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Associated Press
02-04-2025
- Health
- Associated Press
California just blew a deadline for voter-approved health care measure
California voters told lawmakers last fall that they wanted doctors to get paid more to see low-income patients. But officials for the Newsom administration blew past a federal deadline to make that happen through Medi-Cal Monday, effectively leaving millions of dollars unclaimed. The unclaimed money is tied to Proposition 35, a ballot measure passed by 68% of voters in November. The measure committed money from a special tax on health insurance plans to increase payments to doctors and health care facilities that treat low-income patients in Medi-Cal, the state's Medicaid program. But first the state had to submit papers to the federal government for approval. That deadline was March 31. Missing the deadline means that, for the first quarter of the year, doctors will not get the rate increases promised by the ballot measure. It also means that California will lose federal matching dollars intended to boost the Medi-Cal program during that time period. The Department of Health Care Services, the agency that oversees Medi-Cal and the implementation of Prop. 35 did not respond by publication deadline to questions from CalMatters about why the state missed the funding deadline. In recent legislative hearings, Health Care Services Director Michelle Baass stated that California's federal application was delayed by unfilled appointments on the advisory committee established by the ballot measure to oversee spending. Enough of those appointments were filled for the committee to legally meet, but there is still one outstanding appointment. Gov. Gavin Newsom's office refused to respond to questions about why the appointment has not been made. The committee is set to meet for the first time April 14. During a February hearing, another official for the health care services department said the agency never believed it would be feasible for the state to meet the March deadline. The slow implementation is frustrating lawmakers and clinicians alike who say rate hikes are long overdue and necessary to increase access for Medi-Cal recipients. Assemblymember Dawn Addis, a Democrat from Morro Bay, said in a recent hearing that Prop. 35 was 'widely popular' and she had supported it with the hope that rate increases would begin quickly. Lawmakers have aggressively expanded Medi-Cal benefits and eligibility in the past 10 years. Today, one in three Californians get health care through the state program. But doctors say the amount they get paid to see Medi-Cal patients hasn't increased in two decades. Addis said during the hearing that '94% of Californians now have health care coverage, but so many folks can't access providers. And what people in rural areas will point to is that providers just simply cannot afford to practice in rural areas because the reimbursement is so low.' In a separate legislative hearing, Sen. Akilah Weber Pierson noted that even with the unfilled position, the advisory committee has a quorum and could have met to discuss Prop. 35 implementation. 'This was something the voters were very, very clear about…I don't think the residents would like for us to delay,' said Weber Pierson, a Democrat and obstetrician from San Diego. 'It is extremely unfortunate that we will not be able to meet that first deadline and that we are just leaving funds on the table.' Medi-Cal shortfall as costs increase The missed deadline comes at a time when California is confronting other Medi-Cal challenges. The state is bracing for potential federal funding cuts that are tied to budget agreements moving through Congress. And, the state program faces its own shortfall. Newsom and the Department of Health Care Services are under increased scrutiny for requesting a $6 billion state loan to carry out Medi-Cal operations through the end of the year. State Republican lawmakers were quick to pin the blame on Newsom's expansion of Medi-Cal access to all income-eligible immigrants who don't have permanent legal status. The administration defended the expansion and pointed to other cost drivers such as increasing pharmacy costs and growing senior enrollment, but acknowledged that about half of the money from the deficit is from the immigrant expansion. Newsom also blamed the Medi-Cal deficit partially on Prop. 35 in an interview with reporters earlier this month. 'Prop. 35 placed a lot of cost burdens as it relates to rates and so all those things have to be factored in. The voters chose that path with Prop 35, and we were clear, had strong opinions about it. The cost of (Prop. 35) would increase the cost of Medicaid and that's happening,' Newsom said. Health care industry backed Prop. 35 Prior to the election, Newsom stopped short of opposing the measure but said Prop. 35's passage would limit the Legislature's ability to address future state budget deficits because it committed the money to a specific use. Prop. 35 was backed by nearly the entire health care industry, including doctors, hospitals, clinics and ambulance companies. Those groups supported the measure in part because Newsom and past governors had previously reneged on promises to increase Medi-Cal payments and instead used the health care tax money to support general government expenses. The proposition allocates $2 billion annually for 2025 and 2026 to the state general fund while reserving roughly another $2 billion for rate increases and other investments providers want. Stuart Thompson, a lobbyist for the California Medical Association, which supported the measure, advocated at a March legislative hearing for the Prop. 35 committee to meet as soon as possible. Thompson noted that some payment increases that were approved separately by the Legislature in 2023 have still not been implemented and that the state needs to work to keep the ballot measure on track. 'We really want to get our bang for the buck and make sure that the way that Prop 35 is implemented really enhances the care for the most needed here in California,' Thompson said. ___ ___
