CA Governor Announces Major New Proposals to Prevent Inflated Health Care Prices

California Governor Gavin Newsom today announced a series of major health care reforms to provide relief to millions of California consumers, employers, and taxpayers struggling with high health care costs. In his 2020-21 budget, the Governor is proposing policy changes to address the price of health plans, providers, and prescription drugs. Health care consumer advocates and other stakeholders cheered Governor Newsom’s budget proposals as potential game-changers for Californians struggling with the rising costs of care.

These proposals promise some desperately needed relief for California families from the high prices of health plans, providers, and prescription drugs.

OFFICE OF HEALTH CARE AFFORDABILITY: Health and consumer advocates strongly support a new Office of Health Care Affordability to set targets for our health system on cost, quality, and equity, provide tools to help plans and providers meet these goals, and demand accountability when they don’t. While other state efforts have gone after specific market failures and abuses, this new Office will take a comprehensive approach to health care costs. We are never going to get a more affordable health system if we don’t set that as a goal, and have consequences for not meeting that goal. With this plan, Governor Newsom isn’t just setting up new oversight over the health industry, but a moonshot-like goal and effort to prevent the inflated health care prices that so many Californians are concerned about.

PRESCRIPTION DRUG PRICES: Governor Newsom is taking on prescription drug prices with a multi-pronged attack, using the purchasing power of California to demand the best prices not just in the country but the world. While President Trump threatens to veto prescription drug price reform at the federal level, California is moving forward with cutting-edge proposals of it’s own. Consumers would directly benefit if California contracted on its own to manufacture much-needed generic medications like insulin–a drug that has been around for a century yet the price has gone up over tenfold in the last few decades. By focusing on public health rather than profit, California can provide useful competition in the generic drug market and ensure that the state is not getting fleeced when purchasing prescriptions for the millions of Californians in Medi-Cal and other public programs.

COVERED CALIFORNIA: Unique among health care marketplaces, Covered California actively negotiates on behalf of the public for the best possible price, standardizes health plan benefits, and seeks to hold providers accountable for quality and equity. We share the Governor’s goal to strengthen Covered California, and provide more and better public options for Californians. As we look forward to the work of the Healthy California for All Commission to plan for broader reforms, we are excited about more immediate steps like public options that can more quickly get patients the best possible coverage they urgently need.

While consumer advocates have been working on some of these concepts for months if not years, the adoption of these proposals would represent first-in-the-nation breakthroughs to address the health care cost issues that top the list of voter concerns.

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