As California lawmakers race to hash out what will get nixed and what will remain in the state’s strained 2026-27 budget before the constitutional June 15 deadline, aging and disability advocates are sounding alarms.
A consortium of 166 organizations say Gov. Gavin Newsom’s proposals break a promise and target the state’s most vulnerable residents. In 2021 the governor released a Master Plan for Aging to address the state’s shifting demographics. By 2030, nearly a quarter of Californians will be over the age of 60, the plan noted. But the state’s latest budget proposal erases years of progress and breaks the promise of the Master Plan for Aging, the aging and disability advocates contend. Newsom’s most recent budget, updated in May from the original January budget, calls for reducing the state deficit by $14 billion.
A primary concern for older adults is rate cuts to the state’s Program for All Inclusive Care for the Elderly (PACE). PACE currently provides comprehensive care at 40 California centers — including adult day services, nutrition, medical care, transportation and social services — to about 30,000 needy older adults who have medically complex conditions or are socially isolated.
The aim of PACE is to allow the elderly to remain in their communities — and keep them out of more costly nursing home settings, said Maria Zamora, CEO of the Center for Elders’ Independence, a nonprofit PACE organization that serves Alameda and Contra Costa counties. Zamora said PACE is an innovative model that saves taxpayers in the long run.
“Cuts don’t make sense,” she said. “We need PACE to expand. We need to have it in every California community.” In fact, in a June 2 letter to state budget leaders, PACE called on lawmakers to hire more nursing staff at the state level to eliminate bottlenecks in the program. These nurses approve applicants to begin receiving services in their communities.
The call for more rather than less appears a big ask, though. In a previous budget, the program has been the target of provider rate caps, or limits to the amount the program will pay for services. The caps will go into effect in January 2027. “This already represents a $60 million cut” to PACE, said Val Sheehan, CEO of California PACE Association, a nonprofit representing PACE organizations. Piling on additional provider rate caps this time around — what PACE advocates say amount to a $160 million cut to their program — would mean a total hit of $220 million to PACE.
The governor’s office didn’t respond to requests for comment, but Assemblymember Jose Luis Solache, Jr., who represents California’s 62nd district, which includes the L.A. County communities of Bellflower, Huntington Park, Lakewood and South Gate, said he’s siding with senior advocates. In an email exchange, Solache said, “Having dedicated years working in senior advocacy, I understand how vital this community-based model is. Cutting rates jeopardizes care.” Solache said lawmakers must safeguard PACE.
Beyond PACE, aging advocates are also concerned about other proposed budget cuts. These include reinstating a $2,000 Medi-Cal asset limit. An asset limit was eliminated under the Master Plan for Aging, then it was set at $130,000 under last year’s budget — a move aging advocates considered a big step backward. If the new asset limit is passed, older adults and those with disabilities with assets greater than $2,000 would be ineligible for Medi-Cal.
The state also proposes shifts to the funding of In-Home Supportive Services (IHHS) — suggesting counties shoulder more of the cost for this service, which advocates point out keeps older adults and those with disabilities out of state-financed nursing homes. The independent nonprofit California Health Care Foundation calls home and community based services like PACE and IHHS “person-centered, cost-effective approach[es] to care.”
The California Legislative Analyst’s Office, a nonpartisan fiscal and policy advisory group, warns the picture could be worse though. In January, the office estimated the state faced future deficits between $20 and $30 billion per year. Due to a bit of luck with higher revenue estimates, lower baseline spending and ongoing proposals (which the office said both raise revenue and reduce spending), the state’s economic picture looks a whole lot rosier now, according to the analysts.
But the office also said it’s not time to relax: The state’s underlying financial condition — including diminished reserves and an accumulated “wall of debt” — remains unsound. The analysts contend that given current conditions — characterized as a “revenue boom” — the very fact that the state is experiencing any operating deficit is ominous.
Cuts will be unavoidable. Sheehan says if voters don’t want to see services for older adults and those with disabilities reduced they should make their opinions known to their State Senate and Assembly representatives before Monday’s deadline.
This article first appeared on California Health Report and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
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Previously Published on calhealthreport.org with Creative Commons License
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