SACRAMENTO, CA – Today Governor Gavin Newsom released his proposed 2023-24 state budget which continues commitments to expand and improve Medi-Cal, including the plan to remove all barriers for income-eligible Californians, regardless of immigration status, in Medi-Cal beginning in January 2024. Other key investments were enhanced to improve CalAIM, reproductive health, and mental health care. A major exception was the clawing back of $333 million in the Covered California affordability fund that would have been used for state subsidies to help reduce health care costs.
“As we continue to face an ongoing pandemic and increasing economic uncertainty, we must do everything we can to include as many Californians in our health care system as soon as possible. We appreciate that with this budget the state is keeping its commitment to expand Medi-Cal to all low-income Californians, regardless of immigration status, improving the physical and economic health of our families, communities, and the state as a whole,” said Anthony Wright, executive director of Health Access California, the statewide health care advocacy coalition. “We also applaud the continued investments to reform Medi-Cal and for greater health care affordability in general. However, we are disappointed that money meant for Covered California affordability assistance is proposed to be defunded through 2025.”
As Californians face rising cost-of-living pressures, and higher health costs specifically, the Governor’s proposed budget takes $333 million from the Health Care Affordability Reserve Fund, money that would have otherwise been used to make care more affordable for those in Covered California. The money in the fund was raised from individual mandate penalty revenue. The Governor’s proposal to claw back these dollars through 2025 means the potential loss of over $1 billion from the penalty that could have made care more affordable for the nearly 2 million people in Covered California.
“Health care affordability help for middle-class Californians is more needed in an economic downturn, not less. The hundreds of millions raised in the Health Care Affordability Reserve Fund from those without coverage should go directly to lowering costs in Covered California, like cost-sharing and deductibles, to make sure more people are able to afford and use their coverage,” said Diana Douglas, policy and legislative advocacy director for Health Access California.
This budget announcement kicks off months of negotiation with the State Legislature. Building on these proposals and given the urgent needs, health and community advocates urge state lawmakers to take quicker and additional steps to address health affordability.
“While we recognize the realities of the budget deficit, we appreciate that our policymakers have been building reserves and flexibilities for a decade to be ready to continue its commitments in the face of an economic downturn. Yet an economic downturn is exactly when health and human services are most important. With the ongoing pandemic and other public health pressures, we need to double-down on ensuring every Californian can access and afford health care and coverage,” said Wright.
“With Governor Newsom continuing many of California’s commitments to significantly improve health care access and affordability, the Legislature should do more in seeking relief to help California families stressed by health care costs,” concluded Wright.
Beyond the general continued commitments in Medi-Cal, and the sweeping of the funds in Covered California, other health care items of note (including those that require federal approval) include: