Top Health Care Takeaways from Governor Newsom’s 2023-24 CA Budget Proposal

On Tuesday Governor Gavin Newsom released his proposed 2023-24 state budget, continuing 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 January 2024. As we continue to face an ongoing pandemic and increasing economic uncertainty, we applaud this step to include as many Californians in our health care system as soon as possible, improving the physical and economic health of our families, communities, and the state as a whole.

Other health care investments include:

• The proposal to reinstate a managed care organization (MCO) tax to draw down more federal funds for our health system, to prevent cuts and further improve access and quality in Medi-Cal.
• A proposed 1115 waiver to draw down federal funds for reproductive health care services, through a grant program for family planning and related services.
• A Medi-Cal improvement to provide rent for up to six months as a new CalAIM community support for select patients in transitions, furthering the recognition that often the best health intervention is a stable housing situation.

While key commitments were kept, health advocates were disappointed to learn of the Governor’s proposal to take $333 million meant for Covered California affordability assistance back into the General Fund. The Health Care Affordability Reserve Fund was created to make care more affordable for those in Covered California. The money for the fund is raised from individual mandate penalty revenue. The Governor’s proposal to take back these dollars through 2025 means the potential loss of over $1 billion from the penalty for this assistance.

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

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.

With the ongoing pandemic and other public health pressures, California must double-down on ensuring every Californian can access and afford health care and coverage. The legislature can and should do more in seeking relief to help California families stressed by health care costs.

We look forward to working with the legislature in the coming months to enact the strongest state budget possible for California’s health care consumers.