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January 2024
CPEHN Commends Governor Newsom for Upholding Vital Health Care Safety Net Amid Budget Challenges, Urges Addressing Wealth Disparity for State’s Vulnerable Residents
Sacramento, CA – CPEHN commends Governor Newsom for preserving California’s health care safety net in the face of a multi-billion-dollar budget deficit. Critical programs that support California’s most vulnerable residents should never be on the table for budget cuts. These programs provide children, families, and workers with basic health, financial, and food support. California made history on January 1st when we became the first state in the county to remove the unjust exclusion of undocumented immigrants from our Medi-Cal program. The budget maintains this commitment, as well as other key Medi-Cal improvements made in recent years.
At the same time, we must do better. The wealthiest Californian’s continue to benefit richly while those who keep the state running struggle to make ends meet. The Governor and Legislature must consider strategies to raise and stabilize revenues while closing California’s extreme and unacceptable racial wealth gap. We cannot expect to achieve health or racial equity while we allow a tiny number of wealthy people and corporations to maintain their status at the expense of the 5 million California children, families, and workers living in poverty.
Additional Comments:
CPEHN commends the Governor for preserving the Medi-Cal expansion for income-eligible undocumented adults, the removal of the Medi-Cal asset test, and other key Medi-Cal program improvements.
We support the Department of Health Care Services in seeking an amendment from the federal government to the Managed Care Organization tax in order to raise more revenue. However, we are disappointed that the Governor continues to exclude community health workers from the provider rate increases supported by the MCO tax. As it stands, community health workers would not receive a rate increase even when they provide the same service as another provider receiving a rate increase. The current rate for community health workers is too low to ensure a living wage, and severely threatens the success of this Medi-Cal benefit.
Finally, we believe that the underlying budget problem is economic inequality and California’s dramatic and unacceptable racial wealth gap. As such, the only true budget solution is to reform our tax system so that those with extreme wealth, which has been amassed as a result of historical and present-day systemic racism and racialized poverty, pay their fair share.
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As California faces a significant budget deficit, the longevity of investments to support community-based and community-informed solutions to achieve health equity are imperative to preserve. The Governor’s proposed January Budget estimates a $37.9 budget deficit, but continues to demonstrate a commitment to programs such as Medi-Cal, behavioral health, and oral health. However, it fails to increase rates for community health workers, promotoras, and representatives (CHW/P/Rs) and we urge the legislature to take action to increase wages for this important workforce. State leaders must do more to address budget shortfalls to ensure California can meet the needs for all state residents to thrive. We must turn to revenue solutions that allow our state to establish the necessary programs and services for all communities to thrive. CPEHN looks forward to working with the Legislature and the Newsom administration to ensure we can continue strong investments towards health equity.
For a full analysis of the issues CPEHN is tracking in the budget (click here)
Medi-Cal
Despite a projected budget deficit, the Governor’s budget preserves critical Medi-Cal coverage expansions and program improvements, including the continued expansion of full-scope Medi-Cal for all Californians regardless of immigration status and the elimination of the assets test for older adults and seniors with disabilities. The Medi-Cal budget includes $157.5 billion ($37.3 billion General Fund) in 2023-24 and $156.6 billion ($35.9 billion General Fund) in 2024-25, a projected decrease of $1.4 billion General Fund compared to the revised 2023-24 expenditures. The proposed budget pays for critical safety-net programs through a combination of programmatic delays of behavioral health initiatives and a proposed $1.5 billion increase to the MCO Tax, subject to legislative approval.
Medi-Cal: Caseload projections: According to the Administration’s figures, Medi-Cal is projected to cover approximately 14.8 million Californians, an increase of 583,000 individuals over 2023 Budget Act estimates, resulting in increased costs of $2.3 billion ($499 million General Fund) in 2023-24. The budget projects a decrease to 13.8 million in 2024-25 likely as a result of the resumption of annual renewals after a three-year hiatus. Since redeterminations began, over 1.1 million individuals have been disenrolled, with communities of color disproportionately impacted. The majority of disenrollments (90%) were due to procedural reasons, rather than eligibility determinations.
Medi-Cal Highlights:
- Maintains Expansion of Full-Scope Medi-Cal for All Californians ($1.4 billion in FY 2023-24, $3.4 billion in 24-25 and approximately $3.7 billion ongoing). The proposed budget moves forward with the expansion of Medi-Cal to over 700,000 income-eligible adults ages 26 to 49 regardless of immigration status, inclusive of In-Home Supportive Services (IHSS), effective January 1, 2024.
- Maintains Asset Limit Elimination ($101.1 million total funds ($50.5 million General Fund) in 2023-24 and $195.4 million total funds ($97.7 million General Fund) in 2024-25). The proposed budget moves forward with elimination of the Medi-Cal asset test for older adults and seniors with disabilities. Complete elimination will reduce barriers for older adults and seniors with disabilities to accessing the Medi-Cal program, by only considering a person’s income for financial eligibility.
- Fails to increase Medi-Cal Community Health Workers, Promotoras, Representatives Rates to at least 87.5% of the Medicare rate: The current Medi-Cal CHW/P/R payment rates starting at $26.66 for a 30-minute of direct contact (face-to-face, telephone, or video call) are deemed insufficient and contribute to the persistence of poverty cycles. Although the state is pursuing an additional $1.5B dollars from the MCO tax, we are deeply disappointed to see the proposal fail to include CHW/P/Rs provider rate increases to at least 87.5% of the comparable Medicare rate at $53.35 for a 30-minute interaction. A mere 10% of CHW/P/R Coalition members felt their current salary covers their basic expenses. The majority of the CHW/P/R workforce in California are women, Latino/x/e and represent other culturally diverse populations underrepresented in the state’s health workforce. Excluding this diverse demographic from the Administration’s proposal may deepen poverty cycles for these workers, exacerbating existing socioeconomic disparities within the communities served by California’s Medi-Cal program.
- Continues Investments in Cal-AIM ($2.4 billion ($811.1 million General Fund) in 2024-25 as well as $24.7 million ($8.6 million General Fund) in 2025-26 increasing to $197.9 million ($69.3 million General Fund) for CalAIM initiatives including full implementation of the housing community supports program, which will allow up to six months of rent or temporary housing to eligible individuals experiencing homelessness or at risk of homelessness transitioning out of institutional care, a correctional facility, the child welfare system, or other transitional housing settings.
- Share of Cost Reform and Continuous Eligibility Still Subject to Contingencies: California’s 2022 Budget Act updated Medi-Cal Share of Cost so seniors and people with disabilities can afford to access needed Medi-Cal services. Additionally, the state adopted a permanent policy of multi-year continuous coverage for children from birth to age five, which will allow children enrolled in Medi-Cal to remain enrolled without having to face administrative hurdles. These changes must be implemented immediately.
- Maintains one-time spending for the California Reproductive Health Access Demonstration Waiver ($200 million ($100 million General Fund): The California Reproductive Health Access Demonstration (CalRHAD), currently pending CMS approval, is set to begin no sooner than July 1, 2024, and will support access to family planning services for Medi-Cal members and support the sustainability of California’s reproductive health provider safety net. By 2026-2027, $85 million of General Fund costs will be offset by federal funding.
MCO Tax & Other Budget Measure to Close Shortfalls:
- Managed Care Tax Changes and Adjustments: The proposed budget includes several changes and adjustments to the Administration’s 2023 MCO Tax Proposal including:
- Seeks Managed Care Organization (MCO) Tax Increase ($1.5 billion): The Governor’s proposed budget requests the Legislature take immediate action to seek an amendment from the federal government to increase the tax to achieve $20.9 billion in total funding to the state, an increase of $1.5 billion compared to the 2023 version of the tax in order to support critical safety-net expansions and enhancements.
- Shifts a portion of MCO Tax revenue proposed for future Medi-Cal provider rate increases to Backfill Medi-Cal Eligibility Expansions and Programs ($3.1 billion): The proposal modifies the MCO Tax revenue spending plan for future targeted Medi-Cal provider rate increases from $11.1 billion (2023 plan) to $8 billion, a decrease of $3.1 billion, to be used instead to support Medi-Cal’s General Fund spending for critical safety-net programs.
- Maintains Medi-Cal provider rate increases agreed upon in 2023 Budget Act ($727 million ($291 million MCO Tax) annually): These include targeted provider rate increases for primary care, obstetric, and non-specialty mental health services to bring rates to at least 87.5% of the Medicare rate, effective January 1, 2024.
- Reduces Proposition 56 funding for physician services supplemental payments ($193.4 million ($77.1 million Proposition 56)): Due to declining Proposition 56 revenue and budgetary challenges with backfilling reduction with General Fund, 2024-2025 supplemental payments to Medi-Cal providers are reduced by $193.4 million. All other Proposition 56 supplemental payments remain fully funded. The Budget includes $907.4 million ($192.6 million General Fund) for all Proposition 56 supplemental payments, inclusive of $465.2 million for physician services. Certain providers currently receiving Proposition 56 supplemental payments, including physician services, will receive MCO Tax rate increases.
- Adds Trigger Language to Health Care Worker Minimum Wage Increases: The 2023 Budget Act (SB 525 – Durazo) increases the minimum wage incrementally to $25 an hour for nearly 500,000 specified health care workers, effective June 1, 2024. The proposed budget seeks early action in January by the Legislature to add an annual “trigger” to make the minimum wage increases subject to General Fund revenue availability, clarify the exemption for state facilities, and make other implementation clarifications.
- Seeks to borrow from the Hospital Building Fund to the General Fund ($50 million): Budgetary loan to the General Fund from the Hospital Building Fund of $50 million that is not currently projected to be used for operational or programmatic purposes.
- Utilizes Safety-Net Reserve ($900 million): The proposal withdraws $900 million from the Safety Net Reserve to maintain existing program benefits and services for the Medi-Cal and CalWORKS programs.
- Increases Waiver Slots for Assisted Living Waiver (ALW) and Home-and Community-Based Services: The proposed budget increases the number of slots for the Assisted Living Waiver and Home-and Community Based Services Waivers, resulting in $10.8 million in General Fund savings in 2024-25.
Medi-Cal Mental Health
- Continued implementation of the behavioral health crisis care continuum ($8 billion total funds): The administration will continue implementation of previous investments across various Health and Human Services departments to expand the continuum of behavioral health treatment and infrastructure capacity, including providing behavioral health services to children and youth. We support the continued implementation, but continue to have concerns about specific components of the crisis care continuum such as law enforcement involvement in the Medi-Cal mobile crisis benefit and the implementation of the CARE Act, which will create a pathway for government officials to place people under state control through involuntary, court-ordered treatment. This will further endanger a person’s autonomy and liberties by criminalizing and institutionalizing people who are unhoused, and will have a disproportionate impact on Black and Brown Californians.
- Expands the Use of Institutions for Mental Disease as part of the BH-Connect Demonstration ($40.6 million total funds ($762,000 General Fund)) set to begin on January 1, 2025: On October 20, 2023, DHCS submitted its application for a Medicaid Section 1115 Demonstration with the intent to improve access and quality of mental health services for Medi-Cal members living with serious mental illness or serious emotional disturbance. If approved by the federal government, the use of Institutions for Mental Diseases (IMDs), inpatient psychiatric and residential treatment facilities with more than 16 beds would expand using Medicaid dollars. This would disproportionately harm the Black, Indigenous, People of Color (BIPOC), and Lesbian, Gay, Bisexual, Transgender, and Queer Plus (LGBTQ+) people of California. This also diverts investment in community-based mental health services and programs, at a time when funds for prevention and early intervention programs are being threatened.
- Children and Youth Behavioral Health Initiative Wellness Coaches ($9.5 million total funds): The state is introducing a new certification program for Wellness Coaches, aimed at helping children and youth through the age of 25. Wellness Coaches will be a benefit in Medi-Cal starting next year, and will be used to alleviate the workload of school psychologists, counselors, and staff providing clinical services at community-based organizations so those providers can focus on youth who may have more complex need. Wellness Coaches will support youth through non-clinical services, including wellness promotion and education, screening, care coordination, individual and group support, and crisis referral. We appreciate the expansion of more community providers in Medi-Cal’s behavioral health program.
Oral Health
- Maintains adult dental benefits in Medi-Cal Dental: Despite a projected budget deficit for 2024-2025, the proposed budget maintains adult dental benefits in Medi-Cal Dental. One of the most significant barriers to accessing oral health care for low-income communities of color is the lack of stable preventive and restorative dental coverage for adults. We commend the Governor for preserving these benefits to ensure communities can continue to access crucial dental services.
Preserves Key Affordability Provisions in Covered California
The proposal maintains key affordability measures approved as part of 2023 Budget Act, including $82.5M for affordability subsidies in Covered CA available starting 2024 and up to $165M annually, starting in FY 2024-25 for additional subsidy assistance for each coverage year of the program after coverage year 2024. As a result of this assistance, 600,000 Californians will benefit from the elimination of deductibles and a reduction in copayments and other cost-sharing for health care services through Covered California.
Public Health & Prevention
- The proposed budget protects investments in local public health funding including $200 million in ongoing funding for local public health infrastructure and $76.5 million in Public Hero as a workforce investment to train the next generation of public health professionals.
Other Workforce Adjustments
- Maintains $57.5 M in FY 24-25 and 25-26 respectively for Community Health Workers/Promotoras/Representatives Initiative Grants: Despite a projected budget deficit for 2024-2025, the proposed budget maintains funds to recruit, train and certify CHW/P/Rs with specialized training to work with populations such as justice involved, unhoused, older adults, or people with disabilities.
- Delays $140.1 million GF to 2025-26 for the HCAI Nursing and Social Work Initiatives: Given lower-than-projected Mental Health Services Act revenue, the Budget also delays $189.4 million Mental Health Services Fund to 2025-26 for the social work initiative, addiction psychiatry fellowships, university and college grants for behavioral health professionals, expanding Master of Social Work slots, and the local psychiatry behavioral health program. Despite the delays, the Budget maintains $974.4 million (General Fund and Mental Health Services Fund) for these initiatives; however, the funds will go out later than originally planned.
Human Services
Projected CalWORKs Grant Increase —The budget includes an approximate 0.8-percent increase to CalWORKs Maximum Aid Payment levels, with an estimated cost of $26.7 million, is projected to begin October 1, 2024. A determination and update of the projected grant increase will be made at the May Revision. These projected increased costs would be funded entirely by the Child Poverty and Family Supplemental Support Subaccount of the 1991 Local Revenue Fund and would be in addition to the 3.6-percent statutory increase in 2023-24. However, we are disappointed in cuts and elimination of services aimed at supporting CalWORKs recipients secure employment.
Supplemental Security Income/State Supplementary Payment (SSI/SSP) – The Budget includes a $3.7 billion General Fund in 2024-25 for the SSI/SSP program, including the state-only Cash Assistance Program for Immigrants (CAPI). These adjustments raise the maximum SSI/SSP grant levels to $1,183 per month for individuals and $2,023 per month for couples. The 2023-24 budget included $146 million General Fund for the SSI/SSP program.
Safety Net Reserve Withdrawal—The governor and his administration are proposing to use $900 million in Safety Net Reserve to maintain existing program benefits and services for the Medi-Cal and CalWORKs programs.
Specific Immigrant Programs
In-Home Supportive System (IHHS) – The governor maintains investments in provider wage increases, a permanent provider back-up system, and the full-scope Medi-Cal expansion to IHSS undocumented recipients of all ages including the recent expansion for ages 26 to 49, as of January 1, 2024.
Migration, Border Communities, and Wraparound Services: Like last year’s budget proposal the administration will continue to work with the federal government to identify resources and assess state needs to expand humanitarian efforts to those seeking refuge and asylum in California. In the coming months, the administration will continue to assess operational needs in these humanitarian efforts for possible consideration in the May Revision. With no new investments for border communities or legal services, the Governor’s Budget misses a critical opportunity to support refugees and asylum seekers.
Temporary Protected Status Services—The Budget reverts the $10 million General Fund in 2023-24 and makes a reduction of $10 million General Fund in 2024-25 and ongoing. The Budget maintains existing levels of ongoing funding for Immigration Services Funding and Unaccompanied Undocumented Minors Legal Services.
May 2024
CPEHN Opposed to Governor Newsom Balancing California’s Budget on Backs of the Most Vulnerable
Sacramento, CA – CPEHN rejects Governor Newsom’s approach to addressing the shortfall. The Legislature must advance other revenue solutions rather than eliminating funding for crucial health and human services programs serving California’s most vulnerable. The elimination of these programs will have a devastating impact on the health of the state’s poorest residents. Governor Newsom and the California State Legislature must ensure that the richest Californians and corporations pay their fair share to sustain our state.
It is unconscionable to eliminate In-Home Supportive Services for undocumented Californians. These services allow seniors and people with disabilities to meet their basic needs at home, rather than be institutionalized or suffer without care. Farmworkers, construction workers, and other essential undocumented workers built, fed, and supported California for decades. We cannot turn our backs on them now. The Legislature must reject this cut.
Additionally, delaying emerging food benefits will harm immigrant communities struggling to thrive and meet their basic needs. Cutting workforce development funding for Community Health Workers and social workers is short-sighted and will result in greater long-term costs for the state due to poor access to care and lack of economic development in communities of color. Furthermore, eliminating public health funding leaves us vulnerable to the next pandemic.
It is unacceptable to balance the state’s budget on the backs of poor people of color while the richest Californians continue to reap benefits and amass wealth. Rather than eliminating programs that impact the state’s poorest residents, we urge the Legislature to consider more progressive solutions to ensure we have the resources of all Californians.
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CPEHN Urges Governor Newsom to Adopt the Legislature’s Budget
Sacramento On Thursday, June 13, the California Legislature voted on their version of the state budget for 2024-25. Their budget rejects cuts that were proposed by Governor Gavin Newsom including cuts to the In-Home Supportive Services (IHSS) program, the Indian Health Program and the Future of Public Health Funding.
The Legislature’s budget avoids these devastating cuts and instead relies on money from rainy day fund reserves and suspending net operating loss credits for businesses.
Balancing the budget on the backs of those who can least afford it accelerates inequities.
“It was indefensible for Governor Newsom to propose cutting In-Home Support Services for California residents for no other reason but their immigration status and the legislature rightly rejected this discriminatory cut,” CPEHN Managing Policy Director Ronald Coleman Baeza said.
We urge the Governor to adopt the legislature’s budget that ensures all Californians have access to IHSS. Cuts to the IHSS program for undocumented immigrants would single out a population simply because of their immigration status, an unprecedented move for Governor Newsom. It also would devastate immigrant families, potentially exposing them to deportation due to the risk of public charge that comes with institutionalization, while driving them deeper into poverty as a result of lost financial support for family caregivers.
Cuts to the Indian Health Program and the Future of Public Health funding could have devastating impacts on California’s communities of color and historically disenfranchised communities.
CPEHN urges Governor Newsom to stand with California families, and adopt and sign the Legislature’s version of the budget.
The Governor and the Legislature must approve a final budget by June 30.
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July 2024
CPEHN Commends State Policymakers for Preserving Critical Health and Human Services Programs in Passing Balanced Budget
Sacramento, CA – Governor Gavin Newsom and Legislative leaders have announced a state budget agreement which is expected to be passed by both houses of the Legislature and signed into law in the coming days. The California Pan-Ethnic Health Network (CPEHN) commends the Governor on preserving benefits to undocumented immigrants through the In-Home Supportive Services (IHSS) program, preserving the Indian Health Program and maintaining $92 million statewide and $184 million locally annually in the Future of Public Health funding.
“CPEHN is relieved to see that these critical public health and human services programs that serve undocumented and vulnerable Californians will be able to continue,” said Kiran Savage-Sangwan, Executive Director of CPEHN. “The move to cut funding for these critical programs was unconscionable and immoral and would have resulted in greater financial strain on the state in years to come. Preserving funding for public health and for services for undocumented immigrants and the state’s Indigenous communities will ensure that California is able to continue to meet its promise of serving all its residents, regardless of immigration status.”
Cuts to IHSS, the Indian Health Program and the Future of Public Health funding could have devastating impacts on California’s communities of color and historically disenfranchised communities.
The IHSS program serves over 2,600 undocumented immigrants across the state and provides critical support to families caring for loved ones with disabilities. The program allows people to be compensated for their time in caring for their family members, and the loss of this program would have resulted in both a loss of income for already vulnerable undocumented families and a loss of critical care services.
Preserving these programs in addition to the $276 million annual investment in Future of Public Health funding will have long-lasting impacts on undocumented immigrants and communities of color. The Legislature and Governor must find a way to secure stable revenue in future budgets by ensuring that the wealthiest Californians and corporations pay their fair share and not balance its state budget on the backs of the state’s most vulnerable.
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January 2023
Governor Newsom Releases $297 Billion Budget that Advances California Toward Universal Health Care Coverage but Fails to Provide Necessary Investments in Health Equity
Sacramento, CA- The California Pan-Ethnic Health Network released the following statement upon the release of the Governor’s proposed $297 billion budget:
“Despite the expected $22.5 billion shortfall within the budget, CPEHN is grateful that Governor Newsom has proposed no cuts to eligibility or benefits within Medi-Cal, and continued the commitment to Health4All, to cover all income-eligible Californians in Medi-Cal, regardless of age or immigration status, beginning in 2024. Medi-Cal is the cornerstone of health equity in California. The Governor’s commitment to reforming and expanding the program is laudable.
“Instead of taking additional steps this year to advance California to universality, Governor Newsom is attempting to transfer more than $300 million from the individual mandate penalty which was approved for the specific purpose of making health care more affordable and ensuring greater access to care for Covered California beneficiaries (e.g. by strengthening subsidies, eliminating deductibles, reducing cost-sharing and capping out-of-pocket costs), to cover other budget priorities instead. Furthermore, CPEHN is concerned with the impact on vulnerable communities of reducing certain COVID-19 pandemic response spending, including public health outreach, at a time when COVID-19 rates are trending up again, bivalent booster rates are lagging, and new variants are emerging. Lastly, we are disappointed that there are no new investments focused on health equity, for example by investing in innovation for racial justice or enhancing data to reduce disparities.
“While there is modest investment in the Office of Planning and Research to establish the Racial Equity Commission, significant statutory fixes are needed for the Commission to achieve meaningful outcomes for California’s communities of color.
“There is still critical work to do despite the temporary budget deficit. We look forward to working with the Governor and the Legislature to advance health equity, racial justice, access, and public health in the year ahead. Expanding health equity and access will take a long-term vision and unwavering commitment. Our shared values of equity and justice will help us usher in a better future for all Californians.”
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Governor Newsom Releases $297 Billion Budget that Advances California Toward Universal Health Care Coverage but Fails to Provide Necessary Investments in Health Equity
On Tuesday, January 10th, Governor Gavin Newsom released his $297 billion proposed budget for the 2023-2024 fiscal year. Despite a $22.5 billion projected deficit, the proposal maintains many important budget investments approved in the current FY 22-23 state budget including the state’s expansion of full-scope Medi-Cal to all low-income eligible adults regardless of immigration status, funds for Cal-AIM implementation, expansion of behavioral health, and reproductive justice services.
While the budget maintains critical spending on Medi-Cal eligibility and benefits, the Governor proposes to transfer more than $300 million from the individual mandate penalty to the General Fund to pay for other budget priorities. Previously investments were approved for the stated purpose of improving health care affordability in Covered California, including elimination of deductibles, reduced cost-sharing and a cap on out-of-pocket costs. Furthermore, despite rising COVID-19 rates, lagging bivalent booster rates, and emerging new variants, the Governor’s budget contains some spending reductions related to COVID-19 community outreach and response.
The budget fails to include new investments focused on health equity, for example, by investing in the Health Equity and Racial Justice fund or enhancing health plan data to reduce disparities. While there is a modest investment in the Office of Planning and Research to establish the Racial Equity Commission, significant statutory fixes are needed for the Commission to achieve meaningful outcomes for California’s communities of color. There is still critical work to do despite the temporary budget deficit. CPEHN will work with the Governor and the Legislature to advance health equity, racial justice, access, and public health in the year ahead. Expanding health equity and access will take a long-term vision and unwavering commitment. To view the full budget proposal click here.
Overview:
- $297 billion total budget
- $223.6 billion General Fund
- $22.5 billion projected revenue shortfall
- $35.6 billion reserves
- $22.4 billion Rainy Day Fund
Highlights of the State Budget:
- Maintains Expansion of Full-Scope Medi-Cal for All ($844.5 million in 2023-24, $2.1 billion in 2024-25, and approximately $2.5 billion ongoing). The proposed budget moves forward with the expansion of Medi-Cal to over 700,000 income-eligible adults ages 26 to 49 regardless of immigration status, effective January 1, 2024. California has successively expanded full-scope Medi-Cal eligibility to undocumented children, young adults, and seniors. Adding undocumented adults age 26-49, ensures that all Californians are eligible for health care coverage, including comprehensive dental benefits and mental health care services.
- Fails to Provide Additional Affordability Assistance for Covered California Enrollees: The Governor proposes to transfer $333.4 million from the individual mandate penalty, which was approved for the stated purpose of improving health care affordability in Covered California including through the elimination of deductibles, reduced cost-sharing and a cap on out-of-pocket costs, to pay for other budget priorities. Money for affordability assistance is defunded through 2025, despite help California families need in order to pay for the high cost of deductibles which are set to rise to nearly $5,000 in 2023.
- Reduces funding for state COVID-19 direct response: Governor Newsom’s proposed 2023-24 state budget assumes reduced COVID-19 direct response expenditures of approximately $614 million through the California Emergency Relief Fund. As opposed to a budget cut, these reduced funds likely reflect a reduction in expenditures for the current COVID-19 responses under the state’s SMARTER plan. For context, the 2022 Budget Act invested $1.8 billion one-time California Emergency Relief Fund to continue to respond to the pandemic as well as provide a roadmap for ongoing emergency preparedness.
- Fails to Include new Investments Focused on Health Equity: Once again, the Governor’s proposed budget fails to include funds for a Health Equity Racial Fund or funds for enhancing health plan data to reduce disparities. Both Covered California and the Department of Health Care Services are requiring their contracted health plans to achieve National Committee for Quality Assurance (NCQA) Health Equity Accreditation (HEA) by 2023, or 2026, respectively with California’s Public Employee Retirement System expected to align as well. Funds should be set aside to guarantee state enforcement of data equity standards.
Delays Implementation of Community Health Worker/Promotoras Workforce Grants ($133 million) to recruit, train and certify 25,000 new community health workers by 2025, in areas such as climate health, homelessness, and dementia. While the program remains fully funded, the funds would be provided later than initially anticipated including $65 million in both 2024-25 and 2025-26.
Expands the Use of Institutions for Mental Disease as part of the Behavioral Health Community-Based Continuum Demonstration ($6.1 billion ($314 million General Fund, $175 million Mental Health Services Fund, $2.1 billion Medi-Cal County Behavioral Health Fund, and $3.5 billion federal funds): California proposes to seek federal Medicaid approval to expand access and strengthen the continuum of mental health services for Medi-Cal members living with serious mental illness and serious emotional disturbance through a proposed Medicaid Section 1115 demonstration. This proposal would expand the use of Institutions for Mental Disease (IMDs), inpatient psychiatric and residential treatment facilities with more than 16 beds. An expansion of IMDs by the state would impede efforts to expand and strengthen community-based behavioral health services and would disproportionately harm the Black, Indigenous, People of Color (BIPOC), and Lesbian, Gay, Bisexual, Transgender, and Queer Plus (LGBTQ+) people of California.
Medi-Cal/Health Care Systems
The Governor’s budget includes $230.5 billion ($71.5 billion General Fund) for all health and human services programs in 2023-24.
Despite the expected budget shortfall, the Governor’s budget maintains many of the recent investments made to Medi-Cal including:
- the expansion of Medi-Cal eligibility for all Californians, including undocumented adults, aged 26-49
- funds for implementation of Cal-AIM
- efforts to expand the continuum of behavioral health treatment capacity
- the inclusion of new culturally and linguistically responsive community health worker/promotoras and doula benefits and services in Medi-Cal, and
- investments in reproductive health care and efforts to lower the cost of prescription drugs
The budget also includes several new budget augmentations including:
- a proposed five-year expansion of behavioral health services for Medi-Cal beneficiaries living with serious mental illness and serious emotional disturbance
- additional funds for the CARE Act, and
- implementation of a 988 suicide hotline
More broadly, the budget includes new and additional funds to tackle opioid and fentanyl response, improve access to reproductive care and to expand the impact and reach of Cal-AIM, particularly for justice-involved populations, homeless or at-risk and those transitioning out of institutional levels of care.
Additional Details on Medi–Cal
Medi-Cal Projected Caseload & Expenditures: The Governor’s Medi-Cal budget includes $137.7 billion ($32.3 billion General Fund) in 2022-23 and $138.9 billion ($38.7 billion in General Fund) in 2023-24 to cover an estimated 15.2 million Californians in 2022-23 and 14.4 million in 2023-24 – more than one-third of the state’s population. The Budget projects total Medi-Cal expenditures of $38.7 billion General Fund in 2023-24, an increase of $6.4 billion General Fund compared with the revised 2022-23 expenditures. A majority of the increase is attributable to the shifting of repayments to the federal government related to state-only populations from 2022-23 and the assumed loss of increased federal funding consistent with the end of the federal Public Health Emergency while costs for caseload persist through the year. These costs are partially offset by one-time expenditures budgeted in 2022-23 that are not continuing into 2023-24.
- Federal Public Health Emergency (PHE) Extension: The Governor’s proposed budget assumes a two-quarter extension of the federal Public Health Emergency through mid-April 2023 and enhanced federal funding through the end of the 2022-23 fiscal year. The May Revision will reflect the phasing out of enhanced federal funding at the end of the federal PHE.
Maintains Expansion of Full-Scope Medi-Cal Eligibility for All ($844.5 million in 2023-24, $2.1 billion in 2024-25, and approximately $2.5 billion ongoing). The Governor’s proposed budget maintains and completes the expansion of Medi-Cal to over 700,000 income-eligible adults ages 26 to 49 regardless of immigration status. California has successively expanded full-scope Medi-Cal eligibility to undocumented children, young adults, and seniors. Beginning on January 1, 2024, California will expand Medi-Cal eligibility to undocumented adults age 26-49, ensuring that All Californians are eligible for health care coverage, including mental and oral health care services
Maintains Funds for Cal-AIM ($10 billion): The Governor’s proposed budget maintains the reforms to the Medi-Cal health care delivery system through the implementation of Cal-AIM.
Provides additional funds Cal-AIM Justice Involved Waiver ($109.7 million total funds for 2023-24 and $151 million in PATH funding): The Governor’s Budget includes additional funds for 2023-24 for pre-release activities. In addition, DHCS is awarding additional PATH funding to support correctional agencies to collaborate with county social services departments to support planning and implementation of pre-release Medi-Cal enrollment processes.
Adds an additional Community Support for Temporary Rent/Housing ($$17.9 million in 2025-26 increasing to $116.6 million per year at full implementation): To improve the well-being and health outcomes of Medi-Cal members during critical transitions, DHCS will seek an amendment to the CalAIM waiver to authorize an additional Community Support for use by Medi-Cal Managed Care Plans. The new Community Support would allow the provision of up to six months of rent or temporary housing to eligible individuals experiencing homelessness or at risk of homelessness and transitioning out of institutional levels of care, a correctional facility, or the foster care system and who are at risk of incurring other Medicaid state plan services, such as inpatient hospitalizations or emergency department visits.
Invests in Opioid and Fentanyl Response ($167 million in federal funds, Opioid Settlement Funds, and state General Fund, including $42 million in 2023-24 and $103 million over four years): Includes an additional $93 million in Opioid Settlement Fund over four years beginning in 2023-24 to support youth- and fentanyl-focused investments for the Department of Health Care Services and for the Department of Public Health as follows:
- $79 million for the Naloxone Distribution Project to increase distribution to first responders, law enforcement, community-based organizations, and county agencies.
- $10 million for fentanyl program grants to increase local efforts in education, testing, recovery, and support services to implement AB 2365.
- $4 million to support innovative approaches to make fentanyl test strips and naloxone more widely available.
- Also includes $3.5 million ongoing Proposition 98 General Fund to provide all middle and high school sites at least two doses of naloxone hydrochloride or another medication to reverse an opioid overdose on campus.
Enhances California’s Reproductive Health Safety Net California ($200 million/$15 million General Fund in 2024-25 for this Demonstration): Since the Supreme Court’s June 2022 decision in Dobbs v. Jackson Women’s Health Organization, California’s providers have seen an influx of patients traveling from other states to access abortion and other reproductive health services. DHCS will develop an 1115 demonstration waiver that would advance the following goals:
- Support access to family planning and related services for Medi-Cal enrollees, as well as other individuals who may face barriers to access.
- Support the capacity and sustainability of California’s reproductive-health safety net.
- Promote system transformation for California’s reproductive-health safety net.
