Where California’s budget stands on health funding

As the June 15 budget deadline approaches, California’s 2019 Budget Conference Committee is rapidly working to hash out the differences between the Senate’s, Assembly’s, and Governor’s versions of the budget.

Gov. Gavin Newsom’s May Revise featured a mix of new spending proposals, increasing the state’s overall spend by nearly $4.5 billion from his proposal in January. The Health and Human Services Agency, in particular, saw a $1.7 billion increase in funding, bringing the agency’s state funding to $66.5 billion ($41.4 billion in General Fund and $25.19 billion in special funds).

 

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Following the May Revise, the Legislative budget committees released their own versions of the budget.

On Monday, the conference committee held a meeting to discuss differences between the versions of the budget related to health and human services. While all three versions of the budget feature similar health priorities — including investments in access, workforce, and Medi-Cal — there are differences in the details.  

 

Access & Affordability

The governor’s latest proposal includes a variety of funding aimed at improving access and affordability of health care. This includes $295.3 million in 2019-20, $330.4 million in 2020-21, and $379.9 million in 2021-22 for premium subsidies to offer financial assistance to individuals with incomes between 200 and 600 percent of the Federal Poverty Level.

The budget also allocates $8.2 million, ongoing, toward implementing a statewide individual mandate. Penalty revenue from the mandate would go toward funding Newsom’s proposed subsidy expansions.

The Assembly budget defers on subsidies and the individual mandate, noting that separate bills addressing those issues are already being addressed in the Legislature.

The Senate budget adds $300 million to the nearly $300 million proposed by the governor to expand subsidies for Californians up to 600 percent FPL, and adopts changes to the trailer bill that would implement the individual mandate. Some of the changes include: exempting Medi-Cal-eligible individuals from the penalty, eliminating the requirement that the subsidies be limited to penalty revenues, and specifying that the mandate would only go into effect if a certain level of minimum subsidies are provided.

 

Workforce investments

All three budgets prioritize investing in California’s health care workforce. The budgets include a one-time expenditure of $50 million for training opportunities in mental health workforce programs. The Assembly’s version sets aside $750,000 for loan repayments for former foster youth serving as mental health providers in provider-shortage areas, and adds $2.7 million to fund psychiatry fellowships. The Senate similarly adds funds for the psychiatry fellowship (but from a different funding source) and adds $1 million for loan repayment for foster youth.

All three budgets invest an additional $120 million in Prop. 56 funds for the Medi-Cal loan repayment program for physicians and dentists who maintain a caseload of 30 percent or more Medi-Cal patients for five years.

$100 million in Newsom’s budget is slated for the 2020-25 Workforce Education and Training (WET) Five-Year Plan to address shortages in the state’s public mental health system. The Assembly and Senate include $35 million for implementation of the plan.

 

Medi-Cal

The governor’s Medi-Cal budget is $23 billion GF for 2019-20. Investments related to Medi-Cal include $250 million in Prop. 56 funds for the Value-Based Payment program with $70 million dedicated to behavioral health integration. The Senate’s version approves the $250 million, while the Assembly cuts the funding to $170 million.

There are significant differences in how the budgets approach expanding Medi-Cal coverage to undocumented adults. Newsom’s budget includes $98 million to expand coverage to adults ages 19 to 25, regardless of immigration status. The Assembly approved language similar to the governor’s.

The Senate’s versions of the budget look to expand Medi-Cal coverage to a larger population. The Senate subcommittee approved the $98 million, along with an additional $62.5 million GF to expand coverage to seniors regardless of immigration status.

The budgets also take different approaches to restoring Medi-Cal optional benefits. Newsom’s budget includes $33.4 million to restore Medi-Cal optical benefits. The Senate approved the optical benefits and added $21.1 million to restore audiology, podiatry, and speech therapy benefits. The Assembly rejected the governor’s budget proposal and instead approved $38.9 million to restore all optional benefits included in the Senate’s proposal, plus optical.

All three budgets include $100 million for Whole Person Care Pilots. The budgets also add $20 million for non-Whole Person Care counties to help them implement programs focused on behavioral health and care coordination. The Conference Budget Committee needed to discuss discrepancies in the funding source.

 

The Legislature has until June 15 to pass the state’s budget. At a recent conference in Sacramento, Newsom said that the “tentative draft deadline” for the budget is Friday.