Yahoo
19-03-2025
- Health
- Yahoo
California has a $6.2 billion Medicaid funding gap partly due to expanding immigrant coverage
SACRAMENTO, Calif. (AP) — California faces a $6.2 billion budget gap in the state's Medicaid services, which could force Democratic Gov. Gavin Newsom and Democratic lawmakers to reevaluate future coverage for some of the 15 million people who receive health care through the program, including immigrants. The shortfall comes a year after California launched an ambitious coverage expansion to provide free health care to all low-income adults regardless of their immigration status. That's costing far more than the state projected. California also is bracing for major budget hits if Republicans in Congress follow through with a plan to slash billions of dollars in Medicaid and potentially jeopardize coverage for millions of people. California provides free health care to more than a third of its 39 million people. Here's what to know about California's Medicaid gap: Did expanding coverage to adult immigrants cause the gap? Partly. California first extended health care benefits to low-income children without legal status in 2015 and later added the benefits for young adults and people over the age of 50. The program was expanded again last year to cover adults ages 26 to 49. The cost of the recent expansion to cover all low-income adults is $2.7 billion more than the state budgeted because California underestimated the number of people who would sign up for services. California officials said they only had a month of data last year when the state had to produce projections for the budget. The state hasn't said how many people have enrolled through the expansion. Last year, the state projected about 700,000 state residents who are living in the U.S. illegally would gain full health coverage to access preventive care and other treatment. Other factors that are putting pressures on state budgets across the country also played a role in California, state officials said. Those included $540 million in rising pharmacy costs and $1.1 billion from other issues, such as a larger enrollment by older people. In Illinois, which also expanded coverage in recent years to more low-income residents regardless of immigration status, Democratic Gov. JB Pritzker is proposing a $330 million cut to coverage for immigrants ages 42 to 64, citing rising costs. What is California doing about the shortfall? Newsom's administration last week told lawmakers it took out a $3.44 billion loan, the maximum allowed under state law, from the general fund to make payments for this month. The Department of Health Care Services, which oversees the state's Medicaid program, this week said it will need an additional $2.8 billion to cover costs already committed through June. That money will need to be approved by the Legislature in April. The state has proposed ending pandemic-era protections that have prevented it from disenrolling people from Medicaid. Newsom's administration is also bracing for 'significant variability' after President Donald Trump's immigration crackdown. Will California roll back coverage for immigrants without legal status? Newsom told reporters this week that rolling back the coverage expansion 'is not on my docket.' Other Democratic leaders, including Speaker Robert Rivas and Senate President Pro Tempore Mike McGuire, also vowed to safeguard benefits for immigrants but acknowledged 'tough choices ahead.' The budget hole has reignited criticism from Republican lawmakers about the expansion. 'Californians should not be forced to shoulder the burden of radical Democrats' reckless financial mismanagement,' state Sen. Brian Jones said in a social media post this week. Newsom recently defended the expansion in one of his podcast episodes, adding that making preventive care accessible to all low-income people helps save the state money in the long run. How will Congress' plan to cut Medicaid funding affect California? The $6.2 billion budget gap is 'solvable," lawmakers said this week. But Congress' threats of a Medicaid funding cut could add further strain. California would have to cut coverage, limit enrollment or raise taxes to help cover the costs if Congress follows through. State officials said they're certain it would upend coverage for millions of people in the state. Even with the largest state budget in the country at roughly $322 billion, California doesn't have the capacity to backfill services funded by the federal government, officials said. More than half the state's Medicaid funding comes from the federal government. For the next fiscal year, that's roughly $112.1 billion. Federal funding doesn't cover costs related to preventive care for immigrants without legal status.