Allocates funds for Reauthorization of Designated State Health Program and Rate Increases ($40.4 million General Fund savings in 2022-23 and $161.6 million General Fund savings in 2023-24 through 2026-27, for total General Fund savings of $646.4 million): Anticipated federal reauthorization of Designated State Health Program funding will help to cover the costs of the Providing Access and Transforming Health and CalAIM Justice Initiative. As a condition of approval of Designated State Health Program funding, DHCS is required to demonstrate compliance with minimum reimbursement levels for specific service categories. The Budget includes $22.7 million ($8.6 million General Fund) in 2023-24 and $57.1 million ($21.7 million General Fund) ongoing for primary care and obstetric care provider increases. The Administration will continue to evaluate the need for additional targeted provider rate increases at the May Revision.
Allocates funds for a Health and Human Services Innovation Accelerator Initiative: This initiative will seed a new entity and provide an initial investment so that researchers and developers can create solutions to the greatest health challenges facing Californians, such as targeting diabetes-related morbidity and mortality, addressing disparities in maternal and infant mortality faced by women and their babies, and prevention and mitigating infectious disease. Funding for this initiative will be refined over the next few months and included in the May Revision.
Reinstates the Managed Care Organization (MCO) Tax ($1.3 billion ($317 million in reduced General Fund spending) in 2023-24) effective January 1, 2024, through December 31, 2026, to help maintain Medi-Cal program funding for the Medi-Cal expansion to all income eligible individuals and minimize the need for reductions to the program. This tax renewal maintains the structure from the prior MCO Tax as approved by the federal government with minor modifications and data updates. The MCO Tax is estimated to offset $6.5 billion in General Fund spending over the next three years. The Administration will explore opportunities over the next few months to increase the MCO Tax to provide support for the Medi-Cal program.
Medi-Cal: Behavioral Health
Behavioral Health Community-Based Continuum Demonstration (includes $6.1 billion ($314 million General Fund, $175 million Mental Health Services Fund, $2.1 billion Medi-Cal County Behavioral Health Fund, and $3.5 billion federal funds). California proposes to seek federal Medicaid approval to expand access and strengthen the continuum of mental health services for Medi-Cal members living with serious mental illness and serious emotional disturbance through a proposed Medicaid Section 1115 demonstration. This proposal would expand the use of Institutions for Mental Disease (IMDs), inpatient psychiatric and residential treatment facilities with more than 16 beds. An expansion of IMDs by the state would impede efforts to expand and strengthen community-based behavioral health services and would disproportionately harm the Black, Indigenous, People of Color (BIPOC), and Lesbian, Gay, Bisexual, Transgender, and Queer Plus (LGBTQ+) people of California.
Community Assistance, Recovery & Empowerment (CARE) Act (includes $16.5 million General Fund in 2023-24, $66.5 million General Fund in 2024-25, $108.5 million in 2025-26 and annually thereafter for county costs). The CARE Act is a new court system that will lower the legal standard to order mental health treatment against the wishes of a person with a disability. The Act requires Cohort I counties to implement the CARE program beginning October 2023 (Glenn, Orange, Riverside, San Diego, Stanislaus, and Tuolumne and the City and County of San Francisco) and Cohort II counties beginning December 2024. California proposes additional funding related to clinical assessments and time spent in court by providers to assist counties with the implementation of the Care Act. The budget also includes 23.8 million in 2023-24, $12.9 million in 2024-25, and $30.9 million ongoing to public defender and legal services organizations to provide legal counsel to CARE participants. DHCS will also request new positions to implement provisions of the Community Assistance, Recovery and Empowerment (CARE) Court, including developing guidance for counties on CARE Court responsibilities relating to the Supporter Program and Implementing additional processes and measures to support ongoing data collection, validation, and reporting. Investing in a court system to solve mental health issues, especially among people who are houseless, diverts funds away from proven solutions such as equitable, stable housing and community-based services informed by directly impacted communities.
Implementation of New Medi-Cal Mental Health Outreach Requirements – DHCS is requesting new positions and expenditure authority to meet the expanded workload created by CPEHN-sponsored bill SB 1019 (2022), which requires managed care plans (MCPs) to conduct culturally and linguistically relevant annual outreach and education to ensure Medi-Cal members are aware of the mental health benefits available to them through their MCP.
988 Update – ($24.7 million in one-time plus ongoing funds): CalHHS is proposing trailer bill language as cleanup language for AB 988 to be released. California also requests new positions and expenditure authority under AB 988 (2022) to implement and maintain the new workload resulting from the statute’s oversight activities. Funds would be used for CalHHS to convene a state 988 policy advisory group to advise on the development of a comprehensive five-year implementation plan to build out a comprehensive 988 behavioral health crisis prevention, response, and care system. Additional funds would be used by the Department of Health Care Services to oversee county behavioral health plans and to support eligible 988 call center behavioral health crisis services. Funds would also be allocated to the Department of Managed Health Care to oversee heath care service plans.
Implementation of New Lanterman-Petris Short Act Data Reporting Requirements– DHCS is proposing trailer bill language to expand implementation of SB 929 (2022), which requires the Department of Health Care Services (DHCS) to collect specific demographic information about individuals held involuntary under the Lanterman Petris Act. Specifically, DHCS proposes to expand Lanterman-Petris-Short (LPS) Act data reporting requirements primarily by:
- requiring counties to collect and report data quarterly to DHCS from their local entities implementing LPS involuntary holds rather than those entities reporting directly to DHCS, and
- authorizing DHCS to levy civil money penalties against facilities and counties for failure to submit data timely.
Public Health & Racial Justice
Racial Equity:
Invests in California Racial Equity Commission and Youth Empowerment Commission: The Governor’s proposed 2023-24 budget includes $3.8 million General Fund in 2023-24 and $3.1 million General Fund through 2028-29, which includes $1.5 million General Fund that was authorized in the 2022 Budget Act, to support the state’s first Racial Equity Commission established by Executive Order, and the California Youth Empowerment Commission. The Office of Planning and Research will oversee both Commissions, which will launch by the end of 2023. CPEHN believes that statutory changes will be necessary to ensure this commission provides meaningful outcomes to California’s communities of color.
COVID-19 Response:
Reduces funding for state COVID-19 direct response: Governor Newsom’s proposed 2023-24 state budget assumes reduced COVID-19 direct response expenditures of approximately $614 million through the California Emergency Relief Fund. These reduced funds likely reflect a reduction in expenditures for the current COVID-19 responses under the state’s SMARTER plan. For context, the 2022 Budget Act invested $1.8 billion one-time California Emergency Relief Fund to continue to respond to the pandemic as well as provide a roadmap for ongoing emergency preparedness.
Public Health Infrastructure:
Maintains infrastructure investment in state and local public health departments ($300 million ongoing): Despite the budget shortfall, Governor Newsom’s proposed 2023-24 state budget maintains an annual 300 million investment for California’s state and local public health departments. This investment was substantiated in the 2022 Budget Act to support foundational public health areas such as emergency preparedness capacity, workforce, technology systems, communication and public education for state and local public health departments. Of the $300 million, around $100 million will be allocated to the California Department of Public Health (CDPH), the other $200 million to California’s 61 Local Health Jurisdictions.
Reduces funding (by $49.8 million) for state public health workforce development: The proposed 2023-24 state budget reduces funding for previously proposed public health workforce training and development programs by $49.8 million General Fund over four years. For context, the 2022 budget act allocated a total of $75.6 million one-time General Fund over three years to strengthen and expand the state’s public health workforce given challenges presented during the COVID-19 pandemic. Impacted programs likely include previously proposed CA Public Health Pathways Training Corp, CA Microbiologist Training, Public Health Lab Aspire, and CA Epidemiology Investigation. The Budget maintains $47.7 million General Fund over four years for community-based clinical education rotations for dental students and public health incumbent workforce upskilling and training.
Reduces funding (by $25 million) for state climate change resilience programs: Governor Newsom’s proposed 2023-24 state budget eliminates a $25 million one-time General Fund for Local Health Jurisdictions to develop regional Climate and Health Resilience Plans, which was previously included in the 2022 Budget Act. This program might be restored in future years depending on the budget outlook.
Other Health Programs
Fails to Provide Additional Affordability Assistance for Covered California Enrollees ($333.4 million): The Governor proposes to transfer $333.4 million from the individual mandate penalty, which was approved for the stated purpose of improving health care affordability in Covered California including through the elimination of deductibles, reduced cost-sharing and a cap on out-of-pocket costs, to pay for other budget priorities. Money for affordability assistance is defunded thru 2025, help that California families need in order to pay for the high cost of deductibles which are set to rise to nearly $5K in 2023.
Delays Implementation of Community Health Worker/Promotoras Workforce Grants ($133 million) to recruit, train and certify 25,000 new community health workers by 2025, in areas such as climate health, homelessness, and dementia. While the program remains fully funded, the funds would be provided later than initially anticipated including $65 million in both 2024-25 and 2025-26.
Fails to include Additional Funds for Enforcement of Health Plan Data Equity: Both Covered California and the Department of Health Care Services are requiring their contracted health plans to achieve National Committee for Quality Assurance (NCQA) Health Equity Accreditation (HEA) by 2023, or 2026, respectively with California’s Public Employee Retirement System (CalPERS) which manages health and pension benefits for more than 1.5 million public employees, retirees and their families, expected to align as well. Funds should be set aside to guarantee state enforcement of these critical data equity standards.
Reduces Home- and Community-Based Services (HCBS) Spending Plan to $2.8 billion: This is a $60 million cut compared to the 2022 Budget Act for Medicaid beneficiaries to receive services in their own home or community. The Budget assumes that all HCBS spending plan funding will be expended by March 2024, and California will not use the additional optional year to spend the enhanced federal funding. The 2021 Budget Act appropriated funding made available pursuant to the American Rescue Plan Act of 2021 to enhance, expand, and strengthen Home and Community-Based Services for 26 initiatives across six Health and Human Services departments.
Specific Immigrant Programs
Delays Investment to Expand Food4All: While the Governor’s Budget did not cut from earlier investments to expand the California Food Assistance Program (CFAP) to undocumented Californians (ages 55 and above), the Administration has proposed to delay implementation of Food4All to January 1, 2027. This delay will mean thousands of elderly Californians, who need food assistance now, will not have access simply because of their immigration status.
Fails to Include Unemployment Benefits for Immigrant Workers: The Governor’s Budget failed to include investments that would establish the SafetyNet4All Program, and provide undocumented immigrant workers with an alternative, barrier-free option to seek unemployment benefits. This is a critical missed opportunity to support all workers in California, regardless of immigration status.
Migration, Border Communities, and Wraparound Services: The Administration will continue to work with the federal government to identify resources and assess state needs to expand humanitarian efforts to those seeking refuge and asylum in California. With no new investments for border communities or legal services, the Governor’s Budget misses a critical opportunity to support refugees and asylum seekers.
Human Services
- Makes Additional Investments to Increase CalWORKS Grants ($87 million in 2023-24 funded by the 1991 Local Revenue Fund): The Governor’s Budget projects a 2.9% increase in CalWORKS payment levels, specifically Maximum Aid Payments, in 2023-2024. Additionally, given the increase in CalWORKS and EBT electronic thefts over the last years, California will become the first state in the nation to use enhanced security features and technology advancements to safeguard Californians and their benefits.
- Supplemental Security Income/State Supplementary Payment (SSI/SSP) ($146 million General Fund in 2023-24 and $292 million ongoing): The Governor’s Budget reflects increased investments to support additional SSP dollars starting January, 1, 2024. This increase will provide seniors and individuals with disabilities with opportunities to receive increased supplemental support dollars.
MAY 2023
Governor Continues Strong Investments in Health Equity; More Action Needed to Address Racism as a Public Health Crisis
Sacramento, CA – The California Pan-Ethnic Health Network released the following statement in response to the Governor’s May Budget Revision (FY 2023-2024) from Executive Director, Kiran Savage-Sangwan.
“As California faces a budget shortfall of $31.5B, CPEHN applauds Governor Newsom for maintaining commitments to strengthening Medi-Cal, particularly the expansion of eligibility for all income-eligible Californians, regardless of age and immigration status; as well as long-overdue investments to incentivize more providers for primary care, maternity care (including doulas), and non-specialty mental health services through the Managed Care Organization (MCO) Tax.
The MCO tax investments to shore up the primary care, reproductive health, and mental health must include raising the base rates for Community Health Workers/Promotoras and Representatives (CHW/P/Rs). When Governor Newsom added CHW/P/Rs to Medi-Cal in 2022, he recognized the value of this essential workforce in improving the health of all Californians. However, the currently proposed rates are insufficient to robustly implement the benefit and ensure a living wage for CHW/P/Rs, and the continued delay in funding for education and training means a continued delay in unleashing the potential of this vital workforce.
In an uncertain economic climate, it is imperative that we act to strengthen the community resources that prevent costly illnesses and advance racial equity. We are disappointed that the Governor once again failed to include dollars for the Health Equity and Racial Justice Fund. This omission fails to acknowledge the value of prevention and the dire cost to California of continued racial injustice.
Finally, we remain concerned about the diversion of the individual mandate penalty revenues. CPEHN supported the reinstatement of the individual mandate penalty in 2019 only with the understanding that revenues from this fund would serve to make health care more affordable and accessible for all. Instead of unjustly redirecting these funds, California must explore long-term and progressive revenue solutions that ensure the health and wellbeing of communities of color.”
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Analysis of the May Revision
Governor Continues Strong Investments in Health Equity; More Action Needed to Address Racism as a Public Health Crisis
On Friday, May 12th, Governor Newsom released his $224.1 billion General Fund (GF) revised budget for the 2023-2024 fiscal year. Despite a $31.5 billion projected deficit, the proposal maintains many important budget investments, including the state’s commitments to strengthening Medi-Cal, particularly the expansion of eligibility for all income-eligible Californians, regardless of age and immigration status; as well as long-overdue investments to incentivize more providers for primary care, maternity care (including doulas), and non-specialty mental health services through the Managed Care Organization (MCO) Tax.
MCO tax investments are proposed to be used to shore up primary care, reproductive health, and mental health, but CPEHN urges the legislature and the Administration to include rate increases for Community Health Workers, Promotoras and Representatives (CHW/P/Rs). When Governor Newsom added CHW/P/Rs to Medi-Cal in 2022, he recognized the value of this essential workforce in improving the health of all Californians. However, the currently proposed rates are insufficient to robustly implement the benefit and ensure a living wage for CHW/P/Rs. The continued delay in funding for education and training means a continued delay in achieving the full potential of this vital workforce.
The May Revise has once again, failed to include dollars for the Health Equity and Racial Justice Fund. This omission fails to acknowledge the value of prevention and the dire cost to California of continued racial injustice. Finally, the budget continues to divert individual mandate penalty revenues rather than using the funds for additional affordability subsidies. CPEHN supported the reinstatement of the individual mandate penalty in 2019 only with the understanding that revenues from this fund would make health care more affordable and accessible for all. Instead of unjustly redirecting these funds, California must explore long-term and progressive revenue solutions that ensure the health and wellbeing of communities of color. To view the full budget proposal click here.
Highlights of the FY 2023-24 Revised State Budget Proposal (below):
Total Budget: $306.5 Billion, $224.1 Billion General Fund (GF)
Budget Year Deficit: $31.5 Billion
Total Spending for Health & Human Services: $73.2B (General Fund)
Medi-Cal Adjustments
Overview
The Medi-Cal program is projected to cover approximately 15.3 million Californians in 2022-23, decreasing to 14.2 million in 2023-24 to 12.8 million members following the determination period. For the Medi-Cal program, the Governor’s May revision proposes a total budget of $151.2 billion ($37.6 billion General Fund) in 2023-24. Despite an estimated $31.5 billion shortfall, the May Revision maintains funds for the Medi-Cal expansion for all Californians regardless of immigration status and adds additional funds to cover program changes. The budget also includes a new proposal to increase provider rates for primary care, obstetric care (including doulas) and non-specialty mental health services using funds generated from reinstatement of California’s Managed Care Organization (MCO) provider tax, effective April 2023. However, the increase does not extend to CHW/P/R rates, which are insufficient to robustly implement the new benefit and ensure a thriving wage. The Medi-Cal budget also continues an $8 billion in investments in behavioral health.
Key Changes:
- Maintains the Expansion of Medi-Cal to Undocumented Individuals and Includes Additional Funds to Cover Program Changes for Adults Aged 26-49 and 50+: The May Revision includes $1.4 billion ($1.2 billion General Fund) in 2023-24 and $3.4 billion ($3.1 billion General Fund) at full implementation, inclusive of In-Home Supportive Services (IHSS) costs, to expand full-scope Medi-Cal to all income-eligible adults aged 26-49 regardless of immigration status, on January 1, 2024. The May Revision includes increases for the two most recent expansions for adults 50 and older and ages 26-49 of $1.6 billion General Fund in 2023-24 and an estimated $2.4 billion General Fund annually compared to the Governor’s Budget. These increases resulted from updated managed care rates, higher share of state-only costs, higher caseloads due to the COVID-19 pandemic continuous coverage requirement, and higher acuity members based on actual experience.
- Increases Medi-Cal Provider Rates for Primary Care, Maternity Care and Non-Specialty Mental Health Services ($98 million General Fund) in 2023-24 and roughly $580 million ($240 million General Fund) annually thereafter. Effective January 1, 2024, rates for Primary Care (inclusive of Nurse Practitioners and Physician Assistants), Maternity Care (inclusive of OB/GYN and doulas), and non-specialty mental health services would be increased to 87.5 percent of Medicare rates. The May Revision sets aside the remaining $10.3 billion in MCO funds, including $922.7 million in 2023-24, for future spending considerations by stakeholders and DHCS, including on additional augmentations to primary care, maternal care, and behavioral health as well as specialty care, outpatient, and acute care systems.
- Fails to Raise Rates for Community Health Workers, Promotoras and Representatives; Continues Delay of CHW/P/R Workforce Funds: While we applaud the Governor for raising rates for primary care providers including doulas, the May Revise fails to include a rate increase for CHWPRs who play a vital role in connecting Californians to care. When Governor Newsom added CHW/P/Rs to Medi-Cal in 2022, he recognized the value of this essential workforce in improving the health of all Californians. The current proposed rates are insufficient to robustly implement the benefit and ensure a living wage for CHW/P/Rs, and we urge the legislature and the administration to include this workforce in its proposal for rate increases. Finally, the May Revision also continues to delay much needed grants and stipends to train and grow California’s CHWPR workforce in order to meet the needs of Medi-Cal recipients. This delay in funding for education and training means a continued delay in achieving the full potential of this vital workforce, and the legislature and Administration should reserve some funding to continue to engage stakeholders on the future implementation of the program.
Other Medi-Cal Adjustments:
- Includes Funds for the Distressed Hospital Loan Program: The May Revision includes up to $150 million one-time General Fund to provide interest-free cashflow loans to not-for-profit and public hospitals in significant financial distress or to governmental entities representing a closed hospital, for purposes of preventing the closure of, or facilitating the reopening of, those hospitals.
- Extends the Doula Services Implementation Evaluation. The Department proposes to extend the timelines for the workgroup to examine implementation of the doula benefit in the Medi-Cal program from April 1, 2022, until December 31, 2023, to April 1, 2023, until June 30, 2025, to align with implementation of the benefit one year later than originally anticipated. The proposal would align the date extension with the associated evaluation report and sunset date.
- Extends Expenditure Authority for the Medical Interpreter Pilot Program: The Department proposes to extend the expenditure authority of the Medical Interpreter Pilot Project for a period of 12 months, from June 30, 2024, to June 30, 2025. The program’s inoperative date would be extended from July 1, 2024, to July 1, 2025, as well as the sunset date from January 1, 2025, to January 1, 2026.
- California Children’s Services Whole Child Model (WCM) Expansion in County Organized Health Systems (COHS) Counties and Mandatory Managed Care Enrollment of Foster Care Children in new Single Plan and COHS Counties. The Department proposes to remove the three Single Plan Counties—Alameda, Contra Costa, and Imperial counties—from WCM implementation proposal.
- CalAIM Behavioral Health Payment Reform. The Department proposes amendments that authorize the Department, rather than the Department of Finance, to submit the offset and transfer schedule to the California State Controller once counties elect to authorize the Controller to transfer certain Mental Health Services Fund and Realignment funding into the Medi-Cal County Behavioral Health Fund. Additionally, the amendments further describe when the Department will provide the transfer schedule to the Controller.
Other Health Care Systems Changes:
- Includes augmented funds for Health and Human Services Innovation Accelerator Initiative ($10 million) $9 million General Fund ($10 million in total). Funds would be used to create the environment for researchers and developers to create solutions to the greatest health challenges facing Californians, such as targeting diabetes-related morbidity and mortality, addressing disparities in maternal and infant mortality faced by women and their babies, and preventing and mitigating infectious disease. The Initiative will look to accelerate the translation of research and development into innovations that help to directly address disparities and inequities in California’s safety-net programs.
- Fails to Provide Additional Affordability Assistance for Covered California Enrollees ($333.4 million): The May Revision continues to the transfer of $333.4 million from the individual mandate penalty to pay for other budget priorities. It was approved for the stated purpose of improving health care affordability in Covered California, which could include the elimination of deductibles, reduced cost-sharing and a cap on out-of-pocket costs, to pay for other budget priorities. Money for affordability assistance is defunded through 2025, help that California families need in order to pay for the high cost of deductibles which are set to rise to nearly $5K in 2023.
- Includes an additional $141.3 million in Opioid Settlements Fund ($220.3 million). Additional funds invested to support the Naloxone Distribution Project over four years.
- Includes $30 million one-time Opioid Settlements Fund in 2023-24 to support the development of a lower cost, generic version of a naloxone nasal spray product through the CalRx Naloxone Access Initiative at the Department of Health Care Access and Information.
Behavioral Health Adjustments
Under today’s behavioral health system Californians of color are most likely to experience challenges utilizing the behavioral health system and most likely to have untreated behavioral health issues lead to unsheltered homelessness, incarceration, and adverse behavioral and physical health consequences. Despite Prop 63, the Mental Health Services Act, being approved by voters in 2006, the Affordable Care Act expanding access to behavioral health coverage in 2014, and California investing billions of dollars in various behavioral health programs, these inequities remain largely unchanged.
Overview
In March, Governor Newsom announced a proposal to “modernize” California’s behavioral health system by raising funds for supportive housing, making changes to how Mental Health Services Act dollars are spent, and improving commercial behavioral health coverage. As of the May Revision, no specific policy language has yet been made available to the public.
Key Changes:
Provider Rate Increases in Mental Health ($237 million). As previously stated, starting in 2024, the May Revision proposes to increase rates to at least 87.5 percent of Medicare rates for primary care, obstetric care (including doulas), and non-specialty mental health services for Medi-Cal consumers. In 2021, CPEHN conducted secret shopper testing of access to mental health services in Medi-Cal managed care and found considerable difficulty navigating to these services, particularly for Black, Indigenous, people of color and non-English speaking people. Provider rate increase could encourage greater access and utilization of mental health services for consumers with mild-to-moderate conditions.
Community Assistance, Recovery and Empowerment (CARE) Act: The Governor’s May Revision includes additional money to expand coercive treatment for individuals who are unhoused and living with serious mental illness. These funds will go towards activities such as changes in the hourly rate for activities performed by counties, updates to the length of time in hearings, and funding for Los Angeles County to implement its CARE Court program earlier than expected. Increasing funding for this program will worsen existing challenges in the mental health system, disproportionately burden people who are unhoused, and perpetuate institutional racism. Additionally, this “solution” fails to address the real drivers of houselessness, which are inaccessibility to stable and affordable housing, lack of robust support services, and limited availability and funding for community-based services created by and for impacted communities.
Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) Demonstration (formerly referred to as the California Behavioral Health Community-Based Continuum, or CalBH-CBC, Demonstration): The state continues to seek federal approval of a Medicaid Section 1115 demonstration waiver to improve care for people living with serious mental illness and emotional disturbance. The Governor’s May Revision includes an update to the BH-CONNECT Demonstration to include a new Workforce Initiative. We appreciate DHCS’s intent to expand the behavioral health workforce, examine and address racial disparities, increase the use of community-based services, and engage stakeholders on opportunities to incorporate community-defined practices. However, we oppose restrictive care facilities like Institutions for Mental Disease (IMDs), which will disproportionately impact communities of color, and which this waiver would expand, and urge DHCS to instead focus on expanding community-based services and culturally and linguistically equitable access to existing SMHS and NSMHS services that are aggressively responsive to racial disparities.
988 Suicide and Crisis Lifeline (AB 988): The Governor’s May Revision includes an additional $15 million for California’s 988 centers to support workforce expansion to handle the increased number of calls, extend call center service hours, and ensure the availability of chat and text options for those utilizing 988 services. Given that California has the highest 988 call volume in the country, and most funds for 988 services are not sustainable/recurring, this increase in funding to support the state’s call center services will be critical to maintaining and improving services for Californians.
Public Health & Prevention
Overview
Due to the ending of state and federal Public Health Emergency declarations, the May Revision further reduces California’s COVID-19 response activities and resources. The revised budget maintains previous investments in public health governmental infrastructure and restores workforce development program cuts from January, but it fails to include funding for the Health Equity and Racial Justice Fund. Once again, the Newsom administration has missed an opportunity to acknowledge the importance of prevention and targeted community projects to reduce long standing health disparities, while also addressing systemic and institutional racism. CPEHN urges the Legislature and the Administration to establish the framework for the Health Equity and Racial Justice Fund in statute this year.
Key Changes:
Further reduces funding for COVID-19 response ($50 million) as Public Health Emergency declarations ended: Compared to the proposed January budget, Governor Newsom’s May revision further reduces COVID-19 response funds by another $50 million in General Fund. The January proposal already proposed a $614 million cut in existing COVID-19 response funds. As both the state and federal public health emergency declarations came to end, California is rapidly ramping down COVID-19 response activities across state and local public health departments as well as community-based organizations. Provision of ongoing COVID-19 services such as testing and vaccinations will be transferred to and reliant on the traditional healthcare delivery systems. California Department of Public Health (CDPH) will continue to surveil COVID-19 trends through existing respiratory disease and statewide wastewater surveillance systems, with focuses on hospitalizations and deaths rather than individual cases.
Maintains investment in state and local public health departments ($300 million ongoing): Governor Newsom’s May revised 2023-24 state budget continues to commit to an annual 300 million investment, which started in FY 2022-23, for California’s state and local public health departments. The annual investment includes $100 million allocated to the California Department of Public Health (CDPH) and $200 million to California’s Local Health Jurisdictions. However, funding for communities through the Health Equity and Racial Justice Fund is a critical missing component to ensure a comprehensive public health infrastructure moving forward.
Restores funds for state public health workforce development: Governor Newsom’s May Revision reversed a previously proposed cut in his January draft for the public health workforce training and development programs. The January draft budget proposed a $49.8 million General Fund reduction for these programs over four years. For context, the 2022 Budget Act allocated a total of $75.6 million one-time General Fund over three years to strengthen and expand the state’s public health workforce given challenges presented during the COVID-19 pandemic. This allocation has now been restored in the proposed 2023-24 state budget.
Transfer of Southern Border Humanitarian Support from Department of Public Health to Department of Social Services: The May Revision includes one-time $150 million General Fund in 2023-24 in the Rapid Response program for continued humanitarian efforts, such as sheltering services, in partnership with local providers.
AIDS Drug Assistance Program Rebate Fund Loan ($400 million): The May Revision proposes a loan of $400 million from the AIDS Drug Assistance Program Rebate Fund to the General Fund.
Human Services
Overview
The state’s health and human services budget saw total investments increase from $230.5B to $245.7B for the 2023-2024 May Revision. Food assistance, cash assistance, and other supportive services have played an instrumental role for families in need as many Californians continue to recover from the COVID-19 pandemic. Safety net programs are effective anti-poverty tools and they are critical to our state’s success in achieving equity for all.
Key Changes:
Makes Additional Investments to Increase CalWORKS Grants ($111.2 million in 2023-24 funded by the 1991 Local Revenue Fund): The Governor’s January Budget projected a 2.9% increase in CalWORKS payment levels in 2023-2024. The May Revise reflects a 3.6% increase to Maximum Aid Payment levels. However, the CalWORKS Single Allocation program will see unexpended dollars reverted to the General Fund. The exact amount is to be determined in collaboration with the County Welfare Directors Association.
Investments to Increase Access to In-Home Supportive Services ($22.4B in 2023-24): The May Revise proposes to make significant investments to IHHS that will ensure more Californians, particularly low-income, seniors, and individuals with disabilities have access to in-home care options and support as demand continues to increase.
Additional Investments to Supplemental Security Income/State Supplementary Payment (SSI/SSP) and Cash Assistance Program for Immigrants (CAPI): The May Revise maintains the $146M GF from 2023-24 and $292M ongoing for SSI/SSP workload increases. Additionally, the May Revise includes $3.6B for cost-of-living adjustments and anticipated workload increase to both SSI/SSP and CAPI.
Immigrant Programs
Overview
Communities of color and immigrants face various barriers to recovery from the COVID-19 public health emergency. While California has taken steps to close equity gaps for immigrant communities, state leaders must continue to advance proposals that will reduce challenges with accessing vital safety net programs.
Key Changes:
Proposal to Investment Food4All for Ages 55 and Above: In the January Budget, the Governor proposed to delay the expansion of the California Food Assistance Program (CFAP) to undocumented Californians (ages 55 and above) to 2027. The May Revise proposes to restore the promise of food access for undocumented Californians ages 55 and above to October 2025. While this change is promising, the Governor’s revised budget fails to provide critical food benefits to the majority of undocumented communities who need assistance now.
Fails to Include Unemployment Benefits for Immigrant Workers: The Governor once again failed to include investments to establish the SafetyNet4All Program, and provide undocumented immigrant workers with a barrier-free option to seek unemployment benefits. This is a critical missed opportunity to support all workers in California and we urge the Legislature to prioritize this support.
June 2023
CPEHN Applauds Legislature’s Budget Agreement; Urges Governor Newsom to Enact Key Health Equity Priorities
On Thursday, the California State Assembly and Senate passed a 2023-24 state budget that maintains and strengthens investments in key health and equity programs.
- Continuing recent Medi-Cal eligibility and benefit expansions, including removing immigration status as a barrier to eligibility and adding community health worker services as a covered benefit.
- Rejecting cuts to community health worker, promotora, and representative (CHW/P/R) education and training opportunities.
- Raising the base Medi-Cal rate for community health workers to at least 87.5% of Medicare.
- Rejecting the sweep of individual mandate penalty funds and making those dollars available to increase affordability of health care.
CPEHN applauds the Legislature for advancing a budget that supports the Californians most negatively impacted by uncertain economic times. Only by investing in the communities that shoulder the burden of structural racism and generational poverty will California return to a path of economic growth and progress. We urge Governor Newsom to sign SB 101.
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Legislature Continues Strong Investments in Health Equity; Governor should continue investments for CHWPRs
California Pan-Ethnic Health Network (CPEHN) Executive Director, Kiran Savage-Sangwan, released the following statement in response to the passage of SB 101, the joint legislative budget framework:
“In difficult economic times, it is more important than ever to prioritize investment in historically marginalized communities and the programs that support them. The California State Legislature demonstrated their As California faces a budget shortfall, CPEHN applauds the California State Assembly and Senate for uniting on a joint budget that continues to make strong investments in health equity and avoids cuts to core health care programs. Despite the $31.5B shortfall, maintaining our state’s commitment to equity is essential. Yesterday, the legislature recognized the strength and value of maintaining the promise of investments towards community health workers which will support reducing disparities and improving health outcomes for communities throughout the state. The legislature’s inclusion of community health workers in their MCO Tax proposal also ensures that this critical workforce may also benefit from an increase in base reimbursement rate increases to 87.5% of Medicare, which will support capacity to maintain the new Medi-Cal benefit. CPEHN and partners urge Governor Newsom to stand with the legislature and CHW’s to continue the implementation of this important benefit.
When Governor Newsom added CHW/P/Rs to Medi-Cal in 2022, he recognized the value of this essential workforce in improving the health of all Californians. However, the currently proposed rates are insufficient to robustly implement the benefit and ensure a living wage for CHW/P/Rs, and the continued delay in funding for education and training means a continued delay in unleashing the potential of this vital workforce.
Finally, we commend the legislature for rejecting the diversion of the individual mandate penalty revenues. Investing penalty revenues towards additional affordability subsidies for enrollees in Covered CA will ensure that more Californians will be able to use their health care options when they need it. While access is important, removing cost barriers is key to ensuring Californians get timely care in order to thrive. CPEHN supported the reinstatement of the individual mandate penalty in 2019 only with the understanding that revenues from this fund would serve to make health care more affordable and accessible for all. We urge the Governor to follow the legislature’s lead and support additional subsidies to Covered CA enrollees.”
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CPEHN Applauds Final Budget Deal; Urges Equity Focus in Implementation
CPEHN applauds the 2023-24 state budget agreement reached yesterday by Governor Newsom and Legislative leaders. This budget agreement protects our progress toward universal coverage and health equity, and makes important investments as a down payment to future efforts.
The Managed Care Organization (MCO) tax is a historic investment in the Medi-Cal program, California’s most important tool for health equity. The tax will bolster the foundational underpinnings of the program, helping to increase access and quality. In order to advance equity with these dollars, CPEHN urges the Department of Health Care Services (DHCS) to focus the implementation of provider rate increases on a methodology that recognizes and mitigates underlying racial inequities. We look forward to partnering on this effort.
