CA Healthcare Budgetary Woes in Spotlight

A sign of things to come in this already very shaky economy?  Political pundicrats always say “as California goes, so does the nation”.  Let’s hope that the (in)solvency of their Medicaid managed care contracts doesn’t bleed over to what the other 49 get in matching funds to provide healthcare for the poor and elderly.

State officials put the healthcare facilities on notice that starting today, payments from the Medi-Cal insurance program for the poor will be frozen until a budget is approved. An emergency pot of cash officials had set aside to pay the healthcare clinics, nursing homes and adult day care centers in the event of a delayed budget has run dry.

Many of those facilities are those whose fiscal lifeblood relies upon Medicaid and associated managed care contracts — long term care facilities and those which serve the developmentally disabled.

“It is very scary this year,” said Cheryl Loflin Wertz, who runs 18 of the group homes in Los Angeles and Orange counties. “We’ve laid people off, haven’t let other people take vacations, cut back. . . . I’ve already borrowed money from my family. There isn’t anyplace to go to borrow.”  Michelle Clarke, who operates 12 group homes between Upland and Loma Linda, said she would be out of cash by mid-August. A lender will give her the $100,000 a week she needs to stay solvent, she said, but each weekly loan will cost her $5,000 in interest and fees.

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