-Cal for undocumented immigrants across the state are essential workers.

Also cuts to FQCs, Federally Qualified Health centers that allow for these services to take place and the assessment tests for targeting our disabled communities. Gracias.

Good evening, y' all. My name is Camila Camaleón, President with the San Gabriel Valley LGBTQ Center and Director of Policy at California Latinas for Reproductive Justice. We strongly oppose the cuts to the acupuncture benefits, the cuts for undocumented Californians, the enrollment freeze for full scope Medi-Cal, strong opposition for the reinstatement of the Medi-Cal asset test limit, cuts in funding to FQHCs and rural clinics, elimination of dental benefits for folks 19 and over and elimination of long-term health benefits. Thank you.

Good evening. Rita Medina with the Latino Coalition for Healthy California, joining others to say we are opposed to Medi-Cal cuts and limitations for undocumented and unlawfully present immigrants in California, including the cuts and freezes to full scope Medi-Cal, the $100 monthly premiums being proposed for access to Medi-Cal, cuts to dental long term care, reinstatement of the assets limits.

All of this will affect Latinos directly as over 50% of the users of the Medi-Cal program. Thank you.

Kim Rothschild, California Association of Public Authorities for IHSS and representing Janie Whiteford with the IHSS Consumer Alliance. She just had to leave. We are opposed to the reinstatement of the Medi-Cal asset test limit as that will limit access to IHSS. Thank you.

Hello, my name is Leonela. I'm from Sacramento with the California Dream Network, college students and I oppose two Medi-Cal cuts for undocumented people in California.

Andrew Mendoza, on behalf of the Alzheimer's Association. We're opposed to the reinstatement of the asset test limit and the elimination of the long-term care bill benefit. Thank you.

Johan Cardenas with the California Pan-Ethnic Health Network. Here to oppose the governor's proposed budget cuts to IHSS for long-term care and dental health benefits that directly affect low immigrant communities. Thank you.

Good evening. Eva Jimenez, Sacramento local with the Coalition for Humane Immigrant Rights and strongly opposition for any Medi-Cal freezes for undocumented immigrants that are California residents.

Monica Madrid with the Coalition for Humane Immigrant Rights, CHIRLA. We're in strong opposition of the enrollment freeze for Medi-Cal expansion for undocumented immigrants. We're opposed to Medi-Cal undocumented-- I'm sorry, we're opposed to the premiums, the discriminatory premiums for for undocumented immigrants 19 and over. And we're also opposed to the elimination of IHSS for undocumented immigrants. Thank you.

Esther Flores on behalf of the California Farm Worker Foundation. We oppose the governor's proposed budget cuts to Medi-Cal. These changes risk making health care even further out of reach for the very people-- for the very own people who sustain the California agricultural economy. Thank you.

Darby Kernan on behalf of First 5 Association of California. We oppose the rolling back of the Medi-Cal benefits for undocumented Californians. Thank you.

Chair, Members. Kathy Mossburg with the Area Agencies on Aging. Strongly oppose the reinstatement of the asset test.

Brian Souza, on behalf of the San Francisco AIDS Foundation, APLA Health and the End the Epidemics Coalition. Although not spoken about on issue one, we oppose any funding shifts from harm reduction to the naloxone distribution. Thank you.

Kelly Brooks, on behalf of the California Association of Public Hospitals and Health Systems. We're opposed to the elimination of the PPS rate and have serious concerns about the imposition of premiums on undocumented immigrants.

And on behalf of the Center for Elder's Independence, which is a PACE organization in Alameda and Contra Costa counties, we oppose the PACE rate reduction. Thank you.

Yesenia Jimenez, with End Child Poverty California and proud daughter of a parent who has coverage to the Health for All expansion. We oppose any proposals that implement draconian asset limits, inhumane and unjust exclusion of undocumented people for any Medi-Cal program and reject any discriminatory health premiums. Thank you.

Christopher Sanchez, on behalf of the Central American Resource Center, echoing the comments of the previous speaker. Thank you.

