January 12, 2018 Edition


Governor Brown Releases 2018-19 State Budget

On Wednesday, Governor Jerry Brown released his proposed FY 2018-19 State Budget, marking his final budget proposal of his eight year term. The $190.3 billion ($131.7 billion General Fund) budget includes a $6.1 billion surplus in revenues and would dedicate $3.5 billion of the surplus to the state’s rainy day fund, achieving the constitutional target of $13.5 billion in reserves.

True to form, Governor Brown stressed the need to adopt a prudent budget that considers both the needs of the state and prepares for the future. The proposed budget focuses largely on the rainy day fund, education, transportation infrastructure, and ongoing concerns over health care coverage amid federal uncertainty.

Following the release of the proposed budget, CHEAC produced a summary of the Governor’s 2018-19 Budget Proposal; that memo is available here. Additional budget resources will be posted on our CHEAC budget page throughout the year.

The California Department of Public Health’s (CDPH) budget overview is available here and the California Department of Health Care Services’ (DHCS) budget overview is available here.

Over the coming weeks, the Legislature will begin hearing proposed budget items, as well as stakeholder proposals. The Senate is scheduled to convene a budget overview hearing on January 18, and the Assembly will convene a similar hearing on January 23.


Legislature Back in Business, Two-Year Bills Face Deadlines

This week, the Legislature convened an informational hearing focused on justice for victims of sexual harassment. The hearing, convened jointly by the Senate Committee on Judiciary, Select Committee on Women, Work, and Families and co-sponsored by the Legislative Women’s Caucus, explored current sexual harassment laws in our state and included compelling testimony from a victim sharing her heart-wrenching experiences.

The Senate Governance and Finance Committee also convened an informational hearing on the recent federal tax reform, taking an initial glimpse at the impacts to California. Committee Chair Mike McGuire announced additional hearings on the federal tax reform would be held throughout the year.

Also, this week, as bill introductions continue to slowly trickle in, policy committees convened hearings to meet the January 12 legislative deadline for two-year bills in their house of origin to be passed out of policy committees. Two-year bills that have progressed to fiscal committees either this year or last year face a January 19 deadline for action. This includes one bill of significant interest to local health departments, AB 626, which is described in further detail in the bill updates below.

Our weekly CHEAC Bill Chart is available here.

Environmental Health

AB 626 (E. Garcia) as amended on 04/02/2017 – Oppose

AB 626 would create a new type of food facility under the California Retail Food code for “microenterprise home kitchens.” These entities would be allowed to operate in private home kitchens with a limitation on the number of meals that can be prepared per day and per week along with a gross annual sales limitation of $50,000. These home kitchens would only be allowed to operate if permitted by a local enforcement agency including being required to submit written operating procedures and allowing compliance inspections.

CHEAC and our county partners including HOAC, CSAC, UCC, and RCRC jointly opposed this bill with specific concerns around the increased potential for foodborne illness and the proposed regulatory role going beyond the scope and ability of local health departments.

While at the time of this writing, the bill has not yet been set for a hearing, we do know that the bill must be acted upon by the Assembly Appropriations Committee next week. CHEAC encourages members to reach out to your Legislative representatives that sit on the Assembly Appropriations Committee to express your opposition and/or concerns with the measure. We also recommend all jurisdictions send updated letters of opposition.

Tobacco Control

AB 1097 (Levine) as amended on 01/09/2018 – Support

Assembly Member Marc Levine’s has reintroduced his bill to ban smoking on state beaches and parks through amending language in AB 1097.  Recall, Assembly Member Levine’s previous bill, AB 725 was vetoed by Governor Brown this fall citing his veto of a similar measure SB 1333, by then Senator Marty Block in 2016. The Governor referred to the bill (SB 1333) as an overly broad, far-reaching prohibition cited concerns around the total fine amount (up to $250) being excessive.

Assembly Member Levine’s AB 1097 is identical to AB 725, which set the fine to $50 and allowed the director of the Department of Parks and Recreation to post signs within the state beach and units of the state park system designating the areas as exempt from the smoking ban.

The measure was passed by the Assembly Water Parks and Wildlife Committee and now heads to the Assembly Appropriations Committee.