Associated Press
19-03-2025
- Health
- Associated Press
California has a $6.2 billion Medicaid funding gap partly due to expanding immigrant coverage
SACRAMENTO, Calif. (AP) — California faces a $6.2 billion budget gap in the state's Medicaid services, which could force Democratic Gov. Gavin Newsom and Democratic lawmakers to reevaluate future coverage for some of the 15 million people who receive health care through the program, including immigrants. The shortfall comes a year after California launched an ambitious coverage expansion to provide free health care to all low-income adults regardless of their immigration status. That's costing far more than the state projected. California also is bracing for major budget hits if Republicans in Congress follow through with a plan to slash billions of dollars in Medicaid and potentially jeopardize coverage for millions of people. California provides free health care to more than a third of its 39 million people. Here's what to know about California's Medicaid gap: Did expanding coverage to adult immigrants cause the gap? Partly. California first extended health care benefits to low-income children without legal status in 2015 and later added the benefits for young adults and people over the age of 50. The program was expanded again last year to cover adults ages 26 to 49. The cost of the recent expansion to cover all low-income adults is $2.7 billion more than the state budgeted because California underestimated the number of people who would sign up for services. California officials said they only had a month of data last year when the state had to produce projections for the budget. The state hasn't said how many people have enrolled through the expansion. Last year, the state projected about 700,000 state residents who are living in the U.S. illegally would gain full health coverage to access preventive care and other treatment. Other factors that are putting pressures on state budgets across the country also played a role in California, state officials said. Those included $540 million in rising pharmacy costs and $1.1 billion from other issues, such as a larger enrollment by older people. In Illinois, which also expanded coverage in recent years to more low-income residents regardless of immigration status, Democratic Gov. JB Pritzker is proposing a $330 million cut to coverage for immigrants ages 42 to 64, citing rising costs. What is California doing about the shortfall? Newsom's administration last week told lawmakers it took out a $3.44 billion loan, the maximum allowed under state law, from the general fund to make payments for this month. The Department of Health Care Services, which oversees the state's Medicaid program, this week said it will need an additional $2.8 billion to cover costs already committed through June. That money will need to be approved by the Legislature in April. The state has proposed ending pandemic-era protections that have prevented it from disenrolling people from Medicaid. Newsom's administration is also bracing for 'significant variability' after President Donald Trump's immigration crackdown. Will California roll back coverage for immigrants without legal status? Newsom told reporters this week that rolling back the coverage expansion 'is not on my docket.' Other Democratic leaders, including Speaker Robert Rivas and Senate President Pro Tempore Mike McGuire, also vowed to safeguard benefits for immigrants but acknowledged 'tough choices ahead.' The budget hole has reignited criticism from Republican lawmakers about the expansion. 'Californians should not be forced to shoulder the burden of radical Democrats' reckless financial mismanagement,' state Sen. Brian Jones said in a social media post this week. Newsom recently defended the expansion in one of his podcast episodes, adding that making preventive care accessible to all low-income people helps save the state money in the long run. How will Congress' plan to cut Medicaid funding affect California? The $6.2 billion budget gap is 'solvable,' lawmakers said this week. But Congress' threats of a Medicaid funding cut could add further strain. California would have to cut coverage, limit enrollment or raise taxes to help cover the costs if Congress follows through. State officials said they're certain it would upend coverage for millions of people in the state. Even with the largest state budget in the country at roughly $322 billion, California doesn't have the capacity to backfill services funded by the federal government, officials said. More than half the state's Medicaid funding comes from the federal government. For the next fiscal year, that's roughly $112.1 billion. Federal funding doesn't cover costs related to preventive care for immigrants without legal status.
