CVIndependent

Fri09182020

Last updateMon, 24 Aug 2020 12pm

Happy Wednesday, everyone. Let’s get right into it:

• Remember how on Monday, we said that Gov. Gavin Newsom was expressing tentative optimism about a statewide decrease in COVID-19 cases? Well … it turns out there may or may not be a decrease at all—because the state reporting system is currently being hampered by technical issues. According to our partners at CalMatters: “California’s daily count of COVID-19 cases appears to be falling, but that may be due to underreporting caused by technical issues, state health officials said (Tuesday). ‘We’ve discovered some discrepancies,’ said Dr. Mark Ghaly, the state’s health and human services secretary in a press call. Data, he said, is ‘getting stuck’ in the electronic system that feeds information from test labs to both the state and local public health departments. This means counties and the state are not getting a full picture of who and how many are testing positive. That lack of information hampers the counties’ ability to investigate cases and initiate contact tracing, Ghaly said.” Whoops! 

• And here are details on an even-more heinous state whoops, also according to our partners at CalMatters: “As the coronavirus continues to sicken Californians, the state mistakenly terminated or reduced health-insurance benefits for thousands of low-income people. An error involving the state’s Medi-Cal program and its automated system for renewals triggered the drops in coverage—despite the governor’s executive order earlier this year that was supposed to ensure that people maintain access to safety net programs during the pandemic.” Yeesh.

• Meanwhile, the United Parcel Service is prepping for that happy day a vaccine is available: Bloomberg reports that UPS is building two “giant freezer farms” that can each hold up to 48,000 vaccine vials.

• More vaccine news: Johnson and Johnson will deliver 100 million vaccine does to the U.S. for a cool $1 billion when they’re ready—and give the U.S. the option to buy another 200 million doses, the drug-maker announced today. Presuming, you know, the vaccine actually works.

• Because the federal testing plan … uh, really isn’t a thing, seven states have joined forces to buy more than 3 million coronavirus antigen tests. These tests could be a game-changer; according to Bloomberg, “the tests, which search for proteins on the surface of the virus, can deliver results in 15 to 20 minutes.

• Public Citizen, “a nonprofit consumer advocacy organization that champions the public interest in the halls of power,” yesterday issued a scathing report accusing Gilead Sciences and the federal government of “sitting on a potentially promising coronavirus treatment (GS-441524) for months that may offer significant advantages over the closely related antiviral drug remdesivir, possibly to maximize profits.” Read what Public Citizen has to say here.

• CNN today released a series of before and after satellite images of the pure devastation created by the massive explosion in Beirut yesterday. Simply put: They’re horrifying.

• It appears neither major-party presidential candidate will appear at their conventions to accept their nominations this year. The Biden campaign said today that the former vice president will not be going to Milwaukee, while the Trump administration is making plans for the president to deliver his nomination-acceptance speech from the White House, which may not exactly be legal.

• From the Independent: The U.S. Supreme Court ruled that the Trump administration’s efforts to terminate the Deferred Action for Childhood Arrivals (DACA) program—which allows some undocumented residents who were brought to the United States as children to gain legal status—were illegal. Nonetheless, feds are pretty much terminating the program anyway. Kevin Fitzgerald recently spoke to two local activists about the toll the DACA shutdown is taking on local undocumented families.

• Also from the Independent: President Trump recently suggested that we delay the election because of the supposed threat of mail-in voting fraud. Could he really do such a thing? Probably not … but Jeffrey C. Billman examines other scenarios Republicans seem to be preparing to use to create a constitutional crisis the likes of which the country has not seen since 1976.

• Past and present U.S. surgeons general said earlier this week that concerns over vaccines in the Black community could be a big problem, according to MedPage Today. That same publication also examined a related problem: Scientists aren’t doing enough to make sure people of color are being included in various clinical trials.

• The U.S. military has found the amphibious assault vehicle that sank off the coast of San Clemente Island last week, killing eight Marines and one sailor. CNN has the details on these people who died in service to our country.

• If you have not yet watched the bonkers interview President Trump did with Axios on HBO yet … boy, it’s worth your time—and here’s a link to the whole thing.

The PPP loans are starting to run out … and that means that more layoffs are coming.

• Our partners at High Country News took a pants-wetting look at the ways in which religious zealots in the West are using the pandemic as an opportunity to gain converts. Key quote: “When asked how he would respond to observers who say he’s exploiting people’s fear to further his anti-LGBTQ+, anti-women, anti-abortion agenda, (Idaho preacher Doug) Wilson responded frankly. ‘Yeah,’ he said. ‘I am.’

The Riverside County Board of Supervisors unanimously voted yesterday to declare racism as a public health crisis. Better late than never!

The Coachella Valley Economic Partnership crunched the numbers on the decrease in passenger accounts at the Palm Springs International Airport. Key quote: “The lockdown, which started in mid-March, had an immediate effect, with passenger traffic for the month quickly dropping 50 percent. April and May traffic were down an unfathomable 97 percent and 90 percent. Projecting a conservative 50 percent drop in passengers for the rest of the year would result in a 2.8 million decrease in passengers for the entire year, resulting in passenger traffic for the year being only one-third of 2019.”

Flu-shot makers are producing record amounts of this year’s flu vaccine, anticipating that more people than ever will be getting the shots, because of … well, you know. 

• If you’re planning on sneaking into New York City without quarantining for two weeks, beware: They may have checkpoints waiting for you.

• We recently pointed out social-media sleuthing indicating that the Riviera may soon become a Margaritaville resort. Well, Jimmy Buffett fans can rejoice, because the conversion was officially announced today.

If you have Disney+ and are willing to fork out an extra $29.99, you will be able to watch the much-anticipated Mulan from your couch Sept. 4.