Chronic Disease Prevention and Wellness Promotion

AB 274/C.Garcia and ACA 2/C.Garcia as amended on 05/01/2017 – Watch

AB 274 and ACA 2 are companion measures introduced by Assembly Member Cristina Garcia last year to eliminate an existing exemption from sales and use taxes for candy and snack foods.  Originally instituted by Governor Pete Wilson in 1991 to cover part of a significant state budget deficit, a voter initiative overturned this sales tax on candy and snack foods in 1992.  Assembly Member Garcia had hoped to reinstitute these taxes to both encourage a reduction in the consumption of these foods and to use new revenues to address the costs of obesity and diabetes by funding chronic disease prevention programs.

Given the two-year bill policy committee deadline, both bills were heard in the Assembly Revenue and Taxation Committee earlier this week.  A majority of members expressed a number of concerns with the measures including definitional problems of what constitutes a “snack food” and that there was no specificity as to how new revenues would be spent.  Assembly Member Garcia noted she had made every attempt to engage the opposition to her measures (which included the California Chamber of Commerce, the California Grocers Association, and the National Association of Theater Owners); however, most refused to come to the table.  Both measures failed on a 2-7 vote. It is unclear if Assembly Member Garcia will reintroduce the measures for this year.


Governor Brown Secures Additional Federal Aid for Southern California Mudslides

Governor Jerry Brown announced on Thursday that the Federal Emergency Management Agency (FEMA) granted the state’s request for expanded federal disaster assistance in response to the flooding and mud and debris flows that have impacted Santa Barbara and Ventura counties in recent days.

FEMA expanded the previously-approved Presidential Major Disaster Declaration in the areas impacted by the December 2017 wildfires to include damage incurred from the most recent natural disaster events. The expanded declaration will ensure federal funds are available for emergency response and eligible disaster recovery costs. More information about the expanded federal aid is available from the California Governor’s Office of Emergency Services (CalOES) here.

It was also reported today that the Thomas Fire, the largest wildfire in California’s modern history, in Santa Barbara and Ventura counties is now 100 percent contained.


Government Shutdown Looms Once Again, CBO Releases Updated CHIP Reauthorization Analysis

Negotiations continue among Congress and the White House as another federal government shutdown looms. Recall late last month, Congress passed a short-term government funding measure that extended current federal funding levels through next Friday, January 19.

Bipartisan discussions over immigration, fixes to the Affordable Care Act (ACA), national security, and defense spending, among other items, have thus far failed to result in an agreement. While Republicans hold the majority in both the House and Senate, they do not have a Senate supermajority to secure 60 votes needed to secure passage of a budget bill. As such, Republicans will need to gain the support of at least nine Democrats.

Recent reports suggest Congressional Republicans are considering not passing a GOP budget altogether this year; instead, they may be forced to continue adoption of short-term continuing resolutions to keep the government running throughout 2018, largely due to intra-party conflict and concerns about how such budget-related actions would impact this year’s mid-term elections.

The Children’s Health Insurance Program (CHIP), which received a short-term reauthorization through March 2018 in last month’s government funding measure, may or may not be included in the next continuing resolution or budget deal. A CHIP reauthorization measure may instead be taken up at a later date.

It has been indicated that the short-term funding made available through last month’s continuing resolution, however, will not be sufficient for several states to continue operation of their CHIP programs. The U.S. Centers for Medicare & Medicaid Services (CMS) announced recently that states may run out of funding after January 19, though it did not identify which states may be impacted first.

Late last week, the Congressional Budget Office (CBO) sent a letter to Congressional leaders updating their recent CHIP analysis projections. The CBO reports that reauthorizing CHIP for ten years would net the federal government $6 billion in savings. Current debate has instead been centered on a five-year extension of CHIP. The projected reason for the additional budgetary savings over a longer reauthorization period is detailed by the CBO:

  • The recent tax reform measure signed into law late last month repealed the ACA individual health insurance coverage mandate tax penalty. With the tax penalty now removed, fewer people are expected to enroll in the ACA marketplaces. As such, fewer low-income enrollees will receive federal subsidies.
  • Some of the parents deciding not to enroll in ACA marketplace family health insurance plans will decide to remain uninsured and instead enroll their children in CHIP. From the federal government’s perspective, paying for CHIP coverage is less expensive overall than funding subsidies for private ACA marketplace family health insurance plans.

