ALL GOOD MORNING, EVERYONE. I'M
PLEASED TO CALL THIS HEARING TO
ORDER AND WE'RE GOING TO GO
AHEAD AND GET STARTED BECAUSE I
KNOW MEMBERS HAVE PLANES TO
CATCH AND WE STILL HAVE FOLKS
COMING OVER FROM THE CAPITOL.
TODAY. WE ARE GOING TO HEAR S¼ B
ONE THREE SIX A BILL ON THE
FLOOR THAT AMENDS THE M èC TAX.
THIS BILL MUST BE ADOPTED THIS
MONTH TO ALLOW THE STATE TO
APPLY FOR ADDITIONAL FEDERAL
FUNDS. THIS PROPOSAL WAS HEARD
IN SUB-COMMITTEE ONE ON FEBRUARY
26 AND OUR INTENT IS TO HEAR
THIS BILL TODAY AND THEN PASS IT
TO THE SENATE ON MONDAY. MARCH
18TH. THIS IS AN INFORMATIONAL
HEARING ONLY AND THERE WILL BE
NÓ VOTES TAKEN TODAY. WE ARE
JOINED TODAY. UH AND THANK YOU
FOR JOINING US BY. UH ERICA LEE
AND LAURA AYALA FROM THE
DEPARTMENT OF FINANCE WHO WILL
PRESENT THE BILL AND WE ALSO
HAVE, UH, JASON KUROS. I THINK I
GOT THAT RIGHT FROM THE L A Ó,
UH, AND CHRISTIAN GRIFFITH HERE
FROM OUR BUDGET TEAM, HER
AVAILABLE TO ANSWER ANY
QUESTIONS, AND I HAVE MR FONG'S
PERMISSION TO FOR THE PERMISSION
FROM OUR VICE CHAIR TO GET
GOING. SO FINANCE. UH PLEASE GO
AHEAD WITH YOUR PRESENTATION.
GOOD MORNING, UM, CHAIR GABRIEL.
MEMBERS OF THE COMMITTEE ERICA
LEE WITH THE DEPARTMENT OF
FINANCE. UM AND I'M HERE TO
PRESENT ON S¼ B 136, WHICH IS A
PORTION OF THE ADMINISTRATION'S
MANAGED CARE ORGANIZATION, OR M
èC Ó TAX PROPOSAL, WHICH IS
ONE OF MANY SIGNIFICANT
SOLUTIONS THAT WERE IT WAS
INCLUDED IN THE GOVERNOR'S
BUDGET. UM AS YOU WILL RECALL, I
TESTIFIED BEFORE THIS COMMITTEE
ON THE PROJECTED BUDGET
SHORTFALL, UM, WHICH WAS
ESTIMATED TO BE ROUGHLY 38
BILLION AT THE GOVERNOR'S
BUDGET. IN LIGHT OF THE
SIGNIFICANT SHORTFALL, THE
ADMINISTRATION ASKED THE
LEGISLATURE TO TAKE EARLY ACTION
TO REQUEST THE FEDERAL
GOVERNMENT APPROVE AN AMENDMENT
TO THE RECENTLY APPROVED M èC
Ó TAX. PROVIDER TAX. UM SO
SPECIFICALLY, THE ADMINISTRATION
PROPOSES TO MODIFY THE MCO TAX,
WHICH WAS AUTHORIZED PURSUANT TO
THE 2020 THREE BUDGET ACT AND
APPROVED BY THE FEDERAL
GOVERNMENT IN DECEMBER OF LAST
YEAR. UM AND THIS IS FOR THE
PERIOD COVERING JANUARY 1 OF
THIS YEAR STARTING THIS YEAR
THROUGH DECEMBER, 31 2026. THIS
PROPOSAL WILL INCREASE THE M èC
ATTACKS TO ACHIEVE AN ADDITIONAL
1.5 BILLION IN NET FUNDING
COMPARED TO THE CURRENT M èC Ó
TAX. SO INSTEAD OF 19.4 BILLION,
UM THE STATE WILL WILL RECEIVE
20.9 BILLION IN TOTAL FUNDING.
THIS ADDITIONAL 1.5 BILLION IS
PROPOSED TO SUPPORT THE MEDICAL
PROGRAM THROUGH 2627, AND IT
HELPS MAINTAIN EXISTING SERVICES
AND MINIMIZES THE NEED FOR
REDUCTIONS IN THE MEDICAL
PROGRAM. UM I ALSO WANT TO
HIGHLIGHT THE FACT THAT THIS
PROPOSAL DOES NOT IMPACT THE
TARGETED RATE INCREASES, UM,
THAT WERE AGREED UPON AS PART OF
THE 2020 THREE BUDGET ACT. UM,
TO BE ABLE TO COLLECT TAX
REVENUES RETROACTIVE TO JANUARY.
1 OF THIS YEAR. UM AS CHAIR
GABRIEL MENTIONED THIS PROPOSAL
NEEDS LEGISLATIVE APPROVAL NÓ
LATER THAN THE END OF THIS
MONTH, UM, TO GIVE THE
DEPARTMENT OF HEALTH CARE
SERVICES, THE ABILITY AND THE
TIME TO SEEK FEDERAL APPROVAL.
WE GREATLY APPRECIATE THE
ASSEMBLY'S EARLY MOVEMENT ON THE
M èC Ó TAX PROPOSAL. IT IS AN
IMPORTANT SOLUTION. HOWEVER THE
MAGNITUDE OF OUR BUDGET
SHORTFALL IS SUCH THAT IT IS
NECESSARY TO ALSO COME TO AN
AGREEMENT AND WORK TOWARD A
BIGGER, BROADER, BROADER BASED,
UM, EARLY ACTION PACKAGE SO THAT
WE CAN BEGIN TO SOLVE FOR THE
SHORTFALL. AS I MENTIONED
EARLIER, WE LOOK FORWARD TO
WORKING WITH THE ASSEMBLY AND
THE SENATE, UM TOWARD THE SHARED
GOAL. THANK YOU VERY MUCH. I AM
HERE TO RESPOND TO QUESTIONS
ALONG WITH MY COLLEAGUE. UM,
LAURA. THANK YOU VERY MUCH, AND
WE ALSO CERTAINLY LOOK FORWARD
TO THOSE CONVERSATIONS. I WANT
TO ASK THE L A Ó. IF YOU HAVE
ANY COMMENTS THAT YOU'D LIKE TO
SHARE DECENT CONO CIO. I'M IN
OUR ANALYSIS OF THIS PROPOSAL.
