November 14, 2018 - This web post provides detail on our projections and assumptions related to General Fund spending in Medi-Cal for the years 2018-19 through 2022-23. In the near term, we project Medi-Cal spending to grow to $23.9 billion in 2019-20. Over the long term, we project General Fund spending in Medi-Cal to grow to up to around $28 billion.
In addition to this report, you can find the main California's Fiscal Outlook report along with a collection of other fiscal outlook material on our fiscal outlook budget page.
March 9, 2017 - In California, the federal‑state Medicaid program is administered by the Department of Health Care Services (DHCS) as the California Medical Assistance Program (Medi‑Cal). Medi‑Cal is by far the largest state‑administered health services program in terms of annual caseload and expenditures. In this report, we provide an analysis of the administration’s caseload projections, including a discussion of the projected increases in ACA optional expansion caseload. We also provide an assessment of several aforementioned major factors affecting projected changes in Medi‑Cal spending in 2017‑18 and other policy changes proposed by the administration. These include the Governor’s proposed uses of Proposition 56 revenues, the proposal to shift additional New Qualified Immigrants (NQIs) to Covered California in 2017‑18, assumptions around federal CHIP funding, and the proposed abolition and transfer of the Major Risk Medical Insurance Fund (MRMIF).
February 13, 2019 - In this report, we describe the major changes and proposals in the Governor's proposed $100.7 billion (all funds) Medi-Cal budget. Specifically, we advise the Legislature to seriously consider renewing the managed care organization tax, despite the Governor not proposing to do so; present issues for consideration related to the Governor's proposed expansion of comprehensive Medi-Cal coverage for young adults regardless of immigration status; and provide an initial assessment of the Governor's proposals to use Proposition 56 funding in Medi-Cal to extend and expand provider payment increases. We recommend approval of the Governor's proposals to improve fiscal oversight of the Medi-Cal budget, and also recommend that the Legislature require the administration provide additional information to the Legislature in an effort to improve fiscal oversight and transparency of this very large, complex budget going forward.
November 20, 2019 - This web post provides detail on our projections and assumptions related to General Fund spending in Medi-Cal for the years 2019-20 through 2023-24. In the near term, we project Medi-Cal spending to grow to $23.5 billion in 2020-21. Over the long term, we project General Fund spending in Medi-Cal to grow to up to $27.6 billion.
In addition to this report, you can find the main California's Fiscal Outlook report along with a collection of other fiscal outlook material on our fiscal outlook budget page.
November 16, 2016 - Under our current projections, assuming no changes in existing state and federal policies, we estimate the state will end the 2017-18 fiscal year with $11.5 billion in total reserves. This includes $8.7 billion in required reserves, which must be deposited into the rainy day fund, and $2.8 billion in discretionary reserves, which the Legislature can appropriate for any purpose. These reserve levels reflect the continued progress California has made in improving its budget situation. Our estimates include the effects of statewide ballot measures that were approved on November 8. The condition of the state budget depends on many volatile and unpredictable factors. This uncertainty is present in the near term and becomes greater in each subsequent year. We discuss two illustrative economic scenarios for the fiscal years after 2017-18. Under a mild recession scenario, the state would have enough reserves to cover its operating deficits through 2020-21. This means, under our assumptions, the state could weather a mild recession without cutting spending or raising taxes. However, this conclusion assumes that the state does not make any changes to its current policies and programs in any year during the outlook. This outlook also assumes no changes in federal policy, even though the recent election results suggest some such changes are now likely. State or federal policy changes could have a significant impact on the state's bottom line.
May 14, 2018 - In this post, we describe and provide our initial comments on adjustments to the Medi-Cal budget in the 2018-19 May Revision.
February 16, 2018 - In this report we provide a broad overview of the Governor's health and human services budget, highlighting major year-over-year changes. We then provide a more in-depth analysis of select programmatic areas.
May 17, 2017 - In this Budget and Policy Post, we provide an overview of several of the key factors driving the changes in estimated and proposed Medi-Cal spending in 2016-17 and 2017-18; our evaluation of the Governor’s updated caseload estimates; and an update on several key proposals from the January budget, some of which have been modified at May Revision. During continuing budget deliberations, we recommend that the Legislature ask for clarity from the Department of Health Care Services on how the Major Risk Medical Insurance Program will be funded in the future under the Governor’s proposal if Health Care Services Plans and Penalties Fund revenues are insufficient to cover the costs of the program. We also recommend that the Legislature, should it approve the Governor’s plan to cancel the planned transition of Newly Qualified Immigrants from Medi-Cal to Covered California, consider trailer bill language that repeals existing state statutory language that calls for the transition. Finally, we recommended a downward technical adjustment of $62 million General Fund to the 2017-18 May Medi-Cal Estimate.
