Catania Reluctantly Backs Off Health Plan

By David Nakamura
Washington Post Staff Writer
Wednesday, October 29, 2008

The D.C. Council member who created a plan to provide health care to thousands of uninsured residents said yesterday he wants to delay it to help the District create a $20 million cash reserve in the face of continued economic uncertainty.

David A. Catania (I-At Large), who sponsored the Healthy DC proposal that the council approved last spring, said he will formally ask his colleagues to postpone the program for at least a year.

Instead, Catania said the cash reserve is necessary to prepare for a likely continued decline in revenue, which could swell the rolls of residents who seek health care under the D.C. Healthcare Alliance, a safety net for low-income residents.

Catania has been critical of revenue estimates made by D.C. Chief Financial Officer Natwar M. Gandhi, who announced last month that the city faced a $131 million revenue shortfall for 2009. Although Mayor Adrian M. Fenty (D) has proposed closing the gap through a combination of spending cuts, including eliminating hundreds of vacant jobs and using special revenue that has accrued in the accounts of city agencies, Catania said he expects the fiscal crisis to worsen.

"No one looks forward to making reductions," Catania said at a news conference with Fenty. "This means we have to take action that is more aggressive than we'd like but that the times require."

As many as 25,000 residents might ultimately have been eligible for insurance under Healthy DC, under which some would pay monthly premiums as low as $20.

Catania said other initiatives would also have to be put on hold, including a planned increase in Medicaid reimbursements and a proposal to add medical doctors to public schools. He said the estimates Gandhi released in September were based on reviews of financial indicators conducted in August, before the Wall Street meltdown. Although Gandhi has acknowledged that the stock market troubles could further cut into revenue, he has been hopeful that the $700 billion federal bailout will help stabilize the stock market.

"You cannot budget wisely on a week-to-week basis by reading the Dow Jones averages," said David Umansky, Gandhi's spokesman. "In addition, the federal government is making a massive intervention in the financial markets. Uncertainty dominates, and the real economic effects are just beginning to show up in the data. We will monitor these trends closely and have a much better sense of their impacts for the December revenue estimate."

The council has yet to vote on Fenty's plan to close the budget gap, saying it needs information on some of the measures. But Fenty, who supported Catania's effort to postpone Healthy DC and other programs, said yesterday that he will issue an executive order to immediately reduce expenditures throughout the government by $52 million. He'll need council approval to trim an additional $8 million in spending and use about $71 million in the accounts of the city agencies to balance the budget.

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