• Finally, because life is random and weird, yet history keeps repeating: Both Who’s the Boss? and Ren and Stimpy are being rebooted. Happy, happy, joy, joy!

Be safe, everyone. Wear a mask. Wash your hands. If you value honest, independent local journalism, and have the means to do so, we ask you to help us continue to do what we do by becoming a Supporter of the Independent. Thanks for reading! The Daily Digest will return Friday.

Published in Daily Digest

Despite speculation about bold moves—in a far-left direction, even for this blue state—Gov. Gavin Newsom and legislative Democrats actually landed a budget Thursday that’s surgical about new taxing and spending while still keeping promises to help poor Californians and working families.

Under the $214.8 billion spending plan, the state inched closer to universal health coverage, expanding Medi-Cal to all low-income young adults regardless of immigration status. State lawmakers also charted a course to increase tax credits to the working poor and boost subsidies to middle-income Californians to buy health coverage. There were significant investments in early education and housing, while a portion of the surplus was diverted to pay down pension liabilities.

While Democrats began the year with a surplus of ideas for taxing Californians, only a few strategic levies survived the negotiation process, specifically a fine on individuals who don’t have health insurance under a state mandate. There’s even a little tax relief: Parents, for instance, will get a temporary tax exemption on diapers.

One hitch? The devil is in the details, some which have yet to be worked out. Though Democrats met their deadline for a balanced spending plan, most of the underlying policy to enact the budget wasn’t hashed out—and may not be for weeks. Call it a learning curve: This was the new governor’s first time negotiating with seasoned legislative leaders who know how to count votes. Look for more action in coming trailer bills.

Here’s what you need to know about California’s new budget—including maybe, just maybe, the first steps toward the establishment of a four-year college in the Coachella Valley.

Yes to Health Care for Undocumented Young Adults

The Legislature agreed to the governor’s plan to expand Medi-Cal, the state’s Medicaid program for low-income people, to young adults ages 19-25. It’s a step toward offering free health care to all undocumented adults since the state already makes Medi-Cal available to children regardless of immigration status.

The Senate had proposed going further by offering Medi-Cal to undocumented seniors 65 and older. However, none of the leaders backed offering health care to all low-income immigrants.

The state expects an estimated 90,000 young adults could gain coverage when the benefit begins next year. Already, 76,000 have registered for a limited version of Medi-Cal that covers emergency services and prenatal care available to low-income people regardless of immigration status. The price tag for this expansion? About $98 million a year.

It’s worth noting the state also affirmed its commitment to restoring optional Medi-Cal benefits. During the recession, coverage for audiology, optical, podiatry, speech therapy and incontinence creams had been taken away.

Obamacare Lives: A $695 State Mandate to Carry Health Coverage

Starting next year, California will join New Jersey, Vermont and the District of Columbia in requiring residents carry health coverage or face a $695 state penalty—a fine that will go up each year with inflation.

The state individual mandate aims to replace the federal one that Republicans repealed in their effort to dismantle the Affordable Care Act. The administration says California needs to act, because without a mandate, the number of Californians without coverage—10.4 percent in 2016—will go back up. Separately, a study conducted by the University of California estimated the uninsurance rate will rise to 12.9% by 2023, or 4.4 million people, without state action.

Money raised from the penalties, about $450 million over three years, will be used to give bigger subsidies to those who purchase private insurance through the state’s health coverage exchange, Covered California.

Newsom and lawmakers hope to expand assistance to 190,000 middle-income Californians making between $48,000 to $72,000 a year, according to Health Access California, a health advocacy group.

Fear of Recall = Not Many New Taxes

The budget includes a plan to impose a fee—that still needs to be voted on—of no more than 80 cents a month on each telephone line to help digitize the state’s 911 system, which is still analog. The next-generation system would improve call delivery, better location data and incoming text capability.

Other than that and the health-care mandate, lawmakers opted against most of the new taxes proposed early in the session. In fact, California parents and women will get a sales tax exemption on diapers and menstrual products (though only for two years).

Notably rejected, given the state’s current $21.5 billion surplus, was Newsom’s push for a 95-cent tax on most residential water bills to fund-clean-drinking water initiatives in the Central Valley. Instead, the Legislature worked out a deal to clean up toxic water by diverting money generated from big polluters under the state’s cap-and-trade program.

Some environmental groups questioned using clean air money to pay for drinking water, but supporters reasoned that water is being contaminated with arsenic and other toxic chemicals from the heavy use of fertilizers, so it makes sense to draw the $100 million for cleanup from the agriculture industry’s portion of the greenhouse gas fund.

One issue that won’t be resolved this week is whether California will conform its tax code to match federal changes made by Republicans in 2017. Newsom is relying on the projected $1.7 billion increase in net revenue from that to expand the state’s earned income tax credit, the centerpiece of his anti-poverty agenda.

Assembly Democrats in swing districts are skittish about limiting deductions and losses that can be claimed by some businesses. They know the fate of former Sen. Josh Newman, who was recalled from his Orange County seat after voting to raise California’s gas tax. Tax conformity requires a two-thirds vote in the Legislature to pass, so the pressure is on.

Paying Debt and Rainy-Day Saving

Lawmakers embraced the governor’s proposal to use some of the surplus to make extra pension payments, a step Newsom says is necessary to tame the state’s $256 billion retirement liability for state workers and teachers.

The Legislature approved supplemental payments of $3 billion to the California Public Employees’ Retirement System and $1.1 billion to the California State Teachers’ Retirement System for the state’s portion of unfunded liability.

To relieve school districts across the state, the Legislature will contribute a total of $3.15 billion toward paying down their liabilities and reducing their payroll contribution rates. One difference is where it will go.

Previously, Newsom had all the extra payments going to the teachers' pension fund—a reaction, in part, to teachers strikes that erupted as he took office. Now a portion of that money will be doled out to CalPERS. The change was made in recognition that while teachers are members of CalSTRS, many other school employees from janitors to bus drivers belong in the state’s other public-employee pension fund.

Besides paying down California’s “wall of debt,” as former Gov. Jerry Brown called it, the state is shoring up for a downturn—or in Newsom-speak, “building budget resiliency.” The new budget carries a roughly $20 billion reserve from several rainy-day funds. This amount, while hefty, would be easily wiped away in a downturn. According to the Legislative Analyst’s Office, the state would need as much as $40 billion to cover the budget in a moderate recession.

Big Spending on Housing

With new commitments topping $2 billion, the budget represents the most important action the governor has taken so far on housing and homelessness. The lion’s share will target the state’s homeless population, including $650 million in grants for cities and counties to build and maintain emergency shelters, and $100 million for wrap-around care for the state’s most vulnerable residents. Another $500 million will go toward quintupling the size of the state’s affordable housing financing fund, plus hundreds of millions earmarked for cities to update their often outdated housing plans.

While lawmakers and Newsom have agreed to cut big checks, it’s not clear who’ll get the money, and with what strings attached. Big-city mayors and lawmakers want homelessness grants directed towards the state’s largest 13 cities, while Newsom wants to spread out the money to include counties.

Newsom also wants to deny transportation funds to cities not building enough housing. As of Thursday, lawmakers were still negotiating a scaled-back version of the proposal. Another Newsom proposal that speeds construction of homeless shelters by sidestepping environmental laws also remains unresolved.

Lending a Hand to Working Families

Expanding California’s earned income tax credit has quickly become one of Newsom’s signature anti-poverty programs, because it gives a cost-of-living refund to low-income working families. Lawmakers are poised to triple the program from $400 million to $1.2 billion to provide a $1,000 refund for families with children under 6 and expand income eligibility from $24,950 to $30,000.

Anti-poverty advocates had wanted Newsom to include undocumented workers who file with individual taxpayer identification numbers instead of Social Security numbers. That proposal did not make the final version of the budget. Still, the administration estimates the current expansion will increase the number of beneficiaries from 2 million to 3 million households.

The budget also will make it easier for low-income families with children to qualify for assistance, increasing the CalWORKs asset limit to $10,000 and the motor vehicle exemption to $25,000—changes that will allow people to save and hang on to cars that can get them to work.

And parents of all incomes will get a longer paid family leave to care for new babies—eight weeks, up from the current six weeks, starting in July of next year. The goal will be to boost the benefit to 90 percent of most wages, up from the current maximum of 70 percent.

The K-14 Kids Did All Right

As required by law, the lion’s share of the budget goes to public schools, with nearly $102 billion in state money to be pumped into California classrooms and community colleges, plus another $389 million in a special reserve fund for schools. Though the figure is an all-time high, California is still viewed as lagging in per-pupil spending, in part because of the high cost of living.

Democrats are also demanding more stringent oversight of charter schools, which can operate like private schools, tend to be non-union and have proliferated in big cities such as Oakland and Los Angeles. Newsom proposed prohibiting charter schools from blocking or disenrolling special-education students who require more support for disabilities. Lawmakers readily embraced that change.

The budget includes $300 million to build more kindergarten classrooms in an effort to boost full-day kindergarten programs. Newsom had initially proposed $750 million but that was reduced after a study found most part-day kindergarten programs are in wealthier communities.

After-school programs will get a $50 million boost over the $600 million or so the state is currently spending. The money will help cover the cost of minimum wage increases enacted during Brown’s tenure.

So Did the Little Ones

In emphasizing early education, Newsom and lawmakers agreed to expand day care and preschool slots by the thousands while investing in training for child care providers.

Newsom gets $50 million in seed money to start child savings accounts for college and post-secondary education. He initially asked that all of it go toward pilot projects with First 5 California and local governments, but the Legislature is designating $25 million to that. The other $25 million will create a state program with the Scholarshare program in the Treasurer’s Office.

More Free College and Help for Student Parents

Newsom and legislators delivered on a $45 million promise to fund a second year of tuition-free community college for first-time, full-time students at campuses participating in the state’s College Promise program.

Other big winners include students with children, who will be eligible to receive grants of up to $6,000 to help cover their families’ living expenses. The budget boosts by about 15,000 the number of competitive Cal Grants—a significant jump, but far less than the 400,000 qualified students who applied for the state scholarships last year and didn’t receive them.

The University of California and California State University systems will receive money to increase enrollment, and waive tuition during the summer to help low-income students graduate faster. Lawmakers also set aside funds for campuses to combat hunger and homelessness, strengthen veterans resource centers, and provide more mental health counseling. A center at the University of California San Francisco is getting a $3.5 million earmark for dyslexia screening and early intervention.

Backers of the state’s controversial new online community college fended off an effort to slash the college’s funding, clearing the way to enroll its first class this fall. And CSU will get $4 million to study five possible locations for a new campus: Stockton, Chula Vista, San Mateo, Concord and Palm Desert.

Lots for Police Training; a Little for Police Records

Reflecting the Legislature’s focus this year on reducing police shootings, the budget includes $20 million to train police officers on de-escalation tactics, and how and when to use force. Outside the budget, bills to set a tougher standard for police to use deadly force and require more officer training are advancing through the Legislature, reflecting a compromise between civil rights advocates and law enforcement groups.

Attorney General Xavier Becerra’s office will get $155,000 to implement the new state law he’d been resisting: making law-enforcement misconduct records public. Becerra will also have to report to the Legislature on how many requests his office processes, and how much time is spent on that. A judge ruled in May that Becerra must produce the records; previously he had said he would not release them until the courts clarified whether he had to.

