Gov. Gavin Newsom, state lawmakers, and health industry leaders have a small window to reach an agreement on billions of new dollars for Medi-Cal before it’s put to voters in November.
An initiative, supported by virtually every sector of the state’s health care industry as well as the local Republican and Democratic parties, would lock in the money for Medi-Cal, California’s version of the Medicaid health insurance program for low-income residents. The funds would be used primarily to increase payment rates for health care professionals who serve Medi-Cal patients.
Newsom, a Democrat, initially supported using the money for that purpose. But after California’s fiscal situation darkened, he reversed course in May, proposing to divert most of it to reduce the state’s $45 billion budget deficit.
The money is from a tax on managed-care health plans that’s been around for two decades but has historically been used to offset existing state spending rather than support new investments in Medi-Cal.
“The importance of this ballot initiative is finally being serious about investing in the viability of the Medi-Cal system,” said Adam Dougherty, chief of emergency medicine at Sutter Medical Center in Sacramento. “The MCO tax literally touches every aspect of the Medi-Cal system, and it can’t be at the mercy of year-to-year budget crises.”
Michael Genest, a former finance director under Republican Gov. Arnold Schwarzenegger, noted that several ballot initiatives approved by voters in the past continue to narrow the state’s fiscal choices, including one that limits property tax increases and another that guarantees a large share of the state budget to schools.
“We do ballot-box budgeting in the state of California. We’ve done it forever. And…
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