Medi-Cal Salvation Bill Could Rescue Jobs, Elderly Debts

Written by the Office of Luis Alejo:

In the last five years, approximately 40 hospital-based skilled nursing facilities in California (about one-third) have closed due to financial pressures and many more find themselves at the brink of bankruptcy and closure. This is the result of draconian Medi-Cal cuts that were implemented to deal with the budget crisis two years ago. 

“The message to our colleagues should be, 'we have unfinished business,’” Alejo said. “The Assembly unanimously passed Assembly Bill 900 to reverse these cuts.   When the Senate returns this month we are confident our colleagues will also vote for this legislation. Republicans and Democrats are united on this solution and we need to tell the Governor that without his support the elderly, frail and vulnerable patients at hospital-based skilled-nursing facilities throughout California will be left without access to the vital health care they need. This is inhumane and we must do better.” 

Palomar Health Facility in San Diego County announced it will close its 96-bed distinct-part skilled nursing facility in Escondido, and that it would no longer accept new admissions or transfers as of July 1. In Fresno County, Coalinga Regional Hospital has said it will close its facility without immediate relief. Although California’s budget boasts a surplus this year, the Governor has not committed to reversing those cuts and protect our society’s most vulnerable patients.

“In many cases, these hospital-based skilled-nursing facilities are the only point of access to health care, especially in the rural areas I represent,” said Senator Nielsen, who represents many small hospitals in Northern California.  “Unless we take action, these facilities are going to close. That means patients will remain in the acute-care hospital longer, adding greater costs to the health care system than the dollars ’saved’ through the proposed cuts from two years ago. ... We must prioritize resources to care for the elderly and poor who cannot afford medical attention. ... We must restore Medi-Cal funding otherwise more ... patients will suffer.”

Authored by Assemblymember Alejo with Senator Nielsen as a principle co-author, Assembly Bill 900 would reverse these devastating Medi-Cal cuts. AB 900 passed out of the Assembly 78-0 and will be heard in the Senate Appropriations Committee on Aug. 12.

According to a recent economic issue brief prepared by the California Hospital Association (CHA) California’s fragile economic recovery could be dealt a severe setback if the Medi-Cal cuts to hospitals are not reversed, with the potential loss of up to 36,000 jobs statewide. These are direct-care, well-paid positions, plus related jobs in the goods and services industries. In addition, the CHA analysis found, the overall ripple effect stemming from these cuts could result in a $2 billion economic erosion to the state’s economy.