Californians face cut in Medicaid benefits

LOS ANGELES - At the height of the recession, Congress threw millions of Americans a lifeline. It boosted federal funding for Medicaid by $100 billion to play for medical care for the down and out.

But no one expected unemployment to be this high, this long. Now, the extra Medicaid money runs out tonight.

CBS News correspondent Bill Whitaker met Sharon Brown and her 10-year-old daughter Rosa at the Arroyo Vista Family Health Center, a non-profit, community clinic in Los Angeles. Rosa came for strep throat.

With a family income below the federal poverty line of $18,310 a year - Rosa's treatment and Sharon's check-up cost just one dollar each. The rest is paid by the joint state/federal, low-income medical program, Medicaid.

"I depend on it a lot," Sharon said. "Because I have three children. I use it for their yearly physical, for their eyes checked, for the dentist for their yearly shots for school."

But with the temporary infusion of federal funds to Medicaid running out, California is taking a $4.8 billion hit. So like most states California is scrambling to reduce costs: cutting services; capping doctors visits at seven a year; cutting doctor's payments; raising patients' co-payments $5 for office visits; $50 for emergency rooms; $100 to $200 a day for hospital stays. You might not think that's much.

"But you know what?" Sharon asked. "You're so wrong, because people count on it."

Sharon lost her job as a cafeteria worker when LA schools made drastic staff cuts a year ago. She's had no luck finding work since. Her extended family lives on the edge of downtown and on the edge financially. Renting out the front of their modest house to help pay the mortgage, they all live crammed here in the back.

"We have bills to pay, we have food for children," Sharon said. "Gasoline, the clothing, the light bill, the water bill, the gas bill."

Sharon is one of 7,650,000 Californians on Medicaid. 42 percent of the patients at the Arroyo Vista clinic rely on Medicaid.

With the cuts, Arroyo Vista CEO Lorraine Estrada says "our revenue will go down. Which means potentially cutting services and layoffs, which is unfortunate."

Pediatrician Aanal Desai worries about her patients. "Will the end up in an emergency room," she asked. "I don't know. We're talking about cutting costs here."

California already is struggling with a budget crisis of its own and doesn't have the funds to make up for federal cuts in Medicaid. With unemployment here near 12 percent among the highest in the country, the Arroyo Vista clinic and others like it don't expect to see any reduction in need.