After 77 days in limbo, lawmakers in Sacramento stayed up until 2 a.m. the morning of Sept. 16 to complete and sign a proposed budget. Gov. Arnold Schwarzenegger threatened to veto it, and as of press time, a decision had not been made—though a veto seemed likely .
This precarious state of events, however, was enough to give at least one local business owner—and likely countless others who rely on state funds—a little bit of hope.
“That’s good,” John Henning said in reaction to the proposed budget. “We’ll have money for payroll, and I just won’t pay my bills until the end of the month.”
Henning and his wife Sharon own and operate the Country Oaks Care Center, an assisted living senior care center in Santa Maria that has 57 residents and a staff of 70. Their business is just one example of many in the county that have been tightening their belts and making do with less money while waiting for a budget to pass.
In this case, it’s Medi-Cal that’s the problem. Seventy-five percent of the residents at Country Oaks rely on Medi-Cal to pay the $160 a day it costs to live at the facility. That price tag covers around-the-clock nursing care, food, medical supplies, employee salaries, and utilities. Since Sept. 1, John and Sharon have only been receiving 30 percent of that $160 per patient, per day.
“We’re okay for now, but if it lasts another few weeks, we’re going to be hurt,” John said. “I have some money in reserve, but it’s not going to last a long time.”
Country Oaks is actually better off than other assisted living facilities in the state, Sharon said, because of CenCal Health, a nonprofit organization that administers Medi-Cal in Santa Barbara and San Luis Obispo counties. While some counties ran out of Medi-Cal months ago, CenCal had funding reserves that lasted through to September.
CenCal had to dip into those reserves to the tune of $40 million since July, according to CenCal deputy CEO Bob Freeman. To make it this far, the company has also limited payments to only those facilities that rely on Medi-Cal to a great extent, such as Country Oaks.
As of Sept. 1, CenCal cut payments to 30 percent of normal, in an effort to conserve the $20 million left in the reserve account. During a normal month, with a state budget in place, CenCal pays out about $20 million a month in Medi-Cal payments, for 85,000 residents in both counties.
“If we made one more full payment, we’d have no money left for anything,” Freeman said. “We couldn’t keep the lights on.”
And even the scaled-back payments would only last about a month longer—if that, he explained.
In the 15 years that Freeman has been with the company, he said, CenCal has dipped into its reserves three or four times, but never for this long a period of time or for this much money.
Sharon and John don’t blame CenCal for their money troubles. In fact, they said that the company has managed their state funds well and provided a nice buffer for them and other care centers in the county. The ultimate fate of their funds is in the hands of the state government now, they said.
Contact Sports Editor Sarah E. Thien at sthien@santamariasun.com.
This article appears in Sep 18-25, 2008.