Shrinking CA budget

The last week (OK, 8 days) have held plenty of good news, right? Election results, cancelled final exam for PH220, California's budget deficit nearing elimination... Wait, what? Yep, per the Legislative Analyst Office (and covered in plenty of news sources, so you can read the executive summary), it'll be down to $1.9 billion by summer 2013. But the full report (I skipped to the "Health and Human Services" section towards the bottom of the page) relies on several assumptions. Some of these seem predictable--of course CA will adopt the Medicaid expansion--and others not so much.

What do we think of this projection overall? In terms of the HHS section, are these assumptions realistic?

One thought of mine: Below there is a section that mentions reduced costs for other state health programs, including the Family Planning, Access, and Care Treatment Program (FPACT). That's the program that folks are enrolled in when they access family planning services at pretty much any CA safety-net clinic, including Planned Parenthood, La Clinica, Lifelong, and teen clinics, such as those at local high schools. It covers to low-income individuals without health insurance, regardless of documentation status, and also to those who are unable to use their parent, guardian, or spouse's insurance for reasons of confidentiality. Many of the low-income individuals will be able to purchase Medical with subsidies. But this does bring up questions about how safety-net clinics will provide services for those who are ineligible for Medical. Not to mention how they'll continue reassuring notoriously wary teenagers that they can access sexual/reproductive health care safely under a program who's reputation for confidentiality is poor.

• Several Key Assumptions and Remaining Policy Decisions Result in Significant Fiscal Uncertainty. Our fiscal estimates related to ACA implementation are subject to substantial uncertainty and depend heavily on several key assumptions, meaning that actual costs could be several hundreds of millions of dollars higher or lower over this period. In addition, the state is still awaiting additional federal guidance on ACA implementation and several major state–level policy decisions have yet to be made that would be critical to informing a projection of the net fiscal impact of the ACA. Some of the major policy decisions facing the Legislature include:
• Determining whether to adopt the Medicaid expansion and how to fund it.
• Selecting the benefits that would be provided to the expansion population.
• Determining how the state and local governments will fund medical care provided to the remaining medically uninsured population.
• Determining how the existing Medi–Cal eligibility standards and enrollment processes will change in response to the new ACA requirements.
• Evaluating whether to modify existing state health programs that provide services to persons who would become eligible for Medi–Cal, or other federally subsidized health coverage, in 2014.

• Implementation of Federal Health Care Reform. Our spending projections assume that implementation of the ACA will have several significant fiscal effects on the Medi–Cal Program.
  
• Medi–Cal Expansion. As mentioned above, our forecast assumes the state will adopt the Medicaid expansion authorized under the ACA. While this expansion would have a significant impact on the program’s total caseload beginning in 2014, the federal government will pay the large majority of the costs of the expansion during our forecast period. Our forecast projects costs in the low hundreds of millions of dollars in 2016–17 and 2017–18.
• ...
• Reduced Costs for Other State Health Programs. As a result of ACA implementation, we project reduced General Fund spending for some non–Medi–Cal state health programs, such as the Breast and Cervical Cancer Treatment Program and the Family Planning, Access, and Care Treatment Program. These programs currently pay for services for populations that will become newly eligible for Medi–Cal or other subsidized health insurance coverage in 2014. We project about $100 million in reduced General Fund costs in 2013–14, with annual ongoing reductions of about $200 million. There is a significant amount of uncertainty surrounding these estimates as the fiscal effects will largely depend on future policy decisions about the potential modification of these existing programs in response to the ACA coverage expansions.