The legislature passed a new budget on June 13 largely following the governor’s wishes by canceling the planned Medi-Cal increases in 2025. But Newsom hasn’t signed off.

“What was approved represents a two-house agreement between the Senate and the Assembly — not an agreement with the governor,” said H.D. Palmer, spokesperson for the state’s Department of Finance. “We’ll respectfully decline to speculate on what the contours of a final agreement would look like.”

Revenue from the managed-care tax allows the state to draw matching federal dollars, more than doubling the amount available. Federal and state money would also be used to reimburse the health plans for nearly all the taxes they paid, theoretically having no effect on insurance premiums.

California is among 19 states that have such an “MCO tax” in place to help fund their Medicaid programs. Using the tax revenue to pay Medi-Cal providers more is “a generational opportunity to fundamentally fix access to care for Medi-Cal recipients,” said Dustin Corcoran, CEO of the California Medical Association and a spokesperson for the ballot initiative.

Corcoran said internal polling shows the initiative has public support by “very healthy margins,” though he declined to share specific numbers.

If the initiative does end up on the November ballot and is approved, it would override any compromise Newsom strikes with lawmakers. It would restore the previously planned Medi-Cal investments for 2025 and 2026. And it would make the increased funding, and more of it, permanent starting in 2027, though that would require federal approval.

Proponents of the initiative say it is fundamentally a question of health equity. Medi-Cal covers medical and mental health services for nearly 15 million Californians, well over a third of the state, many of them among the poorest and most vulnerable residents. The program has a budget of about $157 billion, including recent expansions to cover all immigrants regardless of legal status and a $12 billion experiment to offer socioeconomic supports not traditionally covered by health insurance.

But access to care is notoriously spotty for many Medi-Cal patients, in part because low payment rates discourage providers from seeing them. The shortage is particularly acute in specialty care.

“Our patients wait months for access to specialists or travel great distances to see them,” said Joel Ramirez, chief medical officer of Camarena Health, a chain of over 20 community clinics based in Madera. “Higher rates would allow for more providers.”

Ramirez said 60% to 70% of Camarena’s patients are on Medi-Cal, many of them farmworkers. “It’s a tall ask for them to find time off work and get the transportation to travel an hour for an appointment,” he said. “Whatever condition that patient has that needs the attention of a specialist is being either untreated or incompletely treated.”

Dougherty, Sutter Medical Center’s ER chief, said that over half of his patients are on Medi-Cal and the ER is always at full capacity, with the waiting rooms jammed and an insufficient number of beds. The initiative, he said, “allows us to hire more staff, add more beds, create more infrastructure for the volume we’re seeing.”

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This article was produced by KFF Health News , which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.