The agreement rightfully returns individual mandate penalty funds to Covered California via the Health Care Affordability and Reserve Fund. These dollars will be used to lower health care costs for consumers who purchase insurance through Covered California.
Finally, the agreement maintains critical funding for community health workers (CHWs) so that the state can strengthen this critical workforce and ensure robust implementation of the new Medi-Cal benefit. The budget allocates $15M to the Department of Health Care Access and Information (HCAI) for CHW training in 2023 and $57.5M in each 2024 and 2025.
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View CPEHN’s 2023 Budget Summary here.
January 2022
CPEHN Applauds Major Investments in Health4ALL but More to Do for Racial Justice
Sacramento, CA – The California Pan-Ethnic Health Network (CPEHN) released the following statement in response to Governor Newsom’s proposed $286.4 billion budget (FY 2022-2023). The statement can be attributed to Kiran Savage-Sangwan, the executive director:
“Three years into a global pandemic and we continue to see the ongoing impacts of systemic racism, the disproportionate impact of COVID-19 case rates and deaths among communities of color, and the consequences of our crumbling public health infrastructure.
“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.
“We are overjoyed the Governor has included closing the Medi-Cal gap for undocumented immigrants ages 27 to 49. California will be the first in the nation to cover Medi-Cal for everyone who calls it home, regardless of their immigration status. Once the legislature approves this initiative, this community will have access to health care, including oral and behavioral health and In-Home Supportive Services. This is thanks to the tireless work of advocates, spanning more than a decade, who fought to end racist exclusions to health care access. We look forward to working with the Administration to finish the job of getting to universal healthcare by closing remaining coverage gaps.
“We are also excited to see a historic investment in the Community Health Worker/Promotoras (CHW/Ps) workforce. CHW/Ps are trusted community partners, who provide culturally and linguistically competent care. We look forward to seeing more details of the Administration’s proposal and opportunities for public input into how these critical dollars are spent.
“But we must not stop there. California must dedicate ongoing funding for Medi-Cal outreach and enrollment by trusted community health navigators in order to retain the anticipated influx of individuals who will be up for renewal once the public health emergency ends, as well as those newly eligible for coverage. California must partner with culturally and linguistically competent community health navigators who have strong relationships with the people who need this information the most, and do outreach in Spanish, Mixteco, and more languages.
“We urge the Governor to declare racism as a public health crisis, something that we and our coalition have been waiting nearly two years for. A declaration must be followed by resources, investments, and accountability. Across state programs and policies, resources should be targeted to the communities and grassroots organizations that bear the cumulative burden of centuries of underinvestment and divestment due to structural racism.
“While CPEHN certainly appreciates the recently announced investments in public health, these one-time investments, earmarked strictly for testing, vaccinations, and related outreach and education, are not enough. We need ongoing, flexible, and permanent solutions, not stop gaps and piecemeal measures. Additionally, while investments to state and local infrastructure are important, community-based organizations must be funded directly through the Health Equity and Racial Justice Fund as a critical component to a comprehensive public health system that will meet the needs of California’s diverse population.
“We look forward to working with the Administration and Legislature to enact these meaningful health equity and racial justice proposals, and to ensure funding directly to community-based organizations, clinics, and tribal organizations makes its way into the budget, tied to community engagement to make sure their voices and needs are incorporated.”
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Governor’s Budget Includes Major Investments in Health4ALL, but More to Do for Racial Justice
On Monday, January 10th, Governor Gavin Newsom released his $286.4 billion FY 2022-2023 proposed budget. The Governor’s spending plan includes significant investments in health care and workforce diversity, including a proposal to expand access to Medi-Cal for undocumented adults aged 26-49 years for an estimated 700,000 individuals and $350 million in one-time funds for recruitment and training of up to 25,000 culturally and ethnically diverse Community Health Worker/Promotoras (CHWs/Ps) by 2025. With the Governor’s proposed Medi-Cal expansion, California becomes the first in the nation to provide full-scope Medi-Cal to all Medi-Cal eligible Californians, regardless of immigration status. CPEHN looks forward to working with the Administration on this step towards universal healthcare by closing remaining coverage gaps in Medi-Cal, and to providing input on the Governor’s new investment in growing the CHW/P workforce.
The budget also includes significant investments in public health, mental and oral health, homelessness, and climate change. While these investments are critical, the budget misses an important opportunity to address both health equity and racial justice together. With yet another budget surplus, this time projected at $45.7 billion, the Governor’s budget fails to pair a $300 million investment in public health infrastructure, earmarked strictly for testing, vaccinations, and related outreach and education, with ongoing, flexible funds to enhance local partnerships with racially and ethnically diverse community-based organizations through the California Health Equity and Racial Justice Fund. Additionally, the budget fails to provide funds for marketing and outreach, as well as navigation assistance for individuals who will be up for renewal once the public health emergency ends as well as adult seniors newly eligible for Medi-Cal as early as May 2022.
To view the full budget proposal click here.
Highlights of the FY 2022-23 Final State Budget Proposal:
Total Budget: $286.4 billion
Total Spending Health & Human Services: $217.5 billion ($64.7 billion General Fund and $152.7 billion other funds)
Budgetary Reserves/Rainy Day Fund: $34.6 billion total, $20.9 billion Rainy Day Fund
Medi-Cal: $123.8 billion ($26.8 billion General Fund) in 2021-22 and $132.7 billion ($34.9 billion General Fund) in 2022-23
Budget Highlights
- Expands Medi-Cal Coverage to all Adults, Regardless of Immigration Status ($819.3 million in 2023-24 and $2.3 billion annually): The Governor’s budget expands access to full-scope Medi-Cal to all income-eligible adults aged 26-49, making California the first state in the nation to provide Health4All for an estimated 700,000 Californians. Beginning no sooner than January 1, 2024, Medi-Cal will be available to all income-eligible Californians, inclusive of oral and mental health and In-Home Supportive Services.
- Includes an investment in developing the Community Health Worker (CHW) Workforce ($350 million one-time funding): Funds will be used to recruit, train, and certify 25,000 new community health workers by 2025 to meet the goal of a more ethnically and culturally inclusive workforce in partnership with the Department of Health Care Access and Information and the Department of Health Care Services, with specialty certifications in areas that include climate health, homelessness, and dementia.
- Includes Financial Incentives for Medi-Cal Providers to Strengthen Prevention and Improve Health Equity ($400 million one-time funding): The Governor’s budget includes funding for provider payments to reward Medi-Cal providers for advancing equity and improving quality in children’s preventive, maternity, and integrated behavioral health care.
- Includes funds to create the Office of Community Partnerships and Strategic Communications ($65M ongoing): The budget includes funding to formalize and leverage the infrastructure and work of the Census 2020 and COVID-19 public awareness and community engagement campaigns. The Office will be established within OPR and will manage the state’s highest priority public awareness and community outreach campaigns. In managing these select efforts, the office will develop and execute the public awareness and outreach strategy, working in partnership with the respective state agencies who will serve as subject matter experts. The Office will work with local community-based organizations (CBOs) and other partners statewide to engage Californians experiencing the greatest health and social inequities with culturally competent and relevant information to improve the quality of their lives and livelihoods.
- Fails to Include Funds for Navigation Assistance in Medi-Cal ($30 million ongoing): The Governor’s budget misses a critical opportunity to provide ongoing funding for Medi-Cal outreach and enrollment by trusted community health navigators. This is critical to retain the anticipated influx of individuals who will be up for renewal once the public health emergency ends as well as those newly eligible in Medi-Cal. California must partner with community health navigators who have strong relationships with the people who need this information the most to provide culturally and linguistically competent outreach in Spanish, Mixteco, and more languages.
- Fails to include an investment in community-based organizations as part of California’s public health infrastructure: We applaud the state for investing in public infrastructure, however more needs to be done. Despite extensive advocacy from CPEHN and health and racial equity advocates in the last year, the proposed ongoing 300 million general fund in the proposed 2022-23 state budget fails to include direct investments in non-governmental, community-based organizations who are critical parts of California’s public health system and in particular filled the gaps for underserved communities during the COVID-19 pandemic.
- Fails to Address Racism as a Public Health Crisis: Governor Newsom’s proposed 2022-23 state budget fails to acknowledge that racism is a public health crisis, nor does it commit actions or dollars towards tackling institutionalized racism within the state government.
Medi-Cal
The budget projects Medi-Cal expenditures of $34.9 billion General Fund in 2022-23, an increase of $8 billion General Fund compared with the revised 2021-22 expenditures due to the loss of enhanced FMAP, other COVID-19 related impacts, funding shifts and second year funding for the Behavioral Health Continuum Infrastructure Program and the Children and Youth Behavioral Health Initiative, funding for housing supports for those with behavioral health needs, and state-only claiming adjustments. Additionally, the Governor’s budget projects an average monthly caseload of 14.2 million in 2022-23, and includes $10 billion total funds ($2.8 billion General Fund) in 2022-23 for caseload attributable to the COVID-19 Pandemic. Caseload is projected to peak at 15.2 million in July 2022, driven by the assumed federal continuous coverage requirement related to the COVID-19 Public Health Emergency.
Expands Medi-Cal Coverage to all Adults, Regardless of Immigration Status ($819.3 million in 2023-24 and $2.3 billion annually): The Governor’s budget expands access to full-scope Medi-Cal to all income-eligible adults aged 26-49, making California the first state in the nation to provide Health4All for an estimated 700,000 Californians. Beginning no sooner than January 1, 2024, Medi-Cal will be available to all income-eligible Californians, inclusive of oral and mental health and In-Home Supportive Services.
Equity and Practice Transformation Payments: (one-time funds of $400 million total funds ($200 million General Fund)): The Department proposes to make equity and practice transformation payments to qualifying Medi-Cal providers, to close critical health equity gaps; address gaps in preventive, maternity, and behavioral health care measures; and address gaps in care arising out of the COVID-19 Public Health Emergency (PHE). Such payments are intended to promote patient-centered models of care in pediatric, primary care, obstetrics and gynecology, and behavioral health settings and to align with the goals of the Medi-Cal Comprehensive Quality and Equity Strategy. CPEHN has been advocating for many years for the state to tie health care payments in Medi-Cal to concrete, year-over-year goals for the reduction of health disparities. While this is a promising first step, we must continue to strengthen requirements on plans and providers for the collection of comprehensive, granular demographic data including for smaller subpopulations in order to ensure more equitable care for all.
Invests in the state’s recently approved Medi-Cal waiver, California Advancing and Innovating Medi-Cal (Cal-AIM) ($1.2 billion in 2021-22, $2.8 billion in 2022-23, $2.4 billion in 2023-24, and $1.6 billion in 2024-25). The Governor’s spending plan includes funds for implementation of the state’s Medi-Cal 1115 waiver, Cal-AIM. Funds in 2022-23 are to be spent on mandatory enrollment into managed care of beneficiaries eligible for both Medi-Cal and Medicare; the requirement that all managed care plans cover long-term care; the provision of a targeted set of Medicaid services to eligible justice-involved populations prior to release; and the Providing Access and Transforming Health (PATH) initiative to further the successful implementation of CalAIM. PATH includes the following programs and initiatives:
- Justice Package ($50 million in 2022-23, $561 million total funds over five years): CalAIM justice-involved initiatives support justice-involved individuals by providing key services pre-release, enrolling them in Medi-Cal coverage, and connecting them with behavioral health, social services, and other providers that can support their re-entry. California statute mandates that all counties implement pre-release application processes in county jails and youth correctional facilities no sooner than January 1, 2023. Funding is included for county and corrections capacity building and coordination activities and is also included to support services and administrative costs associated with these initiatives beginning in January 2023. Additionally, the Department is proposing trailer bill to extend the duration of suspension of Medicaid benefits when an individual is incarcerated in order to increase the likelihood that coverage is maintained.
- Providing Access and Transforming Health (PATH) ($1.3 billion total over 5 years). PATH provides funding to community-based organizations, counties, and other local providers to support capacity building as they begin to implement and scale Enhanced Care Management and Community Supports, in particular increasing resources available to populations and communities that have been historically under-resourced and under-served. In addition, PATH will support justice-involved adults and youth by sustaining the pre-release and post-release services (see above). The proposed budget reflects an expanded scope of activities through PATH as part of the Department’s 1115 waiver renewal, subject to adjustment due to late changes in the final waiver package, finalized at the end of December 2021.
Invests in additional COVID-19 Impacts ($3.1 billion total funds ($2.9 billion General Fund savings) in 2021-22 and $1.1 billion total funds ($498.6 million General Fund savings) in 2022-23 for COVID-19 impacts (excluding caseload), such as enhanced FMAP savings, COVID-19 testing in schools, and federal waiver flexibilities.
Includes funds for implementation of Medi-Cal for Older Adults Regardless of Immigration Status ($54 million ($43.1 million General Fund) in 2021-22 and $660.9 million ($567.1 million General Fund) in 2022-23): The Budget includes funds for the full year cost of expanding full-scope Medi-Cal to older adults age 50 and older regardless of immigration status effective May 1, 2022 (inclusive of IHSS costs). This policy change was included in the 2021 Budget Act. The Governor’s budget fails to include funds for marketing and outreach to undocumented senior adults to ensure they are aware of this new benefit. CPEHN and state advocates will continue to urge the Administration to include funds for this purpose.
Includes funds for elimination of Medi-Cal Asset Limits for Older and Disabled Adults ($200.7 million ($93.4 million General Fund) in 2022-23): The budget includes funds to phase in the elimination of the Medi-Cal asset limit no sooner than January 1, 2022 (inclusive of IHSS costs). The asset limit will be fully eliminated no sooner than January 1, 2024 with an annual cost of $434.7 million ($201.3 million General Fund) ongoing. This policy change was included in the 2021 Budget Act.
Extends Adverse Childhood Experiences (ACES) Provider Training ($135.1 million ($67.6 million Mental Health Services Fund and federal funds)) over a three-year period.
County Eligibility Redeterminations Funding ($73 million total funds ($36.5 million General Fund) in each of 2021-22 and 2022-23): The budget includes funds for counties to resume annual redeterminations of Medi-Cal beneficiaries.
Includes funds for Indian Health Program Grant Restoration (one-time $12 million General Fund to restore grant funding for Tribal Health Programs): The budget includes funds for Indian Health Program grants, which provide health care services to American Indian populations, both on tribal land and in urban areas, and operate in designated Health Professional Shortage Areas. This funding will promote the retention of the health care workforce that serves these programs and decrease the health disparities experienced by American Indians.
Includes funds for the Reduction of Medi-Cal Premiums ($53.2 million ($18.9 million General Fund) in 2022-23 and $89 million ($31 million General Fund) annually): The Administration proposes to reduce the financial burden of paying for health care coverage for approximately 500,000 Medi-Cal enrollees who pay monthly premiums for coverage. The Budget includes funds to reduce premiums for beneficiaries, including pregnant women, children, and disabled working adults, whose income is marginally above the threshold for no cost Medi-Cal.
Sunsets the Child Health and Disability Prevention Program: The Administration proposes to sunset the Child Health and Disability Prevention Program (CHDP) effective July 1, 2023 to advance CalAIM’s goal of streamlining the Medi-Cal program. As part of this proposal, DHCS will implement the Children’s Presumptive Eligibility Program to replace the CHDP Gateway to allow applicable Medi-Cal providers to enroll children into Medi-Cal through the presumptive eligibility process.
Transitions Certain Proposition 56 Payments to Ongoing General Fund Support ($176 million): Proposition 56 revenues have declined over time and are insufficient to support current Proposition 56 payments beginning in FY 2022-23. The budget proposes to fully transition the following payments, valued at $147 million, to ongoing rate increases supported by the General Fund, beginning in FY 2022-23:
- Adverse Childhood Experiences Screenings
- AIDS Waiver
- Community-Based Adult Services
- Developmental Screenings
- Freestanding Pediatric Subacute
- Home Health Services o Intermediate Care Facilities for the Developmentally Disabled
- Non-emergency Medical Transportation (by converting the existing Proposition 56 supplemental payment to an ongoing rate increase, costs budgeted with other Proposition 56 changes)
- Pediatric Day Health Care
In addition, the budget includes an increase of $29 million from the General Fund to fully fund remaining Proposition 56 payments at their current level in FY 2022-23.
Medi-Cal Mental Health
The Administration has made numerous investments in behavioral health, including investments to expand services for children and youth, improve behavioral health facilities, and ensure timely access to behavioral health services for Medi-Cal consumers, regardless of where they begin care. Sadly, access to mental health care continues to be extremely challenging for Medi-Cal consumers. While these investments are a good start, the data shows Medi-Cal consumers continue to face other serious, systemic barriers to accessing timely, and culturally and linguistically appropriate mental health care. if California is to be truly successful in addressing Medi-Cal consumers’ mental health needs across the lifespan, the Administration should direct resources and policy change towards improving consumer outreach and education in Medi-Cal health plans, the most common entry point for care for the majority of Californians.
Includes a proposal to develop a plan to coordinate crisis response programs: A series of new state and federal resources aimed at reducing the impact of untreated behavioral health conditions on emergency departments, psychiatric facilities, and the criminal justice system have recently been introduced. This includes funds for a new Medi-Cal mobile crisis response services benefit and implementation of a 9-8-8 behavioral health crisis hotline (see details below). CPEHN and partners have advocated for CalHHS to implement these programs in a cohesive and coordinated fashion, with a clear commitment to advancing racial equity by building upon the promise of the Crisis Act and shifting funding to non-law enforcement response models. In response, the administration has indicated they plan to develop a plan to coordinate these various new state and federal programs aimed at addressing crisis in the January proposal:
- Funds for a new Medi-Cal mobile crisis response services benefit ($108 million total funds, $16 million General Fund). Starting as soon as January 1, 2023, California will add a new Medi-Cal benefit to ensure all Medi-Cal consumers can have access to mobile crisis services for a qualifying mental health and/or substance use disorder-related crisis 24 hours a day, 7 days a week. The benefit will be implemented through county behavioral health delivery systems by multidisciplinary mobile crisis teams in the community. CPEHN and partners have advocated for this new benefit to not fund law enforcement, a common practice, and instead fund proven community-based models that center racial equity. The American Rescue Plan Act of 2021 has authorized 85 percent federal matching funds for this new benefit. Trailer Bill language is forthcoming.
- Implementation of the 9‑8‑8 Behavioral Crisis Hotline ($7.5 million, $6 million ongoing). The budget includes general and ongoing funds for the California Governor’s Office of Emergency Services to advance implementation of the 9-8-8 call system, which aims to provide a person experiencing a behavioral health crisis access to a trained counselor by July 2022, an alternative to 911 for people seeking help during a mental health crisis. Though the proposal includes some funds for equipment to ensure existing crisis hotlines have the resources to support the anticipated increase in calls, adequate design, workforce, and funding are ongoing concerns for many local mental health providers.
Precision Medicine and Depression Research in Behavioral Health Settings ($10 million one-time funding). The budget includes one-time General Fund for a competitive grant program to support precision medicine-based approaches to preventing, diagnosing, and treating depression. Clear evidence links the impact of systemic racism on medical research and interventions, particularly in the area of behavioral health. CPEHN urges the Administration to release more details about this proposal and clarify how these funds will not perpetuate racial disparities in behavioral health.
Continued implementation of the behavioral health crisis care continuum ($2.4 billion): The administration will continue implementation of previous investments in behavioral, including investments to expand services for children and youth, improve behavioral health facilities, and ensure timely access to behavioral health services for Medi-Cal consumers, regardless of where they begin care.
Opioid Response ($96 million 2022-23 and $61 million ongoing). The current opioid epidemic is one of the largest drug epidemics in U.S. history, and the increasing availability of synthetic opioids and psychostimulants has resulted in a disproportionate share of deaths occurring in communities of color and low-income communities. The administration has included funds for a number of programs to combat the epidemic, including:
- Medication Assessment Treatment Expansion Program ($96 million)
- Public Awareness Campaign Targeted Towards Youth Opioid Education awareness and fentanyl risk education ($50 million)
- Improving the state’s ability to collect and analyze data on opioid overdose trends ($5 million)
- provider training on opioid treatment ($26 million) for the Department of Health Care Access
- Information, and distributing naloxone to homeless service providers ($5 million) for the Department of Health Care Services.
Housing and Supports for Individuals with High-Risk Behavioral Health Needs. The Governor’s January Budget includes funding to support individuals with the greatest risk of homelessness, including individuals with serious behavioral health needs and individuals leaving incarceration.The budget includes:
- $1.5 billion General Fund for behavioral health bridge housing
- $571 million in prevention and community-based services to reduce the flow of new incoming referrals to incompetent to stand trial, and to treat the nearly 1,700 individuals currently found Incompetent to Stand Trial (IST) on felony charges and waiting in jail, and
- Expansion of pre-release and post release services for incarcerated individual, which includes requirement counties to process Medi-Cal applications for incarcerated individual’s pre-release, to access need health and behavioral health services. Additionally, the governor’s budget includes plans to develop a broader strategy for preventing institutionalization and incarceration through community-based care.
- A new multi-disciplinary mobile crisis services benefit to Medi-Cal.
Investments in Workforce, including dedicated funds to expand stipends and scholarships for social workers ($210 million) and, trainings for psychiatric residents $120 million) and an investment in recruiting, training, and certifying 25,000 new community health workers.
Oral Health
Adult Californians enrolled in Medi-Cal continue to lack access to equitable access to critical oral health. The Governor’s budget proposes to expand access to custom crowns. While pre-fabricated crowns are considered a covered benefit under Medi-Cal, they are meant to be temporary, and they are by no means customizable. Adding this benefit will create parity for Medi-Cal patients.
The Governor’s proposal also expands Medi-Cal coverage to all Californians, regardless of immigration status, would ensure that many Californians will have access to oral health coverage for the first time ever (see above). Some of the benefits this newly eligible population will have access to are full and partial dentures, root canals, deep cleanings, and hopefully, custom crowns.
Medi-Cal Dental Policy Evidence-Based Practices ($37 million total funds, $13 million General Fund): The Department of Health Care Services proposes to update coverage requirements in Medi-Cal to include evidence-based dental practices. This will mean that instead of stainless-steel crowns, laboratory-processed crowns for posterior teeth will be available for adult Medi-Cal beneficiaries. Laboratory-processed crowns are custom made for a tooth, and therefore prevent further degradation of the tooth, making them an improved option for Medi-Cal beneficiaries, compared to stainless-steel crowns.
Proposition 56 Provider Payments ($176 million General Fund): A portion of Proposition 56 revenue is distributed to the Department of Health Care Services to increase the level of payment for health care, services, and treatment provided to Medi-Cal beneficiaries, including dental services. As tobacco use declines, revenue collected through Proposition 56’s cigarette tax continues to decline. For this reason, the Governor’s Budget includes $176 million to support Medi-Cal supplemental payments funded by Proposition 56, as Proposition 56 revenue declines.
State-Only Claiming Adjustment ($1.5 billion General Fund): The Governor’s Budget includes $728.3 million General Fund in 2021-22 and $1.5 billion General Fund in 2022-23 for retroactive and ongoing dental, pharmacy, managed care, and behavioral health costs associated with state-only populations.
Dental Managed Care: The Administration plans to extend dental managed care contracts and reprocure new contracts no sooner than January 1, 2024.
Incarcerated Patient Medical Care ($3.8 billion General Fund): The Governor’s Budget proposes $3.8 billion for health care programs that provide incarcerated individuals with access to medical care. Dental care services are also included in this scope of care and services.
Federal Approval of Cal-AIM Dental Initiatives: To follow through on their commitment to improving the accessibility of Medi-Cal dental services and improving oral health outcomes for Medi-Cal members statewide, the Department of Health Care Services through CalAIM submitted a State Plan Amendment to CMS for expanded pay-for-performance payments and two new benefits. The State Plan Amendment was approved by CMS on December 15, 2021, authorizing the following initiatives, effective January 1, 2022:
- Expanded pay-for-performance payments:
- Preventative pay-for-performance: This offers a performance payment for each paid preventative service. The goal is to increase statewide utilization of preventative services for all Medi-Cal members.
- Continuity of care pay-for-performance: This offers a flat rate performance payment paid annually to offices that maintain dental continuity of care. The goal is to establish a dental home for all Medi-Cal members, so patients return to the same dental office for continuity of care and improved health/oral health outcomes.
- Caries Risk Assessment: This new benefit assesses and manages caries risk and emphasizes preventative services in place of more invasive and costly procedures for children aged 0-6.
- Silver Diamine Fluoride: This new benefit provides an option for caries arresting treatment when restorative caries treatment may not be adequate. This benefit is reimbursable for children aged 0-6 and individuals with underlying conditions for whom nonrestorative caries treatment may be adequate.
Public Health & Prevention
Invests in Public Health Infrastructure ($300 million ongoing): Governor Newsom’s proposed 2022-23 state budget includes $300 million in funding to strengthen the state’s public health infrastructure, substantiating a promise from the 2021-22 California state budget. Of the total,100 million will be allocated to the California Department of Public Health (CDPH) for key investments including, establishment of an Office of Policy and Planning, strengthening emergency preparedness capacity, supporting workforce expansion, enhancing communication and public education, directing efforts towards population health management, and improving organizational equity efforts and quality measurements overall. The remaining 200 million will be allocated to California’s 61 local health jurisdictions (LHJs), following an allocation formula that takes into account race/ethnicity and poverty indices. These additional local assistances are directed to expand staffing, improve data collection and integration, and expand community partnerships at LHJs. These decisions were made following the recommendations from the 2021 “Future of Public Health Work Group” to assess gaps in the state’s public health infrastructure.
Fails to include an investment in community-based organizations as part of California’s public health infrastructure: We applaud the state for investing in public infrastructure, however more needs to be done. Despite extensive advocacy from CPEHN, health and racial equity advocates in the last year, the proposed ongoing 300 million general fund in the proposed 2022-23 state budget fails to include direct investments in non-governmental, community-based organizations who are critical parts of California’s public health system and in particular filled the gaps for underserved communities during the COVID-19 pandemic.
Fails to Address Racism as a Public Health Crisis: Governor Newsom’s proposed 2022-23 state budget fails to acknowledge that racism is a public health crisis, nor does it commit actions to tackle institutionalized racism within the state government.
COVID-19 Public Health Responses: The 2022-23 budget proposal provides an overview of approximately $5 billion that California and state and local public health departments received from the Centers for Disease Control and Prevention since the onset of the pandemic. These federal funds have contributed to enhanced departmental capacity and staffing expansion, but are temporary in nature.
Given recent variants and case surges, Governor Newsom’s proposed 2022-23 state budget seeks early action by the Legislature to allocate $1.43 billion in the current budget year to continue efforts in vaccination, expanding testing and supporting hospital surge staffing. The Administration estimates in the budget proposal that the state’s pandemic response costs through various departments have grown to $3.2 billion, or $1.43 billion above the level authorized in the 2021 Budget Act which authorized $1.75 billion to COVID-19 response activities. The Governor’s budget proposal projects expenditures at approximately $1.25 billion for budget year 2022-23. (From 2019-20 through 2022-23, direct emergency response costs due to the pandemic are estimated to be $13.9 billion.) Estimates for key public health strategies are as follows.
- Vaccination: The budget proposes an additional $399 million in 2021-22 and $182 million in 2022-23 for vaccine distribution and administration.
- Testing: The Budget proposes an additional $214 million in 2021-22 to maintain and expand testing operations and $362 million for continued testing efforts in 2022-23.
- Hospital Surge: Given the demand for medical surge staff and vaccine administrators, the Budget proposes an augmentation of $478 million for surge staffing in 2021-22 and $124 million in the budget year 2022-23.
The budget proposal also urges the Legislature to extend COVID-19 Supplemental Paid Sick Leave beyond September 30, 2021 (Senate Bill 95 of 2021) through additional legislative actions.
The budget proposal specifically directs $74 million General Fund to CDPH to support continued COVID-19 Pandemic response and humanitarian efforts for newly arrived migrants and local border communities. This is following the efforts since 2021 to provide health and social relief for the migration and border communities due to the pandemic.
Climate Change Resilience Programs ($385 million): Governor Newsom’s proposed 2022-23 state budget includes three initiatives to strengthen the state’s climate resilience through the California Department of Public Health (CDPH). These proposed initiatives include $10 million ongoing General Fund to establish a disease surveillance program, $25 million one-time General Fund Local Health Jurisdictions to develop regional Climate and Health Resilience Plans, and $350 million one-time General Fund to recruit, train, and certify 25,000 new community health workers by 2025 in areas such as climate health, homelessness, and dementia to meet the goal of a more ethnically and culturally inclusive workforce by 2025.
Federal Relief to California for Pandemic Response ($657 billion): The Governor’s proposed budget provides a summary of the total $657 billion federal aid California has received since March 2020 through six enacted federal legislations. Most recently, the American Rescue Plan Act of 2021 provided California with $27 billion flexible aid (i.e. the State and Local Fiscal Recovery Fund), of which $11.2 billion will be used to offset California’s General Fund revenue losses.
Supporting Community-Based Organizations through Non-Profit Hospital Community Benefit Fund: Governor Newsom’s proposed 2022-23 state budget proposed to require non-profit hospitals across the state to use 25 percent of their community benefit dollars to invest in local community-based organizations to address the social determinants of health.
Other Health Programs
Office of Health Care Affordability ($30 million): The new office will be established in Department of Health Care Access and Information and aims to increase transparency on cost and quality, develop cost targets for the health care industry, enforce compliance through financial penalties, and improve market oversight of transactions that may adversely impact market competition, prices, quality, access, and the total cost of care.The Budget reappropriates funding for the Office that was originally included in the 2021 Budget Act and proposes statutory changes for its establishment.
Enhancing Covered California Subsidies ($333.4 million): The Governor’s budget proposes to tap into $333.4 million deposited into a reserve fund as part of the FY 2021-22 state budget (AB 128, AB 133) to be used for future affordability programs. Covered California has developed a report (as required by AB 133) “Bringing Coverage within Reach: Promoting California Marketplace Affordability and Improving Access to Care in 2023 and Beyond,” which provides options to reduce out-of-pocket expenses for consumers which continue to rise at unsustainable levels. The Administration will work with the Legislature, Covered California, and stakeholders, including CPEHN on options to further improve affordability and access to health care coverage, while considering the role that potential federal legislation may play in determining the ongoing level of federal subsidies available through Covered California.
Reducing the Cost of Insulin: A potential partnership with a contract manufacturer of insulin could position the state to find drug affordability solutions as it lays the groundwork for future collaborations on other high-priority drugs, securing more consistent and reliable supply chains, and advancing a Healthy California for All where cost is not a barrier to essential medicines.
Reproductive Health
- Increasing Flexibilities— To increase flexibility for Medi-Cal providers to provide clinically appropriate medication abortion services, the Department of Health Care Services (DHCS) will modify its existing billing requirements to remove requirements for in-person follow up visits and ultrasounds, if not clinically indicated.
- Family Planning, Access, Care and Treatment (PACT) HPV Vaccine Coverage ($8 million, $4.6 million General Fund, in 2022-23 and ongoing) – to add the human papillomavirus vaccine as a covered benefit under the Family PACT program, effective July 1, 2022.
- Clinical Infrastructure (One-time funding of $20 million General Fund within the Department of Health Care Access and Information) Provides scholarships and loan repayments to a variety of health care provider types that commit to providing reproductive health care services.
- Capital Infrastructure (One-time funding of $20 million in grant funding to the Department of Health Care Access and Information) Assists reproductive health care facilities in securing their physical and information technology infrastructure and to enhance facility security.
- Zeroing out Covered California Premiums ($20 million): The Budget includes $20 million General Fund in 2022-23 for Covered California to support the One-Dollar Premium Subsidy program which subsidizes the cost of Covered California consumers for health plans due to federal policy concerning abortion coverage.
Additional Funds for Department of State Hospitals ($2.6 billion, $2.4 billion General Fund, in 2022-23). The Department of State Hospitals (DSH) administers the state mental health hospital system, the Forensic Conditional Release Program, the Sex Offender Commitment Program, and the evaluation and treatment of judicially and civilly committed patients. This patient population is expected to reach 8,064 by the end of 2022-23.
- Incompetent to Stand Trial (IST) Solutions Workgroup—The Budget includes statutory language authorizing the Department of Finance to augment DSH’s budget by an additional $350 million General Fund, building on the $175 million already available in 2022-23 authorized by the 2021 Budget Act for the purposes of implementing solutions identified by the Incompetent to Stand Trial (IST) Workgroup to address the IST patient waitlist.
- Electronic Health Records (EHR) Phase 3—The Budget includes $2.4 million General Fund in 2022-23, $19.8 million General Fund in 2023-24, $20.8 million General Fund in 2024-25 and $8.2 million General Fund in 2025-26 and ongoing to prepare for and support operation of the enterprise Continuum EHR project.
- COVID-19 Impacts—The Budget includes $64.6 million General Fund in 2022-23 related to direct response costs to continue responding to and mitigating the impacts of the COVID-19 Pandemic
Funds Department of Health Care Access and Information (HCAI) ($310.5 million General Fund in 2022-23). HCAI collects data and disseminates information about California’s healthcare infrastructure and publishes information about healthcare outcomes; promotes an improved healthcare workforce with loan and scholarship programs; monitors the construction, renovation, and seismic safety of hospitals and skilled nursing facilities; and provides loan insurance to assist the capital needs of California’s non-profit healthcare facilities.
Specifically, there will be adjustments around:
- Care Economy: Workforce for a Healthy California for All ($1 billion over three years): to strengthen and expand the state’s health and human services workforce
- Clinical Infrastructure: Reproductive Health Care ($20 million): to provide scholarship and loan repayments to a variety of health care provider types that commit to providing reproductive health care services.
- Capital Infrastructure: Reproductive Health Care ($20 million): to assist reproductive health care facilities in securing their physical and information technology infrastructure.
- Office of Health Care Affordability ($30 million): to lower health care costs, improve quality and address health equity.
- Community Benefit Funding for Community-Based Organizations (CBOs): to require non-profit hospitals to direct 25% of their hospital community benefit dollars to CBOs with HCAI enforcement authority.
Specific Immigrant Programs Food4All ($35.2 million increasing to $113.4 million in 2025-26): The Governor’s Proposed Budget provides funds for planning purposes to expand the California Food Assistance Program to Californians ages 55 and above, regardless of immigration status.
Immigration Legal Services (43.6 million ongoing): The proposed budget includes ongoing funding for Immigration Services Funding which assists applicants seeking Deferred Action for Childhood Arrivals (DACA), naturalization, affirmative immigration remedies, provides legal training and technical assistance, education and outreach activities and services to assist individuals with removal defense.
Immigrant Workforce: The Governor’s Proposed Budget includes allocated funds for the Labor and Workforce Development Agency (LWDA) and Governor’s Office of Business and Economic Development (Go-Biz), to invest in innovative practices that will increase immigrants’ participation in the workforce to help close critical gaps in the state’s economy. These include:
- Integrated Education and Training ($30M one-time funds)for the Employment Development Department’s Workforce Services Branch. These funds would expand English Language Learner pilot programs and combine English language instruction with vocational skills training.
- Workforce Literacy ($20M one-time funds) for the Employment Training Panel to expand workplace literacy training, digital skills, and technical skills training for incumbent workers in an effort to provide pathways for higher-wage jobs.
- Grants for Local Government ($8.7M one-time funds) to create competitive grants for local governments to build trust with immigrant residents and help immigrant community members navigate state and local services.
- Immigrant-Focused Position ($150,000 ongoing funds) for one position at Go-Biz to support statewide immigrant integration collaboration with existing similar positions across state government.
- Business Quick Start and Navigational Guides ($600,000 in 2022-23 and $200,000 annually thereafter), to develop navigational guides regarding professional licensing for immigrants, provide additional translations for these resources, and expand online resources.
Migration and Border Communities ($74 million one-time funds): The Governor’s Proposed Budget includes funds, for the Department of Public Health, to provide continued COVID-19 pandemic support and humanitarian response efforts. The funds would support sheltering, testing, vaccines, and support services for newly arrived migrants.
Human Services
Support for Food Banks: The budget proposal also includes an investment of $50M one-time funds to support the CalFood program and food banks throughout the state as they work to mitigate food insecurity along low-income communities.
Community Benefit Funding for Community-Based Organizations (CBOs): The Governor’s Proposed Budget proposes to make statutory changes that would direct 25% of non-profit hospital community benefit dollars to community-based organizations. Currently, nonprofit hospitals are required to create Community Benefit Plans that demonstrate how the institution has identified and worked to address community needs. The Administration would require nonprofit hospitals to include information in the Benefit Plans on work done in collaboration with community-based organizations to address the social determinants of health. The oversight for these statutory changes and enforcement would fall on the Department of Health Care Access and Information (HCAI).
Supplemental Security Income/State Supplementary Payment (SSI/SSP) Investments: The Governor’s Proposed Budget aims to begin to restore SSI/SSP payments to pre-Great Recession levels by taking steps to close the gap. The budget includes a $3.1B investment in 2022-23 to support caseload management within the Department of Health Care Services and a cost-of-living adjustment for monthly payments. Beginning January 1, 2024 there would be an investment of $296M in 2023-24 and $593M ongoing thereafter to fully restore benefits. These changes would also apply to the state-funded Cash Assistance Program for Immigrants (CAPI) program which provides benefits to individuals who are ineligible for SSI/SSP due solely to their immigration status.
Helpline for California Parents and Youth: The Governor’s Proposed Budget includes an allocation of $4.7M one-time funds to continue the Helpline for California Parents and Youth within the Department of Social Services. These funds would be used over a period of three years to support the continuation of the hotline, which serves as a resource for children, families, and seniors to receive guidance on safety net services via phone or online.
Care Economy Investments: The Governor’s Proposed Budget includes a $1.7B investment, over a period of three years, to bolster efforts that will expand the Care Economy workforce to recruit, train, and hire an ethnically and culturally diverse workforce that has improved diversity and health equity outcomes. The California Health and Human Services Agency (CalHHS) and the Labor and Workforce Development Agency (LWDA) will work in collaboration to oversee and implement various components of the proposed package. The investments noted here are specific to immigrant and non-English speaking communities, and include:
- Community Health Workers: $350M to DHCS and HCAI to recruit, train, and certify 25,000 new Community Health Workers by 2025. These workers will also have specialty certifications in areas such as climate health, homelessness, and dementia.
- English Language Learners Health Careers: $130M one-time Proposition 98 funds to support healthcare-focused pathways and vocational opportunities for English language learned, at all levels of proficiency, to increase language and cultural diversity in the field.
- Multilingual Health Initiatives: $60M to expand scholarship and loan repayment programs in health care and social work for multilingual applicants. These funds would also support efforts to increase language and cultural competencies throughout the entire health workforce.
- Indian Health Program Grant Restoration: $12M one-time for Tribal Health Programs. The funds will assist with the retention of programs that provide these services to Native communities and work towards decreasing health disparities experienced by Native Americans.
Public Safety
CPEHN understands that incarceration and policing are key health issues affecting BIPOC communities
everyday. For instance, at least 33% of people in California’s state prisons are diagnosed with mental health needs (CURB) and the state’s carceral system has often been the last resort for many to receive care. Although there is significant funding for rehabilitation services for incarcerated peoples, we
also call for increased funding for preventative systems of care that ensures communities can receive support outside of the justice system. Additionally, there must be increased support for formerly incarcerated people to continue to receive care even after release and re-entering their communities. We will continue to monitor the intersection of health and public safety throughout this budget cycle.
The Governor’s Budget includes total funding of $14.2 billion for the California Department of Corrections and Rehabilitation in 2022-23.
COVID-19 Response: The state is allocating a $424.7 million General Fund for CDCR to respond and mitigate COVID-19 in state prisons. This funding is designated for COVID-19 testing, the use of masks and PPEs, and cleaning and sanitation services.
Rehabilitation and Re-entry
- Returning Home Well Program: Provides emergency transitional housing services to individuals who would have been at risk of being unhoused at the time of their release. The budget includes a $10.6 million General Fund annually for three years to continue the program.
- Ongoing Education: The Budget includes $5 million General Fund to permanently fund Bachelor’s Degree Programs in collaboration with the California State University system. These programs will be available to students after they complete their community college programs.
- Tattoo Removal Services: The Budget includes $567,000 General Fund in 2022-23 and $1.1 million through 2025-26 to provide tattoo removal services to incarcerated persons.
- California Correctional Health Care Services (CCHCS): The state will allocate $3.9 million from the General Fund in 2022-23 and $4.6 million ongoing to provide administrative support for important rehabilitative services.
Incarcerated Patient Medical Care and Mental Health Services
- The budget includes $3.8 billion General Fund in 2022-23 for health care programs, which provide incarcerated individuals with access to mental health, medical, and dental care services that are consistent with the standards and scope of care appropriate within a custodial environment.
- Integrated Substance Use Disorder Treatment Program: ISUDT was designed as a whole person care delivery model and to provide treatments for incarcerated individuals with substance use disorders. The Budget includes $126.6 million General Fund in 2022-23, and $162.5 million ongoing, to expand the Program.
- CalAIM: The Budget includes $10.4 million ongoing to implement California Advancing and Innovating Medi-Cal (CalAIM) services and supports for justice-involved individuals (details above).
Juvenile Justice: Counties will be responsible for serving all justice-involved youth. In 2020-21, to facilitate this realignment, the Board of State and Community Corrections (BSCC) allocated $9.6 million in one-time funds for the Regional Youth Programs and Facilities Grant Program as authorized by SB 823. The Budget includes $100 million one-time General Fund for grants to be administered by the BSCC to support improvements to county-operated juvenile facilities, with a focus on trauma-informed care, restorative justice, and rehabilitative programming.
Bolstering Local Public Safety
- The Budget includes a total of $356 million General Fund over three years, including $132 million in 2022-23, to bolster local law enforcement efforts responding to respond to organized retail theft and other crimes and support affected small businesses
- $85 million annually through 2024-25 in competitive grants for local law enforcement to combat organized retail crime.
- $10 million annually through 2024-25 for competitive grants to local District Attorneys to create retail theft prosecution teams.
- $6 million in 2022-23 to provide a total of $15 million annually for CHP to create an Organized Retail Theft Taskforce.
- $20 million one-time for grants to small businesses that have been the victim of retail theft
- The Budget includes $25 million one-time General Fund to establish a competitive grant program to support local gun buyback programs.
Proposition 47 Savings—In November 2014, voters passed Proposition 47, which requires misdemeanor rather than felony sentencing for certain property and drug crimes and permits incarcerated persons previously sentenced for these reclassified crimes to petition for resentencing. Proposition 47 established a fund to invest savings from reduced prison utilization to prevention and support community programs. The Department of Finance estimates net General Fund savings of $147.3 million in 2022-23.
- These funds will be allocated according to the formula specified in the initiative, which requires 65 percent be allocated for grants to public agencies to support various recidivism reduction programs (such as mental health and substance use treatment services), 25 percent for grants to support truancy and dropout prevention programs, and 10 percent for grants for victims’ services.
Department of Justice: The Budget includes total funding of approximately $1.2 billion, including $433 million General Fund, to support DOJ.
- Police Officer Use of Force—$2.3 million General Fund in 2022-23, and $1.6 million ongoing, to investigate officer-involved shootings that result in the death of an unarmed civilian
- Reproductive Health Care Services—$879,000 General Fund in 2022-23 and $671,000 ongoing to implement new data reporting requirements, prepare an annual report that details anti-reproductive healthcare rights violations and criminal offenses, and provide legal guidance to state and local entities
The Commission on Peace Officer Standards and Training (POST) has a long history of establishing selection and training standards.
- Implementation of SB 2—The Budget includes $22.7 million General Fund in 2022-23, and $20.6 million ongoing, for POST to support implementation of SB 2. SB 2 authorized POST to suspend, revoke, or cancel any peace officer certifications under specified conditions.
Housing, Homelessness, Anti-poverty
State Excess Sites Development—$100 million one-time General Fund ($25 million in 2022-23, and $75 million in 2023-24) to expand affordable housing development and adaptive reuse opportunities on state excess land sites. This will leverage state land as an asset to expedite housing opportunities by offering low-cost, long-term ground leases in exchange for affordable and mixed-income housing.
Mobile home Park Rehabilitation and Resident Ownership Program—$100 million one-time General Fund ($25 million in 2022-23, and $75 million in 2023-24) for HCD’s Mobile home Park Rehabilitation and Resident Ownership Program. These funds will finance the preservation and development of affordable mobile home parks, assisting one of the communities disproportionately and negatively impacted by the state’s affordability and climate challenges.
Encampment Resolution Grants: Building on the $50 million of Encampment Resolution Grants to local jurisdictions that will be awarded in Spring 2022, the Budget includes an additional $500 million one-time General Fund to deploy a substantially expanded program for jurisdictions to invest in short- and long-term rehousing strategies for people experiencing homelessness in encampments around the state.
Transitional Housing for the formerly incarcerated: The Budget includes $10.6 million General Fund annually for three years to continue the Returning Home Well Program, which provides transitional housing services to individuals who would otherwise be at risk of being unhoused at the time of their release. This program, initiated during the COVID-19 Pandemic, has served nearly 5,300 individuals to date. For more information, see the Criminal Justice Chapter.
Homeless Housing and Assistance Program: Local governments are required to submit local homeless action plans to Cal-ICH as a condition of receiving funding through the Homeless Housing and Assistance Program. This $2 billion one-time General Fund, multi-year, flexible grant program is available to counties, large cities, and Continuums of Care. Cal-ICH will work with local grantees on their accountability plans so that local governments begin taking immediate steps towards implementation. The California Interagency Council on Homelessness (Cal-ICH), formerly named the Homeless Coordinating and Financing Council
Housing and Homelessness, overall resources: The Budget reflects the Administration’s commitment to equitably build more affordable housing for Californians and expand access to housing for vulnerable populations, including individuals with complex behavioral health conditions and people living in unsheltered settings. In total, the Budget includes $9 billion for housing resources and $8 billion for homelessness resources in 2022-23, as detailed below.
The Young Child Tax Credit: Established in 2019, provides a $1,000 refundable tax credit to low-income earners with a child age 5 or younger. The Budget expands this tax credit to families that file returns without income, allowing more families to benefit, and proposes to index the credit to inflation, which will prevent the erosion of its value.
Transportation/Climate ChangeCreating a green school bus fleet: $1.5 billion one-time Proposition 98 General Fund, available over three years, to support school transportation programs, with a focus on greening school bus fleets. Specifically, grants of at least $500,000 would be available with priority for local educational agencies with high concentrations of low-income students, youth in foster care, and English language learners, as well as small and rural local educational agencies. For $500,000, a local educational agency will be able to acquire an electric school bus, construct the bus’s charging station, and support other local school bus transportation needs. These investments will result in ongoing savings to transportation programs that could be used to support other aspects of school transportation programs.
Decarbonizing California’s most polluted sectors: An additional $6.1 billion ($3.5 billion General Fund, $1.5 billion Proposition 98, $676 million Greenhouse Gas Reduction Fund, and $383 million Federal Funds) one-time over five years, with a focus on communities that are most impacted, bringing the total investment to $10 billion over six years to decarbonize California’s most polluting sector and improve public health. The Budget proposes targeted investments in disadvantaged and low-income communities, including tribal communities, to increase access to the benefits of clean transportation and more than doubles the money targeted for heavy-duty market acceleration.
Low-Income Zero-Emission Vehicles and Infrastructure: $256 million for low-income consumer purchases, and $900 million to expand affordable and convenient ZEV infrastructure access in low-income neighborhoods. These investments will focus on planning and deploying a range of charging options to support communities, including grid-friendly high-power fast chargers and at-home charging.
Zero-Emission Mobility: $419 million to support sustainable community-based transportation equity projects that increase access to zero-emission mobility in low-income communities. This includes supporting clean mobility options, sustainable transportation and equity projects, and plans that have already been developed by communities that address mobility. These locally driven projects continue to be a direct response to critical mobility needs identified by community-based organizations
High-Speed Rail and Transit Safety Improvements—$4.2 billion Proposition 1A bond funds for High-Speed Rail, $3.25 billion General Fund for statewide, regional and local transit and rail projects, and $500 million General Fund for high-priority rail safety improvements.
Climate Adaption Projects—$400 million General Fund for climate adaptation projects that support climate resiliency and reduce infrastructure risk.
High-Speed Rail in the Central Valley: $4.2 billion to complete electrified high-speed rail construction in the Central Valley, perform advance work for service between Merced and Bakersfield, and complete advance planning and project design for the entire project. This is in addition to the funds available for this program in Cap and Trade.
Active Transportation and Projects to Connect Communities: $750 million to transform the state’s active transportation networks, improve equity, and support carbon-free transportation options, including: $500 million for Active Transportation Program projects, which encourage increased use of active modes of transportation such as walking and biking, and increase the safety and mobility of non-motorized users.
Workforce Development and Training for Climate Change: $35 million General Fund for the UC to create regional workforce development and training hubs focused on climate change; $30 million General Fund over two years to the CCC to train, develop, and certify forestry professionals; and $60 million General Fund over three years for the California Workforce Development Board’s Low Carbon Economy Workforce grant program to support workforce development programs that align with strategies in the state’s Climate Change Scoping Plan.
Drought Response: additional $750 million General Fund to address immediate drought response needs, including $250 million set aside as a contingency. These investments will expand support for critical drinking water emergencies and mitigate drought damage to fish and wildlife, and the investments will also support small farmers and ranchers and water systems facing a loss of water supply.
Climate Initiatives: An increase of $185 million one-time General Fund to support three complementary climate initiatives, including $100 million for climate action research seed and matching grants available to researchers from the UC system and other institutions, $50 million for regional climate innovation incubators, and $35 million to establish climate workforce development and training hubs.
Climate and Health Resilience Planning: $25 million one-time General Fund for a grant program to bolster the actions of local health jurisdictions and develop regional Climate and Health Resilience Plans.
Climate, Health and Disease Monitoring—$10 million ongoing General Fund to establish a monitoring program to track emerging or intensified climate-sensitive health impacts and diseases.
Community Air Monitoring—$30 million one-time Greenhouse Gas Reduction Fund to deploy local, real-time pollution monitoring, including climate, air and toxic emissions, in disadvantaged communities across the state.
Community Resilience Centers Program: $25 million to support vulnerable residents experiencing extreme heat, wildfires, power outages, flooding, and other emergency situations brought about by the climate crisis.
Low-Income Weatherization Program: $25 million to accelerate energy efficient upgrades in low-income households through, for example, accelerated deployment of air conditioning heat pumps and low global warming potential refrigerants in communities particularly vulnerable to heat.
Transformative Climate Communities Program: $165 million to support catalytic projects that serve as a model for equitable, community-driven infrastructure investments in the most disadvantaged communities of California.
Regional Climate Collaboratives and Resilience: $135 million to provide direct investment in communities through capacity building grants, tribal, local and regional adaptation planning, and implementation of resilience projects.
California Climate Action Corps: $4.7 million ongoing to empower Californians to take climate action through service positions, volunteer opportunities, or individual action.
Community Air Protection Program (AB 617): $240 million to support the Community Air Protection Program, which reduces emissions in communities with disproportionate exposure to air pollution through targeted air monitoring and community emissions reduction programs. This funding will provide grants to community-based organizations, implementation funding for local air districts, and incentives for cleaner vehicles and equipment.
Expanding Monitoring in Disadvantaged Communities: $30 million to deploy local and real-time pollution monitoring, including climate, air, and toxic emissions, in disadvantaged communities across the state.
Establishing Office of Racial Equity at the Air Resources Board: $1.8 million Air Pollution Control Fund ongoing and four positions to establish the new Office of Racial Equity (Office) at the Air Resources Board. The Office will help coordinate, integrate, and implement racial equity into policy development, with an initial focus on research, incentive programs, regulations, air quality planning, and climate change. The Office will help develop trainings for staff to engage communities and advance racial equity.
Advancing Racial Equity and Environmental Justice in OEHHA’s Scientific Activities: $1.3 million ongoing for the Office of Environmental Health Hazard Assessment (OEHHA) to advance racial equity and environmental justice through science, data, and research including: $565,000 ongoing General Fund and two positions to create a new racial equity and environmental justice program. The program would formulate strategies, policies, and technical assessments to advance racial equity in OEHHA’s scientific activities, including quantitative risk-assessment methods.
Strengthening CalEnviroScreen: $370,000 ongoing funding from multiple fund sources and two positions to support the tracking of changes in community pollution burden using information from the CalEnviroScreen mapping tool. CalEnviroScreen assigns cumulative scores to communities based on indicators such as environmental pollution exposure, health, and socioeconomic vulnerability. Analyzing changes over time can provide information on the effectiveness of the state’s programs in addressing environmental justice.
Biomonitoring in Community Air Protection Program (AB 617) Communities: $350,000 ongoing Greenhouse Gas Reduction Fund for targeted biomonitoring studies in communities disproportionately impacted by air pollution. Contract funding will allow OEHHA to serve these diverse communities by applying biomonitoring to directly measure air pollution exposures in community members over time, increase understanding of the potential health risks they face, and support the design of effective strategies to reduce exposures.
Climate Action Plan for Transportation Infrastructure (CAPTI): Additional nearly $15 billion for transportation programs and projects that align with climate goals, advance public health and equity, and competitively position the state to pursue significant federal investment through the Infrastructure Investment and Jobs Act (IIJA) and other federal funding programs by leveraging funding from state and local sources.
Education
K-12 education: $119 billion K-12 per-pupil funding totals $15,261 Proposition 98 General Fund—its highest level ever—and $20,855 per pupil when accounting for all funding sources.
Enrichment, Arts and Music Instruction: Additional $3.4 billion Proposition 98 General Fund ongoing to support access to expanded-day, full-year instruction and enrichment for all elementary school students, with a focus on local educational agencies with the highest concentrations of low-income students, English language learners, and youth in foster care. Linked to this expansion is an additional $937 million Proposition 98 General Fund to support integrating arts and music into enrichment programs.
State Pre-School supporting students with disabilities and dual-language learners. $309 million so that the State Preschool Program better supports students with disabilities and dual language learners. These funds will support new requirements for State Preschool providers to: (1) serve at least 10 percent students with disabilities, and (2) provide additional supportive services for dual language learners. Additionally, all students participating in State Preschool will maintain continuous eligibility for 24 months (increased from 12 months) once eligibility is confirmed, children with an individualized education program will be categorically eligible to participate in State Preschool, and State Preschool providers that have served all eligible three- and four-year-olds in their service will be allowed to serve two-year-old children.
Inclusive Early Education Expansion Program: $500 million one-time Proposition 98 General Fund to support the Inclusive Early Education Expansion Program, which funds infrastructure necessary to support general education and special education students in inclusive classrooms.
STEM Pathway Programs: $1.5 billion one-time Proposition 98 General Fund over four years to support the development of pathway programs focused on technology (including computer science, green technology, and engineering), health care, education (including early education), and climate-related fields. These programs are predicated on developing local partnerships that bring together school systems, higher education institutions, employers, and other relevant community stakeholders.
High school student support, dual enrollment and career preparation: $500 million one-time Proposition 98 General Fund, also available over four years, to strengthen and expand student access and participation in dual enrollment opportunities that are also coupled with student advising and support services. These investments will be complemented by $45 million in higher education funding for curricular pathways software and public-private partnerships for STEM, education, and health care career preparation.
Part-Time Faculty Health Insurance: An increase of $200 million ongoing Proposition 98 General Fund to augment the Part-Time Faculty Health Insurance Program to expand healthcare coverage provided to part-time faculty by community college districts.
Healthcare Vocational Education: An increase of $130 million one-time Proposition 98 General Fund, of which $30 million is for 2022-23, $50 million is for 2023-24, and $50 million is for 2024-25, to support healthcare-focused vocational pathways for English language learners across all levels of English proficiency, through the Adult Education Program.
Graduate Medical Education: A decrease of $582,000 ongoing General Fund to adjust the Proposition 56 revenue offset amount for a statewide grant program and maintain $40 million ongoing for graduate medical residency slots.
Integrated Education and Training: $30 million to the Employment Development Department’s Workforce Services Branch to expand the English Language Learner pilots in the Integrated Education and Training programs to 15 sites across the state. These programs will combine contextualized English language instruction with vocational skills training for in-demand occupations.
Workforce Literacy: $20 million for the Employment Training Panel to expand workplace literacy training in contextualized English, digital skills, and technical skills training for incumbent workers. This will enable employers to build skilled workforces and increase employee retention and provide pathways to higher wages and better jobs for immigrants.
California Youth Leadership Program Language Justice Pathway: $10 million to expand earn-and-learn community change career pathways for community college students through the California Youth Leadership Corps, a new statewide partnership between the Labor Agency, the Community Learning Partnership, selected California community colleges, local nonprofit organizations, and community partners.
May 2022
Governor Continues Strong Investments in Health Equity; More Action Needed to Address Racism as a Public Health Crisis
Sacramento, CA – The California Pan-Ethnic Health Network released the following statement in response to the Governor’s May Budget Revision (FY 2022-2023) from Executive Director Kiran Savage-Sangwan.
“We are pleased to see the Governor’s May Revision continue the strong commitments to health equity that were proposed in January and enacted over the past three years. The Governor recognizes that the Medi-Cal program is the foundation of health equity in California and has made important investments in reforming that program so that it meets the needs of all Californians. In particular, we celebrate the investments to bring California nearly to universal coverage by removing immigration status as a barrier to Medi-Cal coverage and keeping Covered California affordable.
The May Revision builds on this foundation with several critical health equity investments:
- Extending the Medi-Cal Enrollment Navigator program, which will assist Californians with low incomes in accessing and navigating their coverage. The program is particularly important now as Medi-Cal eligibility expansions go into effect and the federal government contemplates ending the Public Health Emergency (PHE) and reinstating Medi-Cal redeterminations.
- Funding implementation of health information exchange by providing technical assistance and capacity building support so that health providers, including community-based organizations, are able to collect and exchange data and identify health disparities.
- Strengthening supports for pregnant and birthing people by improving access to doula care, a proven intervention for the unacceptable racial disparities in birth outcomes, and ensuring that California will remain a reproductive freedom and justice state.
At the same time, we must do more to recognize racism as a public health crisis, and to fund interventions that tackle inequities at their root. 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. We must double-down on that commitment now. We look forward to working with the Governor and the Legislature to build a Healthy California for All.”
Highlights of the FY 2022-23 Revised State Budget Proposal:
Total Budget: $300.7B
Historic State Surplus: $97.5B (subject to Prop 2 & Prop 98); $49.2B discretionary surplus
Total General Fund Spending: $227.4B
Total Spending for Health & Human Services: S64.7B (General Fund)
Rainy Day Fund: $23.B
Medi-Cal Adjustments
The Medi-Cal Budget is $36.6 billion General Fund in 2022-23, a 1.7 billion General Fund increase from the January Govenor’s Budget Proposal 2022-2023. The May Revision assumes that caseload will increase by approximately 6.6 percent from 2020-21 to 2021-22 and increase by 0.6 percent from 2021-22 to 2022-23. Medi-Cal is projected to cover approximately 14.5 million Californians in 2022-23, over one-third of the state’s population.
Key Changes:
- Reproductive Health: With reproductive freedoms changing across the United States, CPEHN is pleased to see an investment on reproductive justice and rights for Californians in the following areas:
- Uncompensated Care Funding for Reproductive Health Services ($40 million General Fund one-time, available over six years) for the Department of Health Care Access and Information to award grants to reproductive health care providers to offset the cost of providing care to low- and moderate-income individuals who do not have health care coverage for abortion care services.
- California Reproductive Justice and Freedom Fund ($15 million General Fund one-time) for the Department of Public Health to award grants to
- community-based reproductive health, rights, and justice organizations to conduct medically accurate and culturally competent outreach and education on sexual health and reproductive health issues.
- Comprehensive Reproductive Rights Website ($1 million General Fund one-time) for the Department of Public Health to develop and maintain a website providing accurate and updated information to the public on the right to abortion care under state law, information about reproductive health care providers, and options for coverage for reproductive services including state-funded coverage and programs.
- Research on the Unmet Needs for Reproductive Health Care Services ($1 million General Fund one-time) for the Department of Public Health to research the unmet needs for access to reproductive health care services
- Unwinding the Public Health Emergency (PHE): To ensure timely continuity of coverage for Medi-Cal beneficiaries when PHE ends and redetermination resume, the May revise includes the following:
- Health Enrollment Navigators Project ($60 million and $30 million General Fund, available over four years): Health enrollment navigators help eligible beneficiaries retain Medi-Cal coverage by assisting with annual renewals, reporting updated contact information, and engaging in outreach regarding application assistance and enrollment. Health enrollment navigators will also provide more targeted outreach and enrollment to support individuals newly eligible for Medi-Cal through coverage expansions, such as the expansion for all income-eligible Californians regardless of immigration status.
CPEHN and partners look forward to working with the Administration and Legislature on the details of an improved and enhanced navigator program. CPEHN is also sponsoring AB 2680 (Arambula), which seeks to look at lessons learned from the existing navigator program established in AB 74 (2018), in order to better serve the needs of our communities. Take Action by sending in a letter of support to Assembly Appropriations here.
- Coverage Ambassadors—DHCS is enlisting counties, CBOs, state and local government partners, Medi-Cal managed care plans, providers, and others to be Coverage Ambassadors to amplify messaging on various platforms related to the continuity of coverage for beneficiaries in preparation for the end of the PHE.
- Media and Outreach Campaign—An April 1 Budget proposal included $25 million ($12.5 million General Fund) for a media and outreach campaign to encourage beneficiaries to update their contact information with their counties, and to educate beneficiaries of the implications of their eligibility once the COVID-19 PHE ends.
- Transitions to Covered California—DHCS and Covered California are actively working to implement Chapter 845, Statutes of 2019 (SB 260) to support a seamless transition of eligible individuals from Medi-Cal coverage to a Covered California health plan.
- Separate Billing by Federally Qualified Health Centers (FQHCs) for COVID- 19 Vaccine Administration ($47 million total funds ($7 million General Fund): to continue separate billing by FQHCs for COVID-19 vaccines.
- Presumptive Eligibility for Individuals 65 and older, Blind, or Disabled ($73 million total funds ($37 million General Fund)): to continue presumptive eligibility for these populations.
- Increases funds to Doula Benefit (The estimated annual cost is $10.8 million ($4.2 million General Fund)): The May Revision proposes an increase to the maximum reimbursement rate per birth from an average of $450 to $1,094 per birth to better align with rates in other Medicaid programs as well as an implementation shift from July 2022 to January 2023. CPEHN applauds the Administration for investing the additional funds to attract and sustain the workforce and ensure opportunities and roles are accessible to racially and ethnically diverse individuals and those with intersecting identities.
Other Medi-Cal Changes/Adjustments:
- Increases Funds to Expansion of Full-Scope Medi-Cal Coverage Regardless of Immigration Status ($834million in 2023 and $2.6 billion annually thereafter)- the May Revision proposes an increase in $15 million total funds ($12 million General Fund) and $155 million total funds ($132 million General Fund) respectively towards this expansion and is due to an increase in estimated number of people eligible based on more recent data. We urge the Legislature and the Administration to expand Medi-Cal to all undocumented adults this year, while also preventing unnecessary age outs for those turning 26 before the implementation of this proposal.
- Increases funds to Equity and Practice Transformation Payments: (one-time funds of $700 million total funds including an addition $150 million General Fundin the May Revise): The May revise proposes an additional $300 million total funds towards Equity and Practice Transformation Payments which will advance equity; address gaps in preventive, maternity, and behavioral health care measures; reduce COVID-19 driven disparities; support upstream interventions to address social drivers of health and improve early childhood outcomes; and prepare practices to accept risk-based contracts and move towards value-based care. CPEHN has been advocating for many years for the state to tie health care payments in Medi-Cal to concrete, year-over-year goals for the reduction of health disparities. While this is a promising first step, we must continue to strengthen requirements on plans and providers for the collection of comprehensive, granular demographic data including for smaller subpopulations in order to ensure more equitable care for all.
- NEW: Village San Francisco and Yurok Tribe of California Regional Wellness Center (one-time $15 million General Fund): to support the construction of a Regional Wellness Center for substance abuse and behavioral health services for the Yurok Tribe of California. The May Revision also proposes one-time $15 million General Fund to support the construction of the Village San Francisco, Friendship House facility that will offer health care, behavioral health, and social support services)
- NEW: Medi-Cal Provider Equity Payments (one-time $400 million ($200 million General Fund)): for provider payments focused on advancing equity and improving quality in children’s preventive, maternity, and integrated behavioral health care.
CalAIM Adjustments:
- Increases funds to CalAIM ($1.1 billion in 2021-22, $3.1 billion in 2022-23): The May Revision updates to CalAIM which includes in part:
- Population Health Management Service: The Population Health Management Service is now anticipated to go live statewide in July 2023, with additional PHM Service capabilities incrementally phased in thereafter. DHCS intends to launch the PHM Service with a subset of key target partners from January 2023 to June 2023 to optimize
- Transitions to Managed Care: Under CalAIM, various populations are shifting to managed care as their primary delivery system. The Department continues work to carefully identify which additional individuals will need to transition. Once that work is completed and proper noticing is provided to both the Medi-Cal managed care plans and members, the additional populations will transition to mandatory managed care in January 2023.
- Justice Package: The estimated cost of inmate pre-release has been updated to reflect the inclusion of expanded pharmacy services as part of the package of benefits provided up to 90 days pre-release.
Oral Health-Key Changes Include:
- Adjusts Proposition 56 Funding for Supplemental Payments for Dentists ($295 million): The Department of Health Care Services receives funding from Proposition 56 to increase the level of reimbursement payments to Medi-Cal dentists. Because revenue collected from Proposition 56 has declined as the use of tobacco declines, the May Revise adjusts Proposition 56 funding to $295 million from the General Fund to provide supplemental payments.
- Establishes new General Fund Support for the Dental Transformation Initiative: The Dental Transformation Initiative (DTI) was extended in 2021 during the extension of the Medi-Cal 2020 waiver, and concluded on December 31, 2021. This year, there is an expectation that the total waiver allotment will be surpassed, which would result in a deficit in payments for DTI claims. For this reason, the Department of Health Care Services proposes to support the DTI deficit with $30.2 million in FY 2022-23.