UH, WE RECOMMENDED THE
LEGISLATURE CONSIDER ADOPTING
THE TAX INCREASE. UM THIS TAX
INCREASE IS A KEY PART OF THE
HOW THE GOVERNOR'S BUDGET
ADDRESSES THE BUDGET PROBLEM AND
RELATIVE TO OTHER BUDGET
SOLUTIONS. UM TH THIS PARTICULAR
PROPOSAL HAS SOME ADVANTAGES.
IT, UM ENTAILS DRAWING DOWN MORE
FEDERAL FUNDING TO HELP ADDRESS
THE BUDGET PROBLEM RATHER THAN
IMPOSING NEW COSTS ON TAXPAYERS.
OR, UH, CUTTING CORE. UM
GOVERNMENT PROGRAMS. THAT SAID.
WE ALSO RECOMMENDED THE
LEGISLATURE ENSURE THAT THE
PROPOSED INCREASE, UH ALIGNS
WITH, UH, FEDERAL RULES TO
ENSURE THAT THE TAX HAS A
REASONABLE CHANCE OF RECEIVING
APPROVAL FROM THE FEDERAL
GOVERNMENT. THANK YOU. THANK YOU
. THANK YOU VERY MUCH. UH, WE
WILL. I WILL NOW BRING IT BACK
TO THE COMMITTEE. ARE THERE
QUESTIONS OR COMMENTS FROM
MEMBERS OF THE COMMITTEE? MR
VICE CHAIR. UH, THANK YOU, MR
CHAIR. UM SO I CERTAINLY HAVE,
UM A FEW A FEW HOSPITALS IN MY
DISTRICT. UM RICH èC IN KOREA
THAT ARE FACING FINANCIAL
CHALLENGES DUE TO LOW MEDICAL
REIMBURSEMENT RATES. UM HOW MUCH
OF THE PROPOSED 1.5 BILLION AND
THIS DEPARTMENT OF FINANCE WILL
WILL FUND MEDICAL PROVIDER RATE.
PIECES. THANK YOU, MR FONG. UM,
SO THE 1.5 BILLION IS ACTUALLY
GOING TO BE PART OF THE SOLUTION
FOR THE BUDGET PROBLEM, SO WE
WILL, UM, IT WILL PROVIDE, UM
1.5 BILLION IN GENERAL FUND
BACKFILL. SO IT WON'T BE
UTILIZED FOR THIS 1.5 BILLION
ISN'T GOING TO BE USED FOR ANY
PROVIDER RATE INCREASES THAT'S
CORRECT. THE PROVIDER RATE
INCREASES, THOUGH, AND I'M NOT
SURE IF YOU CAUGHT IT. WE WILL
WE CONTINUE TO, UM, FUND AT THE
RATE THAT WAS COMMITTED TO AT
THE 2020 THREE BUDGET ACT. SO
THEN EXPLAIN THAT TO ME. I KNOW
THIS. THIS PROPOSAL IS PART OF A
LOT OF MOVING PARTS, BUT THE
OTHER THE OTHER PIECE OF THIS
DOES SHIFT SOME OF THOSE FUNDS
INTO THE LAST M èC Ó
DISCUSSION. IT DOES SHIFT SOME
OF THOSE FUNDS IN THE GENERAL
FUND AS WELL. SO, YES, THERE ARE
FUNDS. UM, THAT ARE I BELIEVE
ARE IN THE COURT HERE AND IN
BUDGET YEAR, UM, THAT WE WOULD
BE MOVING TO HELP OFFSET SOME OF
THE GENERAL THE NEED IN THE
GENERAL FUND. UM AGAIN WE ARE.
WE ARE COMMITTING TO THE RATES
THAT WE, UH AGREED TO AS PART OF
THE 2020 THREE BUDGET. UM BUT
THOSE DOLLARS WILL GO TO HELP.
UH, THE GENERAL FUND DEFICIT. SO
HOW DO YOU HOW DO YOU MAINTAIN
THE PROVIDER RATE INCREASES WHEN
YOU NONE OF THIS. NONE OF THIS.
NONE OF THIS IS GONNA GO TO
PROVIDER INCREASES AND THEN
YOU'RE SHIFTING. UH, THREE 0.1
BILLION OUT OF THE RESERVE
CORRECT. WELL, YOU SH ARE YOU
SHIFTING MONEY OUT INTO INTO
INTO THE GENERAL FUND? SO HOW DO
YOU MAKE THE WHERE DO YOU DO YOU
GET IT OUT OF THE RESERVE? IS
THAT HOW YOU MAKE MAKE UP THE
DIFFERENCE? LET ME START AND
THEN I WILL HAND IT OVER FOR
SOME DETAILS TO MY COLLEAGUE.
BUT UM THE DOLLARS THAT WILL BE
SHIFTED WOULD BE WOULD GO
TOWARDS, UM, ASSISTING THE
GENERAL FUND CONDITION. UM WHAT
WE WOULD HAVE TO DO IS TO HAVE
CONVERSATIONS ONE YEAR EARLIER
AT AT THE END OF THIS M èC Ó
TAX TO, UM BASICALLY DECIDE HOW
WE WOULD BE PAYING FOR THOSE
RATES FORTHCOMING, SO THIS WAS A
DISCUSSION THAT WE WOULD HAVE
HAD TO HAVE AT THE END OF THIS M
èC Ó, UM TIME FRAME, AND IT IS
SOMETHING THAT WE WILL HAVE TO
HAVE, UM, A YEAR EARLIER. JUST
TO CLARIFY IT. LAURA YAA
DEPARTMENT OF FINANCE THE BUDGET
ACT, 2020 THREE BUDGET ACT.