Carol Gonzalez, on behalf of HOPE, Hispanas Organized for Political Equality. Here to oppose those that came before me. The same thing, Medi-Cal for undocumented adults, IHSS cuts and support for caregivers. Rejecting the cuts for reproductive and women's health and really opposed to the Medi-Cal asset limits. Thank you.

Good evening. Keith Coolidge, on behalf of AARP California and its 3.2 million members and their families. AARP opposes the reinstatement of the asset test, the pause in the 96 hour backup power requirement and the elimination of the Workforce Quality Incentive Program. All are incredibly harmful to older Californians and will deeply impact their caregivers.

Feel free to just come right up so you can move quickly through the next person.

Hello, my name is Maribel. I'm from Long Beach and Associate Director with ORALE. And we oppose all cuts to Medi-Cal, in particular the enrollment freeze into full scope Medi-Cal and instituting a monthly premium for undocumented community members. Thank you.

Good evening. My name is Khiabeth Sanchez, Health Justice Manager with ORALE. We strongly oppose all of the proposed cuts, specifically the freeze in enrollment targeting undocumented folks, the 100 monthly premium and the reimplementation of the asset test.

Hi, my name is Brittany Brandon with SEIU 121RN and I'm also RN in Los Angeles County. I strongly oppose all budget cuts related to healthcare as we believe as nurses that healthcare is a right and not a privilege.

And also, no matter if you have money, don't, or regardless of your status, our oath tells us that we have to take care of all individuals. Thank you.

Hello, my name is Guillermo Mendoza-Lujan. I'm a registered nurse at Pomona Valley ER. I'm a member of SEIU 121 and we oppose all cuts and I ask those that write the budget cuts to walk a day in our shoes.

Good evening. Danielle Bradley, on behalf of the California State Association of Counties, would like to uplift CWDA's concerns regarding the proposals for the Medi-Cal reductions around automation, especially feasibility of timelines. We would also like to express serious concerns with the reinstatement of the asset limit and how this could really push our most vulnerable community members into homelessness. Thank you.

Madam Chair and Members. Peter Kellison, on behalf of the California Hospice Association and hospice providers in California. They're opposed to the proposal to provide-- to require prior authorization on hospice elections.

I'm also here on behalf of St. Paul's Homes and Services for the Aging, opposing the PACE proposals. As well as the proxy for the San Diego PACE program, also opposing those proposals. Thank you.

Debbie Daly on behalf of CalOptima Health in Orange County and here to oppose the PACE proposals, respectfully. Thank you.

Good afternoon. I'm Melissa Yanez, an emergency department nurse at LA Harbor General and a proud member of SEIU 721. I oppose any budget cuts directed towards the elderly in PACE programs, skilled nursing facilities and undocumented immigrants. Thank you.

Good evening. My name is Jordan Stuler. I am a registered nurse from Harbor UCLA in Los Angeles County. We do oppose all budget cuts to Medi-Cal from the governor's office. It would put great strain on emergency departments and be a death sentence to certain individuals in our community. Thank you for your time.

Hello, my name is Cynthia White and I'm a proud member of SEIU Local 721. And I am a data conversion equipment operator for the Department of Public Health. And I am here in strong opposition of cuts of Medicare. Thank you.

Good evening now. Thank you for all your work. Hi Pilar. Teresa Velasco. I am an Executive Board Member for SEIU Local 721. We came up here from Los Angeles for this important decision and information that you guys are making. I work at Los Angeles County as a community health worker at the campus of Rancho Los Amigos.

It's a rehab facility. It's a national rehab facility that services all populations. And again, just like my other 721 members throughout California, we oppose any budget cuts. Thank you.

My name is Robert Copeland. I'm a member of DAPA with disability rights organization here in Sacramento and part of Kara. Any cuts to Medi-Cal will harm more Californians. Thank you.

Good evening. My name is Pysay Phinith. I'm from Berkeley. I'm a licensed clinical social worker with Korean Community Center of the East Bay. I oppose to governor cut to Medi-Cal that unjustly target our vertical immigrant communities. Thank you.

