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California has billions more in tax revenue than projected. It should be used to keep people out of poverty.

In an unanticipated but not completely surprising series of events, California’s wealthiest residents have seen significant boosts in income during the pandemic, with many making good money because of the pandemic. Meanwhile, on the other end of California’s 40 million people, Californians don’t have enough to eat, don’t have a reliable place to live, and are at high risk of COVID exposure because they have no choice but to work in close proximity to others. Most jobs that were lost or had reduced hours from the state’s COVID shutdown mandates are low wage jobs. People in those positions are already just making it – pandemic-induced income loss is pushing them into deeper uncertainty.

The good news is that since wealthy Californians are making so much money, the state is experiencing a spike in revenue. Last month, the non-partisan Legislative Analyst Office estimated that California may have a surplus of $26 billion in the 2021-22 budget. This illustrates the virtue of a progressive tax system like California’s, since the point of taxes is to provide for the structural needs of a society to help stabilize it – but it also requires taxes to be used efficiently and wisely. Unfortunately, many are already calling for California to hoard this tax windfall for a “Rainy Day,” because apparently, a global pandemic plunging millions into poverty doesn’t fit that category.

If California wants to be a leader in the United States and in the world, it cannot ignore the obvious call here – make sure people can eat, have access to shelter, and access to health care — make sure people can actually live here.

Widespread poverty is everyone’s problem because the deeper into poverty a society goes, the harder it is to get out. Fortunately, California has wealth, so we can address these fundamental, deeply destabilizing problems – the question is, will we? This is where conversations about economic and racial justice and equity in California reach their limit. This is a stark, straightforward situation; state policy makers and administrators have to put money where the talk is, and make the tax revenue from the 5th largest economy in the world work for the people who hold it up.

The state must invest in the people the state’s pandemic polices most negatively effect. With as much directness and immediacy as possible, people need:

  1. Direct food and cash assistance.
    • In September Governor Newsom vetoed AB 826, which would have provided one-time food aid to those most in need during the pandemic. He cited cost for the veto. The money is here now. Food should be the very first item on the agenda, especially since in many cases, the people who don’t have enough to eat are the same people supplying the majority of California and U.S. agriculture. It shouldn’t need to be said, but the people producing our food should have enough to eat.
    • With unemployment still at record levels, many people need income. As extended unemployment benefits end due to a lack of federal empathy, California must step in and provide cash so people can afford basic necessities. California needs extended unemployment, increased grants to people on CalWORKs, and restoration to cuts made to elders and people with disabilities on SSI. Every dollar the state provides will go right into the economy, providing a boost to business.
  2. Direct rent relief and housing assistance.
    • People can’t work, so they can’t pay rent. Without stable housing, every part of life is harder. It’s harder to keep a job, educate kids, rely on steady meals, and have safe harbor from the pandemic.
    • We are seeing an increase in homelessness on top of the crisis we already have. In Sacramento for example, the Sacramento Bee reported that “During the first six months of this year, 3,790 people in Sacramento County escaped homelessness, but another 3,736 became homeless.” The state expanded shelter capacity, but that funding is drying, and so is the housing. We need to keep people who are already housed in their homes so they don’t slip into homelessness.
  3. Health4All and a fix for the Medi-Cal asset test.
    • At the start of 2020, Governor Newsom promised to expand Medi-Cal to undocumented elders. That hasn’t happened, and the delay is causing further instability for those hit hardest by COVID-19: immigrants and people over age 65.
    • Similarly, AB 683 would have fixed an outdated rule that limits the cash savings elders and people with disabilities can have and still be able to enroll in Medi-Cal. Forcing people to choose between health care and saving for an emergency is a particularly shortsighted policy during a pandemic that this money should be used to fix.

The Legislature is due to return next Monday, December 7th. When they do, the first order of business must be to pass an emergency relief package to prevent more suffering. We think the steps above are concrete, doable first steps.

 

In the midst of the pandemic, California continues to strip assets from elders with low incomes in exchange for health care.

A California bill to fix the Medi-Cal assets test (AB 683 – Carrillo), jointly sponsored by Justice in Aging and Western Center, will not move forward this year.

The Medi-Cal assets rule limits the amount of assets an individual can have to $2,000, or $3,000 for a couple. While it does have exceptions (a home and one car), it still limits how much Californians can save to take care of themselves if they need help from Medi-Cal. Most Medi-Cal recipients don’t know about the exceptions, and don’t have access to financial advice to help save as allowed by the rule.

The real kicker, though, is that the assets test only applies to people over age 65 and some people with disabilities. How’s that for equity?

The test is not just some vague rule that only health policy advocates worry about. It’s an outdated measure of whether someone deserves health care that is even more strikingly anachronistic during the COVID-19 pandemic.

So what does this look like in the real lives of Medi-Cal recipients?

Alfred Calderón, 64, from Long Beach has been paraplegic since 1973. He’s been dealing with the ins and outs of both Medicare and Medi-Cal for some time since he is eligible for both programs. Medi-Cal is supposed to pick up where Medicare leaves off to cover premiums and high-cost sharing, which he can’t afford.

Like many Californians, Alfred’s family is spread out. His aging father lives on the other side of Big Bear, and his nieces and nephews live on the Pala reservation outside of San Diego. The only way for him to get around to visit family and friends is with a special van outfitted to meet his needs, but it’s impossible to save enough to buy such a van, since it would cost more than Medi-Cal allows Alfred to have as long as he wants to keep his health care. He says it’s hard to stay in community when there’s no way to visit his people.

Alfred is also unable to save for things like a comfortable bed, which would be helpful given his disability and age. While Medi-Cal pays for a basic hospital-type bed if medically necessary, he can’t save money for a bed that will ensure he can actually rest.

Alfred says he and his friends on Medi-Cal, “feel indentured – we need to ask for permission on how to live our lives.”

He’s right. While we have no problem with pandemic profiteering by California’s billionaires — who can’t possibly need another house, car, or luxury bed with personalized settings, the California public health care program is preventing Alfred from seeing people he cares about and getting a decent night’s sleep.

Beyond the comforts that make life feel more human and connected, the inability to save also puts many Medi-Cal recipients at risk of homelessness. When financial disaster happens – a layoff, an eviction, the car you need for your job breaks down, or the hot water heater needs replacing, a $2,000 cap on assets can make it impossible to bounce back.

The economic fallout of COVID-19 has shown just how easy it is for finances to be wiped out in the face of the unexpected. What’s worse, the Medi-Cal assets test rule targets those most at risk of COVID-19: elders with low incomes and people with disabilities who are also disproportionately people of color.

We need state policy that sets people up for success and treats them with the dignity that all Californians deserve. AB 683 would have corrected the most egregious parts of the Medi-Cal assets test: the low asset cap that hasn’t been updated since 1989, and the wonky rules only policy experts can explain.

But since the state won’t appropriately tax the rich, state leadership says we can’t afford to change these ridiculous rules – even though legislators across party lines agree it’s bad policy. So reports on health disparities and economic insecurity will keep coming, even when we know what fixes would make a difference. It is absolutely absurd that the state is stripping elders of what little assets they have to access health care, as it allows billionaires to hoard resources at unprecedented rates.

We’ll be back to get this bill through next year, but in the meantime, we hope state leaders reevaluate their priorities and actually commit to a more equitable California – rather than just saying they will.