DIFFERENT WAYS TO DIVIDE UP UP $300 MILLION
Amont the healthcare budget cuts proposed by Gov. Arnold Schwarzenegger in January was a plan to eliminate a state-funded program that pays relatives of disabled people a stipend to take care of that person. The program allows the disabled to stay in their homes, and advocates say it saves the state money by keeping them out of nursing homes, where care is far more expensive. In the face of widespread protests and the promise of a federal waiver that would qualify the program for federal funding, Schwarzenegger dropped that proposed cut and reinstated the program in his May budget plan.
An analysis of the original proplosal concluded that 27,000 disabled Californians would lose paid care, potentially forcing their parents or adult children to take a job outside the home and sending them to a nursing home. Another 18,000 disabled Californians, the analysis concluded, would be able to switch to nonrelative caretakers, a change that would qualify them for federal funding.
In other words, the cuts would have had a dramatic effect on the lives of 45,000 families. How much would it have saved the state budget? $277 million.
That figure took on a new significance last week when a legislative committee held hearings into the proposed buyout of Wellpoint by Anthem, a move that would consolidate two of the state's largest managed care providers. The Foundation for Taxpayer and Consumer Rights, through a Freedom of Information Act request, disclosed before the hearing that a handful of Wellpoint executives stand to reap a compensation package, including cash bonuses and stock options, of at least $300 million in the transaction.
Anthony Wright, excutive director of the healthcare consumer group Health Access, found the amount invovled to be painfully coincidental. "The amount of executive payouts is in fact larger than many of the healthcare cuts we have debated as part of the state budget crisis; this amount of money could go to provide care to hundreds of thousands of
The consumer groups were particularly critical of the Schwarzenegger administration's Department of Managed Care, which declined to conduct public hearings on the proposed merger. They noted that Schwarzenegger and his political committees have received $92,400 in campaign contributions from Wellpoint and its top executives.