Mental Health
Behavioral Health Adjustments
The unmet need for mental health care in California is devastating. We see it in our families in our communities, and in ourselves. The collective trauma of the COVID-19 pandemic has only intensified this need, particularly for young people. The May Revision includes $290 million over three years to prevent and address youth suicide in school and community-based settings. While mental health care is considered an essential benefit that must be provided by health insurers, there are still significant racial disparities present in the actual utilization of non-severe mental health services. CPEHN urges the Legislature and Administration to invest $15 million from the General Fund in FY 2022-2023 and $12 million ongoing to augment Californian’s capacity to support culturally and linguistically appropriate access to non-severe mental health services for children, youth and adults within Medi-Cal.
Other Adjustments
Community Assistance, Recovery and Empowerment (CARE) Court Program – The Governor’s May Revision allocates large sums of money toward expanding involuntary treatment for unhoused people living with severe mental illness. Legal and disability right advocates say the policy framework accompanying these new investments bypass existing requirements, ignore the evidence, undermine civil liberties, and perpetuate racial disparities. CARE Court will disproportionately harm Black, Indigenous and People of Color communities who are significantly more likely to be homeless and diagnosed with such conditions due to decades of unfair housing policy and inaccessible mental health care. The breakdown of investments are as follows, with the largest sum of money in the Care Court proposal allocated to the judicial branch to conduct hearing processes.
- Judicial Branch—$39.5 million General Fund in 2022-23 and $37.7 million ongoing for the Judicial Branch to conduct CARE Court hearings.
- Training and Technical Assistance—$15.2 million General Fund in 2022-23, $1.1 million General Fund annually between 2023-24 and 2026-27, and $1.3 million General Fund annually ongoing for the Department of Health Care Services to provide training and technical assistance to counties, data collection, and evaluation.
- Supporter Program—$10 million General Fund ongoing to the Department of Aging.
Behavioral Health Services for American Indian and Alaska Native Communities ($30 million)
- Substance Abuse and Behavioral health Services for the Yurok Tribe ($15 million) – The May Revision includes one-time to support the construction of a Regional Wellness Center for substance abuse and behavioral health services for the Yurok Tribe, the largest Tribe in California.
- Construction of Village San Francisco, Friendship House ($15 million) – The May Revision includes funds to expand Village San Francisco facilities to provide integrated care, including traditional Native Healing services, to address the significant disparities in mental health for Native American communities.
CalHOPE Extension—The May Revision includes $10.9 million General Fund in 2021-22 and proposes $80 million General Fund in 2022-23 and $40 million General Fund in 2023-24 to continue operating a statewide emotional support line, including crisis counseling services, to Californians.
Other Health Programs
- Reducing the Cost of Insulin (includes $100 million General Fund one-time): The CalRx Biosimilar Insulin Initiative to implement partnerships for increased generic manufacturing of essential medicines. Through a contractual partnership, the Department of Health Care Access and Information (HCAI) will invest $50 million towards the development of low-cost interchangeable biosimilar insulin products and an additional $50 million towards a California-based insulin manufacturing facility.
Public Health/Prevention
CPEHN is disappointed to see that Governor Newsom’s 2022-23 May Revision budget proposal continues to fall short in putting resources behind community-based organizations and community-based solutions which are key to address the racial and social injustices emerged and exacerbated during the COVID-19 pandemic.
- Fails to include the Health Equity and Racial Justice Fund (HERJF): Governor Newsom’s 2022-23 May Revision budget proposal once again fails to include an investment through the Health Equity and Racial Justice Fund, a $100 million budget proposal led by CPEHN, Latino Coalition for a Healthy California, Public Health Institute, and other grassroots community partners since early 2021. Although the HERJF proposal was included in the Senate’s Budget Plan this year, the Governor’s May Revise once again missed critical opportunities to build a comprehensive, resilient and equitable public health infrastructure in California. A strong public health infrastructure for the 21st century must be able to carry out all foundational public health services, actively promote partnerships and collaboration across public, private, ad non-profit sectors, and most importantly directly recognize and uplift the roles and contributions of community-based non-profit organizations (CBOs). This also means directly funding CBOs who serve and fill the gaps for Black, Indigenous and People of Color and other historically excluded and oppressed communities that institutions have failed to care for, as evidenced throughout the COVID-19 pandemic.
- Fails to address institutionalized racism or ensure antiracism is an essential public health vision and strategy: Governor’s May Revise once again fails to acknowledge that racism is a public health crisis in the state of California, despite advocacy from Black, Indigenous and People of Color led organizations and advocates in the last two years. The budget proposal yet again fails to commit actions to tackle institutionalized racism within the state government, nor does it strengthen governmental or non-profit infrastructure to implement and promote racial equity efforts across the state. In contrary, dozens of cities and counties in California successfully passed resolutions and/or actions plans to address systemic racism during 2020’s nationwide racial justice uprisings due to the police killing of George Floyd, Breonna Taylor, and Ahmaud Arbery. Some local governments followed up with concrete actions to create racial equity offices and initiatives, including Los Angeles County’s Anti-racism, Diversity and Inclusion Initiative, Ventura County’s Office of Diversity, Equity and Inclusion, and San Bernardino County’s Equity Vision Element Workgroup. Many of these local racial equity-focused governmental infrastructures are actively involved in strategic and budgetary decisions on local governments’ COVID-19 relief efforts such as how the American Rescue Plan Act Local Relief Funds are being implemented on local levels.
- Includes additional funding for the COVID-19 response SMARTER Plan, though the plan lacks racial equity focus: The 2022-23 Revised May budget proposal includes $1.8 billion for specific items and a $250 million Contingency Fund to implement the “SMARTER” plan, or the next phase of COVID-19 response plan that the state administration released in February 2021. Key investments from this plan include $140 million for medical surge and vaccination staffing, $530 million for testing kits including school testing, $93 million for vaccines boosters and expanded programs for young children, as well as $230 million for the Office of Community Partnerships and Strategic Communications to continue supporting COVID-19 vaccine-related public education and outreach. The state’s SMARTER Plan does not have any explicit racial, social or gender equity focus to address the disparities Black/African American, Latino/a/x, Asian American and Pacific Islander, and Indigenous and other people of color have continued to experience during COVID-19.
Human Services
The May Revise includes an investment of $296.2M in 2022-23 to increase CalWORKS Maximum Aid Payment levels. In addition, the Revise includes $6.5B General Fund dollars to increase monthly caseloads of the In-Hoe Supportive Services Program (IHSS). IHSS provides essential domestic and in-home supportive services to low-income, disabled, children, and seniors in need. These increases will allow California to expand the social safety net to ensure vulnerable Californians have access to key support systems.
CPEHN is also pleased to see a maintained investment of $1.7B towards building up the Care Economy however, we are concerned about the Governor’s intent to potentially use community-based support systems, such as community health workers/promotores (CHW/Ps), to support with the implementation of proposals like Care Court. We will continue to monitor these developments.
Immigrant Programs
CPEHN is pleased to see continued investments to immigrant legal services in the 2022-23 May Revised Budget. While no augmentations were made to programs like One California, the Administration has allocated $2.5M one-time General Fund dollars, for 2022-23 and 2023-24, to bolster the work of the California Immigrant Justice Fellowship. Lack of accessible legal services continues to place a burden on hard-to-reach, rural immigrant communities. Many of these regions have severe immigration attorney shortages meaning that Californians are even more hard pressed to find quality, legal services when they need them most. The Fellowship will create a sustainable pipeline to fulfill shortages and ensure more Californians have access to legal services.
However, CPEHN stands with our immigrant rights partners throughout California to urge the Governor and the Legislature to fully expand CalFresh to include all Californians, regardless of immigration status, and to establish the SafetyNet4All which would provide unemployment benefits to excluded immigrant workers. While we appreciate Food4All expansions to those aged 55 and above, food insecurity remains rampant. The COVID-19 pandemic has exacerbated the ability for everyday Californians to put food on the table for their families and loved ones and this is especially true for immigrant communities who have faced unprecedented levels of unemployment and reduced work hours. It is essential for the Governor and Legislature to step up and deliver necessary benefits to the communities that have been hit hardest by the pandemic. We urge the inclusion of Food4All and SafetyNet4All in the Final Budget.
Public Safety/Criminal Justice CPEHN is disappointed to see that Governor Newsom’s 2022-23 May Revise budget proposal doubles down on multiple January budget proposal items which rely on the state’s criminal legal systems to respond to community safety, health and social needs.
- Includes $13.9 billion total funding for the California Department of Corrections and Rehabilitation (CDCR): Governor’s May Revise maintained the expanded funding plan from January of $13.9 billion ($13.3 billion General Fund and $603.2 million other funds) to CDCR, despite concerns raised from multiple legislators and community advocates. Of this total amount, $3.7 billion General Fund is for “health care programs, which provide incarcerated individuals with access to mental health, medical, and dental care services that are consistent with the standards and scope of care appropriate within a custodial environment.” This proposal ignores multi-year reports from the California State auditor detailing the “the reality and inertia of decades of substandard care” at CDCR and that CDCR has failed to adequately provide health care including mental health care for incarcerated community members.
- Increases funding for Department of Justice on crime surveillance: The May Revision includes an additional $7.9 million General Fund in 2022-23, and $6.7 million ongoing to build upon investments in January including “combatting retail theft” and building “anti-crime taskforces” around the state.
- Increases funding for local policing: The May Revision includes an additional $20 million one-time General Fund to set up grants for counties to create “mobile probation centers” modeled after Placer County, and an additional $50 million one-time General Fund to fund “health and wellness” benefits specifically for law enforcement officers.
June 2022
Here is a chart that shows what was originally proposed and what was ultimately passed for health, public health, oral health, mental health, prevention, and more.
January 2021
Governor Invests in COVID Relief, Advances Key Proposals to Address Health Equity, But Leaves out Health4ALL and New Funding for Local Public Health Departments
On Friday, January 8th, Governor Gavin Newsom released his $227 billion proposed budget for the 2021-2022 fiscal year. The proposal includes $14 billion in emergency investments to provide immediate relief for individuals and small businesses disproportionately impacted by COVID-19, including $600 dollars in one-time assistance for low-income Californians, $300 million for vaccine distribution and an awareness campaign, an extension of the state’s eviction moratorium, the safe reopening of schools including extended learning time, and workforce investment. The budget also includes critical investments in telehealth and an important focus with no dedicated funding on improving health equity in the Medi-Cal program by strengthening the way California identifies, tracks, and holds accountable health care delivery systems and drivers of high health costs, with consequences for those who fall short of key health equity metrics.
While these additional investments are critical, the budget misses important opportunities to make substantial, long-term investments in the health and economic well-being of Californians including low-income and communities of color, hardest hit by COVID-19. California’s economic recovery has been uneven with higher earners continuing to prosper while low-income workers bear the brunt of the economic impacts. The Governor’s budget fails to expand Medi-Cal to all undocumented Californians including seniors over the age of 65, in the middle of a pandemic. Additionally, the budget fails to include new funds for local public health departments, who for a second year in a row, are being asked to work overtime to educate their communities about the pandemic and safety requirements, as well as outreach to underserved communities. In order to continue doing their jobs, which have only grown due to the pandemic, we must invest in them and fund their work for the health of all Californians. To view the full budget proposal click here.
Highlights of the 2021-2022 State Budget: The Governor’s proposed FY 2021-22 budget includes $34 billion in budget resiliency actions, consisting of various budgetary reserves and discretionary surpluses. Despite the state’s projected budgetary surplus, expenditures are projected to grow faster than revenues over future years. A structural deficit of $7.6 billion is projected in 2022-23 which is expected to grow to over $11 billion by 2024-25.
Overview
- Total Budget: $227 Billion
- General Fund Spending: $164.5 billion
- Total Spending for Health & Human Services: $195.1 billion ($64.3 billion General Fund and $130.8 billion other funds). This number does not include all pandemic response costs.
- Rainy Day Fund: $15.6 billion coming from the state’s rainy day fund
Key Proposals: COVID-19 has highlighted and exacerbated health disparities for communities of color. The Governor’s spending plan proposes several initiatives (both funded and not) to address these inequities including:
- Health Plan Equity and Quality Standards (no dedicated funding): The Administration is proposing to invest in the establishment of a priority set of standard quality measures for full services and behavioral health plans that will include quality and equity benchmark standards. Health plans that do meet equity benchmarks will be subject to enforcement actions.
- Improving Equity Through Managed Care Plan Re-Procurement (no dedicated funding): The Administration is proposing to focus on health disparities and cultural and linguistic competency through health plan contractual language with a framework similar to the Blueprint equity metric as Medi-Cal managed care plans contracts come up for renewal. Read more about our proposals in our report we released in December, Centering Equity in Health Care Delivery and Payment Reform: A Guide for California Policymakers.
- Telehealth Flexibilities in Medi-Cal: The Governor’s proposed budget makes permanent some telehealth flexibilities and adds remote patient monitoring as a new covered benefit, effective July 1, 2021. Read more about our survey findings and proposals in a report we released in December, Equity in the Age of Telehealth: Considerations for California Policymakers.
- New Office of Health Care Affordability: This new Office will investigate the drivers of health care costs and track equity metrics on the entire health care system, and hold them accountable and impose consequences.
- Investments in CalAIM to focus on payment reform, incentive payments, investing in preventions, and whole person care.
Medi-Cal/Overall Health Care:
With communities of color bearing the brunt of COVID-19, the Governor’s budget includes several proposals (both funded and not), aimed at improving health equity through more targeted enforcement of health plan requirements and re-procurement (details are expected to be released this spring.) However the budget misses an important opportunity to expand Medi-Cal to all Californians including seniors over the age of 65 regardless of immigration status in the midst of pandemic when it is needed most. The budget also includes additional COVID-19 related investments including $300 million in funds for vaccine distribution and an awareness campaign and an expansion of telehealth flexibilities which will make it easier for Medi-Cal recipients to access care. The budget also includes funds for implementation of the California Advancing and Innovating Medi-Cal Initiative (Cal-AIM) which was delayed by one year due to the pandemic.
- Medi-Cal Caseload Projections: The Governor’s budget includes $5.4 billion ($1.7 billion General Fund) in 2020-21 and $13.5 billion ($4.3 billion General Fund) in 2021-22 for increased caseload attributable to the COVID-19 Pandemic. The Administration projects caseload will peak at 16.1 million beneficiaries in January 2022, driven by the federal continuous coverage requirement related to the COVID-19 Public Health Emergency and the COVID-19 induced recession, despite lower-than-expected Caseload rates in 2020.[1] If 2020 is some indication, further scrutiny of the Administration’s enrollment projections is warranted.
- Fails to Include a Proposal to Expand Medi-Cal to Undocumented Seniors: Prior to the COVID-19 pandemic, Governor Newsom proposed to expand Medi-Cal to undocumented adults aged 65 or older. This proposal was withdrawn in May and is noticeably absent from the Governor’s proposed spending plan at a time when access to health care including preventative care, testing, treatment and vaccines is needed most. Latinx workers, at the frontlines as essential workers, with many living in congregate settings, must not be left behind, especially in the middle of a pandemic.
- Includes Investments to Improve Health Equity: The Governor’s spending plan includes several proposals totaling at least $13 million tied to the goal of improving health equity including:
- Health Plan Equity and Quality Standards (no dedicated funding): The Administration is proposing to invest in the establishment of a priority set of standard quality measures for full services and behavioral health plans that will include quality and equity benchmark standards. Health plans that do meet equity benchmarks will be subject to enforcement actions. Additional details are expected to be released this spring.
- Improving Equity Through Managed Care Plan Re-Procurement (no dedicated funding): The Administration is proposing to focus on health disparities and cultural and linguistic competency through health plan contractual language with a framework similar to the Blueprint equity metric as Medi-Cal managed care plans contracts come up for renewal. There is currently no budget amount tied to this proposal.
- Analysis of COVID-19 Impacts ($1.7 million): The budget includes $1.7 million in 2021-22, $154,000 in 2022-23 and ongoing to the California Health and Human Services Agency to conduct an analysis of the intersection of COVID-19, health disparities, and health equity to help inform any future response.
- Community Navigators for Developmental Services ($5.3 million): The Budget includes $5.3 million for the Department of Developmental Services to contract with family resource centers to implement a navigator model statewide that would utilize parents and individuals in the regional center system to provide education on resources, advocacy, and mentorship to other parents of individuals being served by the regional center system.
- Development of an Equity Dashboard ($4.1 million in 2021-22/$2.1 million ongoing): The budget allocates $4.1 million in 2021-22 and $2.1 million ongoing for the Health and Human Services Agency to further reorient the administration of its programs through the use of data and the development of an equity dashboard.
- Includes Funds for Cal-AIM: The budget includes $1.1 billion ($531.9 million General Fund) in 2021-22, growing to $1.5 billion ($755.5 million General Fund) in 2023-24 to implement the California Advancing and Innovating Medi-Cal (Cal-AIM) initiative which was delayed for a year due to the COVID-19 pandemic. This investment will provide for enhanced care management and in lieu of services, necessary infrastructure to expand whole person care approaches statewide, and build upon existing dental initiatives. Beginning in 2024-25, the Administration proposes to phase out infrastructure funding, resulting in ongoing costs of about $846.4 million ($423 million General Fund) per year. There are also several other Cal-AIM proposals detailed under behavioral health. Given the disruption of COVID-19, the Legislative Analyst’s Office (LAO) recommends that the Legislature use the upcoming budget process to learn more about the differences between this and last year’s proposals, resolve key outstanding questions, weigh the potential benefits and risks of the current reform package, and identify components that may be missing.[2]
- Includes Funds for Medi-Cal Coverage of Continuous Glucose Monitors: The Budget includes $12 million ($4.2 million General Fund) in 2021-22 and ongoing to add continuous glucose monitors as a covered Medi-Cal benefit for adult individuals with type 1 diabetes, effective January 1, 2022.
- Expands Telehealth Flexibilities in Medi-Cal: The Budget includes $94.8 million ($34 million General Fund) ongoing to expand and make permanent certain telehealth flexibilities authorized during COVID-19 for Medi-Cal providers, and to add remote patient monitoring as a new covered benefit, effective July 1, 2021. This effort will expand access to preventative services which may improve health outcomes and increase health equity.
- Includes Funds for Vaccine Distribution: The budget includes $300 million as an initial estimate for vaccine distribution and a public awareness campaign.
- Addresses Aging Issues: The budget includes $5 million for spring proposals to further implement the Master Plan for Aging and a $3 million one-time investment for OSHPD to grow and diversify the pipeline for the geriatric medicine workforce. The Administration also plans to appoint a Senior Advisor on Aging, Disability and Alzheimer’s to advance cross-Cabinet initiatives.
- Medi-Cal Postpartum Eligibility Extension ($27.1 million): The Budget delays the suspension of Medi-Cal post-partum extended eligibility by 12 months to December 31, 2022 for a cost of $27.1 million General Fund in 2021-22.
- Optional Medi-Cal Benefits Extension ($47 million): The budget delays the suspension of optional Medi-Cal benefits, specifically audiology and speech therapy service, incontinence cream and washes, eyeglasses and contracts, and podiatric services for a cost of $47 million.
- Proposition 56 Suspensions Extension: The budget extends Proposition 56 suspensions effective July 1, 2022, except for supplemental payments to intermediate care facilities for the developmentally disabled, freestanding pediatric subacute facilities, and Community Based Adult Services, which will be suspended December 31, 2022, due to the managed care calendar rate year. Payments for Women’s Health, Family Planning, and the Loan Repayment Program are exempt from suspension. The Budget also proposes to exempt supplemental payments for the Behavioral Health Integration program, the AIDS waiver, Home Health, and Pediatric Day Health from suspension because they would not be deemed eligible by the federal government.
Medi-Cal Mental Health
A number of studies and polls show a significant increase in the number of Californians experiencing mental health challenges as a result of COVID-19’s social, physical, and economic impacts. We will continue to see effects of the COVID-19 Pandemic on the mental health of Californians for many years to come. The governor’s proposed budget includes investments in behavioral health services with a particular focus on school-age children and those with acute needs.
- Behavioral Health Continuum Infrastructure Funding ($750 million): Available over three years, the budget proposes to invest and expand the capacity of the community-based behavioral health continuum, including the addition of at least 5,000 beds, units, or rooms for services to address short-term crisis stabilization, acute needs, peer respite, and other clinically enriched longer-term treatment and rehabilitation opportunities for persons with behavioral health disorders.
- Increased Access to Student Behavioral Health Services ($400 million): The governor proposed $400 million to implement an incentive program through Medi-Cal managed Care plans, in coordination with county behavioral health departments and schools, to build infrastructure, partnerships, and capacity statewide to increase the number of students receiving preventive and early intervention behavioral health services.
- Health Plan Equity and Quality Standards (no dedicated funding): California’s Medi-Cal managed care plans in particular continue to fall short of offering equitable access to mental health services five years after implementation of the mental health parity laws. Current behavioral health reporting measures cannot answer how effective current behavioral health interventions are at improving outcomes and across significant indicators of wellbeing in communities of color, including those that are community-defined and consumer-focused. CPEHN will be closely monitoring the Administration’s plan to set standard quality measures for full service and behavioral health plans. A proposal to the Legislature will be available in the spring.
- Board and Care Housing for Individuals with Significant Behavioral Health Needs ($250 million): The budget includes critical investments to prevent and address homelessness among individuals with serious behavioral health needs.
- Incompetent to Stand Trial: California continues to experience a growing number of incompetent to stand trial (IST) commitments who are referred from trial courts and are awaiting admission to state hospital system, which has been further exacerbated by the COVID-19 Pandemic. The number of ISTs pending placement into the state hospital system was approximately 1,428 individuals in December 2020. CPEHN and advocates are concerned about the growing number of Californians who are incompetent to stand trial. As alternatives, the state is investing in the development of community-based treatment options for individuals who are experiencing mental illness and are homeless.
- Mental Health Student Services Act Partnership Grant Program ($25 million): These one-time funds, available over five years to the Mental Health Services Oversight and Accountability Commission, can be used to augment the Mental Health Student Services Act Partnership Grant Program, which was established to fund partnerships between county behavioral health departments and local education entities for the purpose of increasing access to mental health services in locations that are easily accessible to students and their families.
- Partnerships Between County Behavioral Health and Student Mental Health Services ($25 million): The budget includes $25 million ongoing Proposition 98 General Fund to fund innovative partnerships with county behavioral health departments to support student mental health services. This funding would be provided to local educational agencies as a match to funding in county Mental Health Services Act (MHSA) spending plans dedicated to the mental health needs of students.
Oral Health
- Proposition 56 Funding Suspensions Postponed: The Governor’s Budget has proposed to postpone planned Proposition 56 suspensions for July 1, 2021, to a new effective date of July 1, 2022. In 2017, Proposition 56 funds were approved to supplement payments for popular dental services under the Medi-Cal Dental program. Reimbursement rates for Medi-Cal Dental covered services are not competitive with private insurers, making it difficult for dentists to treat Medi-Cal patients while maintaining their practice. These funds supplement Medi-Cal Dental reimbursement payments, making it easier for dentists to provide care for Medi-Cal patients without worrying about their dental practice’s financial security.
- Dental Care and CalAIM: Intending to achieve at least a 60% dental utilization rate for Medi-Cal eligible children, and with the hopes of improving care coordination, this budget launches the following CalAIM reforms for the Medi-Cal Dental program:
- Adding new dental benefits based on the outcomes and successes from the Dental Transformation Initiative that will provide better care and align with national oral health standards. The proposed new benefits include a Caries Risk Assessment Bundle for young children and Silver Diamine Fluoride for young children and specified high-risk and institutional populations
- Continued and expanded Pay for Performance Initiatives initiated under the Dental Transformation Initiative that reward increasing the use of preventive services and establishing/maintaining continuity of care through a dental home. These expanded initiatives would be available statewide for children and adult Medi-Cal enrollees.
- State-Only Claiming Adjustment ($279.1 million): The Budget includes $249.8 million General Fund in 2020-21 and $279.1 million General Fund in 2021-22 for retroactive and ongoing dental, pharmacy, and managed care, targeted case management, and behavioral health costs associated with state-only populations.
- Missing from the budget: The budget does not include a commitment to cover all income-eligible seniors ages 65 or older, regardless of immigration status, for full-scope Medi-Cal. What this means for the oral health of full-scope ineligible seniors is they will continue to remain in restricted-scope Medi-Cal, which does not include the optional adult dental benefit. Emergency dental services are covered under restricted-scope Medi-Cal.
Public Health & Prevention
- COVID-19 Response: COVID-19 has disproportionately impacted communities of color, further exacerbating economic and health disparities in our state. The Governor’s COVID-19 relief plan relies heavily on federal assistance $298 billion to date (including the CARES Act) and another $100 billion from the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) passed in December 2020. Unlike the CARES Act passed in April, 2020, CRRSAA does NOT include direct relief to local governments (e.g. local health departments) and hospitals. It does extend the deadline to spend down CARES Act dollars by a full calendar year until the end of 2021, hopefully sustaining local relief programs and policies that were established largely due to the CARES Act funding.
- Additional relief provided through CRRSAA includes:
- $20 billion in unemployment benefits
- $18.3 billion economic impact payments (i.e. $600 checks)
- $2.2 billion for testing, tracing, and vaccination
- $0 direct aid to local governments
- Fails to Include Additional Funds for Local Public Health Departments: While the budget includes several COVID-19-related proposals, it is important to note that no new funding investments for local public health departments were included in the Governor’s proposed budget.
- New Cannabis Department ($29 million): The budget proposes to transfer 119 positions in 2021-22 from the Department of Public Health to support the consolidation of resources for the new Department of Cannabis Control.
- Licensing and Certification ($19.1 and $4.5 million): The budget includes funds for year three of the Los Angeles County contract ($19.1 million) and to support increased medical breach and caregiver investigation workload ($4.5 million).
- Childhood Reading Augmentation ($5 million): The budget includes a one-time allocation of $5 million for the Department of Public Health to provide books to low-income children to improve child development and literacy.
Other Health Programs:
- Establishes New Office of Health Care Affordability ($11.2 million in 2021-22, $24.5 million in 2022-23, and $27.3 million in 2023-24 and ongoing): The new office will be charged with increasing transparency on cost and quality, developing cost targets for the health care industry, enforcing compliance through financial penalties, and filling gaps in market oversight of transactions that may adversely impact market competition, prices, quality, access, and the total cost of care. The budget also mentions a forthcoming proposal in the spring recasting the Office of Statewide Health Planning and Development and the proposed Office of Health Care Affordability under the umbrella of a Department of Health Care Affordability and Infrastructure.
- Accelerates Implementation of the California’s new Health Information Exchange (no dedicated funding): The budget states the Administration’s interest in accelerating the utilization and integration of health information exchanges as part of a network that receives and integrates health data for all Californians in order to improve health outcomes and health care affordability. This cannot be achieved without unified patient health records and digital infrastructure to support better integration of health and human services.
Specific Immigrant Programs:
- Extends $600 COVID-19 stimulus payments to ITIN filers: The Governor’s budget extends eligibility for the $600 COVID-19 stimulus payment to everyone who receives the CalEITC, even ITIN filers as part of the state’s Golden State Stimulus program. Filers could receive this payment and the CalEITC when they file their 2020 tax return. The Legislative Analyst’s Office, which reviews the Governor’s proposal suggests that the Governor and Legislature could go even farther to target resources to those left out of federal relief by providing up to $1,800 in tax credits specifically to ITIN filers.
- One California Immigrant Services ($75 million): The budget maintains funds to the California Department of Social Services for qualified immigration services to immigrants – including deportation defense, naturalization, and counsel for unaccompanied minors – and other immigration-related legal services. This critical investment includes continuing funding for legal services to students, faculty and staff at the California Community Colleges (CCCs), California State Universities (CSUs) and the University of California system (UC).
- One California Rapid Response Program ($5 million): The budget includes one-time funds for the Rapid Response Program to support entities that provide critical assistance/services to immigrants during emergent situations when federal funding is not available.
Human Services:
- Addressing Aging in California ($258 million): The budget notes the disproportionate effects of COVID-19 on people 65 years or older and makes several targeted investments: a proposal for a new Office of Medicare Innovation and Integration, expanded facilities to support housing, Aging and Disability Resource Connections (ADRC), an In-Home Supportive Services COVID-19 back-up provider system, and an increase in the geriatric care workforce. Excluding the proposed new Office of Medicare Innovation and Integration and the ADRC, the investments amount to $258 million in one-time General Funds.
- California Food Assistance Program (CFAP) Emergency Allotments ($11.4 million): The Budget will include a one-time General Fund expenditure of $11.4 million for the California Food Assistance Program Emergency Allotments. Before the pandemic, CalFresh recipients received Calfresh benefits according to their income. Often, families were not approved for the maximum amount their household could be eligible for. The CFAP Emergency Allotments will bridge the gap between what families are approved for and the maximum allowable allotment based on household size.
- In Home Supportive Services (IHSS) ($1.2 billion): The Budget reflects $1.2 billion ($557.6 million General Fund) to support a minimum wage increase of $14 per hour beginning January 1, 2021, and $15 per hour on January 1, 2022.
Public Safety
Criminal Justice: The Governor’s budget provides $13.1 billion for the California Department of Corrections and Rehabilitation (CDCR) and $546.9 million for rehabilitative programs, nearly double the level in 2012-13. The budget also provides $6.8 million one-time General Fund to repair health care facilities at California’s rehabilitation centers.
- Caseload Projections: The budget projects a 20% decrease in daily adult inmate population compared to the 2020 budget act due to the suspension of county intake from March to late August and in November. As such the state is reimbursing counties for holding greater numbers of inmates in county jails.
- COVID related deaths: Despite repeated assurances of progress in controlling the spread of COVID-19, California’s prisons continue to be hit hard by a deadly surge of COVID-19. As of December 2020 there were 9,000 active inmate cases and 103 deaths. The budget details steps the state is taking to address these surges but more must be done:
- Beginning July 1, 2020, CDCR implemented a community supervision program to enable CDCR to increase physical distancing and other efforts to mitigate the spread of the virus, releasing eligible inmates to county probation and state parole.
- Corrections officials are working to institute other mitigation efforts including providing more space, limited visits, staff screening, etc
- Expanded testing for staff and some for inmates since June per guidelines from CDPH
- Project Hope: provides quarantine and isolation sheltering support for individuals returning to the community from California state prisons
- Criminal Justice and health ($3.4 million in 2021-22 and $3.1 million ongoing): The budget includes funds for the Office of Youth and Community Restoration to develop reports on youth outcomes in the juvenile justice system
Housing, Homelessness, Anti-Poverty:
COVID-19 Pandemic Impacts on Housing
The COVID-19 Pandemic exacerbated California’s already existing housing crisis. The Governor’s budget remains focused on addressing the housing crisis and fostering an equitable economic recovery through targeted investments and reforms, continued resources to increase the supply of very-low, low- and moderate-income housing, and focused provision of stability for households most impacted by the COVID-19 Pandemic
Preventing Evictions and Foreclosures
- Extension of Federal aid to CA: The budget seeks immediate extension to AB 3088 to extend eviction protections past January 31, 2021.
- Tax Refunds: The budget seeks to refund $600 to all 2019 taxpayers who received a California Earned Income Tax Credit (CalEITC) in 2020 as well as to 2020 taxpayers with individual tax identification numbers (ITNS) who will receive a CalEITC in 2021 to help pay rent.
- Consumer awareness and protection campaign ($2 million): The budget includes one-time funding for the Department of Fair Employment and Housing, the state’s civil rights agency, to conduct outreach education campaigns, housing surveys, and prosecute violations of anti-housing discrimination laws.
Economic Recovery Investments
- Infill Infrastructure Grant Program ($500 million): The budget provides one-time funding for the Infill Infrastructure Grant Program to accelerate economic recovery through the creation of jobs and long-term housing development.
- Low-Income Housing Tax Credits ($500 million): The budget includes a third round of funding for low-income housing tax credits. This will further reduce funding gaps in affordable housing units statewide.
- Construction Apprenticeships ($8.5 million): The budget includes one-time funding for the California Workforce Development Board to expand access to state-approved construction apprenticeships through multi-craft pre-apprenticeship programs and High Road Training Partnerships.
- Creation of Housing Accountability Unit at the Department of Housing and Community Development (HCD) ($4.3 million): The budget includes funds to facilitate affordable housing production through monitoring, technical assistance, and enforcement of existing housing production laws.
Homelessness
Expanded Facilities to Support Housing for All: The budget includes 1.75 billion in one-time funding to further develop a broader portfolio of housing needed to end homelessness through continued acquisitions and creation of new units including:
- Project Home key ($700 million): The budget includes funds for HCD to continue provide competitive grants for local governments to purchase and rehabilitate housing, including hotels, motels, vacant apartment buildings, and other buildings, and convert them into interim or permanent long-term housing.
- Behavioral Health ($750 million): The budget includes funds over three years for the Department of Health Care Services to provide competitive grants to counties for the acquisition and rehabilitation of real estate assets to expand the community continuum of behavioral health treatment resources, seeking to improve continuum of services by providing short-term crisis stabilization, acute needs, peer respite, and other clinically enriched longer-term treatment and rehabilitation opportunities for persons with behavioral health disorders.