Powering Down to Cope With Wildfires

Besides beefing up the state’s firefighting capability and disaster preparedness, California will add powering down to its to-do list for coping with climate change-driven wildfires.

The budget doles out $75 million to state and local agencies whenever investor-owned utilities decide to shut off electricity during red flag weather warnings. One note: The Assembly added language to track how the money is used.

CALmatters reporters Matt Levin, Felicia Mello and Laurel Rosenhall contributed to this report. CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

In one of his first official actions, Gov. Gavin Newsom has directed state agencies, including the one that oversees Medi-Cal, to negotiate as a block to demand prescription drug-makers lower their prices.

The move will make California the nation’s largest negotiator with pharmaceutical companies, and could become a model for other states—if it works.

“Right now, with all the gridlock in Congress, we are seeing quite a bit of state action on prescription-drug pricing—and we hope that advances as much as it can until we can see some change in Congress,” said Peter Maybarduk, who specializes in medicine access at Public Citizen, a consumer advocacy group based in Washington, D.C.

“California government has power,” he continued. “It is a large enough economy and large enough state to influence pharma behavior and dictate terms.”

It’s such an attractive idea that it seems to have united the progressive Newsom with his political nemesis, President Donald Trump. Both have espoused the wisdom of the government consolidating its massive purchasing power so it can bargain hard with drug companies and cut the best deal for taxpayers.

Trump campaigned on the notion of harnessing the federal government’s bargaining power to reduce drug prices for programs like Medicare, but the idea went nowhere, because it’s prohibited by federal law: Congress specifically barred the federal government from negotiating Medicare drug prices—a restriction defenders describe as free-market protection and critics deride as a giant pacifier to Big Pharma.

Still it remains a simple and appealing idea in a nation confronted by rapidly rising prescription drug costs. A recent Harvard/Politico poll found the No. 1 priority voters have for the new Congress is reducing the cost of prescription drugs.

There’s a reason it’s top of mind. A study released this month in the Journal of Health Affairs found that the cost of brand-name drugs rose each year between 2008 and 2016—by more than 9 percent per year for oral medicine, and more than 15 percent for injectable medicine. Specialty drug prices soared even higher each year.

In his executive order, Newsom said California has seen prescription drug prices rise 20 percent annually since 2000—and that the 25 most expensive drugs account for half of the state’s spending on pharmacy costs. So far, Newsom’s office has not released any estimates of how much it expects the new bargaining plan to save.

“We will use both our market power and our moral power to demand fairer prices for prescription drugs,” Newsom said during his inauguration speech Monday.

That same day, he told the state’s Department of Health Care Services to begin negotiating the purchasing of prescription drugs for all 13 million recipients of Medi-Cal, the state’s health-care system for low-income patients. Currently, the state only represents 2 million of them, while the rest are on managed health plans that negotiate their own drug rates.

“The governor is the only one that can do this; he is the only one that can force everybody to the table,” said Democratic Assemblyman Jim Wood of Healdsburg, who heads the state Assembly’s health committee.

He said the consolidated bargaining power is vital to address skyrocketing drug prices. With nearly one in three Californians on Medi-Cal, and its budget of $250 billion, even small savings could be significant.

“The savings we’ll be able to enjoy from less spending on prescription drugs,” Wood said, “will help offset some of the additional costs that we’re going to be incurring to expand coverage for other people in California.”

Massachusetts was the first state to enact a “bulk Rx buying plan” in 1999. States eventually started joining forces, and now there are five bulk-buying programs that include multiple states, with some reporting significant savings. Three of those are focused on buying drugs for Medicaid recipients, according to the National Conference of State Legislatures.

The oldest one, focused on Medicaid pooling, was created in 2003 with four states and has now grown to 10, including Michigan, Minnesota, Montana, New York and North Carolina. It represents 3.8 million Medicaid recipients—still less than a quarter of the Medi-Cal recipients California will be bargaining on behalf of.

In its last session, the California Assembly approved a bill that would have created a prescription drug bulk-purchasing program for the state, but it was then held by its sponsor, San Francisco Democratic Assemblyman David Chiu. His office cited a lack of support from then-Gov. Jerry Brown. And nearly two decades ago—in another effort to decrease drug expenses—the state authorized the Department of General Services to buy prescription drugs for state or local agencies through a bulk purchasing program, but the program hasn’t been used much.

The governor’s plan also calls for eventually giving private employers the option to join the consolidated purchasing block, although how that would work is still vague.

As for the expected drug-industry opposition, the Pharmaceutical Research and Manufacturers of America said it’s reviewing the proposal.

“We welcome the opportunity to work with the governor and his administration on comprehensive solutions to the problems patients are facing accessing and affording their medicines,” said spokeswoman Priscilla VanderVeer.

Gerald Kominski, senior fellow at the UCLA Center for Health Policy, lauded the idea of using market power to obtain the lowest prices possible, but predicted that drug-makers would unleash a campaign against it inside and outside of California.

“They will start running ads that are going to scare people—that if you are on Medi-Cal, you are no longer going to get this drug or this drug,” he said. “There will be dark music and maybe a doctor in the scene shaking their head 'no' saying you are no longer eligible for this or for that.”

For the health plans that currently serve the majority of Medi-Cal patients, efforts to get better prices are welcome, said John Baackes, CEO of L.A. Care Health Plan. With 2.5 million Medi-Cal patients, it is the largest Medi-Cal managed plan in the state.

“We are supportive of investigating the idea, because logically it says if the state is negotiating for 13.5 million people, they can do a lot, maybe more than what we can do for 2 million people,” he said. “It’s worth it to see if it will produce better pricing.”