INCLUDED AN M èC Ó TAX AND
THAT M èC Ó TAX HAS ALREADY
RECEIVED FEDERAL APPROVAL. THAT
IS THE M èC Ó TAX THAT
INCLUDES $8 BILLION FOR PROVIDER
RATE INCREASES. WHAT WE'RE
PROPOSING HERE TODAY IS AN
AMENDMENT TO THAT EXISTING M èC
Ó TAX FOR AN ADDITIONAL 1.5
BILLION, AND THE ENTIRE 1.5
BILLION IS PROPOSED TO BE USED
TO SUPPORT EXISTING SERVICES IN
THE MEDICAL PROGRAM. SO THIS IS
AN AMENDMENT TO THE EXISTING AND
IT'S UH, BASICALLY A SEPARATE
PROPOSALS. SO HOW DO I SQUARE
THAT RIGHT? BECAUSE I JUST HEARD
THAT THE 1.5 BILLION ISN'T
ACTUALLY GONNA BE USED FOR
PROVIDER RATE INCREASES AND THEN
IN THE IN THE PART OF THE WHOLE
CONVERSATION. YOU'RE SHIFTING
SOME OF THE REVENUE FROM LAST
YEAR INTO THE GENERAL FUND, AND
YOU'RE MAINTAINING THE PROVIDER
RATE INCREASES, BUT THERE'S A
DELTA. BUT THEN HOW DO YOU MAKE
UP THE DELTA? SO YOU'RE
REFERRING TO THE M èC Ó TAX
THAT THAT IS CURRENTLY
IMPLEMENTED, AND, UH, LIKE WE'VE
MENTIONED BEFORE THAT, UH, WHAT
WAS SHIFTED THAT IT WILL NOW BE
USED TO SUPPORT THE MEDICAL
PROGRAM IS FROM THE BALANCES OF
CURRENT YEAR AND BUDGET YEAR
BECAUSE OF SO HOW DOES THIS
TIMING HOW DOES IT SUPPORT THE
MEDIC PROGRAM IF IT'S GOING TO
BE PUT INTO THE GENERAL FUND?
IT'S GONNA SUPPORT GENERAL FUND.
SO IS A DEDICATED IS IT IS IT
DEDICATED TO THE MEDIC PROGRAM?
YES, IT IT'S GOING TO SUPPORT
WHAT WOULD HAVE BEEN USED AS
GENERAL FUND TO SUPPORT MEDICAL
PROGRAM. SO YOU CAN'T SAY THAT
YOU CAN'T SAY GENERAL FUND AND
THEN ME, SO IS IT GOING TO THE
GENERAL FUND OR IS IT DEDICATED
TO MEDIC? IT'S DEDICATED TO ME,
AND IT'S WHAT WOULD OTHERWISE
HAVE BEEN USED WITH. SO THEN WHY
ARE YOU SHIFTING OUT OF THE
GENERAL FUND? WHY ARE YOU
SHIFTING IT TO THE GENERAL FUND?
RIGHT MR. FONG DID THE, UH,
STATE HAS USED THE M èC Ó FOR
DE FOR DE QUITE OVER A DECADE AS
A SOURCE OF GETTING ADDITIONAL
FEDERAL PARTICIPATION INTO OUR
MEDICAL PROGRAM, AND AS YOU KNOW
, WE HAVE ONE OF THE LOWEST
FEDERAL MATCHING RATES OF ANY
STATE. UM BECAUSE OF THE WAY THE
FEDS SET IT UP, AND SO THIS IS A
MECHANISM THAT WE IN OTHER
STATES USE TO BE ABLE TO DRAW
DOWN ADDITIONAL FEDERAL FUNDS
AND EXACTLY WHAT THIS IS DOING.
SO WHAT? WHAT THEY'RE PROPOSING
IS CONSISTENT WITH WHAT THE
LEGISLATURE HAS ADOPTED OVER THE
LAST COUPLE, YOU KNOW, LAST
DECADE, I, I JUST WANNA SURE
THAT WE'RE ALL ON THE SAME PAGE
BECAUSE BECAUSE THERE'S TALK OF
SHIFTING INSTEAD OF GENERAL FUN.
THERE'S TALK OF MAKING SURE IT
STAYS IN ME. AND THERE'S ALSO
TALK NOW THAT THIS PROPOSAL
ISN'T GONNA GO TO PROVIDE A RATE
INCREASES. IT'S ACTUALLY GOING
TO THE GENERAL FUND AS PART TO
YOUR QUOTE TO QUOTE WHAT YOU
GUYS SAID IS A BUDGET SOLUTION.
RIGHT. SO IF THERE'S A DEFICIT,
RIGHT, I JUST WANNA MAKE SURE
THAT WE AS A COMMITTEE
UNDERSTAND THAT IS THIS MONEY
STAYING IN THE HEALTH CARE,
MEDICAL SPACE, OR IS IT GOING TO
FIX OR IS IT GONNA BE ATTEMPTED
ATTEMPTING TO FIX THE DEFICIT?
RIGHT, BECAUSE THAT WAS THE
CONCERN WE HAD LAST YEAR, WHICH
IS NOT ONLY ARE WE CREATING A
FISCAL CLIFF, BUT IF THE ECONOMY
AND THE BUDGET DEFICIT EXPANDED
AND GOT WORSE, WHICH,
UNFORTUNATELY, THIS COMMITTEE
KIND OF PREDICTED THAT THE FEAR
WAS THE REVENUE WOULD BE SHIFTED
TO FIX THE DEFICIT AND NOT BE
PROVIDER RATE INCREASES, BECAUSE
WHEN WE DEBATED THE M èC Ó
REVENUE DISCUSSION LAST YEAR IT
WAS PROMISED FOR PROVIDER RATE
INCREASES TO SUPPORT OUR DOCTORS
AND OUR NURSES AND OUR IN OUR
HOSPITALS. MR F, UM SO THE M èC
ATTACKS IN THE PAST HAS HAS NOT
BEEN USED FOR RATE INCREASES.