- Preserve and expand housing for low-income seniors ($250 million): The budget includes one-time General Fund for the Department of Social Services to counties for the acquisition or rehabilitation of Adult Residential Facilities (ARF) and Residential Care Facilities for the Elderly (RCFE)
Education
K-12:
Addressing Immediate Needs to Reopen Schools Safely: Since March 2020, as a result of the COVID-19 pandemic, a majority of the state’s school age children have had no access to in-person instruction. These conditions are affecting children’s learning, health and social emotional well-being. As part of the state’s efforts to address immediate needs of schools to re-open safely:
- In-Person-Instruction Grants ($2 billion): The budget augments resources for schools to offer in-person instruction safely. Students with barriers to distance learning, especially those with disabilities, those struggling with behavioral health issues, and the state’s youngest learners. The funding will be available on a per-pupil basis for all county schools, school districts, and charter schools that are open for in-person instruction by specified dates. Funds may be used for:
- Enhancing and expanding COVID-19 testing
- Purchasing personal protective equipment
- Improving ventilation and the safety of indoor and outdoor learning spaces
- Teacher or classified staff salaries for those providing and supporting in-person instruction
- Social and mental health support services provided in conjunction with in-person instruction
- Expanding Learning Time to Address Learning Loss of COVID-19 Pandemic ($4.6 billion): allocated for early action by the Legislature. These funds will address educational disruptions related to COVID-19 pandemic school closures and will focus on target interventions that focus on students from low-income families, English language learners, youth in foster care, and homeless youth, including an extended school year or summer schools.
- Federal COVID-19 Relief Funds ($58.3 billion): These resources will assist schools in reopening and remaining open for in-person instruction and addressing immediate needs of students.
- ($54.3 billion) allocated to Elementary and Secondary School Emergency Relief Fund for public k-12 schools.
- ($4 billion) Governor’s Emergency Education Relief Fund (GEER) for public and private pre-kindergarten through higher education institutions.
- Additional funding for K-12 education ($3.4 billion) in non-proposition 98 General fund for K-14 education. In addition, k-14 schools are expected to receive billions of additional federal funds from the recently approved federal COVID-relief bill.
- Average Daily Attendance (ADA) collection: The 2020 Budget Act included several policies designed to support funding stability for local educational agencies given the COVID-19 Pandemic. These policies include:
- Requirements for distance learning supports for students with exceptional needs
- Requirements for minimum daily interaction with students in distance learning
- Requirements for documenting student participation and engagement
- Addressing Equity ($315.3 million): investments in providing educators with the tools they need to meet the needs of students. This includes a focus on professional development for teachers in high need areas, on social emotional learning and trauma informed practices, on mathematic teaching strategies for young children pre-K through third grade, and on learning loss in core subject matter content areas, and materials for courses on ethnic studies.
- School climate surveys ($10 million): The governor’s budget allocates funds for a county office of education to support wide spread access and use of school climate surveys, with the goal of assessing community needs stemming from COVID-19 Pandemic and distance learning.
- Implementation of Master Plan for Early Learning and Care: The budget begins implementation of the Master Plan by expanding access to transitional kindergarten (TK).
- $250 million, available over multiple years, to provide grants to local education agencies that offer early access to TK, to help them cover up-front costs associated with expanding their TK programs.
- $50 million to support the preparation of TK teachers
- $200 million for school districts to construct and retrofit existing facilities to support TK and full-day kindergarten programs
Higher Education
The COVID-19 Pandemic has impacted the state’s higher education systems. These impacts include a reported 8 percent decline in California Community College enrollment that is disproportionally attributable to underrepresented students. The state has also seen declines of roughly 10 percent and 45 percent in first time freshman application free application for federal student aid (FAFSA) completion rates and the California Dream application completion rates. The budget proposes early action on the following:
- Emergency Student Financial Assistance Grants ($100 million) to full-time, low income community college students.
- Bolster CCC student retention rates and enrollment ($20 million) to engage former students who may have withdrawn from college due to impacts of COVID-19 pandemic and to engage students who may be hesitant to enroll.
- Amend statute to maintain maximum tuition awards for students attending private nonprofit institutions and restore eligibility for Cal Grants for students impacted by a change in their living status due to the pandemic.
- Deferral payments for community colleges that received less overall support in the 2020 Budget Act as a result of the COVID-19 induced recession.
- Assistance for students at community colleges, including:
- Emergency financial assistance ( $150 million)
- Food and housing insecurity ($100 million)
- Technological access such as electronic devises and high speed internet ($30 million)
- California apprenticeship initiatives ($15 million)
- Work-based learning models and programs ($20 million)
- Zero textbook cost degrees ($15 million)
- Assistance for students at California State University, including:
- Emergency financial assistance ($250 million)
- Basic needs focused on digital equity and mental health services ($15 million)
- Basic needs focused on addressing food and housing insecurity, financial stress and other challenges ($15 million)
- Assistance for students at the University of California, including:
- Emergency financial assistance ($15 million)
- Basic needs focused on digital equity and mental health services ($15 million)
- Medical education focused on Native American communities ($12.9 million)
[1] Medi-Cal New Enrollments Ethnicity: DHCS SAC Meeting, July 16, 2020. https://www.dhcs.ca.gov/services/Documents/071620SACWebinar.pdf
[2] Legislative Analyst’s Office, “The 2021-22 Budget: Overview of the Governor’s Budget,” https://lao.ca.gov/reports/2021/4309/budget-overview-2021.pdf
May 2021
On Friday May 14th, Governor Newsom released his May Revise budget proposal for FY 2021-22. CPEHN is excited to see impactful investments working toward health equity, but dismayed at the missed opportunity to include meaningful investments in racial justice and public health. From historic investments in community health workers (CHWs) and doula services, expansions in Medi-Cal to undocumented adults (60+), innovative mental health programs, enhancing quality and equity standards, and expansions to broadband access – California is taking steps to lift up communities. The tireless work of advocates and community-based organizations have made these wins possible.
The partnership with the Biden administration which includes $26 billion in discretionary funds combined with an unprecedented state surplus, has allowed California to seize on opportunities to continue leading the nation on policy goals that take steps toward equity.
While there is much to celebrate, there is once again no new state funding for California’s public health departments. Local public health has been at the forefront of the pandemic response, upholding safety guidelines, employing contact tracers, and connecting people on the ground to critical resources and supports, but were notably absent from Governor Newsom’s proposal. The budget also fails to include California Reducing Disparities Project funding to continue their community defined evidence-based behavioral health practices and funds for community-based organizations to do field testing of translated Medi-Cal materials to enhance culturally and linguistically competent care was also ignored.
Strong and meaningful investments in addressing racism as a public health crisis are still desperately needed. Moving forward, CPEHN will work with the legislature and the Newsom administration to ensure communities of color get the resources they need to thrive, addressing even more upstream health needs through public health investments, while also seeking to targeting systemic and institutional racism while advancing health equity, reducing disparities, and improving health outcomes through a new California Racial Justice Innovation Fund.
Stay tuned for timely updates on state budget discussions and opportunities to advocate for stronger investments in racial equity and public health next week. To view the full May Revise budget proposal click here.
Highlights of the FY 2021-22 Revised State Budget Proposal:
Total Budget: $267.8 billion ($40.8 billion increase)
General Fund Spending: $197 billion ($32.5 billion increase)
Total Spending for Health & Human Services: $207.7 billion ($12.6 billion increase)
Rainy Day Fund: $15.9 billion ($300,000 million increase)
Medi-Cal:
The Governor’s May Revise significantly expands access to health care by expanding Medi-Cal coverage to potentially 89,000 undocumented older (aged 60+) adults, adds community health workers and doulas who come from, have lived experience, and strong empathy with the diverse communities they serve as covered preventive benefits and services for Medi-Cal beneficiaries, and includes additional funds for the development of a health and community health information exchange to improve implementation of Cal-AIM’s Population Health Management program in Cal-AIM.
However, while the budget includes $20 million directed to CHHS to improve language access, the proposal once again ignores repeated calls by CPEHN and advocates to fund community-based organizations to do field testing of translated Medi-Cal materials to ensure materials are culturally and linguistically appropriate for California’s diverse communities.
The Medi-Cal budget is $115.6 billion ($21.5 billion General Fund) in 2020-21 and $123.8 billion ($27.6 billion General Fund in 2021-22): The May Revision assumes that caseload will increase by approximately 7.1 percent from 2019-20 to 2020-21 and increase by 6.6 percent from 2020-21 to 2021-22. Medi-Cal is projected to cover approximately 14.5 million Californians in 2021-22, over one-third of the state’s population.
Key Changes:
- New: Expands Medi-Cal Coverage to Undocumented Older (aged 60+) Adults ($69 million in 2021-22 and $1 billion ongoing) —California currently provides full scope Medi-Cal benefits to eligible individuals under 26 years of age, regardless of immigration status. Additionally, for the upcoming year, existing law requires the expansion of Medi-Cal full scope coverage to individuals who are 65 years of age and over who do not have satisfactory immigration status be prioritized for inclusion in the upcoming FY 2021-22 budget. The May Revision expands Medi-Cal, including In-Home Supportive Services, to undocumented adults aged 60 and older effective no sooner than May 1, 2022. The expansion is projected to cover an additional 89,000 undocumented adults aged 60 years and above, compared with just 30,000 aged 65 and above.
- New: Extends Payment for Community Health Workers ($16.3 million, increasing to $201 million by 2026-27): The May Revision adds community health workers to the class of health workers who are able to provide benefits and services to Medi-Cal beneficiaries, effective January 1, 2022. CHWs are skilled and trained health educators who work directly with individuals and families who may have difficulty understanding and/or interacting with health care providers due to cultural and/or language barriers. CHWs provide vital education, and navigation assistance and can bridge gaps in communication and reduce health and mental health disparities experienced by vulnerable communities in California.
- New: Adds a New Doula Benefit ($152,000 GF 2021-22 and $4.4 million annually): The May Revision adds community-based doula services as a preventive covered benefit in the Medi-Cal program, effective January 1, 2022. Disparities in black infant and maternal mortality rates are persistent in California. Doulas, can help to increase health equity through the provision of culturally and linguistically appropriate personal support to pregnant individuals and families throughout labor, and the postpartum period.
- Fails to Include Funds for Community-Based Field Translations of Medi-Cal Forms and Documents ($1 million 2021-22 and $30,000 ongoing): The Governor’s May Revise fails to include funds to strengthen language assistance through community-based reviews of translated Medi-Cal forms to ensure forms are culturally and linguistically appropriate to the communities they serve. In 2019, CPEHN and Western Center on Law & Poverty co-sponsored, AB 318 (Chiu) which would have required DHCS to pay for materials to be field tested by native speakers through focus groups or outreach from community-based organizations. The bill was vetoed by the Governor due to budgetary constraints and should be revisited given the state’s significant surplus.
Other Medi-Cal Changes/Adjustments:
- New: Extends Medi-Cal Eligibility for Postpartum Individuals for Five Years ($90.5 million in 2021-22 and $362.2 million annually between 2022-23 and 2027-28): The May Revision takes advantage of federal authorization under the American Rescue Plan Act that allows states to receive federal funding if they extend Medi-Cal eligibility from 60 days to 12 months for most postpartum individuals, effective April 1, 2022 for up to five years.
- New: Makes Permanent Accelerated Enrollment for Adults ($14.3 million in 2021-22): The May revision proposes to expand accelerated enrollment to adults ages 19 through 64 at the time of application while income verifications are pending.
- New: Permanently Ends the Suspension of Medi-Cal Optional Benefits specifically audiology and speech therapy, incontinence creams and washes, eyeglasses and contacts, and podiatric services.
- New: Eliminates Proposition 56 Suspensions ($550 million ongoing): The 2020 Budget Act included the suspension of various health and human services investments effective July 1, 2021 and December 31, 2021. Given the improved revenue outlook, the Governor’s January Budget proposed to delay the suspensions for one year. The May Revision proposes to eliminate Proposition 56 supplemental payment increases, as well as to reverse the 7% reduction in In-Home Supportive Service hours and Developmental Services provider rate increases.
- New: Provides Additional Support for Public Hospitals and Health Systems ($300 million one-time): The May Revision includes federal COVID relief funds to help public health care systems cover costs associated with critical care delivery needs provided during and beyond the pandemic.
- New: Revises Telehealth Audio Only Policy to Pay for Visits at 65% FPL: As part of the Administration’s proposal to extend telehealth flexibilities utilized during the pandemic, while providing assurances of appropriate access to in-person care, DHCS will establish rates for audio-only telehealth that is set as 65 percent of the Medi-Cal rate for the service rendered in fee-for-service, and comparable alternative to prospective payment system (PPS) rates for clinics to maintain an incentive for in-person care. Only providers located in California or border communities and able to provide in-person services to each client served by audio-only telehealth can claim Medi-Cal reimbursement for the service. DHCS will consult with subject matter experts to establish utilization management protocols for all telehealth services prior to implementation of post-pandemic telehealth services.
Cal-AIM Adjustments:
- New: Invests in Population Health Management Health and Community Information Exchange ($315 million one-time GF): The May Revision includes one-time funding for population health management services that would centralize administrative and clinical data from the Department, health plans, and providers. Access to this information would allow all parties to better identify and stratify member risks and inform quality and value delivery across the continuum of care while implementing CalAIM. The service will also facilitate the connection between important health data and critical social service data for a given beneficiary.
- New: Establishes Medi-Cal Providing Access and Transforming Health Payments (PATH) ($200 million one-time funding): The May Revision includes one-time funding to build capacity for effective pre-release care for justice-involved populations to enable coordination with justice agencies and Medi-Cal coverage of services 30 days prior to release.
- New: Continues Medically Tailored Meals ($9.3 million one-time funding): The May Revision continues the provision of medically tailored meals in the period between the conclusion of the existing pilot program in 2021 and when medically tailored meals become available as an option for In-Lieu of Service (ILOS) under CalAIM.
Other Health and Human Services Adjustments:
- New: Language Access ($20 million one-time general funds): The May Revision includes one-time funds to improve and deliver language access services across the spectrum of Health and Human Services programs.
- Health Information Exchange: The Governor’s May revise fails to include funds for AB 1131 an independently operated statewide health information exchange, opting instead to provide more limited funds for HIE housed under CHHS and DHCS. Specifically:
- New: Provides Funds for HHS HIE Leadership ($2.5 million one-time funds): The May Revision includes one-time funds for the Health and Human Services Agency to lead efforts and stakeholder engagement in building out information exchange for health and social services programs.
- New: Population Health Management Health and Community Information Exchange ($315 million one-time GF): See description above.
Covered California Adjustments:
- New: Reduces State Spending on Affordability Assistance in Covered California (A decrease of $732.7 million over 2020-21 and 2021-22 combined): The Governor’s May Revise captures approximately $730 million in General Fund spending on state subsidies to go into a new health care affordability reserve fund ($333.4 million) and replaces that spending with new federal subsidies. Advocates had proposed to use those funds to pay for additional consumer affordability provisions in Covered California.
- New: Decreases in Individual Mandate Penalty Revenue (A decrease of $345 million in 2020-21 and 2021-22 combined): The Franchise Tax Board is currently processing returns for the 2020 tax year, the first year in which the individual mandate penalty is in effect. Based on initial sample data, the May Revision reflects reduced revenue from the individual mandate penalty of about $345 million over 2020-21 and 2021-22 combined.
- New: Includes Subsidies for Zero-Dollar Premium Plans ($20 million): Health care consumers pay $1 premiums for health plans due to federal policy concerning abortion coverage. The May Revision proposes to subsidize this cost for Covered California consumers.
- New: Establishes a Health Care Affordability Reserve Fund ($333.4 million): While ARPA provides substantial near-term relief to Californians purchasing health care through Covered California, the future of the enhanced federal assistance is uncertain. To partially backfill the loss of the more generous federal subsidies if they are not extended, or if other state health care affordability investments are explored in the future, the May Revision sets aside $333.4 in a new Health Care Affordability Reserve Fund.
Behavioral Health Adjustments:
The Governor’s May Revision significantly expands access to behavioral health coverage by extending Medi-Cal coverage for older (60+) undocumented adults, and also expands behavioral health outreach and services for children and youth, but severely limits investments in the type of services desperately needed to improve the mental health of BIPOC communities. Funding to continue the successful and innovative California Reducing Disparities Projects to continue their community defined evidence-based behavioral health practices was ignored. Now more than ever, there is a clear need for new strategies to help reduce behavioral health disparities in BIPOC and LGBTQ+ communities.
Behavioral Health
- Fails to include funds for Community-Defined Evidence Practices (CDEPs) expanded under the California Reducing Disparities Project. Research from the Office of Health Equity and the California Reducing Disparities Project suggests community-defined evidence practices improve the behavioral health of children and youth from Black, Indigenous, People of Color (BIPOC) and Lesbian, Gay, Bisexual, Transgender, Queer and Plus (LGBTQ+) communities as opposed to traditionally funded services. Funding for these innovative and successful strategies will expire in a year. To sustain these practices, mental health advocates are currently requesting the Legislature approve a $63 million investment in the California Reducing Disparities Project over the next four years.
- Expands behavioral health coverage to Seniors by extending Medi-Cal coverage for older (60+) undocumented adults. California’s Medi-Cal program currently includes behavioral health benefits for adults. However, beneficiaries are only able to access these benefits if they are in the full-scope Medi-Cal program. The May Revision proposes to expand full scope Medi-Cal for adults 60 years and over regardless of immigration status, to be implemented no sooner than May 1, 2022. Passage of this proposal means older Californians, regardless of immigration status, can see a qualified mental health professional to address their behavioral health needs.
- NEW:Children and Youth Behavioral Health Initiative. The May Revision includes $4 billion investment in behavioral health services for children and youth age 25 and younger, including:
- NEW: Funds to procure a business vendor to implement a virtual platform to integrate behavioral health services with screening, clinic-based care, and app-based support services for children and youth, regardless of payer source ($83 million in Coronavirus Fiscal Recovery Funds for FY 2021-22 and growing in the out years). The direct service platform proposes to incorporate regular automated screenings and self-monitoring tools; develop tools and services to help families navigate how to access help; facilitate a statewide e-consult service to allow primary care pediatric and family practice providers to receive asynchronous support and consultation to manage behavioral health conditions for patients in their practices; and use a tiered model to deliver and monitor behavioral health treatment.
- NEW: grants to qualified entities to increase behavioral health services at or affiliated with schools ($100 million in Coronavirus Fiscal Recovery Funds for FY 2021 and growing in out years). The May Revision proposes to build infrastructure, partnerships, and capacity statewide to increase access to ongoing behavioral health prevention and treatment services on or near school campuses and connect consumers to commercial insurance plans and Medi-Cal managed care plans, counties, community-based organizations, and schools via data sharing systems.
- NEW: grants to support development and expansion of evidence-based programs (10 million in Coronavirus Fiscal Recovery Funds for FY 2021 and growing in out years). The May Revision includes grants for Medi-Cal behavioral health systems, tribal entities, health care service plans, Medi-Cal managed care plans, community-based organizations, and behavioral health providers to support implementation of evidence-based practices for children and youth. In addition to evidence-based practices, advocates have long highlighted the need to expand the suite of practices and services provided by grants to also include community-defined evidence practices.
- NEW: competitive grants to construct, acquire, and rehabilitate real estate assets to expand the behavioral health infrastructure targeted at individuals age 25 and younger ($2.455 billion total funds over three years)
- NEW: Medi-Cal dyadic service benefits ($200 million funds ongoing) new statewide benefit that provides integrated physical and behavioral health screening and services to the whole family.
- NEW: Behavioral Health Outreach for Young People ($100 million over the next five years). The May Revision includes resources to support youth behavioral health education and outreach programs through the Department of Public Health.
- Fails to expand investments in the behavioral health of diverse Californians over the age of 25. The Governor’s May Revision significantly expands behavioral health services for children and youth but does not expand investments in outreach and services needed to improve the behavioral health of adults.However, recent data suggests the mental health of adults, particularly adults from communities of color, are impacted by COVID-19 at a significantly higher rate than their White counterparts.
Oral Health
- NEW: Medi-Cal Coverage to Undocumented Adults Aged 60 and Older: Effective no sooner than May 1, 2022, undocumented adults aged 60 and older will be eligible for full-scope Medi-Cal regardless of their immigration status. The May Revise is alloting $69 million ($50 million General Fund) in 2021-22 and $1 billion ($859 million General Fund) ongoing to expand Medi-Cal to this population. For many, this will be the first time they have access to comprehensive oral health coverage. Some of the benefits this newly eligible population will have access to are full and partial dentures, root canals, and deep cleanings.
- NEW: Restoration of Dental Fee-For-Service (FFS) in Sacramento and Los Angeles Counties: The May Revise announces an elimination of Dental Managed Care (DMC) and a transition to an entirely fee-for-service (FFS) system in Medi-Cal Dental. The restoration of FFS comes as DMC has failed to meet its goals of improving access to dental care since its inception. With the elimination of DMC, the budget estimates a net savings of $20 million total funds ($8million General Fund). The restoration would occur January 1, 2022. The Department has proposed trailer bill language related to the elimination of DMC. You can read that language here.
- NEW: Permanent Removal of Proposition 56 Suspensions and Adult Optional Benefits: The May Revision proposes permanently removing all suspensions of Proposition 56 payments and optional benefits currently in law. These supplemental payment increases incentivize providers to provide quality dental care to Medi-Cal patients without the worry of a low reimbursement rate for popular procedures like cleanings, root canals, and crowns. This suspension means supplemental payment increases for certain Medi-Cal Dental procedure codes will remain. The Department has proposed trailer bill language as part of the May Revision related to Prop 56 suspensions and adult optional benefits, and you can read it here. The resulting cost for eliminating the suspensions is $550 million ongoing.
Public Health:
The May Revise budget proposal revealed that there is yet a fundamental lack of understanding of the core public health functions that are critical to protecting and upholding all communities’ health and well-being: at the baseline, communicative or infectious disease prevention and mitigation, and more broadly, the mission to address broader, more upstream social factors that impact the lives of all Californians, including institutionalized racism and discrimination. While rapid and widespread vaccination, bolstering state hospital systems and achieving universal health care are important investments to make, adequate investments are needed now in order to implement effective and equitable preventive measures early on before the next pandemic.
The Governor’s budget fails to include funds to integrate community-defined practices that have proven effective for Black, Indigenous and other communities of color, immigrants, LGBTQ+ communities and other underserved Californians. Additionally, the budget fails to include funds responsive to community requests that the state declare racism a public health crisis and explicitly and affirmatively invest in antiracist programs and strategies by setting aside large-scale, flexible funding to support community-based solutions in reducing racialized health disparities. The state must also bolster funding for local health departments who have been underfunded, understaffed, overworked and exhausted this pandemic, so that local health departments have adequate resources to hire equity positions and implement equity plans, improve data and surveillance systems, build capacity to conduct stakeholder engagement and build relationships with community groups in order to raise public education and awareness collectively with community groups about public health, including countering myths and misinformation.
Pandemic relief and recovery
- COVID-19 Response Costs ($1.08 billion) The May revision includes funds to support testing and laboratory operations, continued vaccinations including an outreach and education campaign in partnership with hundreds of community groups, medical surge capacity, contact tracing management, and other state operations needs.
- Funds public hospitals and health systems ($300 million one-time funding) with federal funds to cover costs associated with the pandemic.
- Immediate economic relief for individuals and businesses, including $12 billion Golden State Stimulus for low-to-middle income Californians, including ITIN filers, and $2.5 billion total in grants and tax credits for small businesses including cultural institutions and non-profits as well as longer-term historic investments to support renters, workers and the unhoused population
Equity in emergency response structure
- Establishes a New Office of Equity at Cal OES ($29.9 million General Fund ongoing) and makes permanent a Listos grant program to further strengthen connections and build resiliency with all communities
- Develops and implements a new initiative, “Prepare California,” ($250 million one-time General Fund) modeled after a successful FEMA program, designed to build disaster-resistant communities through state, local, federal, and private sector and nongovernmental organization partnerships.
Public health infrastructure
- Includes Funds for a Public Health Review ($3 million) to assess the lessons learned, identify programmatic gaps, and develop a proposal as part of the 2022 Governor’s budget to fund prevention.
- Adds Community Health Workers ($16.3 million, 2021-23, $201 million by 2026-27), to the class of health workers who are able to provide benefits and services to Medi-Cal beneficiaries, effective January 1, 2022.
Long-Term Investments in Prevention and Racial Justice:
- Fails to Include $500 Million Racial Justice Innovation Fund, “to grant funding to stakeholders such as community based organizations, tribal organizations, local health departments, non-law enforcement branches of state and local government, and other entities that seek to reduce disparities for chronic diseases impacting communities of color, community health equity innovation projects, and to support program implementation and evaluation.” (CPEHN)
- Fails to Include $200 Million ongoing general fund for Local Health Departments, to train and recruit adequate workforce, improve and expand communicable disease prevention and mitigation, address health equity and health disparities, and improve environmental health capacities
- Fails to Include $180 Million Health Equity fund, “$60 million per year over three years as a one-time appropriation of $180 million,” “to engage communities most severely impacted by the pandemic in selecting and implementing policy, systems and environmental change strategies to mitigate the health and social impacts of COVID-19.” (Public Health Institute)
July 2021
CPEHN Commends Budget Investments in Health Equity, Urges Stronger Future Commitments to Racial Justice
UPDATED 07/23/21
Governor Newsom and the California Legislature reached agreement on a $262.6 billion state budget deal (FY 2021-2022) which was announced on June 26, 2021. The COVID-19 pandemic magnified stark and unacceptable health disparities, as people of color got sick, lost jobs, and died from the virus in unparalleled numbers. This Budget turns a corner by making record investments in health equity including:
- Providing access to health coverage through Medi-Cal for undocumented residents age 50 and older regardless of immigration status.
- Continuing the groundbreaking work of the California Reducing Disparities Project to tackle mental health inequities.
- Ensuring that consumer health care materials are accurately translated and language access is a reality.
- Creating systems to track and act upon health disparities data.
- Building accountability mechanisms to ensure that health plans provide quality and equitable care.
Together, these investments have the potential to shift the paradigm in the state of California.
At the same time, the budget agreement does not reflect the urgency of the most pressing public health crisis of our time: racism. This budget misses the opportunity to invest $100 million in the Health Equity and Racial Justice Fund and to spur innovation and community investment to advance racial justice. While the Governor and the Legislature have made a commitment to $300 million, ongoing, for public health infrastructure beginning in 2022-2023, CPEHN and our partners will be working closely with all stakeholders to ensure the swift and full implementation of the Health Equity and Racial Justice Fund.
Highlights of the FY 2021-22 Final State Budget Proposal:
Total Budget: $262.6 billion
General Fund Spending: $196 billion
Total Spending Health & Human Services: $209.9 billion ($57.3 billion GF/$152.6 billion other funds)
Rainy Day Fund: $25.2 billion in reserves including $15.8 billion Rainy Day Fund
Medi-Cal:
Key Changes:
- Expands Medi-Cal Coverage to Undocumented Older Adults (Aged 50+) ($1.3 billion ongoing): California currently provides full scope Medi-Cal benefits to eligible individuals under 26 years of age, regardless of immigration status. Additionally, for the upcoming year, existing law requires the expansion of Medi-Cal full scope coverage to individuals who are 65 years of age and over who do not have satisfactory immigration status be prioritized for inclusion in the upcoming FY 2021-22 budget. The final budget expands Medi-Cal, including In-Home Supportive Services, to undocumented adults aged 50 and older effective no sooner than May 1, 2022. The expansion is projected to cover an additional 250,000 undocumented adults aged 50 years and above, compared with just 30,000 aged 65 and above.
- Extends Payment for Community Health Workers ($16.3 million ($6.2 million GF) increasing to $201 million ($76 million GF) by 2026-27): The final budget adds community health workers to the class of health workers who are able to provide benefits and services to Medi-Cal beneficiaries, effective January 1, 2022. CHWs are skilled and trained health educators who work directly with individuals and families who may have difficulty understanding and/or interacting with health care providers due to cultural and/or language barriers. CHWs provide vital education, and navigation assistance and can bridge gaps in communication and reduce health and mental health disparities experienced by vulnerable communities in California.
- Adds a New Doula Benefit $403,000 ($152,000 GF) in 2021-22 and $4.4 million ($1.7 million GF) annually): The final budget adds community-based doula services as a preventive covered benefit in the Medi-Cal program, effective January 1, 2022. Disparities in black infant and maternal mortality rates are persistent in California. Doulas can help to increase health equity through the provision of culturally and linguistically appropriate personal support to pregnant individuals and families throughout labor, and the postpartum period.
- Includes Funds for Community-Based Field Translations of Medi-Cal Forms and Documents ($1 million 2021-22): The Governor’s final budget includes funds to strengthen language assistance through community-based reviews of translated Medi-Cal forms as envisioned by AB 318 (Chiu), sponsored by CPEHN and Western Center on Law & Poverty in 2019.
Other Medi-Cal Changes/Adjustments:
- Extends Medi-Cal Eligibility for Postpartum Individuals for Five Years ($90.5 million in 2021-22 and $362.2 million annually between 2022-23 and 2027-28): The final budget takes advantage of federal authorization under the American Rescue Plan Act that allows states to receive federal funding if they extend Medi-Cal eligibility from 60 days to 12 months for most postpartum individuals, effective April 1, 2022 for up to five years.
- Makes Permanent Accelerated Enrollment for Adults ($14.3 million in 2021-22): The final budget expands accelerated enrollment to adults ages 19 through 64 at the time of application so individuals can access immediate and temporary benefits while income verifications are pending.
- Permanently Ends the Suspension of Medi-Cal Optional Benefits specifically audiology and speech therapy, incontinence creams and washes, eyeglasses and contacts, and podiatric services.
- Eliminates Proposition 56 Suspensions ($550 million ongoing): The 2020 Budget Act included the suspension of various health and human services investments effective July 1, 2021 and December 31, 2021. Given the improved revenue outlook, the final budget eliminates Proposition 56 supplemental payment increases and reverses the 7% reduction in In-Home Supportive Service hours and Developmental Services provider rate increases.
- Provides Additional Support for Public Hospitals and Health Systems ($300 million one-time): The final budget includes federal COVID relief funds to help public health care systems cover costs associated with critical care delivery needs provided during and beyond the pandemic.
- Extends Telehealth flexibilities: The final budget extends telehealth flexibilities for telephone/audio-only modalities through December 31, 2022 and authorizes the use of remote patient monitoring. Convenes an advisory group to provide recommendations to the department in establishing and adopting billing and utilization management protocols for telehealth to increase access and equity and reduce disparities in the Medi-Cal program. The advisory group, consisting of providers, subject matter experts and other affected stakeholders, will analyze the impact of telehealth in increased access for patients, changes in health quality outcomes and utilization, best practices for the appropriate mix of in-person visits and telehealth, and the benefits or liabilities of any practice or care model changes that have resulted from telephonic visits.
Cal-AIM Adjustments:
- Invests in Population Health Management Health and Community Information Exchange ($315 million one-time GF): The final budget includes one-time funding for population health management services that would centralize administrative and clinical data from the Department, health plans, and providers. Access to this information would allow all parties to better identify and stratify member risks and inform quality and value delivery across the continuum of care while implementing CalAIM. The service will also facilitate the connection between important health data and critical social service data for a given beneficiary.
- Establishes Medi-Cal Providing Access and Transforming Health Payments (PATH) ($200 million one-time funding): The final budget includes one-time funding to build capacity for effective pre-release care for justice-involved populations to enable coordination with justice agencies and Medi-Cal coverage of services 30 days prior to release.
- Continues Medically Tailored Meals ($9.3 million one-time funding): The final budget continues the provision of medically tailored meals in the period between the conclusion of the existing pilot program in 2021 and when medically tailored meals become available as an option for In-Lieu of Service (ILOS) under CalAIM.
Other Health and Human Services Adjustments:
- Language Access ($20 million one-time general funds): The final budget sets aside $20 million available until June 30, 2024 for activities to improve and deliver language access services in health and human services programs contingent on completion of a language access framework and submission of an accompanying report to the Legislature detailing framework components and how these additional resources would be utilized in health and human services departments to support language access planning and implementation.
- Establishes Annual Health Plan Equity and Quality Reviews ($1.2 million, $148,000 GF). The final budget establishes and enforces health equity and quality standards for all Department of Managed Health Care licensed full-service and behavioral health plans. The final budget requires DMHC to convene a Health Equity and Quality Committee comprised of diverse individuals and entities to establish standard measures and annual benchmarks for equity and quality, clarifies the 5-year regulatory timeline and requires DMHC to consider evolving equity measurements that take into account cultural competence, health literacy, exposure to discrimination, and social and cultural connectedness such as connection to community identity, traditions, and spirituality.
- Requires Demographic Data Collection of Allied Health Professionals: Originally a CPEHN and SF Jewish Family Services co-sponsored bill (AB 1236 – Ting), the final budget requires all boards that oversee healing arts licensees to collect demographic information including race, ethnicity, sex, gender identity, sexual orientation and disability status.
