Newsom’s May Revised budget proposal further promotes health care affordability and equity


Soraya Marashi


Gov. Gavin Newsom’s long-awaited May Revision of his proposed budget for FY 22-23 was released on Friday, proposing a total of $227.6 billion ($67.4 billion General Fund (GF)) for all health and human services programs. This is a $10 billion increase from Newsom’s January proposal.


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The image below is a breakdown of allocations for health and human services programs, encompassing both state and federal funds. 

Here are some new additions to Newsom’s budget reflected in the May Revision that we’ll be watching:


  • $57 million GF added to the $68 million included in the January proposal to expand access to reproductive health care.


  • $304 million GF to reinstitute California’s premium subsidy program for middle-and-low- income Californians who did not qualify for subsidies under the Affordable Care Act prior to the enactment of ARPA. The proposal indicates that the program would be reinstituted if federal action is not taken to extend ARPA premium subsidies for 2023 and beyond.



  • $50 million in total funds for a two-year grant program to provide technical assistance to small or under-resourced providers, particularly small physician practices, rural hospitals, and community-based organizations, for participation in a statewide health and human services data exchange framework.


  • $290 million GF one-time allocation for investments to implement a multi-pronged approach to address the youth mental health crisis, including through a youth suicide prevention program, crisis response system, wellness and mindfulness programs, and digital supports for mental health assessment and intervention.



  • $41.8 million for a one-time Opioid Settlements Fund in 2022-2023 for workforce training, naloxone distribution, and a public awareness campaign.


  • $36.3 million GF in 2022-2023 and ongoing funding to continue the implementation of the Master Plan for Aging.


  • $135.5 billion in total funds ($36.6 billion GF) in 2022-2023 for Medi-Cal. The May Revision notes that the Medi-Cal caseload is projected to increase by approximately 0.6% from 2021-2022 to 2022-2023, and that Medi-Cal is projected to cover approximately 14.5 million Californians in 2022-2023. 


  • $176.5 million in total funds ($71.2 million GF) to permanently extend 4 flexibilities from the public health emergency: separation of payments to Federally Qualified Health Centers for COVID-19 vaccinations, presumptive eligibility for older adults and individuals with disabilities, a 100% Medicare reimbursement rate for oxygen and respiratory durable medical equipment, and maintenance of 10% rates for Intermediate Care Facilities for the Developmentally Disabled. 


  • $146 million in total funds ($73 million GF) over 2 fiscal years to support counties with additional workload costs performing Medi-Cal eligibility determinations, including through coverage ambassadors and a media and outreach campaign. 


  • $280 million in total funds ($132.7 million GF) for a new Workforce and Quality Incentive Program for payment to skilled nursing facilities that meet quality benchmarks or make substantial improvements. 


  • $933 million in total funds for one-time payments to approximately 600,000 California hospital and nursing facility workers who have been delivering care to the most acute patients during the pandemic, as a method of health care worker retention. 


  • $300 million in total funds ($150 million GF), available over 5 years, for Equity and Practice Transformation payments to focus on advancing equity, addressing COVID-19-driven health disparities, and improving quality measures in children’s preventive, maternity, and behavioral health care. This additional funding would build on the $400 million in total funds ($200 million GF) included in the January proposal.


  • $42.4 billion in total funds ($16.5 billion GF) for Department of Social Services (DSS) programs in 2022-2023, including CalWORKs, CalFresh, Child Welfare Services, and In-Home Supportive Services (IHSS). 


  • $12.7 billion in total funds ($7.6 billion GF), building on Department of Developmental Services (DDS) investments made in the 2021 Budget Act, to fully implement service provider rate reform and fund things like system stability, workforce development, and service access and equity. The May Revision estimates that approximately 400,485 individuals will receive services by the end of 2022-2023. 


  • $185.3 million GF one-time allocation in 2022-2023 and $1.1 million in total funds ($881,000 GF) ongoing to address challenges in recruiting and retaining regional center service coordinators and direct support professionals (DSPs), including through a tuition reimbursement program and training stipends. 


  • $6.5 million GF in 2022-2023, increasing to $29.5 million GF in 2024-2025, to support adjustments in identifying children with signs of developmental delays. These supported adjustments would include a service access and equity grant program, and financial management services for self-determination program participants. 


  • $6.7 billion in total funds ($1.1 billion GF) in 2022-2023 for the Department of Public Health. A significant amount of these funds will be allocated to medical surge staffing for facilities needing additional staff during COVID-19 surges, as well as testing, vaccines, enhanced surveillance, and Test-to-Treat therapeutics


  • $3.2 billion in total funds ($3 billion GF) in 2022-2023 for the Department of State Hospitals, whose patient population is projected to reach 8,289 by the end of 2022-2023. This includes funding for solutions to a significant growth in trial court referrals of individuals found incompetent to stand trial on felony charges.


Organizations like the California Association of Health Plans (CAHP) and the California Medical Association (CMA) have responded positively to the May Revision. In their statement, CAHP applauded Newsom’s proposed increased investments in health insurance premium assistance for low and middle-income families, as well as the behavioral health system for children and youth. 

“California’s health plans are looking forward to working in partnership with the Newsom administration as we move closer than ever to achieving universal health care, by providing health coverage to all low-income Californians, regardless of their immigration statusan effort health plans have long supported …” said Charles Bacchi, President and CEO of the CAHP in the statement. 

“We applaud the $304 million investment to extend health insurance premium assistance under Covered California for families of four earning up to $166,500 annually, which will help make health coverage more affordable for middle-income families. The Governor’s continued focus and additional $290 million funding request dedicated to transforming California’s behavioral health system for children and youth is more critical than ever, and California’s health plans are committed to working with the administration to ensure that all of California’s young people receive the behavioral health care services they need and deserve.”

CMA praised the investments toward supplemental and retention payments for providers.

“Our state is fortunate to have resources to support those who are struggling the most among us, and CMA will continue to advocate on behalf of the 13.5 million Californians that rely on critical Medi-Cal programs for their health care,” CMA President Robert E. Wailes, MD said in a statement. 

“As we enter the third year of the pandemic and our health care workforce continues to face the unprecedented crisis head-on, we applaud the governor’s plan to provide payments to retain our frontline health care workers and to boost funding for vaccinations that will protect patients and keep our communities safe and healthy.”

The California Pan-Ethnic Health Network (CPEHN), however, criticized the revised budget proposal’s continued omission of the Health Equity and Racial Justice Innovation Fund

“We must do more to recognize racism as a public health crisis, and to fund interventions that tackle inequities at their root,” CPEHN’s Executive Director Kiran Savage-Sangwan said in a statement. “Communities of color have borne the brunt of COVID-19 as well as the economic ramifications of the pandemic. Without targeted relief and transformative investment, this status quo will remain. We are disappointed to see the Health Equity and Racial Justice Innovation Fund, a bold investment in racial equity and community resilience, left out once again. 

We also urge the Governor and the Legislature to focus continued COVID-19 response funding and economic relief funding on the most vulnerable Californians. California led the nation in pandemic response due to a strong and equity-focused effort.”

Newsom and the legislature have until June 15th to hash out differences in their respective budgets and sign the final budget into law.