IT'S BEEN USED TO WHAT WE SAY,
MAINTAIN THE MEDICAL PROGRAM SO
THAT WE DON'T HAVE TO MAKE CUTS.
AND SO WHEN WE SAY THAT THIS 1.5
MILLION IS GOING TO SUPPORT THE
GENERAL FUND AND IT IS GOING TO
SUSTAIN ME. THAT THAT IS BOTH
CORRECT. OK SO OTHERWISE WE
WOULD HAVE TO USE GENERAL FUND
TO BACKFILL AND TO PRO PROVIDE
ADDITIONAL FUNDS FOR THOSE RATE
INCREASES. WE ARE NOT CUTTING
THE RATES THAT WERE AGREED UPON
AT THE 2023 BUDGET ACT. BUT THIS
1.5 BILLION WILL HELP.
OTHERWISE, UH USE GENERAL FUND,
YOU KNOW? TOWARDS THOSE RIGHTS.
SO I GUESS WHAT WE'RE SAYING IS
THAT TAKING THIS ADDITIONAL 1.5
BILLION IN FEDERAL FUNDS WILL
HELP OFFSET ANY GENERAL FUND WE
WOULD HAVE SPENT TO MAINTAIN
THESE PROVIDER RATES. SO I AND I
WANNA OTHER MEMBERS ASK SO LET
ME JUST ASK THIS VERY
SPECIFICALLY BECAUSE THE M èC
Ó DEBATE LAST YEAR. WAS THAT
THIS WAS THIS PROPOSAL WAS GOING
TO GO FORTH TO BE USED FOR
PROVIDER RATE INCREASES. IS THAT
CORRECT? YES AND OK, AND THAT
STILL WILL BE AND UNDER WHAT
YOU'VE SAID, EXCEPT FOR THERE'S
NOW TWO MOVING PARTS. THE FIRST
PART. IS WHICH IS NOT PART OF
THIS CONVERSATION. BUT IT'S TIED
TO IT RIGHT IS THAT YOU? SH
YOU'RE GOING TO SHIFT SOME OF
THAT REVENUE FROM LAST YEAR INTO
THE GENERAL FUND, BUT THEN
MAINTAIN THE PROVIDER RATE
INCREASES. THERE'S THE QUESTION
I HAVE IS. HOW DO YOU IF YOU
SHIFT ON ONE SIDE AND THEN
MAINTAIN THERE'S A DELTA AND I
GUESS I'M ASKING WHAT THE DELTA
IS. AND THEN THE SECOND QUESTION
IS THAT WE NEED TO ANSWER AS A
COMMITTEE. IS THAT THIS PROPOSAL
THIS BILL? NONE OF IT IS GOING
TO PROVIDE A RATE INCREASES.
RIGHT IT'S GOING TO SOMETHING.
AND WHAT THAT SOMETHING IS. WHAT
I'M BEING TOLD RIGHT NOW IS THAT
IT'S GOING INTO THE GENERAL
FUND. RIGHT SO I JUST WANNA MAKE
SURE THAT WE'RE CLEAR AS A
COMMITTEE THAT ONE. THERE'S A
DELTA FROM FROM LAST YEAR NOW
BEING CREATED BECAUSE OF THE
SHIFT. AND THAT TECHNICALLY IS
NOT RIGHT BECAUSE WE WERE
PROMISED THAT THAT WAS GONNA GO
DIRECTLY TO PROVIDE A RATE
INCREASES. AND THEN THIS
PROPOSAL DOESN'T GO TO PROVIDER
RATE INCREASES. IT'S GOING TO
THE GENERAL FUND AS A BUDGET
SOLUTION. AND I DON'T EXACTLY
I'M NOT SURE THAT THE PUBLIC AND
MYSELF IS VERY, VERY ASSUAGED OR
, UH, WE'RE NOT. I'M NOT VERY
CONFIDENT THAT NOW THAT MONEY IS
GONNA BE NOT USED FOR SOMETHING
ELSE. SO I I'LL I'LL LEAVE THAT
AS A QUESTION THAT YOU CAN
ANSWER. HOPEFULLY AND THEN I'LL
LEAVE IT TO MY OTHER MEM, UH
OTHER COLLEAGUES TO ASK
ADDITIONAL QUESTIONS. M LE GO
AHEAD AND THEN UM, SO LET'S JUST
START BIG PICTURE LAST YEAR'S M
èC Ó PROPOSAL THAT WAS
APPROVED BY THE FEDERAL
GOVERNMENT WAS FOR 19.4 BILLION
TOTAL. WE ARE ASKING FOR
PERMISSION TO GO BACK TO THE
FEDERAL GOVERNMENT TO ASK FOR AN
ADDITIONAL 1.5 BILLION, WHICH
WOULD BRING US TO 20.9 BILLION
SO OF THAT THERE WAS A PORTION
THAT WAS PROMISED FOR RATES AND
THERE WAS A PORTION THAT WOULD
PROVIDE GENERAL FUND SUPPORT.
AND THIS 1.5 BILLION WE'RE
SAYING IS WE'RE PUTTING IN THAT
BUCKET OF GENERAL FUND SUPPORT.
AND SO WE HAVEN'T TOUCHED THE
DOLLARS FOR THE PROVIDER
PROVIDER RATES. THAT'S WHAT'S
BEFORE YOU. THE SECOND PIECE,
WHICH IS A DIFFERENT PIECE THAT
WILL BE DISCUSSING OUTSIDE OF
THIS EARLY ACTION PROPOSAL IS
THERE WAS A RESERVE THAT THOSE
FUNDS 3.1 TOTAL FROM BUDGET YEAR
AND FROM, UH, CURRENT YEAR.