But the details are going to matter, Baackes said. There has been no information yet on how it will be administered or how the state would handle customer service.

Even California, with super-sized buying power, can only bargain so far. Larry Levitt, senior vice president of the Kaiser Family Foundation, called Newsom’s approach “promising.” But he noted that the state can’t walk away from a negotiation, because it has an obligation to make sure that Medi-Cal recipients can access the drugs they need.

“Leveraging the purchasing power of the state is certainly a smart move,” said Sacramento Democratic Senator Richard Pan, chair of the Senate Health Committee. But he added a caveat: “We want to make sure it’s done in a way that ensures that people have access to the medication they need.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

Rob Lyman of didn’t know what to do.

The Redwood City resident was helping his aunt, Sharron Evans, who had early-onset Alzheimer’s disease and needed constant supervision. A former teacher, she had run out of money and had no income. She qualified for government health-care assistance, but it appeared she’d need to go to the only setting that would be covered: a nursing home.

“Basically, that’s a hospital setting, and that was our only choice,” Lyman said.

To him, that didn’t make sense.

“My aunt just needed a safe place to be; there was nothing physically wrong with her,” Lyman said. “She didn’t need that level of care. It’s inappropriate. It costs the state a lot of money. But this is what people do. That’s the default choice.”

The baby boomers are aging. By the end of the next decade, 11.1 million Californians will be 60 or older, and the number of people 85 and older will jump 37 percent, to the 1 million mark, according to state officials. One in six Americans is expected to develop dementia, and care can be expensive enough to force even middle-class families into poverty and onto the public payroll.

For low-income seniors who can’t afford care at home and don’t need the full medical services of a nursing facility, the state’s few options aren’t enough to meet demand. A middle-ground choice—assisted living—requires special permission under government rules and is available to fewer than 4,000 Californians, although state health officials and lawmakers are both proposing increases. Taxpayers currently pick up the more-expensive nursing-home tab for more than 20,000 people who may not need it, by one advocate’s estimate.

Evans, now 69, was lucky enough to land a permitted spot in a Sacramento-area assisted-living home after nearly a year’s wait. The cost didn’t matter much to her or Lyman, because it was paid by Medi-Cal, the state’s version of the federal Medicaid program. The lower price tag for assisted living saves the state money, while also providing a more home-like setting and the right level of care for Evans.

For more than a decade, the state Department of Health Care Services has been trying to address the need for more-appropriate, less-costly care. But Medicaid pays only for what is “medically necessary,” such as nursing-home care, unless states ask for waivers. The state budget deal struck last week would provide administrative costs for a waiver to cover an additional 2,000 assisted-living slots.

That’s not enough, said Assemblyman Ash Kalra, a Democrat from San Jose. Kalra’s Assembly Bill 2233 proposes adding nearly 13,000 more, to cover a total of 18,500 people over the next five years. That would basically triple the number of Medi-Cal recipients with access to assisted-living care—assuming waivers, which last five years, can be secured.

“We’re hitting a crisis point with our senior care,” Kalra said. “It costs us twice as much for skilled nursing care.” His bill, which has no organized opposition, passed the Assembly and is now in the Senate.

The federal and state governments each pay roughly half of Medi-Cal expenses. A legislative staffer pegged savings for the state’s share at slightly more than $23 million over the five years, once all 18,500 patients are placed in assisted living. According to the Department of Health Care Services, which oversees Medi-Cal, the state’s share of the average cost for assisted living is about $22,000 a year per person—roughly half the $42,000 annual cost of a nursing-home.

“I have visited skilled-nursing facilities, and the nurses … told me that many of the patients don’t need that level of care. So we could be saving money for the state dramatically,” Kalra said.

According to the Department of Health Care Services, California has about 53,000 Medi-Cal patients in long-term institutional care, such as skilled-nursing facilities. A legislative analysis shows an estimated 11,000 of them have lower-care needs and could be fine in assisted living.

That figure could actually be twice as high, said Mark Cimino, who runs assisted-living homes in the Bay Area and around Sacramento, including the one where Evans lives. He said assisted-living facilities provide a wide range of care that could serve upward of 20,000 Medi-Cal patients who are now in nursing homes.

California’s first waivers, approved in 2004, covered about 1,000 people. That figure doubled in 2009 and nearly doubled again to about 3,700 in the most recent period, which runs out in March 2019.

“There’s a huge trajectory here,” Cimino said. “The question is: Is the expansion of the waivers enough?”

And there’s the human side of the equation, he added: “The assisted-living community is more home-like,” he said. “No one wants to spend much time in a (skilled-nursing) unit.”

The state “has specifically worked to expand access to assisted-living services,” said Department of Health Care Services spokeswoman Carol Sloan.

It’s hard to go any faster, she said by email, because the state has to check for “requirements, monitoring and oversight responsibilities, staffing, adequacy of available provider network and other resource limitations” before requesting more waivers.

As for the nursing-home industry: “If a resident can be shifted to a lower level of care, we think that’s a good thing,” said Deborah Pacyna, spokeswoman for the California Association of Health Facilities, a trade group. “We always support people getting the appropriate level of care for their needs.”

That won’t hurt business, she said: “The boomers are coming.”

For Rob Lyman, a move toward assisted living is a no-brainer.

“If the state, and we as a community, are going to provide assistance, we have to do it in a cost-effective way,” he said. “Putting people in skilled nursing when they don’t need it—that’s not good stewardship of public dollars.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues

By many measures, the rambunctious campaign for a single-payer health-care system in California appears to be struggling.

