The US has made it mandatory for those enrolled in its Medi-Cal program for the underprivileged to make co-payments for medical services. In doing this early this week, it blocked California from reducing its health care spending.
The Centers for Medicare & Medicaid Services wrote to the California administration saying it was 'unable to identify the legal and policy support' that would give the state permission to require co-payments to Medi-Cal under the Social Security Act.
This means California will not save the $575 million it had hoped to, on its Medicaid program from the co-payments in its fiscal year beginning on July 1. This is the status quo unless President Obama's administration reverses the decision.
Spokesman for California's department of Finance, Mr H.D. Palmer, said that the state intends to seek a reversal.
California Governor Jerry Brown had introduced a budget plan last month, in which he projected a $9.2 billion deficit. He had called for a combination of cuts in spending and revenue gathering to provide for a $1.1 billion reserve.