WOULD HAVE BEEN USED IN THE OUT
YEARS. TO PROVIDE SUPPORT FOR
RATES. SO CURRENTLY THE RATES
ARE GOING TO GO INTO EFFECT AND
THEY'RE GONNA INCREASE AS AS
COMMITTED TO, UM AND WHAT I WAS
SAYING EARLIER IS THAT WHEN THE
TIME COMES, WE'RE GONNA HAVE TO
HAVE CONVERSATIONS ABOUT HOW TO
MAINTAIN THOSE RATE INCREASES IN
THE OUT YEARS BECAUSE THOSE
DOLLARS WERE BRINGING FORWARD TO
HELP THE GENERAL FUND. SO YOU'RE
TAKING OUT YOUR RESOURCES INTO
THIS YEAR. TO MAKE MAKE UP. THE
DIFFERENCE OF THE OF THE GENERAL
FUND SHIFT IS THAT IS THAT
CORRECT? OK? THAT I. I
APPRECIATE THAT. THAT THAT THAT
JUST CLARIFY THINGS THAT STILL
DOESN'T LEAVE MY CONCERNS, BUT I
BECAUSE NOW THERE'S A CONCERN
NOW OF THE OUT YEAR, RIGHT? UH
I. I DON'T KNOW IF THEY I MAY
JUST ASK IF THE L A Ó HAS ANY
COMMENTS AS WELL. YEAH, I. I
THINK THE ADMINISTRATION
CLARIFIED THAT ISSUE. JUST
WANTED TO MAKE SURE IT WAS CLEAR
THAT YOU KNOW THE PRO PROVIDE SO
LAST YEAR'S PACKAGE, THERE WAS A
PORTION OF IT DEDICATED TO
PROVIDER RATE INCREASES AND
ANOTHER PORTION DEDICATED TO
OFFSETTING GENERAL FUND SPENDING
AND MEDI CAL IN EFFECT. YOU
KNOW, HELPING TO HELPING THE
STRAIGHT STATE TO SORT OF
ADDRESS THE BUDGET PROBLEM. AND
SO, UM YOU KNOW WHAT, UH, FOR
THE PORTION THAT WAS FOR
PROVIDER RATE INCREASES, YOU
KNOW THAT'S BEING SUPPORTED BY
THE M èC Ó TAX. IF THE YOU
KNOW THE STATE CONTINUES TO
RENEW THE M èC Ó TAX AT THE
SAME SIZE IT IS TODAY. THEN IT
COULD THEN THOSE WOULD JUST BE
CONTINUED TO BE FUN BY THE M èC
Ó TAX NOW, AS THE
ADMINISTRATION NOTED IT, AS THE
FEDERAL GOVERNMENT HAS DONE SORT
OF PUBLICLY STATED THE FEDERAL
GOVERNMENT'S CONSIDERING RULE
CHANGES THAT COULD AFFECT THE
SIZE OF THE NEXT M èC Ó TAX
COULD BE MUCH SMALLER, AND
THAT'S WHAT THE ADMINISTRATION
IS, SORT OF, UH, YOU KNOW, SORT
OF PLANNING FOR AND IT'S AND ITS
BUDGET PLANS. THAT MEANS THAT
THERE A SORT OF A BUDGET
SHORTFALL IN THE M èC Ó TAX
PACKAGE, THE PROVIDER PAYMENT
RESERVE HAD RESERVES BAKED INTO
IT SO THAT THOSE IT COULD
SUSTAIN THOSE RATE INCREASES FOR
AN ADDITIONAL FEW YEARS BEFORE
TURNING TO THE SAY THE GENERAL
FUND, FOR EXAMPLE, TO MAINTAIN
THOSE RATE INCREASES BY BY DOING
BY DOING THIS SHIFT FROM THE
RESERVE. UH, THE ADMINISTRATION
IS BASICALLY ACCELERATING THE
TIME TO WIN. THE RESERVE IS
SPENT DOWN BY ABOUT A YEAR OR
SO. SO THAT CONVERSATE THAT THAT
DECISION ABOUT HOW TO SUSTAIN
THOSE INCREASES WOULD WOULD BE
ACCELERATED BY A YEAR, SO JUST
TO BE CLEAR. FOR MYSELF AND FOR
OTHER MEMBERS. WHAT THE WHAT
THIS PROPOSAL IS DOING, I GUESS.
FOR THE COST SHIFT IS TO TAKE
REVENUE FROM OUT YEARS AND MOVE
IT INTO THIS YEAR. BUT THEN WE
STILL HAVE A PROBLEM IN THE LE.
I'M JUST GONNA I'M JUST GONNA
JUMP IN HERE, I. I APPRECIATE
ALL THE QUESTIONS. I THINK IT'S
REALLY IMPORTANT. WE'RE GETTING
A LITTLE BIT BEYOND THE SCOPE OF
WHAT'S IN FRONT OF US TODAY. UM
AND SO I JUST WANNA MAKE SURE
THAT WE'RE NOT CONFLATING
DIFFERENT THINGS THAT ARE GOING
ON. THIS IS A REALLY WORTHY AND
IMPORTANT CONVERSATION AND ONE
THAT I THINK WE'RE GONNA HAVE IN
OUR, UH, BUDGET SUBCOMMITTEE'S
AS WE MOVE FORWARD THE PROPOSAL
THAT'S THE TABLE FOR US TODAY IS
DO WE WANT AN ADDITIONAL $1.5
BILLION IN FEDERAL FUNDS? AND
THAT'S THAT'S REALLY ALL THAT
WE'RE CONSIDERING TODAY. THERE
ARE OTHER PROPOSALS OUT THERE
THAT THE GOVERNOR THAT THE
ADMINISTRATION HAS MADE
CONVERSATIONS THAT WE NEED TO
HAVE AS PART OF THE BUDGET
PROCESS AS PART OF EARLY ACTION,
SO I JUST WANT TO CLARIFY AND I.
I TOTALLY APPRECIATE WHAT THE
CHAIR IS SAYING. I I'M JUST I, I
GUESS TO EVERYBODY. I'M JUST
THIS IS NOT IN AN A SILO, I
GUESS IS THE POINT I'M TRYING TO
MAKE IS THAT THIS PROPOSAL IS
PART OF IN CONJUNCTION WITH WHAT
IS ALSO BEING PROPOSED. AND SO
I'M I'M TRYING TO UNDERSTAND HOW
THEY'RE TIED TOGETHER. SO THANK
YOU, MR CHAIR, I. I APPRECIATE
IT. I'LL I'LL FOLLOW UP AFTER,
UH, THE COMMITTEE. THANK YOU.