A bill that would replace the existing health-care system with a new one run by a single payer—specifically, the state government—paid for with taxpayer money remains parked in the Assembly, with no sign of moving ahead. An effort by activists to recall Assembly Speaker Anthony Rendon for shelving the bill has gone dormant. And an initiative that would lay the financial groundwork for a future single-payer system has little funding, undercutting its chances to qualify for the ballot. 

But even if single-payer is a lost cause in the short term, advocates are playing a long game. For now, it may well be less a realistic policy blueprint than an organizing tool.

And by that metric, advocates are making gains.

Riding a wave of enthusiasm from progressive Democrats, supporters of single-payer have effectively made it a front-and-center issue in California’s 2018 elections. It’s been discussed in virtually every forum with the candidates running for governor, emerged as a point of contention in some legislative races, and will likely be a rallying cry at the upcoming California Democratic Party convention.

“This issue is not going away,” said Garry South, a Democratic political consultant who has worked with the California Nurses Association, which sponsored the stalled single-payer bill. “The progressive elements who are supportive of the single-payer concept know that it’s not going to happen now; it’s not going to happen tomorrow. It’s a long-term process, and Jerry Brown is gone as of January 2019.”

The governor has not needed to stake a position on the bill, because it skidded to a stop in the Assembly last summer without reaching his desk. But state Sen. Toni Atkins, a San Diego Democrat who co-authored Senate Bill 562, said Brown was not receptive. Analyses peg the cost of a statewide single-payer system at between $330 billion and $400 billion—far exceeding the state’s entire budget. That made it an anathema to Brown’s record of prioritizing fiscal stability for state government.

“When the governor saw that we introduced that bill… all he could look at me and do is shake his head and say, ‘$400 billion dollars.’ And I kept trying to say, ‘Can we back up and talk about what you've got to do to get (there)?’" Atkins said in an interview.

“He wasn’t letting it go.”

Atkins, who will take over as Senate leader next month, said she’s not giving up on the goal of single-payer, but does not expect it to happen this year. “People are polarized on this issue in a way that’s not good for coming together to get it done,” she said.

Led by the nurses association—a labor union that embraces firebrand activism—supporters of single-payer have targeted Rendon after he shelved the bill last summer, saying it lacked critical information on how to pay for a massive overhaul of the healthcare system. They peppered social media with images that not only portrayed the bill fight as a boxing match between Rendon and the nurses, but also depicted a knife labeled “Rendon” back-stabbing the bear symbol of California.

The nurses were not involved in the campaign to recall Rendon, said recall organizer Stephen Elzie, who has since dropped the effort and is now helping Democrat Maria Estrada challenge Rendon’s re-election bid. But the nurses union leapt into the governor’s race as one of the first labor unions to endorse Lt. Gov. Gavin Newsom. Single-payer has emerged as one of few issues on which the Democratic candidates disagree.

Newsom and Delaine Eastin, the former state superintendent of schools, have both said they support the nurses’ single-payer bill. Fellow Democrats Antonio Villaraigosa, former mayor of Los Angeles, and John Chiang, the state treasurer, say they want to expand health care so that everyone is covered, but not necessarily with the single-payer model that would abolish private health insurers and replace them with a government-run system.

A coalition of medical groups is lobbying against the single-payer bill, arguing that it makes more sense to protect and expand the federal Affordable Care Act, which has increased the number of Californians who have health insurance. Some members of the coalition have a history of spending big money to sway California elections. One of them, the doctors’ association, donated to Newsom before he voiced support for single-payer; it’s not yet clear if they will shift support to another candidate. 

Almost two-thirds of Californians like the idea of a statewide single-payer health-care system, although enthusiasm drops significantly if it would require raising taxes, according to polling last year by the Public Policy Institute of California. Still, Californians didn’t cite health care as a top priority when asked last month what the Legislature and governor should focus on in 2018.

The Assembly just wrapped up a series of hearings on what it would take to create a health-care system that covers all Californians. It exposed many obstacles—in both federal and state law—to swiftly enacting single-payer. For one, the state would need permission from the federal government—and perhaps an act of Congress—to shift billions of dollars from Medi-Cal and Medicare into a state-run single-payer plan. For another, if lawmakers raised taxes to fund single-payer, voters would likely need to approve changes to the California Constitution to allow the money to go to health care instead of schools. (That’s the only single-payer initiative that someone is trying to get qualified for the ballot; while a Silicon Valley tech consultant is gathering signatures for it, he doesn’t have support from the nurses’ union or any other well-financed group.)

Assemblyman Jim Wood, a Healdsburg Democrat who chaired the panel, called the single-payer bill “aspirational” and said he’s instead considering legislation that could help more Californians get health care without requiring permission from the federal government. One idea: extending subsidized health plans to adults who are undocumented immigrants.

“I believe we can actually get to single-payer, once we go through a lot of study and a lot of work,” Wood said. “But this feels, at times, more like a litmus test.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

California’s resistance began before there was a resistance.

When Gov. Jerry Brown unveiled his final budget on Jan. 10, it bookended eight years of a progressive march to reduce greenhouse gases, expand health care, grant more rights to undocumented immigrants and raise the minimum wage to $15 an hour. Along the way, voters have assented by passing temporary taxes on the rich—not once, but twice. The top marginal income tax rate is now 13.3 percent, the highest state income tax rate in the country.

In short, policies that are now labeled acts of resistance to President Donald Trump were alive and ascendant in California long before Trump won the White House. But the contrasts have become much more stark.

Instead of cutting taxes, the Democratic governor and his party’s legislative leaders have passed a gas tax to help pay for aging infrastructure. Instead of trying to shift government out of the healthcare marketplace, California is looking for a way to fund single-payer health care, including coverage for undocumented immigrants. Instead of criminalizing pot, the state is looking forward to collecting taxes on marijuana sales.

