When the legislature signed the governor's budget and its 10-percent cut in Medi-Cal in February, doctors and other health professionals waited three months for the other shoe to drop--in the form of Gov. Arnold Schwarzenegger's mid-May budget revision. Now that it has, Medi-Cal is poised to undergo further restrictions.

The revision calls for an overall funding increase of about $1.2 billion over the February budget , bringing the total Medi-Cal budget up to about $37.2 billion for 2008-2009, according to the governor's office. But these there are significant cuts.

"If this budget somehow passes and even a fraction of these cuts go into effect, Governor Schwarzenegger's legacy to the people of California will not be the healthcare reform he has promised, but instead a healthcare system damaged beyond belief," says California Medical Association President Richard Frankenstein, MD, in a May 15 statement.

A major portion of the revision's Medi-Cal changes cut back on patient eligibility for the program. Should these $130 million cuts go into effect for 2008-2009, undocumented immigrants will be eligible for coverage only if they meet monthly requirements, while new immigrants and some resident immigrants will experience benefit cuts. The program will continue to cover pregnancy-related services, long-term nursing home care, breast and cervical cancer treatment and emergency services.

The proposal also includes a plan to limit eligibility to families at or below 61 percent of the federal poverty level, where the principal wage earner works no more than 100 hours per month. The governor's office expects the cutback to save about $30 million in the new budget, with savings increasing to about $340 million in three years. Under this restriction, a family of three with an income of about $10,700 to $17,600 would lose access to the program, according to the healthcare policy group Health Access California. Statewide, about 40,000 people will not be able to sign on with Medi-Cal during the first year of the cuts, with that number expanding to more than 400,000 after full implementation, the group says.

Other proposed decreases in the revision to the Medi-Cal budget include: $13 million in savings from the delayed implementation of statutes that accelerate entry of uninsured women into Medi-Cal; and $11.3 million that will result from decreasing rates for non-contracted hospitals. According to the governor's office, the revision reveals an overall budget deficit of more than $17 billion, higher than the approximately $14.5 billion gap anticipated in January. The deficit would have reached $24 billion without the mid-year cuts agreed to in February, the office says.

Perhaps surprisingly, Gov. Schwarzenegger promoted his healthcare reform initiative after introducing the May budget revision. "What's even more painful is that we didn't get health care reform done, because that would have given Medi-Cal an additional $4 billion," he said.