Carole Majors — a diabetic and longtime patient at Clinic Ole and Sister Ann Community Dental Clinic — is one of thousands of Napa County residents who may find themselves without Medi-Cal coverage if Gov. Arnold Schwarzenegger’s proposed 2008-2009 budget is adopted.

“I’m scared to death,” said Majors. “I’m on (Supplemental Security Income) and get a check for $870 a month. I depend on Medi-Cal to get me through any medical needs. ... I just finished my bills this month and I’ve got $12.20 left. ... There is just no extra money.”

In addition to patients like Majors, California’s community health centers like Clinic Ole — which primarily serve the under- and uninsured — also stand to lose a lot under the proposed cuts.

The governor’s proposed cuts come in the face of a roughly $15 billion state deficit. The governor and lawmakers will now lock horns in what may prove to be a protracted negotiation to complete the state budget this summer.

Although community clinics would be exempt from the governor’s proposed 10 percent decrease in reimbursements to physicians treating Medi-Cal patients, the ripple effect of dwindling reimbursements will likely result in even fewer private practice physicians willing to treat Medi-Cal patients, driving more people to community clinics.

Only about half of the state’s private practice physicians now accept Medi-Cal patients because current reimbursements do not cover the cost of care. If physicians’ reimbursements and the state’s number of patients eligible for Medi-Cal are further reduced, clinics may see an influx of uninsured patients, many of whom have limited ability to pay for services.

Most of California’s community clinics receive more than half of their revenue from Medi-Cal funding, “so any reduction in Medi-Cal patients is a problem,” said Pedro Toledo, director of community and government relations for Redwood Community Health Coalition. The coalition includes more than a dozen local clinics and agencies in Napa, Marin, Sonoma and Yolo counties.

Redwood’s coalition of clinics — including Clinic Ole —  are scrambling for solutions to their projected budget woes.

“This (budget proposal) could actually destroy the safety net in California,” said Beatrice Bostick, executive director of Clinic Ole. “Many clinics already operate on a very slim margin ... They’re really afraid, and for good reason, that these cuts will put them out of business.”

If the proposed cuts are implemented, Clinic Ole stands to lose about $1.5 million the first year following the cuts and consequently, may have to turn away 10,000 patients annually, said Bostick.

Although Napa County is home to fewer than 12,000 Medi-Cal patients and only about 15 percent of Clinic Ole’s funding comes from Medi-Cal, she said, about 70 percent of the clinic’s patients are uninsured. In fact, Clinic Ole’s client base consists of more uninsured patients than any community clinic in Northern California, according to Bostick.

Most of Clinic Ole’s uninsured patients are the working poor — those who make too much money to qualify for Medi-Cal but cannot afford private insurance.

Bostick said Clinic Ole and its satellite offices, including those in St. Helena, Calistoga and Sister Ann Community Dental Clinic, draw from a total annual budget of $9.3 million. Because the clinics serve so many uninsured patients, reimbursements for care of the clinic’s Medi-Cal patients are crucial to keeping the clinic’s system financially solvent.

Shifting qualifications

Also on the table in the governor’s proposal is Medi-Cal eligibility itself. Although residents currently living at 100 percent of the poverty level generally qualify for Medi-Cal benefits, under the proposed cuts, eligibility would be reduced to those living at just 61 percent of the poverty level.

Toledo said for a family of four to qualify under the proposed rules, the family’s annual income would have to be $12,900 or less. Currently, a family making about $21,200 qualifies for Medi-Cal coverage.

Bostick said because the cost of living is relatively high in Napa County, a large number of local Medi-Cal patients would lose coverage.

The governor’s proposed budget also eradicates all Medi-Cal mental health and dental funding for adults, which would require the uninsured to pay a fee for services rendered at Sister Ann Dental Clinic and other venues. In the case that patients are unable to pay, she said, some may forgo treatment until declining health eventually lands them in a hospital emergency room.    

Preventing serious, chronic illnesses comprises a vital part of Clinic Ole’s mission, Bostick said, adding that access to affordable, preventative care for low-income patients translates to fewer costly surgeries and long-term treatment expenses later. If adopted, the current budget proposal will translate to decreased funding for preventative care at Clinic Ole.

In addition, under the proposed plan, parents of children covered by Medi-Cal would have to apply for their children’s coverage more often. Currently, children are signed up once each year, but the new plan would require quarterly applications. Consequently, children would likely have lapses in coverage, resulting in further reduced reimbursements to the physicians and clinics still willing to treat Medi-Cal patients.  

About 3,800 children living in Napa and Sonoma counties would likely lose coverage under the proposed cuts, according to a statement from the Redwood Community Health Coalition.

Auction Napa Valley

Auction Napa Valley — which funds more than two dozen organizations throughout Napa County with annual grants — began lending considerable financial support to Clinic Ole in the mid-’80s. The Napa Valley Vintners’ most recent fundraiser amassed $10.3 million for various local causes, less than a quarter of a million dollars shy of a record set in 2005.

Last year, Clinic Ole and Sister Ann received a combined $1.1 million of auction proceeds. This year, they hope to receive at least $1.3 million — $800,000 for medical funding and $500,000 for the dental clinic, according to Bostick.

Although most of California’s community clinics do not have this resource, Bostick said the proposed budget cuts to Medi-Cal would nonetheless be felt at Clinic Ole and across the Napa Valley.

“We rely on a certain amount of wine auction money to help us. ... Even though we (will) get wine auction money, it really isn’t going to make up for losing up to perhaps $1.5 million in Medi-Cal reimbursements,” she said.

“We’re just happy that people wanted to fund the need for the low-income and uninsured in Napa to receive medical care. They were incredibly generous and we appreciate that,” she said.  

Bostick added that the proposed cuts would simply shift the state’s financial health care burdens, not eliminate them.

“It’s an illusion that they’re going to save money by doing this (because) the patients won’t disappear,” she said.

A lack of Medi-Cal coverage — coupled with a reduction in reimbursements to physicians treating them — may land uninsured patients at California’s already crowded emergency departments, which are required by law to treat patients, regardless of their ability to pay for services.

“I and other executive directors of clinics agree that by nuking Medi-Cal, the state projects they might save money, but this will only shift the burden to hospitals and the cost to the state and taxpayers,” she said.

According to Jaime Penaherrera, executive director of public relations for Queen of the Valley Medical Center, the Queen provided care to about 14,000 Medi-Cal patients over the past year.

“We are deeply concerned about the proposed 10 percent Medi-Cal cuts and the challenges they will present for all of California’s healthcare organizations, especially smaller community hospitals and facilities that are already struggling to remain financially viable,” Penaherrera wrote in an e-mail, adding that it is difficult to predict whether the cuts would result in a marked increase in patient visits to the Queen’s emergency department.