YEAH WE CAN. IF YOU YOU COME TO
MY OFFICE, WE CAN DRAW SOME
PICTURES AND, UH AND SET IT ALL
STRAIGHT. UH, I DO WANNA GO, UH,
TO OUR SUBCOMITTEE CHAIR, DOCTOR
WEBBER. THANK YOU, UH, CHAIR,
GABRIEL. THANK YOU SO MUCH FOR
BEING HERE AND, UM, SHARE IF YOU
WILL JUST INDULGE ME FOR A FEW
MINUTES, BECAUSE I DO THINK THE
FACT THAT WE'VE STARTED TO GO
DOWN THIS RABBIT HOLE HAS MADE
CONFUSED PEOPLE A LITTLE BIT. SO
UM, BECAUSE WE HAVE HAD THIS
CONVERSATION ABOUT BOTH THE, UM
EARLY ACTION ITEM AND THE SHIFT
IN THE FUNDS IN SUB ONE
COMMITTEE ALREADY. SO, UM MISS
LEE, CAN YOU REMIND ALL OF US
WITH THE ORIGINAL M èC Ó TAX
BILL. HOW? WHAT YEAR? WHERE THE
PROVIDER PAYMENTS SUPPOSED TO
END. WHAT YEAR DID IT GO OUT TO?
UM, ACCORDING TO THE ORIGINAL M
èC Ó PROPOSAL THAT HAS
ACTUALLY BEEN APPROVED ALREADY
IS 28 29 28. 29 NOW WITH THE
SHIFT OF THE $3 BILLION WHAT
YEAR WILL THE PROVIDER RATES
STOP AT? WELL THE PROVIDER RATES
WON'T STOP, BUT THE FUNDING WILL
BE THE FUNDING WILL BE USED UP
ONE YEAR EARLIER, RIGHT? SO NOW
WE'RE TALKING ABOUT 2728. THE
PROVIDER RATE INCREASES THAT WE
ALL AGREE TO THAT WE DESPERATELY
NEED FOR THESE THREE SPECIFIC
AREAS AND SOME OTHERS. ARE THEY
THE SAME THAT WE VOTED ON LAST
YEAR? YES, THEY ARE. UM ARE WE
AS A STATE AND GOVERNOR'S OFFICE
COMMITTED TO MAINTAINING THESE
RATES, EVEN AFTER THIS CURRENT
FUNDS? ARE GONE. YES, THE
ADMINISTRATION IS COMMITTED TO
THOSE, UH, INCREASED RATES. SO
WE'RE NOT TALKING ABOUT A
PROPOSAL THAT'S ACTUALLY GOING
TO CHANGE THE PROVIDER INCREASE
RATES THAT WE AGREED ON. WE'RE
JUST STATING THAT A YEAR EARLIER
WE'RE GONNA HAVE TO COME
TOGETHER TO FIGURE OUT HOW WE
MAINTAIN THESE RATES. CORRECT?
YES, THAT'S CORRECT, OK? AND THE
1.5 BILLION THAT WE'RE GOING TO
THE FEDERAL GOVERNMENT TO ASK
FOR MORE IS SO THAT WE DON'T
HAVE TO GO BACK AND CUT ANYTHING
FROM OUR PROGRAMS NOR FROM OUR
ME I MEAN, OUR OUR PROVIDER
RATES. THAT IS CORRECT, OK? UM,
I JUST WANTED TO MAKE SURE THAT
THAT WAS CLEAR BECAUSE EVEN I
WAS STARTING TO GET CONFUSED
WITH THE ROUTE THAT WE WERE
GOING. UM SO I JUST REALLY WANT
TO THANK UM UH, YOU ALL AND THE
GOVERNOR FOR BEING VERY CREATIVE
AND REALIZING THAT THERE MAY BE
SOME MORE FUNDS THAT WE CAN GO
OUT AND GET SO THAT WE DO NOT
HAVE TO GO BACK ON OUR WORD. WE
CAN CONTINUE TO KEEP THE WORD
FOR INCREASING OUR PROVIDER
RATES AS WE VOTED ON, UM AND
ALSO PREVENT US FROM HAVING TO
GO INTO, UM OUR HEALTH CARE
SPACE AND CUTTING SOME PROGRAMS
AND OTHER SERVICES FOR OUR
PATIENTS. AND SO, UH, WE HAVE
HAD EXTENSIVE CONVERSATIONS
ABOUT THIS. UM UH AND EVEN IN
OUR BUDGETS OF ONE, AND I REALLY
JUST WANNA THANK YOU ALL FOR
DOING THIS, AND I LOOK FORWARD
TO SUPPORTING. UH, THIS ONCE IT
HITS THE FLOOR. THANK YOU. THANK
YOU, DOCTOR WEBER. THAT WAS AN A
PLUS DIRECT EXAMINATION. IT'S
NOT TOO LATE TO GO TO LAW
SCHOOL, SO THANK YOU FOR THAT.
UM ANY OTHER COMMENTS OR
QUESTIONS FROM MEMBERS OF THE
COMMITTEE? MR SALLIE. OKAY UH,
MISS LI. I WANT A BETTER
UNDERSTAND THIS. SO THE $1.5
BILLION PROPOSED TAX INCREASE IS
GOING TO BE USED TO LEVERAGE
FEDERAL FUNDS. IS THAT CORRECT?
THAT IS CORRECT. OK UM, THIS
YEAR IN THE GOVERNOR'S BUDGET,
HE'S ALLOCATED $4 BILLION TO
FUND THE EXPANSION OF MEDI TO
ILLEGAL IMMIGRANTS, AN ESTIMATED
700,000 NEW PEOPLE. ANY PART OF
THIS MONEY BE USED TO FUND THAT
HEALTH CARE COVERAGE. THIS
FUNDING IS ONLY FOR THE M èC
Ó, UM, PROPOSAL BUT ISN'T THE
MONEY BEING USED TO PAY FOR
MEDICAL COSTS? I'M GONNA TURN
OVER TO MY COLLEAGUE FOR SOME
DETAILS. THE $1.5 BILLION WILL
SUPPORT CAPITATION, UM, PAYMENTS
FOR, UM ADULTS, CHILDREN AND
PERSONS WITH DISABILITIES AND
PERSONS WITH DISABILITIES,
INCLUDING ILLEGAL IMMIGRANTS.
