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Agreement Reached on Key State Budget Issues

The Governor and Democratic leaders announced June 21 that they reached an agreement on changes in the proposed fiscal year 2012-13 state budget regarding the Healthy Families program, subsidized child care and CalWORKS. Under the agreement, all children in Healthy Families will shift to Medi-Cal, which is what the Administration proposed earlier this year.

Under this latest proposal, the transition will take place in three phases over 12 months, beginning January 2013. The first phase will include children in both Medi-Cal and Healthy Families — approximately 415,000 children. The agreement was unexpected because last week both the Assembly and Senate agreed to shift only 187,000 children into Healthy Families, while the Administration wanted to dissolve the program and move all 880,000 children into Medi-Cal. The move is expected to save the state $13 million in the first year. The proposal must be approved by the Centers for Medicare & Medicaid Services. The Senate Budget Committee is expected to take up this issue in a trailer bill on Monday, along with other trailer bills. Both the Senate and Assembly are expected to take up the trailer bills on Tuesday. Discussions on the Coordinated Care Initiative, which includes moving dual eligibles into managed care, are still taking place between the Administration and Democratic leaders.