November 18, 2015 - California's state budget is better prepared for an economic downturn than it has been at any point in decades. Under the main economic scenario in this year's LAO Fiscal Outlook, 2016-17 would end with reserves of $11.5 billion, assuming the state makes no new budget commitments through next year. If the economy continues to grow through 2019-20, annual operating surpluses and larger reserves could materialize, and there may be capacity for some new budget commitments—whether spending increases or tax reductions. An economic or stock market downturn, however, could occur during our outlook period. To illustrate this economic uncertainty, we provide projections under alternative scenarios such as a hypothetical recession that causes budget deficits to re-emerge. The more new budget commitments are made in 2016-17, the more likely it is that the state would face difficult choices—such as spending cuts and tax increases—later.
November 18, 2020 - Medi‑Cal, the state’s Medicaid program, provides health care coverage to about 13 million of the state’s low‑income residents. Medi‑Cal costs generally are shared between the federal and state governments. In a typical year, the General Fund covers a little more than 20 percent of total Medi‑Cal costs, with federal funds and other state and local funds respectively covering the remaining 65 percent and 15 percent of total costs. In this web post, we describe the major factors that we expect to drive changes in General Fund spending in Medi‑Cal over the near term—in 2020‑21 and 2021‑22—and over the longer term through 2024‑25. We also describe a number of key assumptions that we made in our spending projections.
October 18, 2017 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication discusses the 2017‑18 Budget Act and other major budget actions approved in 2017. In general, it reflects budgetary actions that the Legislature has taken through September 2017. In some cases, as noted, we discuss budget actions approved by the Legislature after June 15, 2017. In late July, for example, the Legislature passed and the Governor approved, an extension of authority for the Air Resources Board to implement the state’s cap‑and‑trade program from 2020 to 2030.
November 15, 2017 - The near-term budget outlook is positive. Under our current estimates, the state would have $19.3 billion in total reserves (including $7.5 billion in discretionary reserves) at the end of 2018-19, assuming the Legislature makes no additional budget commitments. The Legislature can use discretionary resources to build more budget reserves, increase spending, and/or reduce taxes. We also estimate the Legislature will have $5.3 billion in uncommitted school and community college (Proposition 98) funds to allocate in 2018-19. We provide more detail on our estimates of Proposition 98 funding in a separate report accompanying this outlook. The state has made significant progress in preparing for the next recession. To assess the longer-term budget outlook, we present two illustrative economic scenarios for fiscal years after 2018-19. Under a moderate recession scenario, the state has enough reserves to cover its deficits until 2021-22, assuming the Legislature makes no additional budget commitments. Additional budget commitments in the near term could cause the state to exhaust its reserves earlier in the next recession
This year, our Fiscal Outlook includes this report and a collection of other fiscal outlook material on our fiscal outlook budget page.
February 11, 2016 - In this report, we provide an analysis of the administration’s caseload projections, as well as a discussion of the impacts of the ACA on the ability to project caseload. We also provide an assessment of several General Fund cost pressures on the horizon in Medi–Cal, including the sunset of the hospital QAF.
November 19, 2014 - The 20th annual edition of the LAO's Fiscal Outlook—a look at possible state revenue and spending trends over the next five years—reflects anticipated progress in building budget reserves under the recently approved Proposition 2. Specifically, absent new budget commitments, we estimate the state would end 2015-16 with $4.2 billion in total reserves, $2 billion of which would result from Proposition 2's new reserve rules. A $4 billion reserve would mark significant progress for the state, but maintaining such a reserve in 2015-16 would mean little or no new spending commitments outside of Proposition 98, the funding formula for schools and community colleges. Our higher General Fund revenue estimates translate to $6.4 billion available in 2015-16 for the state's Proposition 98 priorities. The report also discusses choices facing the state in implementing Proposition 2, such as choices about which budgetary and retirement debts to repay with dedicated Proposition 2 funds over the next 15 years.
February 22, 2017 - Assembly Budget Subcommittee No. 1 on Health and Human Services