This story is part of California Voices, a commentary forum aimed at deepening understanding of California and shining a spotlight on Californians directly affected by policies, or the lack thereof. Learn more here.
*,.ca-voices-intro > h4:first-child{margin: 0;}.ca-voices-intro p{padding-block-start: 4px;font-size: 14px;line-height: 130%;} .ca-voices-intro a{color: #075E73;font-weight: 700;}@media screen and (min-width: 781px){.ca-voices-intro p{font-size: 16px;}}]]>
Fifteen years ago, California’s budget was in the red after the Great Recession hit personal income tax revenues hard and left then-Governor Arnold Schwarzenegger and lawmakers scrambling to balance the budget.
One of the many ploys they employed was a scheme to obtain more health care funding from the federal government: the state would levy a tax on managed care organizations (Kaiser Permanente was, and remains, by far the largest) and use the revenue to support Medi-Cal, the state’s health care system for the indigent, thereby qualifying them for more federal funding.
Since then, managed care organization provider taxes have been adopted sporadically in one form or another.
After lengthy negotiations, the state reached a comprehensive deal last year to raise $19 billion in new taxes and secure another $16 billion in federal funding that will expand services to more than a third of the state’s 39 million residents who receive Medicare and increase payments to doctors, hospitals and other health care providers.
It would bring billions of dollars to a state budget that was once again plagued by deficits.
The deal began to unravel just a few months later, when Gov. Gavin Newsom acknowledged that the state was facing a bigger deficit because of major errors in revenue projections and wanted to capture a bigger share of health care tax revenue to make up the shortfall. His final budget proposal, released in June, relies on a big chunk of health care funding.
But in the meantime, the coalition that negotiated the 2023 agreement has approved Measure 35 for the November ballot, which makes the health care tax permanent but limits diversion to a few billion dollars for non-health care budget items, putting most of it into expanding Medicare-Cal services and reimbursing providers.
Proposition 35 would negate up to $12 billion in spending over the next few years that was envisioned in Governor Newsom’s budget proposal, effectively putting the state budget back into the red.
Become a CalMatters member today to stay informed, strengthen our nonpartisan news and spread knowledge across California.
While the governor has not formally opposed the measure, he has not hidden his disdain for it.
“This plan inhibits the flexibility that is needed in the times we live in,” he told reporters recently. “I’m not openly opposed to it, but I am implying a view, and there’s probably a lot of reading between the lines here.”
That makes for a strange combination of enemies.
On one side are the big health care companies, major players in California’s largest industry and with the ability to spend tens of millions of dollars to pass legislation. On the other side are the governor, smaller medical groups and non-health care players who depend on the state budget.
Proponents of Proposition 35 argue that health care taxes have always been about improving health care, not balancing the budget.
“The best way to protect the Medicare program and our vulnerable patients is to invest in it,” Jody Hicks, co-chair of the initiative coalition and president of Planned Parenthood Federation of California, told CalMatters. “Every day that patients can see a doctor is a good day, and we need to invest and make sure that continues for as long as possible.”
There are two other aspects to the growing conflict: First, federal officials, who must approve exemptions for which health care taxes qualify for federal funding, are skeptical of using the money for anything other than health care.
Second, Governor Newsom has only a few more years in office, and as that date approaches, his ability to influence events diminishes. He is not yet a lame duck, but if Prop. 15 passes over his objections, it would be a symbolic move in that direction.
“CalMatters sets a high standard, providing hard-hitting reporting and expert journalists who ask the tough questions and hold leaders accountable.”
Marisela, Montrose
Featured CalMatters Members
Our members make our mission possible.
div{flex-basis: unset !important;flex-grow: 1 !important;}.single-post .cm-cta.cm-cta-testimonial h6{text-align: left;}.cm-cta.cm-cta -testimonial .cm-cta-center-col{align-items: center !important;gap: 12px;}.cm-cta.cm-cta-testimonial .primary-cols.wp-block-columns{gap: 40px;} .cm-cta.cm-cta-testimonial .btn-col{flex-basis: fit-content;flex-grow: 0;}.cm-cta.cm-cta-testimonial .cm-cta-center-col > div {flex-basis: auto;}.cm-cta.cm-cta-testimonial .wp-block-buttons{min-width: 98px;}@media screen and (max-width: 782px){.single .cm-cta .cm-cta-testimonial .cm-cta-center-col > div{flex-basis : min-content;}.cm-cta.cm-cta-testimonial > .wp-block-group__inner-container{grid-template-columns: auto;}.cm-cta.cm-cta-testimonial .wp-block- button.btn-light .wp-block-button__link{padding: 7px 24px;}div.cm-cta.cm-cta-testimonial{padding: 16px;}.cm-cta.cm-cta-testimonial h6{text-alignment: left;}.cm-cta.cm-cta-testimonial .primary-cols.wp-block-columns,.cm-cta.cm-cta-testimonial .cm-cta-center-col.is-not-stacked-on-mobile{gap: 16px;}.cm-cta. cm-cta-testimonial .btn-02-detail-05{font-size: 12px;line-height: 16px;}.cm-cta.cm-cta-testimonial .mob-p-12{padding: 12px;}} ]]>
Source link
