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Troubling Signs Amid the Budget Recovery

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Anthony York, president and publisher of Grizzly Bear Media, who has been covering California politics since 1997, recently reported on the release of Gov. Jerry Brown’s revised budget on He commented that while for the most part, the revision was not very exciting due to the lack of dramatic revenue dips or spikes of years past and few new policy proposals, one thing did stand out. By next year, the state expects 11 million Californians, 30% of the population, to receive Medi-Cal benefits. York points out that the growth in Medi-Cal is another warning sign that while the state’s economy is recovering, the economic system is failing an ever-growing number of Californians. While capital gains taxes spike upwards and the Dow sets record highs, more Californians than ever are living in or near poverty.

Some of the growth of the Medi-Cal program is due to expanded eligibility under Obamacare. Before the law passed, only poor children and parents were eligible to receive benefits. California opted in to the federal plan to expand benefits to single adults. And instead of cutting off eligibility at 100% of the federal poverty rate, Obamacare raised the threshold to 138% of poverty for individuals and families alike.

Another uptick is due to the fact that Brown folded the state’s Healthy Families program into Medi-Cal. That means about 900,000 kids were pushed onto the Medi-Cal rolls who were previously covered under a different program.

But the fact remains that there are more than 10 million people who are poor enough to qualify for Medi-Cal – individuals making about $15,000 or less, or a family of three earning no more than $21,000. Another 900,000 kids whose parents make no more than $30,000 per year are also receiving government assistance.

These numbers don’t include millions of undocumented immigrants living in poverty, most of whom do not qualify for Medi-Cal, and hundreds of thousands of others who are poor enough to qualify for Medi-Cal but do not take advantage of the benefits.

It was yet another warning sign about the uneven economic recovery, and a cautionary note for our state leaders. It’s not enough to look at the top line revenue numbers and declare the state budget problems solved. Just a quick peak beneath the surface reveals that in the richest state in the union, too many people are being left behind, even as the state’s budget crisis subsides.

The Californian underclass is growing dangerously large, and unless government, business and community leaders take steps to address it, it will pose an ever-growing threat to our continued economic health and viability.

Jenkins Insurance Services
EDCO, Inc.
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Allied Insurance Brokers, Inc.