CA Governor Newsom’s May Budget: Key Health Takeaways

On Friday, May 14th 2021, Governor Gavin Newsom unveiled the 2021-22 May Revision of the state budget, which includes some important investments to improve and expand our health care system, but also missed major opportunities for further expansion and improvement, especially given the size of the surplus. This budget recognizes that our health system is better when everyone has access to coverage, including primary and preventative care, and we will continue to advocate with the Legislature to improve access and affordability in both Medi-Cal and Covered California.

We should take this opportunity to get as close as possible a universal health care system, which we realize is more urgent than ever post-pandemic.

Prior to the Governor’s May revision, the California Assembly and Senate Budget chairs identified and prioritized many of these proposals, including additional #Health4All expansions of Medi-Cal regardless of immigration status, the removal of the asset test in Medi-Cal, additional affordability assistance in Covered California, and more.


In one major step forward, Governor Newsom proposed to strengthen our health system for everyone by removing the unfair exclusions to Medi-Cal for the undocumented immigrants age 60 and over, especially some of these seniors who have been disproportionately harmed by COVID-19.

While the #Health4All coalition—made up of leading health and immigrant rights organizations across California— praised this step, the recently announced historic budget surplus, along with the continuing pandemic, make it even more urgent and possible to cover all adults, regardless of age or immigration status. Both the Assembly and the Senate highlighted Medi-Cal expansions to more income-eligible undocumented Californians beyond seniors as a top priority in this year’s budget. An expansion for undocumented seniors was included in the Governor’s initial 2020 state budget, but was withdrawn due to a forecasted budget downturn that failed to materialize. In just a year, our state has gone from a budget deficit of tens of billions, to a budget surplus of tens of billions, opening the possibility for getting to Health4All adults in the near future.

Most of these undocumented seniors have given a lifetime of contribution to California in working, raising families, and paying taxes, yet have been excluded from Medi-Cal coverage despite being the most vulnerable to COVID-19. We certainly feel the urgency to cover the seniors that survived, that may likely have exacerbated medical conditions, along with a broader group of essential workers who were exposed and in need of coverage and care. We will work with our legislative champions to support this request and take further steps to #Health4All.

The price tag to simply remove this exclusion entirely is a small percentage of the new surplus.

Health advocates appreciate the improvements in Medi-Cal benefits and services, from coverage of post-partum care, doulas, and community health workers, to the reforms to provide more enhanced and accountable care. California should also take the steps expand Medi-Cal coverage to more seniors and people with disabilities by eliminating the asset test, which discourages savings and limits the ability for thousands to get the coverage they need. In this pandemic, we learned that our health is dependent on the health and caring of others, including our friends, family members, and our community members.


One major missed opportunity was the chance to make Covered California even more affordable. We are disappointed that in this time of surplus, the Governor proposed to take back over $700 million of dollars in existing state affordability help in Covered California, missing a major opportunity to further reduce premiums or deductibles in Covered California. This reduction in state investment risks raising premiums should federal assistance not be made permanent. California was proud to pilot additional affordability assistance in our health insurance marketplace, but as much as the new federal dollars are welcome, many families need more help in a famously high cost-of-living state. This pandemic showed the problems of leaving people uninsured, or with coverage that leaves people with deductibles of thousands of dollars, discouraging care. We urge the Legislature to look to keep this California commitment to additional affordability assistance.

California should once again be a leader by further investing in subsides to help millions who need more help paying for care in our high-cost-of-living state, and cover more Californians during this pandemic and beyond.


The proposed state budget continues key initiatives on health care costs, quality, and equity. This includes the effort to create a new Office of Health Care Affordability, to confront health care consolidation and set cost-growth targets for all sectors of the industry. As Californians face an affordability crisis on many fronts, the Office of Health Care Affordability is a bold effort to put in place a comprehensive strategy to contain health care costs, setting enforceable targets for affordability with accountability, and drive innovation in payment and delivery of care while still prioritizing quality and equity. Other industry accountability efforts would require health plans to meet goals regarding quality and reducing disparities, through regulation by the Department of Managed Health Care and contracting by Medi-Cal and Covered California.