Social Agencies Gauge Impact of Federal Cuts : Services: Reductions are certain, but beyond that it’s hard to foretell changes in Medicare and welfare.

Only one thing is sure about Congress’ $270-billion cut in the future growth of Medicare, Medi-Cal and welfare programs, Orange County human service providers say: The move will translate into curtailed health-care services for the elderly and the poor.

Everything else concerning Medi-Cal and welfare is up in the air, they contend, because federal eligibility standards would be dismantled, allowing states to decide whom to cover and what benefits they should receive.

“Basically, less money means less money--less money for states, for managed care plans and doctors and hospitals,” said Mary Dewane, chief executive officer of Cal OPTIMA, the county’s new managed care health-care agency for Medi-Cal recipients.

“It’s difficult to determine for us what the bottom line impact will be on OPTIMA, but from what I understand, there will be fewer eligible people, so we’ll be serving a [smaller] population.”

Officials at the county Social Services Agency are equally stumped. “The biggest thing we’ve been able to figure out is we would receive less funding than we currently receive,” said Angelo Doti, director of financial assistance for the agency, which determines who is eligible for Medi-Cal, the medical program for the poor.

About 250,000 people in Orange County are eligible for Medi-Cal, the bulk of whom also receive Aid to Families with Dependent Children welfare payments. Another 50,000 receive Medi-Cal through Supplemental Security Income.

The structure of the current program, however, is so unwieldy that any change might be for the better--if Washington keeps its promise to give the money to states without any strings attached, Doti said.

“This program is illogical and a nightmare and we would welcome anything that would make it more compatible with common sense,” Doti said.

Proposed cuts to Medi-Cal and Medicare, however, will bring nothing good to hospitals and other health-care institutions, several officials said.

“We are essentially bracing for a devastating impact if [the programs] should in fact become the law of the land,” said John D. Gilwee, a member of the Orange County Health Care Council, an advisory panel of health-care providers and human service agencies.

“We have been on a course toward reforming our health-care system in California, and these changes are taking us back into the Dark Ages,” Gilwee said. “States like California that have been very progressive in managing their health-care system now will use a meat ax approach.

Social service cuts are part of budget packages passed by the House on Thursday and by the Senate on Friday. President Clinton has said the cuts are Draconian and that he will veto the bill.

In particular, the Medicare and Medi-Cal cuts will deal a harsh blow to medical education, said Mark Laret, executive director of UCI Medical Center. Medicare traditionally has been the only source of money that directly covers the costs of educating physicians, Laret said.

Medicaid cuts to California would total as much as $18 billion over seven years. Public hospitals could lose $2.3 billion, with children’s hospitals falling $900 million short by 2002. More than 1 million children would lose Medicaid coverage.

The cuts would also be felt by people with AIDS, and California has one of the largest populations of people with AIDS in the U.S.

If other insurers do not come forward to fill the gap, Laret said, UCI and other UC hospitals will be forced to reduce the number of resident physicians and the range of services the hospitals offer.

Indigent patients, who rely heavily on those services, will suffer most, he said.

The new legislation does not allow states to include treatment for undocumented immigrants in their financing calculations, and hospitals such as UCI, Children’s Hospital of Orange County and Western Medical Center, which treat large numbers of undocumented people, will feel the effects of that edict, Gilwee said.

“These people, like anyone else, can come into a hospital emergency room when they’ve been in an auto accident or suffered an acute illness, and we take care of them,” Gilwee said. “And we will continue to take care of them, but just because the federal government is saying, ‘We’re not going to pay for it anymore’ doesn’t mean they’ve cured the problem.”

Already, UCI projects a loss of $22.9 million in Medicare dollars over the next seven years, a fraction of the $444 million anticipated throughout the UC system.

“I don’t think it threatens to put any of us out of business,” Laret said. “It just threatens our ability to do as much--and as well--as we have in the past.”

About 350,000 county seniors are eligible for Medicare, all of whom would see their monthly premiums for the voluntary, Part B doctor insurance nearly double in seven years, rising from $46.10 to about $90 by 2002.

“I think a lot of people associate Medi-Cal with welfare or the undocumented and they’re not recognizing that in many cases this is for your mother and your father,” said Peggy Weatherspoon, executive director of the Area Agency on Aging. “Realistically, the average family cannot afford $3,500 a month for a nursing home, which is what is costs in Orange County.”

Advocates for county seniors said that many of their constituents do not understand how Medicare changes could affect their lives.

“I think many of the seniors don’t understand it well enough and that’s upsetting to them,” said Shirley Cohen, executive director of the Feedback Foundation, an agency with 20 congregate lunch centers that often serve as the hubs of senior life in the county.

“We’re concerned that their care is going to be reduced and that there’s going to be a lot of effort to push people into HMOs. The only way HMO’s are going to make out is to ration the care,” Cohen said.

Being pushed into a health maintenance organization is also the primary fear Dorothy Glass, a member of the county’s senior advisory council, hears from her friends and constituents. It is also the reason so many seniors are angry and frustrated with the Congress, she said.

“HMOs are fine for a very aggressive person or for the senior who has a daughter or son who goes with them and fights for them,” Glass said. “But if you’re 83 years old and grew up thinking the doctor is God and he has allotted only 15 minutes to examine you and move on, then they’re not necessarily best.

“But I tell you, I’m upset with the people we’ve sent to Congress from Yale and Harvard, who had a Mercedes in high school, went to work for big firms and now are all getting free insurance,” Glass said. “They don’t seem to have any concept about how the rest of us live.”

Times staff writer Julie Marquis contributed to this report.