New #CABudget Deal Extends Major Help to Afford Health Care to Millions of Californians

The Governor and Legislature announced a final deal on the California state budget late yesterday, including some major investments in a variety of health and human services.

We greatly appreciate that this state budget deal includes crucial commitments to improve health care access and affordability for Californians, providing real relief to many immediately, with the potential to eventually help all Californians with the cost of coverage and care. Here are some highlights:

OFFICE OF HEALTH CARE AFFORDABILITY: Years in the making, a new Office of Health Care Affordability will take time to set up, but has real potential to prevent ever inflating health care prices for all Californians, regardless if they get coverage through an employer, public program, or individually. The new Office created in this budget would set enforceable cost targets for the health industry, with accountability if they are not able to justify higher increases. This Office represents California’s biggest effort in many years to address the longstanding concern about rising health care costs.

HEALTH4ALL: “This budget commits to fully remove the exclusion in Medi-Cal based on immigration status, opening up this coverage program by January 2024 to over 700,000 income-eligible Californians ages 26-49, many of whom are essential workers contributing in so many ways to our economy and society. As the pandemic highlighted, our individual health is tied to the health of our community, and we all benefit when everyone has access to primary, preventive, and comprehensive care. With the urgency on the ongoing pandemic, we will continue to advocate to take this and other steps to universal health care as soon as possible.

HEALTH AFFORDABILITY: For many Californians facing an affordability crisis who get their coverage through Covered California or Medi-Cal, this budget provides immediate and direct help for dealing with health premiums and out of pocket costs. In the next year, this budget deal will directly reduce health care costs for over a million in Covered California and hundreds of thousands more in Medi-Cal.

  • COVERED CALIFORNIA: The budget deal restarts special state subsidies in Covered California, either to partially backfill the potential loss of federal premium assistance, or to focus on cost sharing. If Congress acts to prevent premium spikes, then California is poised to take action to reduce cost-sharing. For next year, this could mean the elimination of deductibles in Silver plans, slated to be $4,750 otherwise. For hundreds of thousands with Covered California, this will remove financial barriers to getting needed care, provide some peace of mind and economic security that going to the hospital won’t break their bank account, and hopefully encourage further enrollment.
  • MEDI-CAL: Importantly, the budget allows the Department to eliminate premiums in Medi-Cal for hundreds of thousands of children, people with disabilities and others who were just over certain income thresholds. The budget also reduces share-of-cost in Medi-Cal for other low-income seniors and people with disabilities as well.

PRESCRIPTON DRUGS: The budget also invests in directly contracting to manufacture insulin, which has the potential to drive down inflated prescription drug prices. We strongly support and appreciate this innovative effort to use California’s unique purchasing power to fix the market failures that have plagued patients who stuggle to afford needed medications.

HISTORIC STEPS FORWARD: All these specific budget investments, together, represent increased access and affordability for millions of Californians, so they can make ends meet and get the comprehensive care and coverage that we all need, especially when dealing with an ongoing pandemic. The commitments in this budget represent nation-leading steps forward toward universal coverage in California, and we look forward to implementing and building on these steps in the next few years to that goal.

OTHER KEY INVESTMENTS: Other smaller steps to universal coverage include ensuring continuous coverage in Medi-Cal for young children, and staffing efforts to seek federal waivers for bigger reforms in the future. The budget also takes other key investments to improve our health system, especially in Medi-Cal. We especially appreciate the additional investments for reproductive health services at this critical time when it is under attack nationally, establishing California’s leadership in ensuring access to abortion. As we continue facing challenges related to COVID-19, we welcome the investments in public health, including responding to current and future epidemics. While there is always more to do, this budget represents a big step forward in improving the health and wellness of all Californians.


For background, here’s our summary of the Governor’s budget and what we saw were the opportunities for improved investment at the beginning of the year: