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San Francisco Marin Medical Society Blog

California Heavily Affected by Looming Sequester Cuts

The White House detailed how California and other states would be affected if a deal is not reached by Friday to avoid automatic cuts under sequestration.

The automatic cuts involve nearly $1 trillion in across-the-board reductions over a decade, including a 2% reduction to Medicare reimbursement rates.

If the sequester cuts go through as expected, Obama administration officials and experts estimate that California would lose about $670 million annually in federal grants, as well as $3.3 billion in military and defense revenue.

Health and human services-related cuts in California would involve the loss of:

  • $12.4 million in grants to prevent and treat substance use disorders;
  • $2.6 million in funds to help improve the state's response to public health threats;
  • $2 million in funds for the California Department of Public Health, resulting in 49,300 fewer HIV tests; and,
  • $1.1 million in funds for vaccines, resulting in 15,810 fewer children receiving immunizations.

Although it is unlikely that federal lawmakers will reach a deal by March 1, they are expected by Wednesday to hold votes on competing measures to avoid sequester.

A plan by Senate Majority Leader Harry Reid (D-Nev.) would delay the cuts until January 2014, replacing them with a mix of $110 billion in new tax revenue and more narrowly tailored spending cuts.

Meanwhile, a plan by Senate Minority Leader Mitch McConnell (R-Ky.) still is being developed. Officials say McConnell’s plan might leave the sequester in place but allow for more flexibility among agencies in implementing the cuts.

Source: California Healthline, February 25, 2013.

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