California Governor Gavin Newsom Released May Revise Which Takes Steps on Health Affordability–But Legislature Should Do More

Governor Gavin Newsom released his May Revision of a $300 billion state budget, which continues to propose major steps to expand health care coverage, and included some new investment to ensure Californians keep the coverage as the public health emergency unwinds. Building on these proposals and given the urgent needs, health and community advocates urged the Legislature to take quicker and additional steps to address health affordability.

We appreciate Governor Newsom’s continued commitments to significantly improve health care access and affordability, and we urge the Legislature to seek more relief sooner to help California families stressed by health care costs.

The focus on health care affordability is welcome and urgent, and under this budget, California has the opportunity to provide long and short term solutions, to reduce costs and limit price increases in both public and private coverage. Millions of Californians would benefit from a new Office of Health Care Affordability taking a comprehensive approach in preventing inflated health costs, to specific solutions on prescription drug prices on insulin, and relief in reducing Medi-Cal and Covered California premiums and cost-sharing. We appreciate the investments to keep Californians covered, especially in Medi-Cal as the public health emergency unwinds, complementing the work we need to do to expand coverage in Medi-Cal and affordability assistance in Covered California.

Given the big concern on costs, the Legislature should take this proposal and seek bigger and bolder action to improve health affordability for California families. We need to prevent premium spikes in Covered California, and while the $304 million investment in state subsidies is welcome, it would be a fraction of the $1.7 billion in federal help that may expire at the end of the year, and we also need to address cost-sharing and deductibles which will rise as well without additional action. We are excited by ending the cruel exclusion of coverage in Medi-Cal based on immigration, which should not be delayed under 2024, especially for the tens of thousands of Californians who will needlessly age out of coverage otherwise.

The Governor’s proposal continues to eliminate Medi-Cal premiums for children and people with disabilities just over the poverty level, and the Legislature should similarly reduce share of costs for such seniors and people with disabilities. These budgeted and proposed actions, together, are big steps to a more affordable, equitable, and universal health system. For more background, here’s our one sheet on the Governor’s January budget, which have largely continued in the May Revise, and then more comment about what advocates and legislators will be seeking: https://health-access.org/wp-content/uploads/2022/03/HA-Budget-FactSheet-final-3.2.22.pdf

HEALTH4ALL

The Governor’s budget proposal continues to seek an expansion of Medi-Cal to all income-eligible Californians, regardless of immigration status, starting January 1, 2024 for over 700,000 Californians aged 26-49 years old. Expanding Medi-Cal coverage will benefit not just hundreds of thousands of essential workers we rely on, but the health and economic security of their families, and our common public health. We will work hard to make sure this expansion happens as soon as possible to cover the Californians explicitly excluded from coverage because of where they were born. These Californians can’t wait for coverage, especially the 40,000 young adults that will age out of coverage without more urgent action.

COVERED CALIFORNIA

In the January budget, the Governor made a commitment to improve affordability assistance, including on cost-sharing, building on federal funds. The May proposal would reinstitute the state subsidy program, which would help if Congress does not extend federal American Rescue Plan dollars, but would be a fraction of the $1.7 billion/year that Californians would lose in affordability assistance. We will continue to seek more help to prevent premiums in Covered California from spiking by over $1000/person, and especially if federal funds are continued, to also to help with cost sharing, especially with deductibles that will rise to $4750 next year for Silver plans.

OFFICE OF HEALTH CARE AFFORDABILITY

The budget continues to propose this new Office of Health Care Affordability, a comprehensive approach to set enforceable cost targets for the health industry. In addition to the immediate relief in the budget release, this Office of Health Care Affordability is most far-reaching health affordability proposal, with the potential to prevent inflated health costs for nearly all Californians, in public and commercial coverage. After three years of active negotiation, it’s time for the Office of Health Care Affordability to start it’s crucial work of preventing

MEDI-CAL AFFORDABILITY

The Governor proposes to suspend premiums in Medi-Cal for hundreds of thousands of children, people with disabilities and others just over the poverty level, while advocates hope to eliminate them permanently. Advocates are also seeking reduction of “share of cost” Medi-Cal for seniors and people with disabilities just over the poverty level.

PRESCRIPTION DRUGS PRICES/INSULIN

The Governor hinted in January about California moving forward to contract to manufacture insulin, as a way to address market failures that have left this century old medicine with an inflated price. This May Revision includes more details, including seeking a $100 million investment to start that process. This budget would make an important investment to correct the market failures that have left insulin prices inflate for decades. California can and should use its purchasing power to provide relief to California patients and taxpayers struggling with the price of prescription drugs like insulin.

KEEPING CALIFORNIANS COVERED

The budget includes investments related to the ongoing COVID-19 crisis, and also help to ensure people stay on coverage, through investments like $30 million general fund in Medi-Cal navigators, and another $12.5 million in a media campaign so people know their coverage options and opportunities. We strongly support the new investments to provide public education and outreach, to keep Californians covered, especially as the public health emergency unwinds. Californians need care and coverage even after the worse of the pandemic and public health measures are lifted, and we all benefit when we all are included in the health system.

FURTHER STEPS TO UNIVERSAL COVERAGE

In addition to these major investments in coverage and affordability, other important investments are in reproductive health, in Medi-Cal benefits, and in a health information exchange. These budget investments include big and bold steps to expand coverage and affordability, and we also appreciate the staffing to further explore federal waivers and other steps outlined by the Healthy California For All Commission to take additional steps to a universal health system with unified financing.

 

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