- Establishes a Health Information Exchange: The final budget fails to include funds for AB 1131 an independently operated statewide health information exchange, opting instead to establish the California Health and Human Services Data Exchange Framework by July 1, 2022, housed under CHHS. By September 1, 2021, CHHS must convene a stakeholder advisory group to advise in the development and implementation of the Data Exchange that includes consumers, organized labor and CBOs, amongst other stakeholders. The CHHS Data Exchange will enable real-time access and exchange of information amongst health providers and payers and the government.
- Provides Funds for HHS HIE Leadership ($2.5 million one-time funds): The final budget includes one-time funds for the Health and Human Services Agency to lead efforts and stakeholder engagement in building out information exchange for health and social services programs.
- Population Health Management Health and Community Information Exchange ($315 million one-time GF): See description above.
- Sets aside funds for equity centered programs ($24.6 million). The final budget includes funds for an analysis and final report for how CHHS can address inequities due to COVID, funds for language assistance for all CHHS programs, and establishment of a health equity dashboard to report on health disparities.
Covered California Adjustments:
- Reduces State Spending on Affordability Assistance in Covered California (A decrease of $732.7 million over 2020-21 and 2021-22 combined): The final budget captures approximately $730 million in General Fund spending on state subsidies to go into a new health care affordability reserve fund ($333.4 million) and replaces that spending with new federal subsidies. Advocates had proposed to use those funds to pay for additional consumer affordability provisions in Covered California.
- Decreases in Individual Mandate Penalty Revenue (A decrease of $345 million in 2020-21 and 2021-22 combined): The Franchise Tax Board is currently processing returns for the 2020 tax year, the first year in which the individual mandate penalty is in effect. Based on initial sample data, the final budget reflects reduced revenue from the individual mandate penalty of about $345 million over 2020-21 and 2021-22 combined.
- Includes Subsidies for Zero-Dollar Premium Plans ($20 million ongoing): Health care consumers pay $1 premiums for health plans due to federal policy concerning abortion coverage. The May Revision proposes to subsidize this cost for Covered California consumers.
- Establishes a Health Care Affordability Reserve Fund ($333.4 million): While ARPA provides substantial near-term relief to Californians purchasing health care through Covered California, the future of the enhanced federal assistance is uncertain. To partially backfill the loss of the more generous federal subsidies if they are not extended, or if other state health care affordability investments are explored in the future, the final budget sets aside $333.4 in a new Health Care Affordability Reserve Fund.
Behavioral Health Adjustments:
The final budget significantly expands access to behavioral health coverage by extending Medi-Cal coverage for older (50+) undocumented adults, and also expands behavioral health outreach and services for children and youth. Additionally, the budget includes funding to continue the successful and innovative California Reducing Disparities Projects pilots of community defined evidence-based behavioral health practices.
Behavioral Health
- Includes funds for Community-Defined Evidence Practices (CDEPs) expanded under the California Reducing Disparities Project ($63.1 million). Research from the Office of Health Equity and the California Reducing Disparities Project suggests community-defined evidence practices improve the behavioral health of children and youth from Black, Indigenous, People of Color (BIPOC) and Lesbian, Gay, Bisexual, Transgender, Queer and Plus (LGBTQ+) communities as opposed to traditionally funded services. Funding for these innovative and successful strategies will expire in a year. To sustain these practices, the Legislature and advocates successfully championed a $63 million investment in the California Reducing Disparities Project over the next four years in the final state budget.
- Expands behavioral health coverage to Seniors by extending Medi-Cal coverage for older (50+) undocumented adults. California’s Medi-Cal program currently includes behavioral health benefits for adults. However, beneficiaries are only able to access these benefits if they are in the full-scope Medi-Cal program. The final state budget expands full scope Medi-Cal for adults 50 years and over regardless of immigration status, to be implemented no sooner than May 1, 2022. Passage of this proposal means older Californians, regardless of immigration status, can see a qualified mental health professional to address their behavioral health needs.
- Children and Youth Behavioral Health Initiative. The final budget includes $4 billion investment in behavioral health services for children and youth age 25 and younger, including:
- Funds to procure a business vendor to implement a virtual platform to integrate behavioral health services with screening, clinic-based care, and app-based support services for children and youth, regardless of payer source ($10 million). The direct service platform proposes to incorporate regular automated screenings and self-monitoring tools; develop tools and services to help families navigate how to access help; facilitate a statewide e-consult service to allow primary care pediatric and family practice providers to receive asynchronous support and consultation to manage behavioral health conditions for patients in their practices; and use a tiered model to deliver and monitor behavioral health treatment. The final state budget includes $10 million in 2021 but delays $73 million the proposed 2021 funding until the project has met certain requirements.
- Includes grants to qualified entities to increase behavioral health services at or affiliated with schools ($950 million). The Final State Budget Act includes build infrastructure, partnerships, and capacity statewide to increase access to ongoing behavioral health prevention and treatment services on or near school campuses and connect consumers to commercial insurance plans and Medi-Cal managed care plans, counties, community-based organizations, and schools via data sharing systems.
- Grants to support development and expansion of evidence-based programs and community-defined programs ($429 million). The final budget includes grants for Medi-Cal behavioral health systems, tribal entities, health care service plans, Medi-Cal managed care plans, community-based organizations, and behavioral health providers to support implementation of evidence-based practices and community-defined programs for children and youth. Requires DHCS to establish a Memorandum of Understanding, including $42.9 million, with the Mental Health Services Oversight and Accountability Commission to partner on this grant program.
- Competitive grants to construct, acquire, and rehabilitate real estate assets ($310 million) or to invest in mobile crisis infrastructure to expand the community continuum of behavioral health treatment resources for children and youth. $205 million will be made immediately available for mobile crisis support teams.
- Behavioral Health Coaches and Counselors ($352 million) over five years through Office of Statewide Health Planning and Development. California currently does not have an adequate supply, distribution, or diversity of behavioral health professionals to meet the needs of our young people. This proposal will build on the success of current initiatives for peer providers and community health workers, with a specific focus on youth and behavioral health.
- Medi-Cal dyadic service benefits ($800 million) new statewide benefit that provides integrated physical and behavioral health screening and services to the whole family.
- Behavioral Health Outreach for Young People ($100 million) The final state budget includes resources to support youth behavioral health education and outreach programs through the Department of Public Health.
Oral Health
- NEW: Medi-Cal Coverage to Undocumented Adults Aged 50 and Older: The budget has adopted the legislative proposal to expand full-scope Medi-Cal benefits to adults, 50 years of age or older, no sooner than May 1, 2022. Among many other benefits, full-scope Medi-Cal coverage comes with comprehensive oral health benefits for children and adults. Some of the benefits this newly eligible population will have access to are full and partial dentures, root canals, and deep cleanings. Having been excluded from the full-scope program since its inception, this may be the first time many of these adult consumers have access to comprehensive oral health coverage.
- NEW: Extension of Dental Managed Care Contracts: The Budget is requiring the Department of Health Care Services extend its Dental Managed Care contracts to December 31, 2022. In the May Revise, the proposal was to eliminate DMC and restore the fee-for-service (FFS) system for the entire Medi-Cal Dental program. The Budget did not say whether this is merely a postponement of DMC elimination or if DMC will remain past December 31, 2022. With the extension, there will no longer be a $20 million estimated net savings ($8 million General Fund) for this budget year.
- NEW: The State Oral Health Plan Will Not See Reductions in Funding: Proposition 56 is a tax imposed on distributors of cigarettes and tobacco products that requires all revenues to be deposited into the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund. Since being approved in 2016, $30 million of tax revenue has been allocated to provide the State Department of Public Health state dental program funding annually. The program’s goals are to educate about, prevent, and treat dental disease. Before this budget, the law stated if there were a reduction in revenues resulting from reduced tobacco product use, the amount of funding allocated to the state dental program would be reduced proportionally. This new budget would backfill the reduced amount by continuously appropriating from the General Fund, equivalent to the required reduction so that the state dental program would remain fully funded at $30 million.
- CONFIRMED: Permanent Removal of Proposition 56 and Adult Optional Benefits Suspensions: The Budget confirms the permanent removal of Proposition 56 and adult optional benefits suspensions. The suspensions were anticipated to take place July 1, 2021. The May Revise proposed permanently removing all suspensions of Proposition 56 payments and optional benefits currently in law. These supplemental payment increases incentivize providers to provide quality dental care to Medi-Cal patients without the worry of a low reimbursement rate for popular procedures like cleanings, root canals, and crowns. The permanent removal of suspensions means supplemental payment increases for certain Medi-Cal Dental procedure codes will remain. The resulting cost for eliminating the suspensions is $550 million ongoing.
Public Health Infrastructure and System:
- Funding for Local Health Department and Community Organizations: The final 2021-22 state budget made a future commitment to allocate $300 million annually beginning in budget year 2022-23 to build the public health ecosystem California urgently needs. This funding will hopefully bolster the infrastructure and workforce at California’s 61 local health departments, which have been underfunded and under-resourced for years and yet critical to the COVID-19 pandemic responses. Part of this funding will also like support community-based organizations to strengthen their work in health equity and racial justice, which is critical in bridging institutional responses, addressing systemic racism, and reducing health disparities for communities of color and other underserved communities in California.
- Assessment on Public Health Infrastructure: The 2021-22 budget approved $3 million General Fund one-time to the California Department of Public Health to support a review of the state’s pandemic response in order to understand the needs and gaps in our public health infrastructure.
- Pandemic related economic relief for individuals and small businesses: the final budget included a $8.1 billion Golden State Stimulus for low-to-middle income Californians, including ITIN filers, and $1.5 billion total in grants and tax credits for small businesses including cultural institutions and non-profits. These were proposed in the Governor’s May Revise but of a lower amount.
Governor’s Budget Takes Steps Towards Health Equity Once Again Misses Key Opportunities in Racial Equity and Public Health
UPDATED 7/13/21
On Monday, 7/12 Governor Gavin Newsom signed SB 129, also known as the “California Comeback Plan.” This historic, progressive, $100 billion package includes numerous health equity and racial justice items.
Take a look at our 2021 budget scorecard to see what was initially proposed in January and what has been included in the final budget.
A number of health items are included in AB 133, the health care budget trailer, that has not yet been signed.
2021 Budget Score Card – Updated July 2021
January 2020
Governor Newsom’s Budget Takes Bold Steps to Improve Health Outcomes for All Californians
On Friday, January 10th, Governor Gavin Newsom released his FY 2020-2021 State Budget. The $222 billion spending plan proposes an historic investment in health care for all, expanding Medi-Cal to undocumented older adults over age 65 regardless of immigration status. With this step, California will be one step closer to achieving universal coverage. The budget also includes funds to help pay for the state’s “Medi-Cal Healthier California for All” waiver initiative (formerly Cal-AIM), which includes the provision of enhanced care management and in lieu of services for those with complex care needs, an expansion of whole person care approaches statewide and efforts to build upon existing dental initiatives. While CPEHN supports many of the stated goals of the waiver, we are concerned about the lack of investment in preventive care as well as the heavy reliance on managed care plans to provide mandated safety-net services without adequate requirements to advance health equity and equitable access to care and will be working with state and legislative partners on ways to strengthen these provisions.
The Governor also proposes to consolidate several offices into a new Center for Data Insights and Innovation. Housed under the California Health and Human Services Agency (CHHS), the Center would convene all of the offices and departments under it to develop a more integrated approach to addressing health disparities and improving health outcomes for all. CPEHN believes it is time for California to establish a Master Plan on Equity and looks forward to working with CHHS to achieve those aims. The new spending plan also establishes a new Health Care Affordability office, a single drug-purchasing market and state-owned generic drug label to improve price transparency and control the cost of health care and prescription drugs as well as an investment of $750 million in funds to tackle the state’s homelessness crisis by strengthening the availability of affordable housing.
While we are encouraged by these actions, we look forward to working together with the Administration and the Legislature to include several priorities that would help to advance health equity including funds to ensure counties are providing culturally and linguistically competent mental health care services, translated and easy to understand Medi-Cal notices, and access to a broader set of asthma related services, including environmental remediation services.
The Budget forecast projects a $5.6 billion surplus and assumes federal approval of the Managed Care Organization tax authorized in Chapter 348, Statutes of 2019 (AB 115) with revenue beginning to accrue in 2021-22. To view the full budget proposal click here.
Highlights of the FY 2020-2021 Budget:
Overview
- Total Budget: $222 Billion
- General Fund Spending: $153 Billion
- Total Spending for Health & Human Services: $167.9 billion
- Rainy Day Fund: Governor Newsom is proposing to add a portion of the state’s surplus to the Rainy-Day Fund, bringing the Fund to $18 billion by 2022-23.
Key Items
- Medi-Cal Expansion for Older Adults over age 65 regardless of immigration status ($80.5 million): The Budget includes additional funds to expand Medi-Cal eligibility to older adults aged 65 and older no sooner than January 1, 2021. California currently pays for federally required emergency care. This expansion will provide preventative care to an estimated 27,000 undocumented seniors in the first year. Full implementation costs are projected to be approximately $350 million in 2022-23 and ongoing. Though this investment gets us closer to universal access for all of California’s undocumented community members, we continue to have a gap in coverage for those aged 26-64. We look to the Governor and the Legislature to close this gap in coming fiscal years so that we can achieve healthcare for all regardless of status.
- “Medi-Cal Healthier California for All” (formerly known as Cal-AIM) ($695 million, growing to 1.4 billion in 2022-23): The budget also includes funds to help pay for the state’s waiver initiative, effective January 1, 2021 and ongoing. The proposal ends the Health Homes Program (HHP) despite loss of federal match and the Whole Person Care program, rolling those two programs into a new enhanced care management benefit for patients with complex care needs, administered by managed care plans. The initiative also allows health plans the option of providing services such as housing navigation/supporting services, recuperative care, respite, sobering center, etc. as an In Lieu of Service (ILOS) which are services provided as a substitute, or to avoid, other services such as a hospital or skilled nursing facility admission or a discharge delay. CPEHN would like to see additional asthma related and mental health services considered as an In Lieu of Service. The Administration proposes $112.5 million to continue and expand some elements of the Dental Transformation Initiative, including an expansion to adults of provider incentives for preventive services and continuity of care; caries risk assessment and adding silver diamine fluoride as a covered service for children. The Administration also proposes to spend $45.1 million to implement a Behavioral Health Quality Improvement Program which would provide funding to county-operated community mental health and substance use disorder systems to incentivize system changes and process improvements including enhanced data-sharing capability for care coordination, value-based payment such as data collection, performance measurement, and reporting.
While CPEHN supports many of the stated goals of the waiver, we are concerned about the lack of investment in preventive care as well as DHCS’ heavy reliance on managed care plans to provide mandated safety-net services without adequate requirements on health plans to advance health equity and equitable access to care. We will be working with state and legislative partners on ways to strengthen these provisions.
- Strengthening Health Plan Accountability/Achieving Mental Health Parity: The Governor’s spending plan alludes to a new promise to update and strengthen its enforcement of behavioral health parity laws and other health plan requirements including timely access to treatment, network adequacy, benefit design, and plan policies. California’s waiver proposal shifts even greater responsibility to health plans for providing safety-net services despite years of stagnant quality outcomes. Additionally, California’s plans still fall far short of offering equitable access to mental health services five years after implementation of the mental health parity laws. CPEHN will be closely monitoring the Administration’s plan to strengthen health plan accountability and mental health parity, expected to be released this spring.
- Establishment of a new Center for Data Insights and Innovation: The Governor is proposing to consolidate several offices into a new Center for Data Insights and Innovation. Housed under the Health and Human Services Agency, the Center would be tasked with, amongst other things, improving data integrity in order to generate more equitable health outcomes for all Californians. CPEHN believes it is time for California to establish a Master Plan on Equity and looks forward to providing input into the goals of the Center in order to achieve those aims.
- Additional funds and initiatives aimed at:
- Tackling the State’s Homelessness Crisis ($750 million): The budget proposes an initial investment of $750 million to launch the California Access to Housing and Services Fund tasked with creating a structure for the development of affordable housing units, supplementing and augmenting rental subsidies, and stabilizing board and care homes.
- Improving Affordability: The budget proposes to establish a new office of Health Care Affordability that would be tasked with increasing price and quality transparency, developing specific strategies and cost targets for the different sectors of the health care industry, and financial consequences for entities that fail to meet these targets.
- Strengthening California’s public option: The Health and Human Services Agency will develop options to strengthen enrollment, affordability, and choice through Covered California, including opportunities to leverage the statewide network of existing public Medi-Cal managed care plans.
Medi-Cal/Health Care Overall
- Health 4 All Elders ($80.5 million): The budget newly includes $80.5 million for DHCS to expand full scope Medi-Cal for income eligible seniors regardless of immigration status 65 years and above, covering an estimated 27,000 undocumented persons in the first year. This includes $5.9 million General Fund in 2020-21, growing to $119.5 million General Fund in 2021-22, to support increased IHSS costs, beginning January 1, 2021. This investment moves the state towards universal coverage, which will further the state’s cost containment goals.
- “Medi-Cal Healthier California for All” (formerly known as Cal-AIM) ($695 million, growing to 1.4 billion in 2022-23): The budget also includes funds to help pay for the state’s waiver initiative, effective January 1, 2021 and ongoing. See analysis in key highlights above.
- Strengthening the Public Option: The Health and Human Services Agency will develop options to strengthen enrollment, affordability, and choice through Covered California, including opportunities to leverage the statewide network of existing public Medi-Cal managed care plans.
- State Savings for Reducing Health Care Costs: Medi-Cal Best Price—Current law authorizes the Department of Health Care Services to negotiate state supplemental rebates based, in part, on the best prices that manufacturers provide to other purchasers within the United States. The Budget proposes to expand the Department’s authority to consider the best prices offered by manufacturers internationally when conducting negotiations for state supplemental rebates.
- Leveraging purchasing Power to Reduce the Cost of Prescription Drugs: The Administration will propose to establish a single market for drug pricing within the state. This proposal would enable all purchasers—Medi-Cal, California Public Employees’ Retirement System, Covered California, private insurers, self-insured employers, and others—to combine their purchasing power. Drug manufacturers would have to bid to sell their drugs—at a uniform price—in the California market.
Medi-Cal Mental Health and Oral Health
- Behavioral Health Quality Improvement Program ($45.1 million): In alignment with the Medi-Cal Healthier California for All initiative, the budget includes $45.1 million for the department to implement a Behavioral Health Quality Improvement Program. This program will provide funding to county-operated community mental health and substance use disorder systems to incentivize system changes and process improvements that will help counties prepare for opportunities through the Medi-Cal Healthier California for All initiative. Improvements include enhanced data-sharing capability for care coordination and establishing the foundational elements of value-based payment such as data collection, performance measurement, and reporting. The proposal fails to mention the infrastructure needed for community-based organizations that provide community-defined evidence practices or population specific strategies to further integrate into the Medi-Cal mental health delivery system.
- Updates to the Mental Health Services Act: Proposition 63, also known as the Mental Health Services Act (MHSA), was approved by the voters in 2004 and imposes a 1-percent tax on personal income in excess of $1 million. Revenue generated under the Act primarily supports county mental health services. The administration plans to update the MHSA to focus on people with mental illness who are also experiencing homelessness, who are involved in the criminal justice system, and for early intervention for youth. However, racial and ethnic disparities also persist, with previous reports showing that white Medi-Cal consumers at a greater rate than any other racial or ethnic group. Currently, there is over $500 million of MHSA dollars in local reserves, $161 million of which must be spent by June 2020 or will otherwise be reverted back to the state.
- Behavioral Health Parity: Currently, behavioral health parity laws require that health care service plans that provide mental health and substance use disorder (MH/SUD) benefits to provide those benefits at the same level as the plan’s medical/surgical benefits. However, data shows poor outcomes in behavioral health treatment by health plans, with all health plans demonstrating utilization rates far below those that would correspond with the estimated need in the Medi-Cal population, with even worse outcomes in communities of color. The Governor’s proposal directs the California Health and Human Services Agency and the Department of Managed Health Care to work with health plans, providers, patient representatives, and other parties to update and strengthen its enforcement of behavioral health parity laws and other health plan requirements.
- Behavioral Health Task Force at the Health and Human Services Agency: To further advance efforts to integrate behavioral health and improve parity, the administration plans to establish a Behavioral Health Task Force at the California Health and Human Services Agency, which oversees departments that provide mental and substance use treatment. Efforts to integrate behavioral and physical health are hindered by a number of limitations, such as limits on same day billing for county safety net providers, outdated cultural and linguistic standards, and the absence of statewide goals. The Task Force will review existing policies and programs to improve the quality of care, and coordinate system transformation efforts to better prevent and respond to the impacts of mental illness and substance use disorders in California’s communities.
- Adverse Childhood Experiences Training Program ($10 million): In 2019, California made historical investments in adverse childhood experiences (ACEs) screenings for children and adults in the Medi-Cal program. To ensure providers are equipped to administer the screenings, the budget includes $10 million for the development of an ACEs training program, in addition to a statewide ACEs public awareness campaign. The proposal is an important step toward quality implementation of the ACES screening for children and adults in the Medi-Cal program. The proposal fails to describe the training program’s design. Cultural and linguistic considerations are lacking in the proposal, but should be a central component of the training program and public awareness campaign.
- Drug Medi-Cal Organized Delivery System ($426 million): The budget includes $426 million to support the Drug Medi-Cal Organized Delivery System, which provides expanded substance use disorder treatment for Medi-Cal beneficiaries. A total of 15 counties were expected to implement the waiver in FY 2017-18 with approximately 20 counties implementing the waiver in 2018-19. Importantly, this proposal is double the investment from last year.
- Education, Prevention and Treatment of Substance Youth Disorders ($199.7 million): The cannabis excise tax is forecast to generate $479 million in 2019-20, $199.7 million of which will be allocated to education, prevention and treatment of substance youth disorders and $66.6 million to public safety-related activities. Proposition 64, the measure to legalize recreational cannabis in 2016, aimed to scale back ineffective policies of the War on Drugs and its associated systems of mass criminalization and incarceration. However, emerging research shows that many cities and counties have failed to capture and invest this new source of funds appropriately, and in many cases, served as a windfall for policy departments across the state.
- Mental Health Services for Inmates ($5.9 million):The budget includes $5.9 million to support expansion of telepsychiatry, which uses secure videoconferencing to increase inmate access to mental health care services. This expansion comes on the heels of the Governor’s approval of SB-389, which amended the Mental Health Services Act to authorize the counties to use MHSA moneys to provide services to persons who are participating in a presentencing or post sentencing diversion program or who are on parole, probation, post release community supervision, or mandatory supervision.
- Prevention, Early Intervention and Treatment Services to Prevent Opioid Deaths ($89.2 million one-time): The budget continues efforts to combat opioid overdose through better prevention, early intervention, and treatment to stabilize conditions before they become severe. Specifically, the budget includes $89.2 million for the Medication Assisted Treatment Expansion Project, which aims to expand access points for individuals who need access to medications in combination with counseling and behavioral therapies. However, research indicates ongoing work is needed to address racial and ethnic disparities in programmatic outcomes.
- Expanding Community Treatment of the Incompetent to Stand (IST) Trial Population ($24.6 million one-time): The budget increases funds to community alternatives to increase diversion of mentally ill offenders and decease county IST referrals to state hospitals. To advance this goal, the budget proposes to implement a six-year Community Care Collaborative Pilot program in three counties to provide incentives to treat and serve individuals deemed incompetent to stand trial (IST) in the community. This program will primarily target the development of community-based treatment options for individuals who are experiencing mental illness and are homeless.
- Elimination of Dental Managed Care: The Governor’s budget proposes to eliminate Dental Managed Care (DMC) in Sacramento and Los Angeles counties with services exclusively rendered under a fee-for-service (FFS) delivery system, no sooner than January 1, 2021. Despite being in existence for many years, utilization rates remain low in Dental Managed Care. CPEHN has advocated for greater access to oral health care services, including culturally and linguistically appropriate services in Medi-Cal Dental under both Managed Care and FFS. We join other consumer advocates in urging the Administration to ensure continuity of care for those individuals transitioning between DMC and FFS and continuing to improve health outcomes in FFS dental .
Public Health & Prevention
- Nicotine Tax: In response to the youth vaping crisis, the Governor proposes a $2 tax on every 40 milligrams of nicotine sold. This tax is to take effect on January 1, 2021. Revenues generated by this new tax will support youth prevention programs and health care workforce investments.
- Behavioral Health Task Force: To prevent the long-term effects on unaddressed behavioral health conditions, Governor Newsom proposes the establishment of the Behavioral Health Task Force at the Health and Human Services Agency which will bring together stakeholders to review policies and programs that can be altered to improve patient care and curb substance use and other mental health concerns.
- Safe Drinking Water (Potential $150 million per approval of the voters): Contingent upon the passage of a voter proposition, the Public Preschool, K-12, and College Health and Safety Bond Act of 2020, $150 million would be made available to support lead testing in drinking water in addition to remediation efforts.
Other Health Programs/ Early Childhood
- Public Awareness of the Impacts of ACEs ($10 million one-time): The Governor proposes an investment of $10 million in the Office of the Surgeon General to conduct a public awareness campaign around the effects of adverse childhood experiences (ACEs).
- Office of Early Childhood Development: The Governor proposes to create the Office of Early Childhood Development to be overseen by the Health and Human Services Agency to improve program integration for California youth and is expected to be established July 1, 2021.
- Department of Youth and Community Restoration: In an effort to address juvenile misconduct more holistically, the Governor proposes the creation of the Department of Youth and Community Restoration which would absorb the Division of Juvenile Justice currently overseen by the Corrections system.
- Nutritious School Meals ($60 million): To improve the quality of subsidized school meals and encourage participation in the state and federal school nutrition programs, the Budget proposes $60 million to increase funding for school nutrition participation.
Specific Immigrant Programs
- CalNEW/ California Newcomer Education and Well-Being Project ($15 million one-time): The Budget includes $15 million one-time Proposition 98 General Fund for CalNEW, to provide school-based supports for refugees and unaccompanied undocumented minors students’ well-being, English-language proficiency, and academic performance as well as for immigrant families to address harms caused by the federal “public charge” rule. The funding is available over three years.
- Immigration Legal Services on Community College Campuses ($10 million ongoing): The Budget includes an increase of $10 million general fund to provide legal services to immigrant students, faculty, and staff on community college campuses.
- Social Entrepreneurs for Economic Development Initiative ($10 million one-time): The Budget includes $10 million one-time general fund for the California Workforce Development Board to launch the Social Entrepreneurs for Economic Development Initiative to provide micro-grants and entrepreneurial training to immigrants. (New SEED Initiative) Though we applaud the Governor’s proposal to support immigrant entrepreneurship, we expect to see greater expansion around the earned income tax credit or (EITC) for immigrants. We look forward to exploring what is possible in this budget year to achieve this end.
- Dreamer Resource Liaisons ($5.8 million ongoing) The Budget includes an increase of $5.8 million ongoing general fund to fund Dreamer Resource Liaisons and student support services, including those related to career pathways and economic mobility, for immigrant students on community colleges, pursuant to Chapter 788, Statutes of 2019 (AB 1645).
- Cash Assistance Program for Immigrants (CAPI) Increases: CAPI is a state-only program for immigrants who do not qualify for federal SSI/SSP cash assistance. These amounts are proposed to be increased to $943 per month for individuals and $1,583 for couples. Though we are pleased to see these augmentations in assistance, there have been no significant eligibility expansions for immigrants outside of Medi-Cal such as CalFresh. We hope that greater consideration for basic needs such as healthy food options will be considered as the budget process progresses.
- California Law Enforcement Telecommunications System (CLETS) ($2.8M in year one): Per the requirements of AB 1747, which limits the use of the CLETS for immigration enforcement the following funds have been earmarked—$2.8 million General Fund in 2020-21, $3.3 million in 2021-22, and $2.9 million annually thereafter to conduct investigations and audits to monitor compliance.
Human Services
- Establishment of a Department of Early Childhood Development: The Governor proposes the creation of the Department of Early Childhood Development to improve coordination among child-serving entities. This includes fostering collaboration between the Department of Education and aligning funding streams that are geared toward supporting low-income children and families.
- The Office of the Surgeon General cross sector training ($10 million one-time): Funds to the Office of the Surgeon General will be dedicated to rolling out a public awareness campaign on the dangers of adverse childhood experiences and toxic stress on the long-term health and wellness of youth into adulthood.
- Establishment of the Center for Data Insights and Innovation: This center integrates the Offices of Innovation, Patient Advocate, and Health Information Integrity in order to better align data and develop tailored approaches to responding to population health needs. CPEHN looks forward to leveraging this department to establish a Master Plan on Health Equity which would require collaboration of various healthcare focused departments to reduce the occurrences of poor health outcomes among underserved communities.
- Establishment of a Behavioral Health Task Force: This task force will be focused on improving the integration and parity of behavioral health treatment with physical health. CPEHN is concerned about the lack of access to mental health treatment that communities of color and the LGBTQ community faces. We look forward to leveraging this task force to focus on cultural competency in behavioral health.
- California Access to Housing and Services Fund ($750 million initial investment): Creates a new fund with the goal of reducing street-based homelessness and increasing the number of stable housing units. It will be distributed to local entities that will assist in moving the funds.
- CALWORKs Grant increase ($73.6 million) : Proposes a 3.1% increase to the CalWORKs maximum aid payment levels effective Oct 1, 2020.
- CAL Fresh ($5 million annually): Maintain the website and online application assistance tool to allow enrollment on multiple platforms and increase the number of clients.
- In-Home Support Services ($14.9 billion one-time): a 16% increase in General Fund costs from the 2019-20 budget to account for expected increase caseload and other supportive programs.
- Minimum wage ($1.1 billion one-time): Allocation is to support the planned increase to minimum wage to $13 per hour in Jan. 1 2020, and $14 in 2021.
- Medi-Cal Expansion for Undocumented Persons Age 65 and Over ($5.9 million in General Fund): Allocation to support the increase in usage of services that come with increased coverage.
- (SSI/SSP) ($2.66 billion): A %1.6 decrease from the 2019-20 budget due to a 1.8% decrease in project caseloads. An approximate increase of $13 and $20 for individuals and couple respectively to the maximum grant levels to account for CPI project growth.
Public Safety
- Closing a state-operated prison within the next five years: State budget reflects closing down private contracted prisons and reducing the prison inmate capacity to work towards the goal.
- Youth Offender Rehabilitative and Reentry focus (6.2 million General Fund 2020-21, and $10.1 ongoing): It has been found that younger inmates are more impressionable to treatment than older inmates. A model program will be established at the Valley State Prison in Chowchilla with three budget investments: Academic Information Technology Modernization (26.9 million), Expanding Higher Education Opportunities ($1.8 million in General Fund, $3.5 million ongoing), Expanded Inmate Visitation ($4.6 million General Fund)
- Inmate Medical Care and Mental Health Services ($3.6 Billion one-time): The Budget dedicates $3.6 billion General Fund for health care services programs, which provide access to mental health, medical, and dental care that is consistent with the standards and scope of services appropriate within a custodial environment.
- Receiver has transitioned oversight of 19 institutions back to the state ($9.9 million General Fund in 2020-21 and $11.8 million ongoing General Fund in 2021-22): To enhance quality management and patient safety by providing staff to evaluate risks and implement best practices to improve the health care delivery system.
- Support an electronic health care data exchange process to transfer health records to counties for inmates who are transitioning to county custody or the community ($722,000 ongoing General Fund): The timely sharing of electronic medical records will improve patient outcomes by allowing for enhanced continuity of care as inmates transition from prison. These improvements are intended to support the eventual full transition of medical care back to the state.
- Support expansion of telepsychiatry ($5.9 million General Fund in 2020-21, increasing to $8.4 million ongoing General Fund by 2024-25): which uses secure videoconferencing to increase inmate access to mental health care services.
- Contract psychiatry ($1.4 million ongoing General Fund): Required to meet a federal court order to fill at least 90 percent of the state prison system’s psychiatry positions.
- Healthcare litigation assistance fund ($9 million ongoing funds ($2.2 million General Fund, $3.7 million Attorney General Antitrust Account, and $3.2 million Unfair Competition Law Fund)): To help with the upswing in healthcare litigation due to issues such as the opioid crisis, the Department of Justice will establish a Healthcare Rights and Access Section to consolidate and centralize the healthcare litigation.
Housing, Homelessness, Anti-poverty
- Total Housing Investment ($6.8 billion one time): Across multiple departments and programs to address housing throughout the state. The housing units build goal is set at 1.2 million, with 400k built and 500k permits issued.
- Climate Resilience Bond ($4.75 billion): climate resilience bond for the November 2020 ballot to support investments over the next five years to reduce specific climate risks across California through long-term investment in natural and built infrastructure, especially in the state’s most climate-vulnerable communities.
- Bolster Community Power Resiliency ($50 million one‑time General Fund): In response to the size and scope of the unprecedented electric infrastructure blackouts to support additional preparedness measures.
- California Access to Housing and Services Fund ($750 million one-time): Creates a new fund with the goal of reducing street-based homelessness and increasing the number of stable housing units. It will be distributed to local entities that will assist in moving the funds.
- Six-year Community Care Collaborative Pilot: Program in three counties to provide incentives to treat and serve individuals deemed incompetent to stand trial (IST) in the community. This program will primarily target the development of community-based treatment options for individuals who are experiencing mental illness and are homeless.
