Newsom’s budget prioritizes CalAIM and behavioral health, organizations have mixed responses


Soraya Marashi


On Jan. 10, Gov. Gavin Newsom released his proposed budget for Fiscal Year (FY) 2022-2023,  proposing a total of $217.5 billion for all health and human services programs. This includes $93.5 billion in general funds, 52.4% of which is allocated to the Department of Health Care Services (DHCS) to support numerous DHCS initiatives and services related to behavioral health, CalAIM programs, health equity, and COVID-19 response.


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Below is a breakdown of general fund allocations.


Image: 2022-23 California Governor’s Budget


Here are some budget highlights we’ll be watching:


  • $2.8 billion total funds in 2022-2023, $2.4 billion total funds in 2023-2024, and $1.6 billion total funds in 2024-2025, are devoted to CalAIM initiatives. $50 million total funds is specifically allocated to implement CalAIM justice-related initiatives. This funding includes resources to support the design and launch of these initiatives which aim to provide key services to incarcerated individuals (90 days prior to release) by enrolling them in Medi-Cal coverage and connecting them with behavioral health, social services, and other providers that can support their re-entry. 


  • The proposed budget includes $819.3 million total funds in 2023-2024 and $2.7 billion annually to expand full-scope Medi-Cal eligibility to all income-eligible adults aged 26 through 49 regardless of immigration status.


  • To fund the new Providing Access and Transforming Health (PATH) initiative, which aims to support communities that have been historically underserved, Newsom is calling for $1.3 billion total funds over five years for PATH to support the development of Enhanced Care Management and Community Supports in CalAIM, as well as $561 million to support implementation of CalAIM justice-related initiatives.


  • $400 million total funds are proposed for equity and practice transformation payments intended to provide resources to qualifying Medi-Cal providers to help them close health equity gaps, address gaps in preventive, maternity, and behavioral health care measures, and address gaps in care resulting from the COVID-19 public health emergency. 


  • The budget also includes $20 million total funds in 2022-2023 and $24 million total funds ongoing to eliminate Assembly Bill 97 payment reductions for nurses, respiratory care providers, alternative birthing centers, and other providers. 


  • As part of the Children and Youth Behavioral Health Initiative, the proposed budget includes $87 million total funds to implement dyadic services, $429 million to for evidence-based behavioral health practices, $450 million total funds for school behavioral health partnerships and capacity, and $230 million total funds for the Behavioral Health Services and Supports Platform and related e-consult service and provider training. 


  • $53 million total funds in 2022-2023 and $18 million total ongoing funds, as well as trailer bill language, are included to reduce premiums to zero for services under the Children’s Health Insurance Program (CHIP) and the 250% Working Disabled Program.


  • DHCS is allocated $1.5 billion total funds for behavioral health bridge housing that will address the immediate housing and treatment needs of individuals experiencing homelessness with serious behavioral health conditions. These supports will include the installation of tiny homes and assisted living settings.


  • Mobile crisis services are also funded in the proposed budget, with $108 million total funds for adding 24/7 community-based mobile crisis intervention services as a mandatory Medi-Cal benefit for eligible beneficiaries statewide starting Jan. 1, 2023. This benefit will be implemented through county behavioral health delivery systems.


  • $96 million total funds will go toward the expansion of the medication assistance treatment (MAT) program for those struggling with opioid abuse.



  • DHCS is allocated $304 million total funds for renewal of the Home and Community-Based Alternatives (HCBA) Waiver. This waiver renewal will implement several changes, including the expansion of the Community Transition Service and the addition of assistive technology as a new waiver service.


  • $12 million total funds will be allocated to restore local assistance grant funding in the Indian Health Program, which will be distributed to 45 Tribal and urban Indian health clinic corporations via a competitive grant program on a “need”-and-“performance”-driven basis.


  • Newsom is allocating $11.1 billion total funds for COVID-19 pandemic response for FY 2022-2023, encompassing continuous Medi-Cal coverage requirements, testing in schools, vaccine administration, and funding for county redeterminations. 


The California Association of Health Plans (CAHP) stated they strongly supported the Governor’s legislative priorities, especially the expansion of Medi-Cal coverage for undocumented Californians.

“CAHP supports expanding health care coverage to all Californians, regardless of immigration status. The Governor’s commitment to extend Medi-Cal to the remaining uninsured undocumented Californians of all ages is a historic move toward achieving universal coverage in California. With 94 percent of Californians currently covered, this will bring us closer than ever to finally closing the uninsured gap.”

CAHP also stated its support of the funding included for CalAIM initiatives.

Our Medi-Cal Managed Care plans look forward to working with the Department of Health Care Services on implementing this innovative program designed to address complex health needs, reduce health disparities, and improve health outcomes for our state’s most vulnerable.”

However, several community-based organizations (CBOs) have voiced their disappointment over Newsom’s failure to directly allocate funding to CBOs, clinics, and tribal organizations. Particularly, they are disappointed the governor didn’t allocate any funding to establish the Health Equity and Racial Justice Fund

The Health Equity and Racial Justice Fund Co-Sponsors said:

“Today, we expected no less than $100 million to flow to our historic, bold, and innovative fund … Proposals in the budget continue to be top-down, with the Administration prescribing both the issues and the solutions. That approach has not been successful in eliminating health disparities. Community-based organizations, clinics, and tribal organizations … are at the forefront of addressing the health and racial disparities on the ground. State data does not always reflect local data and specific local needs, which community-based organizations, clinics, and tribal organizations are directly tied into and knowledgeable about.”

The California Pan-Ethnic Health Network also criticized Newsom’s omission of direct funding for CBOs:

“California continues to make investments towards addressing the symptoms of racial and economic inequity, without resourcing and funding communities to address the root causes. The Administration funds healthcare, for when people get sick and go to the hospital, but does not address what makes them sick. The places people live, work, and play are riddled with the impacts of redlining, segregation, and centuries of divestment and exclusion.

… With yet another surplus, projected at $45.7 billion, California has more than enough resources to address both health equity and racial justice together. What we lack year over year is the political will to fund anti-racism work directly. We are disappointed that the Governor’s proposed budget excludes ongoing funding to community-based organizations, clinics, and tribal organizations to address racial equity.”