In the months between now and the June deadline for a final budget, the governor and the Legislature will hammer out details. The focus this year: what to do with an expected surplus of $6.1 billion—and there are definitely differing opinions all around. Republicans say return it to California’s 40 million residents as a nice tax refund. The governor's priority is to fill up the state’s rainy-day fund. Democratic legislators mostly want to spend it.

“We have a very different approach,” said Assemblyman Phil Ting, D-San Francisco, who chairs the Assembly Budget Committee. “Our focus, the people who we think need tax relief, are the working Californians who are making less than $25,000. That’s where we want to spend our money, making sure they have money to pay rent, to pay for food.”

Rather than giving out “huge corporate tax breaks and a huge tax break for the wealthiest in this country,” Ting has a long list of how he would like to spend that extra money, including:

• Increasing the state’s Earned Income Tax Credit, which puts money into the hands of the working poor.

• Expanding Medi-Cal health care for poorer Californians to cover all remaining uninsured residents, mostly undocumented immigrants.

• Expanding early education for 4-year-olds through preschool and transitional kindergarten programs.

• Increasing college aid.

• Expanding mental and social services to reduce the number of criminals who go on to re-offend.

As supportive as Brown might be of these Democratic aspirations, his administration is urging legislative leaders to proceed with caution. The state’s tax structure is more vulnerable than ever to the stock market gains and losses of its wealthiest citizens, and the governor said California must prepare for the next economic downturn, because a mild recession could wipe away at least $20 billion a year in revenues.

He also warns of uncertainty from Washington, D.C.

“There are certain policies that are radical departures from the norm, and California will fight those, whether it’s immigration or offshore drilling,” Brown said. “We don’t know what will happen. I wouldn’t want to portray a California-Washington battle, although there are some key differences, and we’ll espouse our values.”

Since Brown was elected to begin his second stint as governor in November 2010, the state has climbed out of the recession and enjoyed economic prosperity. The unemployment rate, which topped 12 percent, now stands at 4.6 percent. Since his return, California has added 2.4 million jobs, and hourly wages are up $4.76 an hour. The state, which carried a $25 billion deficit in his first year back, has enjoyed billion-dollar surpluses in recent years, and the state now has a rainy-day fund.

The governor’s proposed $190 billion budget is dominated by spending on education (29 percent) and health care (32 percent). Health care spending has been growing particularly fast since the state embraced the Affordable Care Act, also known as Obamacare. The act not only grew the marketplace for private health plans; it allowed states to expand their Medicaid health insurance programs for the poor.

Because California is among 30 states that expanded Medicaid, the federal government is paying at least 90 percent of the cost for newly eligible enrollees. That has allowed California to draw billions in extra funding from the federal government to bolster Medi-Cal, the state’s version of the national Medicaid program. As a result, the number of people without health coverage in the state has dropped to a historic low: from 17.6 percent in the 1980s to 7.6 percent in 2016. Today, one in three Californians is covered by Medi-Cal.

Public schools too have greatly benefited since the recession, with much of the extra spending on schools going to improve teachers’ salaries.

However, if the federal government doesn’t reauthorize the Children’s Health Insurance Program for 1.3 million children, that could add more than $850 million in costs to the state over two years.

Worse, if Republicans in Washington slash Medicaid funding in 2018, the state could lose between $25 billion and $50 billion, said Chris Hoene, executive director of the California Budget and Policy Center, a progressive think tank in Sacramento.

“The reality is California could not afford the scale of the cuts the GOP has been proposing,” Hoene said. “That’s going to put state leaders in a position of deciding who gets state services and how do they fund that.”

Other factors are straining the budget. For example, pension costs for public workers continue to be one of the fastest-growing liabilities—driven by lower investment-rate assumptions, higher health care costs and longer life spans.

Voters, too, could turn on Brown and lawmakers. Early polling suggests Republicans have a decent shot at repealing a gas tax hike that went into effect late last year. Brown said at a press conference Wednesday that he believes a repeal initiative could be defeated.

The Legislature’s nonpartisan budget analyst is also urging lawmakers not to commit to too many new spending programs.

“As it crafts the 2018-19 budget and future budgets, we encourage the Legislature to consider all of the uncertainty faced by the budget in future years and continue its recent practice of building its reserve levels,” the analyst wrote.

On the flipside, Republicans are calling for a tax refund, if not an outright repeal of state income taxes. They argue that California’s high taxes chase residents out of state.

“This surplus is a direct result of Capitol Democrats overtaxing hard-working Californians,” said Assemblyman Matthew Harper, R-Huntington Beach. “Rather than expanding an ever-growing list of government programs, our leaders should figure out a way to return that money to the people who earned it in the first place.”

Assemblyman Vince Fong, R-Bakersfield, said he plans to introduce tax cuts aimed at helping families and small businesses stay in California.

“As we see all too often now, we are losing families and small businesses to neighboring states that have tax burdens much lower than California’s high-priced tax code,” Fong said on Twitter. “We have an opportunity to change that.”

Brown dismissed the refund idea, saying it would only prompt service cuts to public schools and universities later. “If you want to budget responsibly, you need big surpluses in years that are good,” he said.

Still, there’s a growing sentiment that California may have to respond to recent changes in the federal tax plan, specifically a $10,000 cap on state and local deductions that will hit millions of households.

According to the state Finance Department, the average deduction for state and local income taxes alone is nearly $16,000 per return, while state and local property taxes average less than $6,000 per return. Because a portion of those taxes will no longer be deductible, it acts as double taxation for California taxpayers.

Senate President Pro Tem Kevin de León, who is running for U.S. Senate, introduced legislation Thursday to shield Californians from bearing the costs of the tax overhaul. The bill, dubbed Protect California Taxpayers Act, would allow taxpayers to make charitable deductions to the state and receive a dollar-for-dollar tax credit on the full amount of their contribution. By having residents donate to the state government as a charitable contribution, the contribution remains deductible on federal taxes.