Politico
18-03-2025
- Health
- Politico
Newsom's office seeks another $2.8B to plug Medicaid gap
SACRAMENTO, California — Gov. Gavin Newsom's administration is asking for an extra $2.8 billion immediately for the state's Medicaid program, Medi-Cal, on top of a recently proposed $3.44 billion loan. New budget figures laid out to state lawmakers on Monday showed the state will need to allocate additional funds from the general fund to fully cover Medi-Cal bills through the end of the year, after the loan proposed by the administration last week. The figures also show that the biggest contributor to this year's Medi-Cal hole is the insurance of undocumented immigrants, which is costing $2.7 billion more than the state had planned. The new budget figures come as California navigates what has become a larger politically-charged debate over insuring undocumented immigrants — part of Newsom's pledge to bring the state closer to universal health care coverage, regardless of immigration status. The state is trying to balance that promise with increased scrutiny of its immigration policies from the Trump administration in Washington. 'We took these steps because it's important to maintain our commitment to our providers and plans to make timely payments for the remainder of the current year to ensure Californians and those on Medi-Cal get the services,' Michelle Baass, the director of the Department of Health Care Services, told state lawmakers in an Assembly budget subcommittee hearing Monday. A host of other changes to the Medi-Cal program in the last year have kept enrollment higher than anticipated — a factor Baass has noted is contributing to the overall shortfall aside from coverage for undocumented immigrants. Between the loan and the extra $2.8 billion, Baass said, the program will be able to cover its bills through the end of the year. Why it matters: The higher costs reflect some of the most pressing issues in health care nationwide: the rising price of pharmaceuticals, a larger aging population and the coverage of undocumented immigrants through public insurance programs. The budget issues are especially pertinent now as congressional Republicans debate hundreds of billions of dollars in cuts to Medicaid at the federal level, throwing nearly every aspect of the Medi-Cal coverage into question. 'Trump and the Republicans in Congress are trying to take a wrecking ball to Medicaid,' state Senate Budget Chair Scott Wiener separately told POLITICO. 'Depending what they do to Medicaid, it could dwarf the amount [of the loan] that was disclosed by the [Newsom] administration last week.' The loan: Last week, the Newsom administration announced it would need to borrow $3.44 billion — the maximum amount allowed for the state — to cover Medi-Cal's costs through the end of March. The news came as a surprise to some lawmakers, prompting questions about the scale of the problem, as well as criticism from Republicans over the costs for undocumented residents. Wiener voiced criticism to POLITICO about calls to completely cut coverage for undocumented Californians, who work and pay taxes into statewide programs like Medi-Cal — a sentiment voiced by other Democrats in the Assembly. 'While some have sought to politicize this loan request, and they see it as an opening to attack the most vulnerable Californian communities, we should all be clear about what the greatest threat to California's ability to provide health care really is,' said subcommittee chair Assemblymember Dawn Addis on Monday. 'It is our own federal government that appears fixated on rectifying years of its own mismanagement on the backs of those with the least economic means who are seniors, people with disabilities and others in our community,' she added. Baass laid out several other reasons why this year's Medi-Cal budget was so much higher than expected: Cash flow has been uncertain to manage because of changes to a tax on certain health care plans; enrollment that was higher than anticipated because of some program changes leftover from the Covid-19 pandemic; and the full expansion of Medi-Cal to everyone regardless of immigration status in 2024. This year: In addition to the higher-than-expected cost for undocumented immigrants, the increased cost of prescription drugs accounts for $540 million of the $2.8 billion gap identified Monday, especially pricey diabetes drugs like Ozempic. Another $1 billion overrun is from a variety of other costs, like more seniors being on the program than in years past. There's also $1 billion less to play with in the budget, because November's Proposition 35 set out strict requirements for using the managed care organization tax that administration officials had planned on tapping into. Next year: The Newsom administration is proposing an extra $4.4 billion in the 2025-26 budget, or an 11.8 percent increase, for the state's insurance program. The largest driver of that increase — $3.6 billion — is MCO tax revenue that now will be diverted to the spending priorities laid out in Prop 35. Next year's budget will also have to contend with an estimated $215 million increase in pharmacy costs and a $269 million increase in other costs.