It is unclear how this updated projection from the CBO will influence ongoing negotiations and conversations around a longer-term CHIP reauthorization measure. Congressional Democrats continue to maintain that CHIP must be reauthorized for the long-term without using any other health-related programs, such as the Prevention and Public Health Fund (PPHF), as a budgetary offset. Congressional Republicans, on the other hand, have proposed cuts to the PPHF and modifications to programs, such as Medicare. Recall in the latest short-term government funding measure passed last month, Congressional Republicans succeeded in including a $750 million cut to the PPHF that will occur between FY 2019 and FY 2022.

With the January 19 continuing resolution deadline imminent, Congressional leaders and the White House will need to strike a funding agreement to avoid a government shutdown.


Trump Administration Allows States to Impose Medicaid Work Requirements, Approves Kentucky Proposal

This week, the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma issued new guidelines encouraging states to require “able-bodied” Medicaid beneficiaries to work or volunteer to remain eligible for health coverage benefits.

Indicating a departure from prior CMS policy regarding work as a condition of Medicaid eligibility or coverage, states can now require beneficiaries to engage in at least 20 hours per week of employment or community engagement activities, such as job skills training, education, or caregiving, to earn coverage. CMS has signaled that elderly or disabled individuals, as well as children and pregnant women, would be excluded from work requirements. Individuals with substance use disorders may receive slight modifications to the requirements.

Approximately one dozen states have already filed applications with CMS to add work requirements to their state Medicaid programs. Today, one of those states—Kentucky—received approval from the federal agency to impose strict work requirements on some beneficiaries as part of an extensive overhaul of the state’s program. Recall, prior to joining CMS as the administrator, Seema Verma was previously a private consultant and architect of the Kentucky Medicaid plan that was approved today.

Able-bodied beneficiaries in Kentucky will now be required to complete 80 hours of employment or community engagement per month to remain eligible for coverage. Beneficiaries who get a new job or salary without notifying the state would be locked out of coverage for six months. Kentucky will also require beneficiaries who gained coverage through Medicaid expansion to pay for monthly premiums based on income levels and meet certain milestones to earn dental and vision care.

It is unclear how many people will be impacted by the new work requirement rules being proposed by states throughout the country. A recent study by the Kaiser Family Foundation determined that approximately 60 percent of “able-bodied” Medicaid beneficiaries already work and a third of those who do not hold employment cite an illness or disability that prevents them from working.

Legal action by several Democratic and liberal advocacy groups is expected as a result of the new guidance issued by CMS this week. These entities argue Medicaid is a health coverage program, and by adding work requirements, the program’s purpose is undermined.

The work requirement application by Indiana, the home state of Vice President Mike Pence, is expected to be approved in short order. As other states—Arizona, Arkansas, Kansas, Maine, Mississippi, New Hampshire, North Carolina, Utah, and Wisconsin—await their CMS decision, it remains to be seen the full impact of CMS’s latest policy guidance.


Federal Public Health Emergency on Opioid Crisis Set to Expire Later this Month

In October, President Donald Trump directed the acting director of the Department of Health and Human Services to declare the opioid crisis a public health emergency. That emergency declaration is set to expire in approximately 10 days on January 23.

The declaration has permitted public health agencies to redirect existing resources to address the crisis, eliminate or reduce “bureaucratic delays” in hiring personnel, and expand access to telemedicine. However, reports indicate little consequential action has been taken by the Trump Administration since the emergency declaration was made. President Trump has not formally proposed any new resources or spending related to the opioids and it is unclear what actions federal agencies have taken to address the crisis.

Outside of the emergency declaration, the U.S. Centers for Disease Control and Prevention (CDC) launched an opioid awareness campaign and the Food and Drug Administration (FDA) approved a new 30-day injectable treatment for addiction. Health officials and policy experts indicate billions of dollars in new funding are needed to significantly address the opioid crisis. The Public Health Emergency Fund, which is available to HHS under the emergency declaration, continues to have a balance of just $57,000.

President Trump’s emergency declaration can be extended for an additional 90 days past its current January 23 expiration. However, it is unclear at this time if the declaration will be renewed by President Trump or the HHS Acting Secretary Eric Hargan.


CDC’s Vital Signs Highlights Safe Sleep Practices for Babies

This months’ U.S. Centers for Disease Control and Prevention (CDC) Vital Signs highlights safe sleep practices to help lower the risk of sleep-related infant deaths. The CDC reports approximately 3,500 sleep-related deaths among U.S. babies occur each year. The Vital Signs report provides tips and guidance for action by local health departments, public health practitioners, health care providers, and caregivers. More information is available here.