ITUP Summary of Health Components of the Governor’s Proposed State Budget for FY 2016-17

January 7, 2016

The Health and Human Services Agency proposed budget is $136 billion of which $34 billion is state General Fund.

Medi-Cal costs $85 billion; Developmental Services $6.4 billion; 1991-2 realignment $5.3 billion; 2011 realignment $4.9 billion, and IHSS (In Home Support Services) $10.4 billion. Medi-Cal’s General Fund costs are projected to grow 8% from $17.7 billion in the current year to $19.1 billion in the coming year.

The Medi-Cal caseload for 2016-17 is projected to be 13.5 million. It will have grown 8% in the current fiscal year and is expected to grow by 1.5% (62,000) persons in the coming year. Prior to the ACA, Medi-Cal was at 7.9 million enrollees. Covered California is projected to cover 1.5 million subscribers, for a total of 15 million Californians covered between the two programs.

California’s cost per Medi-Cal case is $6,108, ranking California 28th in the nation. Massachusetts has the highest cost per case at $11,091, and the national average is $6,502.

The costs of the “mandatory” expansion would be $4 billion, of which $1.8 billion is General Fund. The costs of the “optional” expansion would be $14.1 billion, of which $0.74 billion is General Fund, for 3.4 million new eligibles.

County indigent health savings for 2013-14 were $151 million less than expected and that amount will be rebated to the counties. County indigent health savings from the expansion are projected to be $742 million in 2015-16.

The budget includes $91 million ($32 million General Fund) for residential treatment services for substance use disorders.

The MCO tax of $1 billion is still in negotiations to make it “cost neutral” and would need approval by the state legislature. The revenues are linked to needed improvements in the IHSS (In Home Support Services) and Developmental Disabilities programs. It is also linked to the fiscal viability of Coordinated Care Initiative where the beneficiary opt-out rates are 69%.

The 2011 realignment is $7.5 billion, of which $1.2 billion is for the mental health account and $1.3 billion is for the behavioral health subaccount.

The full summary of the Governor’s budget proposal can be found at or