Good evening. Beth Malinowski, the SEIU California. I want to second the remarks made by our SEIU members from across the state. Physically want to call out our opposition to any eligibility changes, opposition to any benefit changes including long term care and lastly opposed to an early elimination and stoppage of the WQIP program.

Thank you Madam Chair. Eduardo Martinez here on behalf of Western Dental, the largest Medi-Cal dental provider in California. And we strongly oppose cuts to Prop 56 and adult UIS coverage. Let's not go back to the access crisis we worked so hard to fix a decade ago.

Good evening. Katie Andrew with Local Health Plans of California. While we have concerns with many of the proposals in the May Revise, we are opposed to the medical loss ratio proposal as well as any of the proposals that impact coverage for undocumented folks, particularly the freezing of enrollment and as well as the-- I'm sorry, as well as the imposition of costly premiums. Thank you.

Good evening. Mary Odbert with the California Chronic Care Coalition. We oppose any cuts to Medi-Cal programs and services which improve the lives of people with chronic conditions, especially the cuts to obesity medications. Thank you.

Tim Madden representing the California Chapter of the American College of Emergency Physicians and we're opposed to the cuts of the Medi-Cal program due to its impact on access to care for patients which will drive them into the emergency department. Thank you.

Good evening. My name is Jamaica Sowell, Director of Programs and Policy with Roots Community Health and we oppose reinstating the Medi-Cal asset limit and any cuts to Medi-Cal that will make California less affordable and less healthy for our most vulnerable and marginalized communities. Thank you.

Luan Huynh with the Coalition of California Welfare Rights Organization. One, we're opposed to the cuts for acupuncture in the Medi-Cal program. This cut comes up again and again every year, and I personally wonder if there is a bias against Eastern medicine with this cut because it happens so frequently.

And I would like us to think about that. Two, we're opposed to the asset limit in the Medi-Cal program. We don't cap deductions and credits for corporations and businesses and families that are wealthy at 2000, but we're going to do that to the richest-- the poorest amongst us.

And that doesn't seem fair, and especially in light of all of the benefits and money that was had during the Trump tax breaks of 2017, which the state has not leveraged at all in terms of the businesses within the state.

We are opposed to all of the cuts that are being imposed on the undocumented population, not only because of the health consequences, but because of the story that it feeds into, this othering, this narrative that people can be less than and not worthy of the services that we give to them. And we are Health and Human Services, not American only services--

If I could ask you to just name--

And finally, revenue. We need revenue. We need money. Our problem is money. We need money. There are rich people in the state that has money. We need to go after them for their money. Thank you.

Good evening, Chair Addis and Members. My name is Vanessa Teran. I'm the Director of Policy with the Mixteco Indigena Community Organizing Project. We're here to strongly oppose the governor's proposed cuts to Medi-Cal for undocumented individuals.

As you know, some of the most impacted would be indigenous Mesoamerican immigrants, as well as Spanish and indigenous-speaking disability and LGBT communities who have settled in the farm worker community in the Central Coast and Central Valley. Keeping Medi-Cal saves lives. Thank you.

Thank you. And seeing no other public comment, I'm going to wrap up this portion before we move on to Prop 35. I will say I believe we have heard some very poignant public comment, but also grave dissatisfaction, I think unanimous grave dissatisfaction from Committee Members that have come today, as well as other members from the State Assembly.

And I think one of the reasons for that grave dissatisfaction is that California has done something that we are very, very proud of and we should be proud of. We have coverage for 94% of our residents.

It's one of the highest rates of coverage in the United States. And it's something that this legislature has worked incredibly hard to make happen.

And so when we're confronted with the potential rollback of this coverage and the kind of damage that that rollback is going to do, that we've heard firsthand from people is going to do, naturally, it creates a lot of concern.

And I think all of us in this room know that our job-- Number one, our job is to be strong fiscal stewards, but our job is also to care for the 40 million residents here in California that we were elected to serve.

And I think you've heard again and again a concern around a gap in thinking when it comes to putting forward these proposals, that the proposals are not fine tuned, they appear to lack a strong rationale and that in essence they're doing much greater harm than they would need to do if they were more fine tuned.