INDIVIDUALS UH, ALL ENROLLEES IN
MEDI CAL. SO WE'RE GONNA TAKE
FEDERAL DOLLARS. DOES THE
FEDERAL GOVERNMENT KNOW THAT
WE'RE GOING TO BE USING FEDERAL
DOLLARS TO PAY FOR ILLEGAL
IMMIGRANTS IN CALIFORNIA? IS
THAT AUTHORIZED CALIFORNIA PAYS
WITH GENERAL FUND FOR THE FULL
SCOPE SERVICES FOR INDIVIDUALS,
UM, REGARDLESS OF IMMIGRATION
STATUS, WHO DO NOT HAVE
SATISFACTORY IMMIGRATION STATUS,
AND THERE'S NÓ FEDERAL FUNDS
USED FOR ANY SERVICES BEYOND
EMERGENCY SCOPE SERVICES, WHICH
ARE AUTHORIZED BY THE FEDERAL
GOVERNMENT. SO YOU'RE YOU'RE
ASSURING US THAT NONE OF THIS
MONEY THAT WE'RE TAXING THE 1.5
BILLION AND THE REIMBURSEMENT
FROM THE FEDERAL GOVERNMENT IS
GONNA BE USED ON, UH, THE NEW
ILLEGAL IMMIGRANT HEALTH CARE
FUNDING. OUR COVERAGE. NÓ
FEDERAL FUNDS WILL BE USED FOR
SERVICES THAT ARE NOT
PERMISSIBLE BY THE FEDERAL
GOVERNMENT. OK, SO WE'RE GOING
TO USE STATE TAX DOLLARS FOR
THAT? WE'RE GOING TO BE USING
GENERAL FUND. OK AND, UH WHAT IS
THE GOVERNOR'S CURRENT
PROJECTION OF THE SHORTFALL IN
THIS YEAR'S GENERAL FUND? UH THE
PROJECTION THAT WE HAVE THAT THE
GOVERNOR'S BUDGET IS THE MOST
RECENT 38 BILLION, AND WHAT'S
THE L? A Ó S¼ CURRENT
PROJECTION OF THE SHORTFALL. WE
HAVE IS LE Ó ON THE PANEL, OR
THEY'RE HERE. YEAH, SORRY WE
CAME WITH I CAME PREPARED FOR
THE M èC Ó TAX DISCUSSION. UM,
BUT AT THE OH, I'M SORRY. OUR
LEGISLATIVE ANALYST DOES WILL
ANSWER THAT QUESTION. GOOD
MORNING, MR GABE, PET
LEGISLATIVE ANALYST. OUR
ESTIMATE IS THAT THE
ADMINISTRATION'S BUDGET PROPOSAL
ACTUALLY SOLVED FOR A $58
BILLION BUDGET PROBLEM. MORE
RECENTLY, WE'VE UPDATED OUR
ESTIMATES BASED ON NEW A
COLLECTION DATA, UM, IN OUR RE
CURRENT REVENUE ESTIMATES. PUT
THAT NUMBER AT 73 BILLION. OK,
SO IT'S STILL OVER $20 BILLION
DIFFERENCE BETWEEN YOUR TWO
OFFICES. CORRECT ALL RIGHT. AND
UH SO WE'RE GONNA BE SPENDING 4
BILLION, UM, OF MONEY. WE DON'T
HAVE TO COVER. UH, THIS NEW
EXPANSION OF HEALTH CARE. UM, IS
WHAT IT SOUNDS LIKE. ALL RIGHT,
MR CHAIR. I HAVE NÓ FURTHER
QUESTIONS. ANY OTHER QUESTIONS
OR COMMENTS FROM MEMBERS OF THE
COMMITTEE. OK, SING. NAN I JUST
WANT TO, UH, ECHO THE COMMENTS
OF DOCTOR WEBBER APPRECIATE THIS
PROPOSAL APPRECIATE THE
CREATIVITY FROM THE
ADMINISTRATION. AND CONTINUED AS
WE LOOK TO THESE, UH, THE BUDGET
CHALLENGES IN FRONT OF US TO ME,
IT'S A TOTAL NÓ BRAINER TO GO
OUT THERE AND GET, UH, DRAW DOWN
THESE FEDERAL FUNDS TO HELP
SUPPORT. UH, PROVIDING HEALTH
CARE TO FOLKS HERE IN THE STATE
OF CALIFORNIA. SO THANK YOU FOR
THAT, UH AND WE WILL LOOK
FORWARD TO, UH, VOTING ON THIS
PROPOSAL ON MONDAY ON THE
ASSEMBLY FLOOR, AND, UH, WITH
THAT, LET ME JUST, UH, ALSO SAY
THANK YOU TO, UH, THE L A Ó FOR
BEING HERE. I APPRECIATE FOR, UH
OUR CO OUR COLOR CORDED NATIVE
ASSEMBLY BUDGET STAFF FOR ALL OF
YOUR HARD WORK, AND TO THE
SERGEANTS WITH THAT THIS HEARING
IS ADJOURNED.
YEAH, MY SINCERE APOLOGIES.
WE'RE GONNA REOPEN THIS HEARING
FOR A PUBLIC COMMENT. IF THERE'S
ANY. THANK YOU, MR CHAIR MEMBERS
JUST IN THE INTEREST OF TIME
NICK LUOS WITH THE CALIFORNIA
ASSOCIATION OF HEALTH PLANS. OUR
MEMBERS ARE THE ONES PAYING THE
TAX AND, UM, WE AGREED TO
SUPPORT THE TAX LAST YEAR
BECAUSE THE OVERALL PACKAGE WAS
AFFORDABLE TO PREMIUM PAYERS.
