California is facing a $24 billion budget deficit in its 2023-24 budget, according a new report by the Legislative Analyst’s Office, but it would be even worse without the national public health emergency that has been extended again by the Biden administration.
Thanks to the COVID-19 emergency, states are receiving extra federal money to reimburse the costs of health care covered by Medicaid, called Medi-Cal in California. In 2020, Congress approved a 6.2 percentage point increase in the federal government’s share of the cost of most state Medicaid programs. This enhanced funding continues through the quarter in which the public health emergency declaration ends.
The LAO says its fiscal outlook report was prepared on the assumption that the declaration would expire in January 2023, which would have meant higher state costs for Medi-Cal in the fourth quarter of the 2022-23 fiscal year.
“However, as we completed this analysis,” the LAO report explains, “the U.S. Department of Health and Human Services did not notify states the PHE would end in January.” The Biden administration has promised to give the states 60 days’ notice before the emergency ends. That delay will save California’s general fund an estimated $450 million. Of course, if you pay federal taxes, it’s not saving you any money.
As the pandemic emergency approaches the end of its third year, it is becoming increasingly difficult to separate the intertwined motives for government decisions related to COVID-19. Expectations of financial aid have grown entrenched as both government officials and ordinary citizens have acclimated to an unprecedented mix of mandates, prohibitions and relief funding as part of the toolbox for coping with the normal slings and arrows of life.
What is the justification for the continued national public health emergency, or for that matter, the state declaration of emergency? Gov. Gavin Newsom announced, less than a month before the November 8 election, that he would end the COVID-19 state of emergency on February 28. No reason or explanation for the selected date was offered, and the lack of transparency has reached absurd proportions. CalMatters reported that the administration “would not allow the press to name the senior officials who participated in an embargoed media briefing about ending the state of emergency.”
This is no longer an emergency. It’s a bureaucracy.