The proponents of Proposition 35, a November poll initiative that might create a devoted stream of funding to supply well being take care of California’s low-income residents, have assembled a formidable coalition: medical doctors, hospitals, neighborhood clinics, dentists, ambulance corporations, a number of county governments, quite a few advocacy teams, huge enterprise, and each main political events.
The Yes on Prop 35 marketing campaign has raised over $48 million as of Sept. 9, in response to marketing campaign filings with the secretary of state. The measure would use cash from a tax on managed-care well being plans primarily to hike the pay of physicians, hospitals, neighborhood clinics, and different suppliers in Medi-Cal, the state’s model of Medicaid.
For a lot of months, there was no organized opposition. However shortly after Labor Day, a small group of neighborhood advocates, together with the League of Women Voters of California, California Pan-Ethnic Health Network, and The Children’s Partnership, introduced they have been united in opposition to it.
“We should not have the deep pockets that the proponents of the initiative do,” mentioned Kiran Savage-Sangwan, govt director of the California Pan-Ethnic Well being Community. No fundraising has been recorded from opposition teams to date.
Gov. Gavin Newsom hasn’t taken a public stance, however he has warned that the proposal to lock in how proceeds from the managed-care tax are used would hamstring his administration’s ability to deal with the state’s yawning finances hole.
The folks represented by a few of the opposition teams embrace Medi-Cal sufferers who’re among the many state’s most weak — kids, seniors, folks with disabilities, and the chronically unwell — in addition to some employees who present ancillary care to them.
The opponents say that if Proposition 35 passes, the sufferers, employees, and packages they care about might lose thousands and thousands of {dollars} included for them on this yr’s state finances. That’s as a result of the poll measure would supersede the finances, and it leaves them out of the well being tax proceeds.
The finances presently supplies tens of thousands and thousands of {dollars} a yr to lift the pay of neighborhood well being employees, nonemergency medical transport drivers, and private-duty nurses, amongst different personnel. It additionally funds the price of a brand new program, scheduled to begin Jan. 1, that enables kids by means of age 4 to stay on Medi-Cal with out requiring their households to show eligibility yearly. Little one well being advocates say that may assist keep away from probably dangerous gaps in protection.
Mayra Alvarez, president of The Youngsters’s Partnership, estimates this system would convey protection stability to about 1.2 million California youngsters. However funding for it is going to be in danger if Proposition 35 passes, she warns.
It’s not that the cash for that program, or the pay will increase for ancillary well being care employees, would essentially go away ceaselessly. However advocates must struggle for it in subsequent finances rounds.
Dustin Corcoran, CEO of the California Medical Affiliation, advised me that along with the Medi-Cal pay hikes, and a few funding for medical schooling and additional residency slots, the initiative would offer $2 billion a yr in 2025 and 2026 to the state’s normal fund, “which the legislature can applicable as they see match, which vastly exceeds the price of the packages you talked about.” CMA and Deliberate Parenthood Associates of California are main the cost on Proposition 35.
Corcoran’s feedback counsel that the teams anxious about shedding funding if Proposition 35 passes ought to be capable of get it restored in future budgets. Given the present fiscal disaster, nevertheless, not everyone seems to be shopping for it.
“We’re quick tens of billions of {dollars},” says Ramon Castellblanch, vice chairman of the California Alliance for Retired Americans, which opposes the measure. “For these folks to say, ‘Wait, the final fund goes to cowl it’ — is that known as gaslighting?”
Proposition 35 proponents say that kids, seniors, and disabled or chronically unwell folks additionally use medical doctors, hospitals, and neighborhood clinics, for which the measure does present extra cash.
They argue the initiative will go a good distance towards addressing Medi-Cal’s traditionally low pay charges, engaging extra suppliers to take part in this system and enabling those that already do to take extra Medi-Cal sufferers.
“This would be the most vital funding within the Medi-Cal system because the Reasonably priced Care Act,” Corcoran says. “I feel it holds nice promise for improved entry to care, improved high quality of care, shorter wait occasions for all Californians in our ERs, and elimination of well being care deserts which can be popping up in too many elements of our state.”
One other concern raised by Proposition 35 skeptics is {that a} long-threatened change in federal guidelines governing how states gather managed-care taxes to fund Medicaid might torpedo the plans of California — and a few of the different 18 states with such a tax.
Proposition 35 units particular greenback quantities by means of 2026, that are based mostly on the managed-care tax authorised by the federal authorities final yr. However the tax, which California has had in some type since 2009, have to be renewed and federally authorised each three years. That implies that the tax requires one other federal approval beginning in 2027, the yr the poll measure would make funding everlasting.
California’s managed-care tax comes from a levy imposed on well being plans, based mostly on month-to-month numbers of each Medi-Cal and business insurance coverage enrollees. The cash raised is matched by the federal authorities, doubling the spending energy.
Federal guidelines require that the well being plans be reimbursed for the tax they pay on their Medi-Cal membership. For the reason that Medi-Cal fee is round 100 occasions as a lot as the speed on business membership, 99% of the income from the tax is on the Medi-Cal aspect, thus holding lots of the well being plans nearly fully innocent and minimizing any impression on premiums.
However the federal authorities has been warning California for years, most recently in a letter it despatched in late 2023 accompanying its approval of the managed-care tax, that it’ll require extra stability between the business and Medi-Cal levies. Have been it to vary the principles in that course, it might trigger a serious headache in California for a few causes.
First, as proponents of Proposition 35 readily acknowledge, there isn’t a political urge for food for a rise within the quantity of tax raised on business well being plan memberships. That’s as a result of it could seemingly result in a revolt by well being plans or a leap in premiums that might anger employers, privately insured people, and loads of different folks. In that case, the one option to comply could be to decrease the tax fee on Medi-Cal enrollment, which might considerably scale back income.
Second, although the poll measure incorporates flexibility for small modifications, it requires a three-fourths majority vote within the legislature for any main modifications. That may be a tall order.
“Say the federal administration comes again and says, ‘You possibly can’t do that anymore,’ which appears seemingly,” says Savage-Sangwan, who can also be a spokesperson for the opposing coalition. “We’re going to be caught with an entire lot much less cash.”
To date, nevertheless, the feds haven’t adopted by means of on repeated warnings, and Proposition 35 proponents appear to be betting the specter of modifications will show nothing greater than bluster.
We’ll see.
This text was produced by KFF Health News, which publishes California Healthline, an editorially impartial service of the California Health Care Foundation.