Climate Change/Environment
- Safe Drinking Water ($360 million bond funding): This investment will be used to provide grants and loans to disadvantaged communities to improve access to safe drinking water, including funding capital infrastructure costs for improved water supplies, treatment, and distribution to make vulnerable communities more resilient to the effects of climate change.
- Hardening of Critical Community Infrastructure ($500 million bond funding): The Governor proposes funds to facilitate hardening of critical infrastructure, with a focus on low-income areas at significant risk of wildfires. Types of projects include hardening of drinking water infrastructure, emergency shelters (such as fairgrounds), and public medical facilities.
- Urban Greening and Forestry ($200 million in bond funding): Funds to be dedicated to mitigate urban heat island impacts in the regions most affected by extreme heat. Funds would support urban forestry projects and an expanded urban greening program that supports the creation of green recreational parks in underserved areas.
- Community Resilience Planning ($25 million bond funding): for planning activities to address community-specific climate risks and develop climate resilience plans.
Education
K-12 Education
- Better teachers ($350 million one-time): The budget includes a $350 million one-time General Fund to augment the Educator Workforce Investment Grant, which will support teachers and para professionals to provide special education, mental health support and intervention, support for English learners, LGBTQ students and other marginalized students, and computer science and STEM subjects.
- More teachers (combined $532.1 million one-time): To address shortage of teachers in high-need areas and schools, the budget includes a $193 million one-time General Fund to address general teacher workforce shortage, a $175 million one-time General Fund to expand Teachers Residency Program, a $100 million one-time General Fund to provide stipends for teachers to complete four years of teaching services in these areas/schools, and $64.1 million one-time funding to expand the California Classified School Employees Credentialing Program.
- Special Education ($250 million): The state is investing an additional $250 million (to a $645 million base) this year into pre-school age children with disabilities.
- Community schools ($300 million one-time): The Budget proposes $300 million one-time General Fund to establish Community Schools to provide impoverished/disenfranchised students with wrap-around services, mental health care, restorative justice, family and community engagement, and expanded learning opportunities.
- Opportunity Grants ($300 million one-time): The Budget proposes $300 million one-time General Fund to address disparities for the lowest performing schools and school districts
- Computer science ($19 million one-time): About total of $19 million one-time fund in improving computer science subject outcomes.
- School nutrition (combined $70 million): The Budget proposes $60 million General Fund to increase funding for school nutrition, $10 million training and education for school food service workers, and $10 million to support a farm-to-school model.
- School facilities (potential $9 billion): Through a March ballot measure, potentially $9 billion to support K-12 facilities construction.
Higher Education
- Uplifting the Central Valley Economically and Educationally ($50 million & $17 million): the Budget includes $50 million one-time General Fund to support the Fresno Developing the Region’s Inclusive & Vibrant Economy (DRIVE), which includes an increase of $17 million one-time General Fund to support Fresno Integrated K-16 Education Collaborative, a plan to design educational pathways to improve social and economic mobility in the greater Fresno region.
- CA Community Colleges ($83.2 million): The Budget includes $83.2 million General Fund to support apprenticeship investments; and proposes to streamline technical assistance and consolidate several programs and initiatives into a new California Community Colleges System Support Program.
- California State University System: The Budget includes a five-percent increase in base resources, or $199 million ongoing General Fund, to support the CSU’s operational costs, expand CSU enrollment, and further achieve the goals of the CSU’s Graduation Initiative 2025. In addition, the Budget includes $6 million one-time General Fund to support the development or expansion of degree and certificate completion programs via the Extended and Continuing Education programs, with a focus on online programs.
- University of California System ($217.7M ongoing): The Budget proposes a $217.7 million ongoing General Fund augmentation to support a five-percent General Fund increase in base resources for UC campuses and the Division of Agriculture and Natural Resources; expanded enrollment and operational funding at the UC Riverside School of Medicine; service expansion for the UC San Francisco School of Medicine Fresno Branch Campus in partnership with UC Merced; the Center for Public Preparedness Multi-Campus Research Initiative; and baseline adjustments for immigrant legal services and graduate medical education. In addition to this ongoing funding, the Budget proposes $55.3 million one-time General Fund to develop a grant program for animal shelters, to support degree and certificate completion programs at UC extension centers, and to develop a UC Subject Matter Project in computer science.
- Medical school ($25M ongoing): The Budget includes $25 million ongoing General Fund to expand enrollment and increase operational support for the UC Riverside School of Medicine, and $15 million ongoing General Fund to expand the UC San Francisco School of Medicine Fresno Branch Campus in partnership with UC Merced.
- Degree completion ($4M one time): The Budget provides $4 million one-time General Fund to support degree and certificate completion programs at UC extension centers, with a focus on the development of online programs.
- Affordability ($5M one time): The Budget includes $5 million one-time General Fund to support the convening of a student loan working group and to provide student loan outreach.
May 2020
Governor’s May Revision Proposes Deep Cuts Absent Federal Government Relief
Sacramento, CA. On May 14th, Governor Newsom released his May Revise announcing an unprecedented shortfall of $54 billion in response to COVID-19. The proposal continues to include important provisions for low-income communities of color, specifically maintaining the minimum wage increase schedule and expanding job protections for paid family leave to more workers. Excluded is a January proposal to provide health care coverage for undocumented seniors and a 2019 approved plan to implement an expansion for low-income Aged, Blind and Disabled adults putting those individuals at increased risk of delaying COVID-19 related testing and care. Additionally, the Governor is proposing to reduce critical dental benefits and services for adults including deep cleanings, crowns and partial dentures which are necessary to maintaining good health. The May Revise also eliminates funds for community-based health care navigators who are trusted and relied upon by communities of color to connect people to health care services and could be of assistance to the state’s contact tracing efforts. As the Legislature closes in on the budget deadline, CPEHN urges our state and federal leaders to take a stand for the health and well-being of Californians. CPEHN will continue advocating for investments that prioritize the health of our most vulnerable communities. To view the full budget proposal, click here or read our full budget analysis below:
Highlights of FY 2020-2021 Budget:
Overview
- Total Budget: $203 billion (an $18.8 billion proposed reduction from January’s budget)
- General Fund Spending: $134 billion
- Total Spending for Health & Human Services: $71 billion
- Rainy Day Fund: Transfers $7.8 billion from the Rainy Day fund to meet current COVID related budget shortfalls
Key Budget Items:
- Fails to include Health4All Elders Expansion, a proposal initially included in the Governor’s January budget which would have expanded full-scope Medi-Cal to undocumented elders for a savings of $87 million General Fund.
- Proposes Partial Elimination of Adult Dental Benefits: The May Revision proposes to reduce adult dental benefits to the partial restoration levels of 2014. Since the restoration of the full adult dental benefit, beneficiaries have been utilizing gum treatments to reduce their risk of periodontitis, which is a disease of the gums that can lead to tooth loss and is also a risk factor for heart and lung disease. Low-income Californians have a higher rate of developing periodontitis, and reducing the benefit puts this population at greater risk of complication. Other critical dental services including deep cleanings, partial dentures, and crowns are also slated to be eliminated, which would create immense financial hardships for low-income Californians to afford out of pocket.
- Eliminates Funds for Community-Based Medi-Cal Enrollment Navigators: The May Revision pulls funds for county partnerships with community-based Navigators tasked with providing enrollment assistance to Medi-Cal beneficiaries. Community-based Navigators are trusted community messengers who provide culturally and linguistically appropriate outreach and enrollment assistance to low-income communities. Their services are needed now more than ever as California responds to the COVID-19 pandemic. Navigators can also be of assistance in helping to link community members to contact tracers as state and local governments move towards fully reopening businesses.
- Fails to Move Forward with Medi-Cal Aged, Blind and Disabled Expansion: Approved in 2019, the revision proposes not to implement the expansion of Medi-Cal to aged, blind, and disabled individuals with incomes between 123% and 138% of the federal poverty level for a savings of 67.7 million General Fund. This would have resolved unfair situations in which seniors and adults with disabilities are subject to a lower income eligibility limit than others in the Medi-Cal population.
- Withdraws Funds for the Black Infant Health Program (BIH) ongoing beginning in 2020-21. The BIH serves African-American women who are 18 years or older and up to 30 weeks pregnant at the time of enrollment with the goal of improving infant and maternal health, decreasing Black-White health inequities and social inequities for women and infants.
- Withdraws the 2019 Budget Act expansion of Medi-Cal to Postpartum individuals who are receiving health care coverage and who are diagnosed with a maternal mental health condition, for a savings of $34.3 million General Fund in 2020-21.
Health Care: The Governor’s May Revision includes a modest increase in the Medi-Cal budget from $99.5 billion ($22.7 billion General Fund) in 2019-20 and $112.1 billion ($23.2 billion General Fund) in 2020-21 due to projected caseload increases of about 2 million due to economic conditions associated with the COVID-19 Recession. Enrollment is expected to peak at 14.5 million in July 2020, or about 2 million above what caseload would have been absent the COVID-19 pandemic. Despite this growth, the May Revision includes significant cuts to Medi-Cal eligibility, benefits, services and provider rates.
- Fails to include Health4All Elders Expansion, a proposal initially included in the Governor’s January budget which would have expanded full-scope Medi-Cal to undocumented elders for a savings of $87 million General Fund.
- Trigger Cuts: The May Revision includes a series of reductions that will be triggered absent federal funds to restore them:
- Reduces Adult Dental Benefits to Partial Restoration Levels of 2014: The May Revision proposes to reduce adult dental benefits to the partial restoration levels of 2014. Since the restoration of the full adult dental benefit, beneficiaries have been utilizing gum treatments to reduce their risk of periodontitis, which is a disease of the gums that can lead to tooth loss and is also a risk factor for heart and lung disease. Low-income Californians have a higher rate of developing periodontitis, and reducing the benefit puts this population at greater risk of complication. Other critical dental services including deep cleanings, partial dentures, and crowns are also slated to be eliminated, which would create immense financial hardships for low-income Californians to afford out of pocket. This cut is part of a larger list of trigger cuts that will automatically go into effect if the federal government fails to provide sufficient funding to restore them. The list also includes:
- Eliminates other Optional Benefits in Medi-Cal including audiology, incontinence creams and washes, speech therapy, optician/optical lab, podiatry, acupuncture, optometry, nurse anesthetists services, occupational and physical therapy, pharmacist services, screening, brief intervention and referral to treatments for opioids and other illicit drugs in Medi-Cal, and diabetes prevention program services, for a total General Fund savings of $54.7 million.
- Eliminates the Diabetes Prevention Program, a Medi-Cal covered benefit that provides beneficiaries with at least 22 peer-coaching sessions over 12 months, provided regardless of weight loss.
- Eliminates the Community-Based Adult Services (CBAS) program and Multipurpose Senior Services Program (MSSP) effective January 1, 2021 for a General Fund savings of $106.8 million in 2020-21 and $255.8 million in 2021-22 (full implementation). The effective date for MSSP would be no sooner than July 1, 2020. These proposals are discussed in detail under The Department of Aging.
- Makes an Adjustment to Proposition 56 Supplemental Payments to Providers: Beginning in 2020-21, the May Revision proposes to shift $1.2 billion in Proposition 56 funding from providing supplemental payments for physician, dental, family health services, developmental screenings, and non-emergency medical transportation, value-based payments, and loan repayments for physicians and dentists to support growth in the Medi-Cal program compared to 2016 Budget Act. About $67 million in Proposition 56 funding would continue to support rate increases for home health providers, pediatric day health care facilities, pediatric sub-acute facilities, AIDS waiver supplemental payments, already awarded physician and dentist loan repayments, and trauma screenings (and associated trainings).
- Reduces funds for the Song-Brown Healthcare Workforce Training Program by $33.3 million General Fund ongoing. The Song-Brown Training Program provides grants to support primary care residency training programs in California, including family medicine, internal medicine, OB/GYN, and pediatrics with a focus on attracting residents from underrepresented communities and training students to work in underserved areas.
- Eliminates Funds for Community-Based Medi-Cal Enrollment Navigators: The May Revision pulls funds for county partnerships with community-based Navigators tasked with providing enrollment assistance to Medi-Cal beneficiaries. Community-based Navigators are trusted community messengers who provide culturally and linguistically appropriate outreach and enrollment assistance to low-income communities. Their services are needed now more than ever as California responds to the COVID-19 pandemic. Navigators can also be of assistance in helping to link community members to contact tracers as state and local governments move towards fully reopening businesses.
- Withdraws funds for implementation of California’s Medical Interpreter Pilot Project (AB 635) in four separate sites with the goal of evaluating a mechanism to provide and improve medical interpretation services for Limited English Medi-Cal beneficiaries.
- Fails to implement the Medicare Part B disregard which would have stopped seniors and people with disabilities from losing access to free Medi-Cal because of a confusing Medi-Cal rule that creates fluctuations in income calculations even when a person’s income hasn’t changed.
- Withdraws the 2019 Budget Act expansion of Medi-Cal to Postpartum individuals who are receiving health care coverage and who are diagnosed with a maternal mental health condition, for a savings of $34.3 million General Fund in 2020-21.
- Delays Cal-AIM for a savings of $347.5 million General Fund. Cal-AIM, a multi-year initiative by DHCS that aims to improve health outcomes for Medi-Cal beneficiaries through implementing broad delivery system, program and payment reform across the Medi-Cal program.
- Repeals Limitations on Estate Recovery for individuals who pass away after January 1, 2017. Estate recovery is asset seizure of the home and savings of poor individuals who have received health care coverage through Medi-Cal and are 55 or older or permanently institutionalized. This has acted as an enrollment barrier.
- Eliminates the Carve-out for Federally Qualified Health Centers which provide critical community-based health care services for a savings of $100 million ($50 million General Fund).
- Assumes a 1.5% Managed Care Rate Reduction for the period July 1, 2019, through December 31, 2020, for General Fund savings of $182 million in 2020-21 and makes other changes in the way capitation rates are calculated.
Other Health Care Coverage
- Maintains Expanded Subsidies in Covered California including the extension of subsidies to individuals who are between 400 and 600 percent of poverty, up to approximately $75,000 for individuals and $150,000 for a family of four. The May Revision also includes the following significant policy proposals and workload adjustments.
- Adjusts Funds for Covered California for a decrease of $164.2 million General Fund in 2019-20 and $90.3 million General Fund in 2020-21 to reflect lower-than-projected enrollment in state subsidies. In addition, an increase of $15 million General Fund revenues in 2020-21 to reflect increased individual mandate penalty revenues associated with an assumed higher number of uninsured individuals due to COVID-19 Recession.
- Defers the Administration’s proposed new Office of Affordability tasked with creating greater transparency and accountability with regards to preventing inflated prices, for health plan premiums, for providers, and for prescription drugs.
Mental Health
The state is allocating $1.3 billion of its CARES Act funding directly to counties based on population size to address the public health, behavioral health, and other health and human services needs that have arisen as a result of the COVID-19 pandemic.
- Eliminates Behavioral Health Quality Improvement Program, which aimed to help counties county-operated community mental health and substance use disorder systems prepare for opportunities through the Cal-AIM initiative, for a savings of 45.1 million. Cal-AIM, a multi-year initiative by DHCS aims to improve health outcomes for Medi-Cal beneficiaries through implementing broad delivery system, program and payment reform across the Medi-Cal program, is also delayed.
- Defers Mental Health Services Act (MHSA) Reforms: Proposition 63, also known as the Mental Health Services Act (MHSA), was approved by the voters in 2004 and imposes a 1-percent tax on personal income in excess of $1 million. Revenue generated under the Act primarily supports county mental health services. The administration rescinded its proposal update the MHSA to focus on people with mental illness who are also experiencing homelessness, who are involved in the criminal justice system, and for early intervention for youth. Advocates have previously raised concerns about discussions lack of transparency surrounding the state level discussions.
- Expected Reductions in Mental Health Services Act (MHSA) Revenues: Though not discussed in May Revision, California can expect projected 10-25% reduction in MHSA revenue, which will be compounded by the loss in federal matching funds leveraged using MHSA funds due to the economic downturn and the deferral of the tax filing deadline to July.
- Maintains Proposition 56 Funding for Trauma Screenings: About $67 million in Proposition 56 funding would continue to support rate increases for home health providers, pediatric day health care facilities, pediatric sub-acute facilities, AIDS waiver supplemental payments, already awarded physician and dentist loan repayments, and trauma screenings, and associated trainings.
Substance Use
- Eliminates Screening, Brief Intervention and Referral to Treatment for Opioids and Other Illicit Drugs, along with other option benefits, for a total savings of 54.7 million.
- Maintains Funding for Drug Medi-Cal Organized Delivery System, including $426 million to support the Drug Medi-Cal Organized Delivery System, which provides expanded substance use disorder treatment for Medi-Cal beneficiaries. In light of the Cal-AIM delay, the May Revision also modifies a request to continue funding for the External Quality Review Organization (EQRO) contract.
- Maintains Funding for Education, Prevention and Treatment of Substance Youth Disorders. The cannabis excise tax is forecast to generate $479 million in 2019-20, $199.7 million of which will be allocated to education, prevention and treatment of substance youth disorders and $66.6 million to public safety-related activities. Proposition 64, the measure to legalize recreational cannabis in 2016, aimed to scale back ineffective policies of the War on Drugs and its associated systems of mass criminalization and incarceration.
- Maintains Funding for Mental Health Services for Inmates, which includes 5.9 million to support the expansion of telepsychiatry, a service that is critical now more than ever. While the governor has taken proactive measures to reduce the presence and spread of COVID-19 in its institutions California’s inmates, and their families, have been disproportionately impacted by COVID-19, with more than 600 inmates and staff in California state prisons are infected with coronavirus.
- Maintains Funding for Prevention, Early Intervention and Treatment Services to Prevent Opioid Deaths, including 89.2 million combat opioid overdose through better prevention, early intervention, and treatment to stabilize conditions before they become severe. Specifically, the budget includes $89.2 million for the Medication Assisted Treatment Expansion Project, which aims to expand access points for individuals who need access to medications in combination with counseling and behavioral therapies. However, research indicates ongoing work is needed to address racial and ethnic disparities in programmatic outcomes.
- Withdraws Proposal to Expanding Community Treatment of the Incompetent to Stand (IST) Trial Population, a proposal initially included in the Governor’s January budget which would have expanded funds to community alternatives to increase diversion of mentally ill offenders and decease county IST referrals to state hospitals through a six-year pilot program in three counties, for a savings of $24.6 million.
- Fails to Implement an Expansion to Screening for Additional Substances: SB 78 required the Department to expand the Medi-Cal benefit for adult Alcohol Misuse Screening and Behavioral Counseling Interventions in Primary Care to include screening for additional substances (i.e., opioids and other drugs). The Department proposes to no longer implement the expansion for screenings for additional substances.
Oral Health
- Reduces Adult Dental Benefits to Partial Restoration Levels of 2014: The May Revision proposes to reduce adult dental benefits to the partial restoration levels of 2014. Since the restoration of the full adult dental benefit, beneficiaries have been utilizing gum treatments to reduce their risk of periodontitis, which is a disease of the gums that can lead to tooth loss and is also a risk factor for heart and lung disease. Low-income Californians have a higher rate of developing periodontitis, and reducing the benefit puts this population at greater risk of complication. Other critical dental services including deep cleanings, partial dentures, and crowns are also slated to be eliminated, which would create immense financial hardships for low-income Californians to afford out of pocket. This cut is part of a larger list of trigger cuts that will automatically go into effect if the federal government fails to provide sufficient funding to restore them.
- Adjusts Proposition 56 Funding for Supplemental Payments for Dentists: Beginning in 2020-21, the May Revision proposes to shift $1.2 billion in Proposition 56 funding from providing supplemental payments for physician, dental, family health services, developmental screenings, and non-emergency medical transportation, value-based payments, and loan repayments for physicians and dentists to support growth in the Medi-Cal program compared to 2016 Budget Act. About $67 million in Proposition 56 funding would continue to support rate increases for home health providers, pediatric day health care facilities, pediatric sub-acute facilities, AIDS waiver supplemental payments, already awarded physician and dentist loan repayments, and trauma screenings.
- Maintains Proposal to Replace Current Administrative Service Organization Contract for the Medi-Cal Dental Fee-For-Service Delivery System. DHCS still plans to start its re-procurement efforts to replace the current new Administrative Services Organization (ASO) contract for the Medi-Cal Dental Fee-For-Service delivery no later than July 2020, for a new contract beginning in July 2023. DHCS has undertaken additional efforts to make substantial improvements in response to the concerns raised by advocates.
- Withdraws Medi-Cal Dental Program Workload Proposal, which would have added resources and staffing to support oversight of the Medi-Cal Dental Program, for a savings of about 1 million. That oral health disparities have persisted before and after the restoration of adult dental benefits has raised concerns from the California State Auditor and other California advocates regarding oversight of the Medi-Cal Dental program.
- Adjusts Medi-Cal Dental Program Integrity Proposal, for a decrease of approximately 600,000, resources previously requested to maintain the Dental Managed Care Program, which the May Revision continues to propose for elimination effective January 1, 2021.
- Maintains Funding for the State Oral Health Program, other than a 3.8% reduction in projected revenue. The State Oral Health Program aims to address the burden of disease, increase access to oral health services for high risk populations, and to increase the oral health status of all Californians.
Public Health: For 2020-21, the May Revision Budget provides $3.2 billion for the support of Public Health programs and services, a decrease of .3 percent from the 2020-21 Governor’s Budget. Of the amount approved, $1.1 billion is for State Operations and $2.1 billion is for Local Assistance.
The May Revision maintains and increases the Department’s disease surveillance and identification workforce. Specifically,
- COVID-19 Testing: $5.9 million General Fund for 2020-21 and $4.8 million General Fund ongoing, to support laboratory staff to increase the laboratories’ testing capacity, and to purchase equipment and laboratory supplies that are specifically utilized for COVID-19 testing as well as other diseases.
- Other infectious disease: In addition, the May Revision maintains critical funding for infectious disease prevention and control, including $5 million General Fund each for STD, HIV, and hepatitis C virus prevention and control.
- Withdraws Department of Public Health Home Visiting and Black Infant Health—$4.5 million General Fund ongoing beginning in 2020-21.
Federal/State COVID-19 Public Health Spending: The May Revision reflects $1.8 billion net General Fund expenditures for the state’s direct emergency response efforts for the COVID-19 pandemic. A quarter of this will be used to draw down FEMA funding. So far the state has supported PPE & other critical medical supplies, hospital surge preparation, hotels for health care workers and support staff, supporting vulnerable populations (homeless, foster youth, seniors), state response operations and other support systems, safe reopening (including testing and contact tracing and tracking). Additionally, the May Revision includes $716 million net General Fund as a set-aside contingency for additional response activities in the budget year.
Assistance from the Federal Government:
To date, California has received over $186 billion in federal aid related to the COVID-19 pandemic through four stimulus bills: Preparedness and Response (HR 6074), Families First (HR 6201), CARES Act (HR 748), Pay Roll Protection/Health Care (HR266), with the largest portion of aid, $134 billion, coming from the CARES Act:
- $115 billion of these funds is for direct support or stimulus that goes to individuals, businesses, schools, local governments etc.
- $71 billion is for the state of California with the majority ($50 billion) already spent on Unemployment Insurance
Federal COVID-19 assistance and spending on public health/health systems: California has spent the following federal funds as part of our COVID-19 response to date:
- Over $600 million on “State and local public health,” excluding Los Angeles County which received funding directly from the federal government
- $5.3 billion on enhanced federal share of costs, primarily Medi-Cal
- $5.3 billion on hospitals, providers and rural and community clinics
- $5.8 billion to 21 local governments with populations over 500,000. It will be important to ensure all public health departments are funded appropriately as part of this next round of stimulus funding.
The May Revision includes an additional $1.3 billion to local governments for public health, behavioral health, and other health and human services from the CARES Act’s Coronavirus Relief Fund (CRF) to the state (i.e. as part of that $71 billion), and will run out by Dec 2020
Other Issues:
- Eliminates Community-Based Adult Services (CBAS) and Multipurpose Senior Services Program (MSSP). The May Revision proposes to eliminate the CBAS and MSSP, programs that help older adults and people with disabilities remain living in their homes, for an initial savings of 106.8 million.
- Deep Cuts to the In-Home Supportive Services (IHHS), which provides domestic and related services such as housework and transportation, and personal care services to eligible low-income aged, blind, and disabled persons. These services are provided to assist individuals to remain safely in their homes.
- Maintains the Earned Income Tax Credit (CalEITC) but Continues Exclusion of Certain Immigrant Communities. The California Earned Income Tax Credit (CalEITC) a refundable tax credit that puts money back in the pockets of low-income working families with annual incomes below $30,000. Many people who work are excluded from the CalEITC, including people who use an Individual Taxpayer Identification Number (ITIN) to file their taxes and people who have a Social Security Number (SSN) but lose their DACA or TPS status.
- Maintains CalWORKs Grant and Eligibility Levels. However, California will make reductions to employment services and child care, subsidized employment, and home visiting services if additional federal relief funding is not approved by Congress. CalWORKs caseload is expected to rise to 724,000 families just months after reaching an all-time low of approximately 350,000 families in the program earlier in 2020.
Updated 5/14/20
COMMUNITIES OF COLOR RESPOND TO GOVERNOR’S MAY REVISION PROPOSALS, CALL ON FEDERAL GOVERNMENT TO PROVIDE RELIEF
Despite major cuts to health care expansion and services, the California Pan-Ethnic Health Network and our partners will continue to advocate for closing gaps and inequities
Sacramento, CA. Today, Governor Newsom released his May Revise announcing an unprecedented shortfall of $54 billion in response to COVID-19. The proposal continues to include important provisions for low-income communities of color, specifically maintaining the minimum wage increase schedule and expanding job protected paid family leave to more workers. Excluded is a January proposal to provide health care coverage for undocumented seniors and a 2019 approved plan to implement an expansion for low-income Aged, Blind and Disabled adults putting those individuals at increased risk of delaying COVID-19 related testing and care. Additionally, the Governor is proposing to reduce critical dental benefits and services for adults including deep cleanings, crowns and partial dentures which are necessary to maintaining good health. The May Revise also eliminates funds for community-based health care navigators who are trusted and relied on upon by communities of color to connect people to health care services.
The California Pan-Ethnic Health Network, a statewide health advocacy organization focusing on racial and ethnic health disparities, released the following statement from Executive Director Kiran Savage-Sangwan on Governor Newsom’s 2020- 2021 state budget revision press conference:
“The COVID-19 pandemic has laid bare health and wealth inequalities in our state. We appreciate the Governor’s action to expand job protected paid family leave, which will allow low-income communities of color to take time off from work to care for sick family members and new children without sacrificing their livelihoods. In addition, we applaud maintaining the scheduled minimum wage increases to help those most impacted by COVID-19. We are disappointed by the number of cuts and rollbacks in health care proposed today which will have devastating impacts on communities of color in our state.
“California simply cannot afford to walk back on its promises to help those without a safety net by leaving undocumented seniors without much needed health care coverage and reducing critical dental services needed to maintain good health. The only way out of our fiscal situation is to invest in the communities hardest hit.
“As drastic as these cuts are – many could be prevented if the Federal government would step up and prioritize funding for states and local governments as part of the next round of COVID-19 stimulus funding. We look forward to working with the Senate and Assembly to address the needs of California’s diverse communities and to restore and rebuild the most needed protections in this difficult time.”
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The California Pan-Ethnic Health Network (CPEHN) is a multicultural statewide health advocacy organization that aims at uniting communities of color and advancing racial and health equity in California. Many of our partners work directly with constituents across California and play a crucial role in bridging the gaps between community needs and institutional responses. For more information, please contact Monika Lee, (858) 353-7271.
June 2020
Final Budget Maintains Funding for Critical Health Care Programs Pending Federal COVID-19 Relief
On June 30, 2020, Governor Newsom signed a 2020-21 state budget that delays Health4All elders indefinitely but maintains funding for critical health and human services programs, after reaching a compromise with the state Legislature. California is experiencing a $54 billion shortfall due to the economic impacts of COVID-19. The Governor’s May Revise proposal, which was rejected by the Legislature, included billions in reductions to Medi-Cal and public health care programs, including cuts to Medi-Cal eligibility and services, at a time when communities of color are still reeling from the disproportionate impacts of COVID-19.
In response to calls from CPEHN and other advocacy groups, the Legislature negotiated an alternative budget that preserves critical funding for these programs, pending federal COVID-19 relief. If Congress fails to act in September, the state can still move forward with cuts to critical state programs.
Key Highlights
The final 2020-21 state budget:
- Maintains Full Adult Dental Benefits in Medi-Cal including laboratory processed crowns, posterior root canal therapy, periodontal services, and partial dentures, including denture adjustments, repairs, and relines.
- Maintains funds for Community-Based Medi-Cal Enrollment Navigators trusted community messengers who provide culturally and linguistically appropriate outreach and enrollment assistance to low-income communities. Their services are needed now more than ever as California responds to the COVID-19 pandemic.
- Maintains Full funding for the Black Infant Health Program (BIH) which provides additional funds for empowerment-focused group support services and case management to improve the health and social conditions for African-American women and their families ($7.5 million) previously approved as part of the 2019-20 budget.
- Delays Health4All Elders which would have extended full scope Medi-Cal coverage to all low-income eligible adults, regardless of immigration status ($87 million)
- Maintains Mental Health Equity Funding which provides funds for capacity building and technical assistance to support community defined mental health programs to reduce disparities by race, language, age, gender identity, sexual orientation, and disability status. ($8M)
- Moves Forward with Medi-Cal Aged, Blind and Disabled Expansion approved in 2019 aligning the income eligibility for the Medi-Cal Aged and Disabled program (currently at 123% FPL), with the rest of Medi-Cal under the age of 65 (currently at 138% FPL). Without this, over 20,000 low-income seniors and those with disabilities between 123-138% FPL face high Medi-Cal costs.
- Maintains the 2019 Budget Act expansion of Medi-Cal to Postpartum individuals who are receiving health care coverage and who are diagnosed with a maternal mental health condition, for a savings of $34.3 million General Fund in 2020-21.
- Maintains other Optional Benefits in Medi-Cal including audiology, incontinence creams and washes, speech therapy, optician/optical lab, podiatry, acupuncture, optometry, nurse anesthetists services, occupational and physical therapy, pharmacist services, screening, brief intervention and referral to treatments for opioids and other illicit drugs in Medi-Cal, and diabetes prevention program services, for a total General Fund savings of $54.7 million.
- Maintains the Diabetes Prevention Program a Medi-Cal covered benefit that provides beneficiaries with at least 22 peer-coaching sessions over 12 months, provided regardless of weight loss.
- Maintains the Community-Based Adult Services (CBAS) program and Multipurpose Senior Services Program (MSSP) effective January 1, 2021 for a General Fund savings of $106.8 million in 2020-21 and $255.8 million in 2021-22 (full implementation). The effective date for MSSP would be no sooner than July 1, 2020. These proposals are discussed in detail under The Department of Aging.
- Maintains Proposition 56 Supplemental Payments for physician, dental, family health services, developmental screenings, and non-emergency medical transportation, value-based payments, and loan repayments for physicians and dentists
- Maintains funds for the Song-Brown Healthcare Workforce Training Program which provides grants to support primary care residency training programs in California, including family medicine, internal medicine, OB/GYN, and pediatrics with a focus on attracting residents from underrepresented communities and training students to work in underserved areas.
- Delays Cal-AIM for a savings of $347.5 million General Fund. Cal-AIM, a multi-year initiative by DHCS that aims to improve health outcomes for Medi-Cal beneficiaries through implementing broad delivery system, program and payment reform across the Medi-Cal program.
New Trigger Cuts: Additionally, the Budget includes $11.1 billion in reductions and deferrals that will be restored if at least $14 billion in federal funds are received by October 15, 2020. If the state receives a lesser amount between $2 billion and $14 billion, the reductions and deferrals will be partially restored. The trigger includes:
- $6.6 billion in deferred spending on schools
- $970 million in funding for the University of California and the California State University
- $2.8 billion for state employee compensation
- $150 million for courts
- Funding for child support administration, teacher training, moderate-income housing, and infrastructure to support infill housing.
- An additional $250 million for county programs to backfill revenue losses.
Continued Federal and State Advocacy is Needed!
Given the current economic crisis and political impasse in D.C., we must stay vigilant as the Legislature can still come back and make further cuts to the budget this fall should a federal deal on the next COVID-19 stimulus package fall short. CPEHN and our partners are advocating for Congress to pass a relief package that prioritizes COVID-19 emergency funds for health equity. The next package must include additional funds for Medicaid and Tribal Health programs, including oral and mental health, additional funds for a robust COVID-19 public health response including no cost testing and treatment regardless of immigration status, collection of demographic data on COVID-19 morbidity and mortality and grants for CBOs to engage in contact tracing efforts.
At the state level, CPEHN has joined with other state advocates in advocating for the Legislature and Governor to pass additional tax measures this summer as part of the Commit to Equity campaign to help bridge this gap. Ideas under consideration include a tax on the top one percent of taxpayers, increasing taxes on corporations and instituting a wealth tax on billionaires.
CPEHN will continue advocating for investments that prioritize the health of our most vulnerable communities.