Federal Court rules against Calif. social, medical cuts

By JUDY LIN, Associated Press Writer
March 3, 2010 at 4:31 p.m.

SACRAMENTO, Calif.— Gov. Arnold Schwarzenegger and state lawmakers will have to find more ways to trim spending after an appeals court on Wednesday shot down two budget cuts made in recent years.

In separate cases before the 9th U.S. Circuit Court of Appeals, two judges ruled against the state's plans to cut spending in certain social and health care programs.

One was to reduce the state's contribution to the wages of home care workers by $2 an hour, from a maximum of $12.10 an hour to $10.10. The other was to cut Medicaid payments by 5 percent to pharmacists, hospitals and adult day care providers.

Finance Department officials estimated the state could be saving $79 million in the current fiscal year through June from reduced home care worker wages. At the same time, the state could be saving another $117 million from reduced Medicaid provider payments. California calls its Medicaid program, Medi-Cal.

Union representatives and home care workers said Wednesday's rulings help protect the state's most vulnerable. The groups argued that the state made cuts without studying the impact on the quality of care.

"This is a good decision for a cost-effective program," said Mary Harms, a Contra Costa County home care worker.

The governor's office has asked the U.S. Supreme Court to weigh in on a similar case. Last month, the administration asked the court to decide if private parties can sue the state over Medicaid funding. The administration argues that states need flexibility to make health care and service cuts to balance their budgets.

"We strongly disagree with the court's decision, which interferes with the state's ability to manage its finances and reduce its spending to match its revenue," Schwarzenegger spokeswoman Rachel Arrezola said. "We are confident that the U.S. Supreme Court will overrule the 9th circuit's ruling."

Wednesday's decision does not affect California's $20 billion deficit because finance officials did not count on the savings in the governor's January budget, said H.D. Palmer, Schwarzenegger's finance spokesman.

http://www.signonsandiego.com/news/2010 ... ical-cuts/