“The Republican tax plan gives corporations and hedge-fund managers a trillion-dollar tax cut and expects California taxpayers to foot the bill,” de León said in announcing his legislation. “We won’t allow California residents to be the casualty of this disastrous tax scheme.”

Brown was particularly vocal against the GOP tax proposal, calling it a “tax monstrosity,” but the governor expressed reservations about whether the state could sidestep federal law.

“It looks interesting,” Brown said. “But two questions: Can it work? If it does work, can the Internal Revenue Service issue a regulation and completely subvert it?”

De León responded that he was confident it would work, because similar charitable deductions have already been given out for education-based contributions.

For now, state Democrats are in agreement about a common threat.

Whether it’s federal tax changes or entitlement cuts, the leader of the Assembly, Anthony Rendon, D-Paramount, said he’s most concerned Republicans in Congress and the Trump administration will take another swipe at liberal California in 2018. “We’re worried about the next shoe to drop.”

CALmatters is a nonpartisan, nonprofit media venture explaining California policies and politics.

Published in Politics

California’s Democratic legislators want to extend health benefits to undocumented young adults, the continuation of an effort that ushered children without legal status into the state’s publicly funded health care system last year.

It is unclear when the program would start or how much the state would spend if the proposal, which could cost up to $85 million a year, is approved by Gov. Jerry Brown. Lawmakers are working out details ahead of their June 15 deadline for passing a new budget.

The plan would provide full-scope coverage for 19-to-26-year-olds who qualify for Medi-Cal, the state’s name for Medicaid. Currently, the federally funded program covers only emergency visits and prenatal care for undocumented residents. Under the proposal, revenue from taxes on tobacco products would absorb expenses for all other coverage.

Democratic Sen. Ricardo Lara of Bell Gardens has been one of the strongest voices for expanded care. In 2015, he pushed for coverage for all adults. That proposal was changed to admit only undocumented children; it took effect last year. This year, he said in a recent video message to supporters, “We are going to make the final push to ensure we capture our young adults.”

Supporters’ ultimate goal is to include all undocumented adults, said Anthony Wright, executive director of Health Access California, a health care consumer group backing the proposal.

“We believe without coverage, people are sicker, die younger and are one emergency away from financial ruin. It has consequences for their families and their communities—both health and financial consequences,” he said.

The plan would mean that undocumented children currently in the program would not age out at 19, putting low-income undocumented immigrants on par with those allowed to stay on their parents’ insurance under the Affordable Care Act (often called Obamacare) until they are 26.

Republican Sen. John Moorlach of Costa Mesa opposes an extension of benefits. One reason is financial: California doesn’t have “a balance sheet we can brag about,” he said, citing the state’s debt load, among other reasons.

Secondly, he disapproves of illegal immigration. Moorlach migrated to the U.S. legally as a child with his family from the Netherlands.

“I’m kind of offended that we feel an obligation to pay for expenses for those who did not come through the front door,” he said. “I certainly have compassion and want to help people in need, but I’m having difficulty, as a legal immigrant, because we are already in such bad fiscal shape.”

Advocates argue that undocumented immigrants help propel California’s economy with their labor and the taxes they pay, and that they cost the state money when they don’t work because of illness or when they end up in the emergency room.

“Health care is a right,” said Ronald Coleman, director of government affairs for the California Immigrant Policy Center, an advocacy organization and supporter of the proposal. “These are folks we are investing in through the California Dream Act and through other programs our state offers, and it makes sense to invest in our future, which our young adults will be.”

Estimates vary for how many people this expansion of Medi-Cal would serve and what the costs would be. Each house of the Legislature has passed its own version of the proposal, with differing figures attached.

The Assembly allocated $54 million a year to cover an unspecified number of additional enrollees, with a July 2017 start date. The Senate proposed $63.1 million in the first year, beginning in 2018, and $85 million annually thereafter, also without specific population numbers.

Coleman’s center, which is working closely with lawmakers on the issue, estimates about 80,000 new people would be eligible, and the cost would be around $54 million a year. That assumes the federal Deferred Action for Childhood Arrivals program continues, because it provides access to Medi-Cal. If DACA were eliminated, the figures would increase to about 100,000 eligible people and about $84 million in annual costs, Coleman said.

The governor’s proposed budget does not include the proposed expansion or any money for it.

Kevin, a 19-year-old Angeleno who asked that only his first name be used, because he lives in California illegally, wants the proposal to succeed. He has been working for more than a year to distribute information about Medi-Cal children’s coverage to immigrant families.

He meets all but one of the requirements for DACA: He was not in the country before June 15, 2007. He arrived in the U.S. in 2011 at age 14 from Guatemala, on a visa that later expired. He graduated high school, has no criminal record and is now majoring in business administration at California State University, Los Angeles.

“There’s this misunderstanding that young people are healthy,” said Kevin, who suffers from eczema. He worries about the chronic condition flaring up. “When it gets worse, it doesn’t let me do anything with my hands.”

He is enrolled in a county health insurance program for low-income residents, but he can’t afford a dermatologist. He can barely pay for the prescription lotion he uses for the eczema, and sometimes goes without it.

“We are trying to have a better economic standard, and we are like the building blocks of this society,” he said. “Having health insurance will allow us to focus more on school and do our regular day-to-day activities. A healthier society works better for everyone.”

If lawmakers can now agree on details, a consensus proposal will go to the full Legislature for approval. The deadline for that is June 12.

CALmatters.org is a nonprofit journalism venture dedicated to exploring state policies and politics.

Published in Local Issues