Saturday, November 23, 2013

MediCAL and State Worker Compensation Engulfing California's Budget

This is from David Crane at Bloomberg

... Despite a 30 percent increase in the top income tax rate, higher sales taxes and fees, and greater total revenue, the state is spending less on education, transportation, courts, welfare and parks than it was six years ago. The reason: State spending on health care, employee compensation and benefits, interest, and prisons is greater than it was six years ago.

The largest spending growth is in Medi-Cal, which is California’s version of Medicaid. The program is the state’s second-largest and fastest-rising expenditure, and accounts for most of the Department of Health Care Services’ outlays, which grew 65 percent over the six-year period, to $24 billion a year, from $14 billion.

... California has historically chosen to enact more generous [Medicaid] eligibility criteria than most other states, leading to larger enrollment.

In 2012, Medi-Cal covered 7.6 million Californians, up from 5 million in 2000; and by 2014, the program is expected to cover 9 million, and will swallow ever-greater shares of the state budget.