Yahoo
18-03-2025
- Health
- Yahoo
Newsom's office seeks another $2.8B to plug Medicaid gap
SACRAMENTO, California — Gov. Gavin Newsom's administration is asking for an extra $2.8 billion immediately for the state's Medicaid program, Medi-Cal, on top of a recently proposed $3.44 billion loan. New budget figures laid out to state lawmakers on Monday showed the state will need to allocate additional funds from the general fund to fully cover Medi-Cal bills through the end of the year, after the loan proposed by the administration last week. The figures also show that the biggest contributor to this year's Medi-Cal hole is the insurance of undocumented immigrants, which is costing $2.7 billion more than the state had planned. The new budget figures come as California navigates what has become a larger politically-charged debate over insuring undocumented immigrants — part of Newsom's pledge to bring the state closer to universal health care coverage, regardless of immigration status. The state is trying to balance that promise with increased scrutiny of its immigration policies from the Trump administration in Washington. 'We took these steps because it's important to maintain our commitment to our providers and plans to make timely payments for the remainder of the current year to ensure Californians and those on Medi-Cal get the services,' Michelle Baass, the director of the Department of Health Care Services, told state lawmakers in an Assembly budget subcommittee hearing Monday. A host of other changes to the Medi-Cal program in the last year have kept enrollment higher than anticipated — a factor Baass has noted is contributing to the overall shortfall aside from coverage for undocumented immigrants. Between the loan and the extra $2.8 billion, Baass said, the program will be able to cover its bills through the end of the year. Why it matters: The higher costs reflect some of the most pressing issues in health care nationwide: the rising price of pharmaceuticals, a larger aging population and the coverage of undocumented immigrants through public insurance programs. The budget issues are especially pertinent now as congressional Republicans debate hundreds of billions of dollars in cuts to Medicaid at the federal level, throwing nearly every aspect of the Medi-Cal coverage into question. 'Trump and the Republicans in Congress are trying to take a wrecking ball to Medicaid,' state Senate Budget Chair Scott Wiener separately told POLITICO. 'Depending what they do to Medicaid, it could dwarf the amount [of the loan] that was disclosed by the [Newsom] administration last week.' The loan: Last week, the Newsom administration announced it would need to borrow $3.44 billion — the maximum amount allowed for the state — to cover Medi-Cal's costs through the end of March. The news came as a surprise to some lawmakers, prompting questions about the scale of the problem, as well as criticism from Republicans over the costs for undocumented residents. Wiener voiced criticism to POLITICO about calls to completely cut coverage for undocumented Californians, who work and pay taxes into statewide programs like Medi-Cal — a sentiment voiced by other Democrats in the Assembly. 'While some have sought to politicize this loan request, and they see it as an opening to attack the most vulnerable Californian communities, we should all be clear about what the greatest threat to California's ability to provide health care really is,' said subcommittee chair Assemblymember Dawn Addis on Monday. 'It is our own federal government that appears fixated on rectifying years of its own mismanagement on the backs of those with the least economic means who are seniors, people with disabilities and others in our community,' she added. Baass laid out several other reasons why this year's Medi-Cal budget was so much higher than expected: Cash flow has been uncertain to manage because of changes to a tax on certain health care plans; enrollment that was higher than anticipated because of some program changes leftover from the Covid-19 pandemic; and the full expansion of Medi-Cal to everyone regardless of immigration status in 2024. This year: In addition to the higher-than-expected cost for undocumented immigrants, the increased cost of prescription drugs accounts for $540 million of the $2.8 billion gap identified Monday, especially pricey diabetes drugs like Ozempic. Another $1 billion overrun is from a variety of other costs, like more seniors being on the program than in years past. There's also $1 billion less to play with in the budget, because November's Proposition 35 set out strict requirements for using the managed care organization tax that administration officials had planned on tapping into. Next year: The Newsom administration is proposing an extra $4.4 billion in the 2025-26 budget, or an 11.8 percent increase, for the state's insurance program. The largest driver of that increase — $3.6 billion — is MCO tax revenue that now will be diverted to the spending priorities laid out in Prop 35. Next year's budget will also have to contend with an estimated $215 million increase in pharmacy costs and a $269 million increase in other costs.