UH, IN OUR ESTIMATION, AND THE
MONEY WAS GOING TO BE USED TO
SUPPLEMENT AND NOT SUPPLANT
RESOURCES IN THE MEDIC PROGRAM.
WE'RE PLEASED THE GOVERNOR'S
OFFICE IS, YOU KNOW, HONORING
THE COMMITMENT FOR THIS TO GO,
UH, TO THE RIGHT PLACES. UM AND
WE ARE SUPPORTIVE OF THE, UM UH,
YOU KNOW, THE $1.5 BILLION
INCREASE ON THE MEDI COMP. OF
THE M èC Ó TAX. UH, YOU KNOW,
DURING THIS BUDGET CRISIS, SO,
UH, YOU KNOW, WE JUST URGED THE
LEGISLATURE TO YOU KNOW, ENSURE
THAT THE REVENUES GO TO THE
INTENDED TARGETS. UM YOU KNOW,
WE WERE SUPPORTIVE OF PRIMARY
CARE AND SPECIALTY CARE
INCREASES IN THE PROGRAM. UM,
AND OTHER THINGS, SO WE HOPE
THAT, UH, YOU KNOW THE OVERALL
FUNDING AND THE TARGETED RATE
INCREASES REMAIN CONSISTENT WITH
THAT DEAL FROM LAST YEAR, SO
THANK YOU. THANK YOU. CHAIR
MEMBER JANICE O'MALLEY WITH. ASK
ME, CALIFORNIA JUST APPRECIATE
THE ADMINISTRATION AND THE
LEGISLATURE. UH, ON THIS
IMPORTANT MEASURE, WE SUPPORT
THE $1.5 BILLION EXTRA AND ALSO,
UH, JUST REALLY APPRECIATE THE,
UH, $50 MILLION I WAS AGREED
UPON LAST YEAR FOR A GROUND
EMERGENCY TRANSPORT. THANK YOU.
MORNING TERRORISM MEMBERS, UM
PA. MURPHY SPEAKING ON BEHALF OF
èC, A. Tð P, THE CALIFORNIA
ASSOCIATION OF ALCOHOL AND DRUG
PROGRAM EXECUTIVES, UH, HERE IN
SUPPORT OF THE M èC Ó TAX
PROPOSAL. I JUST WANTED TO
UPDATE YOU ALL THAT WE'RE
WORKING ON A COALITION OF
BEHAVIORAL HEALTH PROVIDERS
ACROSS THE STATE ON, UH,
SUBMITTING A LETTER TO THE
GOVERNOR'S OFFICE, AND WE'LL
ALSO BE INCLUDING YOU IN THAT
LETTER. THANK YOU. MORNING LINDA
WE WITH WESTERN CENTER ONLINE
POVERTY WE SUPPORT A LARGER,
ACCELERATED M èC Ó TAX, NOTING
THAT IT BRINGS IN SIGNIFICANT
GENERAL FUND THAT'S DESPERATELY
NEEDED TO PROTECT THE SAFETY
NET. WE ALSO SUPPORT UM UH, ANY
CONSIDERATION TO EQUITY
ADJUSTMENTS. THANK YOU. THANK
YOU. GOOD MORNING. RONALD
COLEMAN BAESA HERE ON BEHALF OF
THE CALIFORNIA PAN. I THINK
HEALTH NETWORK èC P. WE ARE IN
STRONG SUPPORT OF AN EXPANDED M
èC Ó TAX TO BRING IN
ADDITIONAL DOLLARS. WE DO NOT
WANT TO SEE ADDITIONAL CUTS,
PARTICULARLY TO PROGRAMS WITHIN
ME ALSO, AS IT RELATES TO THE
EQUITY ADJUSTMENTS. WE WANT TO
SEE SOME MORE SPECIFICITY,
PARTICULARLY AROUND HOW DOLLARS
WILL, UH, MEET THE NEEDS FOR
DISPARITIES THAT ARE HITTING
PARTICULAR RACIAL POPULATIONS?
WE ALSO WANNA MAKE SURE THAT
THERE'S DATA IN PLACE TO
ACTUALLY TRACK WHAT'S HAPPENING
WITH THE DOLLARS THAT OUT THE
DOOR WITH THE EQUITY ADJUSTMENTS
AND WE ALSO THINK THAT THE S¼
EQUITY ADJUSTMENTS SHOULD BE
USED TO INCLUDE èC HÌ W S¼ AS
WELL TO FURTHER EQUITY AS WELL.
WE WERE VERY DISAPPOINTED THAT
èC HÌ W S¼ WERE LEFT OUT OF THE
M èC Ó TAX CONVERSATION LAST
YEAR AS IT RELATED TO PROVIDER
RATES, AND WE ARE HOPEFUL THAT
WE CAN HAVE A SEPARATE
CONVERSATION THIS YEAR, UM,
PARTICULARLY ABOUT MAKING SURE
WE DO INCREASE THE RATES FOR èC
HÌ W S¼, USING THE UNSPENT
DOLLARS THAT HAVE ALREADY BEEN
ALLOCATED FOR THE PROGRAM. WE DO
NOT WANT TO SEE THAT POPULATION
GET DISCRIMINATED AGAIN AND NOT
BE INCLUDED IN PROVIDER RATES
MOVING FORWARD. THANK YOU. THANK
YOU. GOOD MORNING. MY NAME IS
DAVID BULLOCK FROM, UH,
NEIGHBORS OF THE 40TH ASSEMBLY
DISTRICT FOR SAYING LEGISLATION.
I WANT TO THANK MR ACE FOR
BRINGING SENSE AND COMMON SENSE
INSANITY TO THIS HEARING TODAY.
THANK YOU. DO YOU HAVE ANY OTHER
MEMBERS OF THE PUBLIC WISHING TO
PROVIDE COMMENT? ALL RIGHT. SING
NAN. THANK YOU, EVERYBODY FOR
JOINING US HERE TODAY. WE
APPRECIATE IT AND WE WILL LOOK
FORWARD TO TAKING UP THIS BILL
ON THE ASSEMBLY FOR ON MONDAY.
HEARING IS ADJOURNED.