On January 10, 2011, newly installed California Governor Jerry Brown released his budget for Fiscal Year 2011-2012. This budget is proposed to address a looming state budget deficit in the billions.
For the first time in history, the budget proposes a co-payment for persons receiving life saving HIV drugs from the California AIDS Drug Assistance Program, ADAP. To many, the co-payments would be substantial given that the program already serves very low income, medically indigent people with HIV/AIDS.
In addition to the proposed ADAP co-payments, the budget puts a cap on the number of medical visits a person can receive through the Medi-Cal system and implements additional co-payments for medical services. All in all, the budget reduces expenditures for the medically indigent and the poor. In total, proposed cuts to health and human services programs include $1.7 Billion to Medi-Cal, $1.5 Billion from CalWorks and reductions in services for Healthy Families and numerous other programs.
Medi-Cal co-pays: $5 co-payments on physician/clinic/dental/and pharmacy visits are proposed. A $50 co-payment on emergency room visits; and a $100 per day co-payment ($200 maximum) for hospital stays. Medi-Cal 10% provider rate cut. The state is proposing to pay physicians who take Medi-Cal patients 10% less. This has a potential impact to reduce the number of physicians willing to take the State’s insurance. The State is proposing to provide less to Medi-Cal Beneficiaries, or Utilization Controls. There is a proposed limitation on the number of physician or clinic visits to 10 per year and limits on the number of prescription drugs (except life saving drugs) to six per month. Many people with HIV/AIDS are on more than six prescriptions per month and see their physicians or other providers more than 10 times per year.
ADAP Co-Payment Impact
Should the Governor’s Budget be implemented, California will see a Share of Cost for ADAP. Best estimates are that about half of all ADAP users will see a co-payment. Anyone with an income above 100% of Federal Poverty or anyone making more than $10,938 dollars annually a year will be imposed a co-payment for their drugs. Estimates are the co-payments would affect people on the program as follows: If your income is between 101-200% of FPL ($10,938 to $21,600 a year) you would be required to pay a co-payment of up to 5% of your income. The co-payments would be between $547 to $1,080. If your annual income is between 201%- 300% of the Federal Poverty Level ($21,763 – $32,490) you can be charged a co-payment of up to 7% of your income or $1,523 – $2,274 annually. And if your income is between 301 – 400% of FPL ($32,598 to $43,320) you can be assessed a co-payment of up to 10% of your annual income or between $3,260 – $4,332.
SSI Benefits: Additionally, the Governor is proposing to cut SSI or Supplemental Security Income benefits to the Federal Minimum Level, an average amount of approximately $830 per month.
This may be just the start: There may be even deeper cuts in addition to those proposed unless additional tax hikes make up the deficit. The Governor has signaled that he would like to see a ballot initiative to increase revenues. If the legislature agrees with the Ballot Measure, the Governor has said he wants the proposed cuts in place before the vote. It is estimated that in addition to those cuts already being proposed, as much as $9-12 billion more will be cut on top of the other cuts from “where the money is.”
Proposed revenue increases are: Personal Income Tax .25 percent surcharge: This proposal is expected to generate revenues of $1.1 billion in 2010 11 and $2 billion in 2011-12. Personal Income Tax Dependent Exemption Credit: Maintain the dependent exemption credit in effect in 2009 until 2015 while allowing for annual indexing. This proposal is expected to generate revenues of $725 million in 2010 11 and $1.2 billion in 2011 12. Sales/Use Tax: Effective July 1, 2011, the 6 percent State SUT rate would continue for five years. This proposal is expected to generate revenues of $4.5 billion in 2011-12. Vehicle License Fee: Effective July 1, 2011, the 1.15 percent VLF rate would continue for five years. This proposal is expected to generate additional revenues of $1.3 billion in 2011-12.
Saying she was just the “messenger” and “delivering one-way communications from the state,” Dr. Michelle Roland, the Director of the State AIDS Office made comments on some of these budget proposals at the Los Angeles County Commission on HIV at its January 13, 2011 meeting. According to Dr. Roland, 45% of everyone in ADAP would be given a share of cost. Roland indicated that the governor has proposed this budget to be passed in 60 days. She continued saying, there are “no details yet but, we need to work these out pretty darn fast.”
The state already has a very skimpy HIV/AIDS budget and this is now just adding insult to injury. You may be surprised to know that California puts no State General Funds in HIV prevention, testing or care services directed to community programs. It only passes down to cities federal dollars which it receives in the form of grants, after it takes out its administrative costs. What was once a state that contributed to the fight against AIDS, California has slashed nearly all of its support for AIDS services over the last few years. The only place where state General Fund dollars are spent are on HIV Surveillance and the ADAP Program.
This budget will hurt – badly. AIDS experts believe the governor’s proposal will create a forcible exit to the ADAP program because clients will not be able to afford the co-payments, so they will leave the program or get fewer drugs. If the state is calculating for these savings, they are being extremely short-sighted. People with AIDS need their drugs. If they can’t afford the co-pays, they will fall off the ADAP program or get fewer medications filled according to their medical needs. That will result in increased medical costs down the road. These increased costs will be seen in increased viral loads in people with HIV that miss medication doses. This will lead to more expensive laboratory testing, increased treatment costs and an increase in the number of new medications one might need in an HIV regimen if their health is affected due to resistance.
What to do: If you are in agreement that these budget proposals would hurt people living with HIV/AIDS, you need to contact your legislators and Governor Brown and urge them to preserve these vital programs. Call and write them and tell them this proposal will hurt people with HIV/AIDS and you want them to find solutions other than cutting programs and services to the state’s budget problems. You can contact our Speaker and Governor at these addresses and phone numbers:
Speaker John Perez
P.O. Box 942849
Sacramento, CA 94249-0046
Tel: (916) 319-2046
Fax: (916) 319-2146
Governor Jerry Brown
c/o State Capitol, Suite 1173
Sacramento, CA 95814
Phone: (916) 445-2841
Also, go to www.CCALAC.org and click on State budget updates. Within that link, you will be able to find out who your legislators are and send a message to them via the website. Do this. Don’t wait if this is an important issue for you.
By: AL BALLESTEROS, MBA
MEMBER – LOS ANGELES COUNTY COMMISSION ON HIV