Health Net is extending up to $5 million in emergency loans to a network of community clinics in Californias Central Valley region that is struggling to stay open because of a state budget impasse.
The Woodland Hills, Calif.-based health insurer is issuing the 60-day, interest-free loans to the Central Valley Health Network, a consortium of 13 federally qualified health centers, with 116 sites in 20 counties serving 530,000 patients a year, of whom 77% have incomes at or below 100% of the federal poverty level.
California is facing a budget deficit of $17 billion in the next fiscal year, which begins July 1, and Gov. Arnold Schwarzenegger is proposing $1.1 billion in Medicaid cuts to help meet the shortfall, which has met stiff opposition from providers. The state failed to meet a deadline to produce a budget on June 15, and the impasse is expected to continue through the start of the fiscal year, delaying Medicaid payments. To be honest with you, we are extremely frustrated, said David Quackenbush, chief executive officer of the Central Valley Health Network. Were working on meeting payroll and chasing after loans to keep our doors open.
Health Net may provide additional loans to other health clinics, said Dave Meadows, Health Nets senior vice president of state health programs. Last year, Health Net loaned about $500,000 to three clinics so they could meet expenses during that 52-day budget impasse. -- by Rebecca Vesely