On January 10, California Governor Gavin Newsom unveiled his proposed 2020–21 state budget. In a press conference that lasted nearly three hours, the governor explained how the $222.2 billion budget (PDF) addresses some of the most pressing problems facing Californians, including catastrophic wildfires and public education funding. The budget also signaled Newsom’s health care priorities — making care more affordable, improving the state’s behavioral health system, and more. The proposal is the start of the budget negotiation process with lawmakers and will culminate in a final state budget by June 15. Here are five key health care proposals included in the budget:

1. Expanding Health Coverage to Undocumented Seniors

As of January 1, 2020, young adults with low incomes in California are eligible for benefits through California’s Medicaid program, Medi-Cal, regardless of immigration status. To build on this progress, Newsom is proposing to extend public coverage to residents over 65 who would be eligible for Medi-Cal if not for their immigration status. “The expansion pushes California toward universal coverage,” wrote Judy Lin of CalMatters, noting that an estimated 27,000 undocumented seniors could enroll in the first year.

The proposed expansion would cost $80.5 million in the first year and could take effect as soon as January 1, 2021. Ongoing costs are forecast to be $350 million per year starting in 2022–23.

2. Investing in Medi-Cal Healthier California for All

Medi-Cal Healthier California for All (formerly known as CalAIM) is the Newsom administration’s multiyear initiative to transform the Medi-Cal program. The initiative builds on previous pilot programs to coordinate physical health, behavioral health, and social services for Medi-Cal members. It also aims to reduce complexity and increase flexibility across Medi-Cal and to implement value-based initiatives and payment reform.

The budget includes $695 million in 2020–21 for the initiative, growing to $1.4 billion per year in 2021–22 and 2022–23. “Medi-Cal has come under fire in recent years for not adequately connecting patients to needed services including dental care, behavioral health care, and child checkups,” Capital Public Radio reported. Researchers at the University of California, San Francisco, also found that from 2009 to 2018, the quality of care in Medi-Cal managed care was stagnant at best on most measures. The governor’s proposed investment could help address some of those concerns.

3. Helping County Behavioral Health Systems in California

Last year, CHCF and KFF conducted a statewide poll to capture the health priorities of Californians as Newsom took office. The poll revealed that mental health access ranks in the top two health priorities for Democrats, Republicans, and independents. More than half of Californians believe their community does not have enough mental health providers.

At his press conference, Newsom announced that he plans to commission a behavioral health task force at the California Health and Human Services Agency. The purpose would be to convene relevant stakeholders “to review existing policies and programs and coordinate system changes to prevent and respond to the impacts of mental illness and substance abuse in California.” Among other things, the task force would review the Lanterman-Petris-Short Act, which regulates involuntary civil commitment to mental health institutions.

In addition, county-operated behavioral health systems would receive $45 million in the 2020–21 budget to implement a Behavioral Health Quality Improvement program that would prepare the counties for changes under Medi-Cal Healthier California for All. Newsom also expressed his intent to update the Mental Health Services Act (Prop. 63) and to focus on enforcement of mental health and substance use disorder parity laws.

4. Creating the Office of Health Care Affordability

The CHCF and KFF poll last year also found that 80% of Californians wanted the governor and legislature to prioritize making health care more affordable. The governor’s budget includes language creating a new Office of Health Care Affordability to address health care costs. The office “would set cost targets for various health-care industry sectors and propose ‘financial consequences’ if those targets aren’t met,” Christine Mai-Duc and Jared S. Hopkins reported in the Wall Street Journal.

Other functions of the office include boosting price transparency and addressing hospital cost trends with a particular focus on industry consolidation. A new CHCF brief looks at cost containment commissions in four states, with valuable lessons for California and other states looking to emulate their successes.

5. Tackling Homelessness Across the State

With California’s homelessness crisis in the national spotlight, Newsom previewed his budget with an executive order (PDF) that proposed devoting $1 billion to fighting homelessness. This includes $750 million to immediately establish the California Access to Housing and Services Fund administered by the Department of Social Services. The fund’s purpose is to “get individuals off streets and into supportive services quickly,” according to a press release from the administration.

The Medi-Cal Healthier California for All initiative includes funding “to boost the state’s Medicaid programs to expand services for homeless individuals whose housing struggles are directly linked to health problems,” Bobby Allyn reported for NPR. Additionally, Newsom “directed state agencies to review public property that can be converted to emergency housing, and to deploy 100 camp trailers from the state fleet to use as temporary shelters,” Lin reported.

With the budget proposal submitted, Newsom on Monday kicked off a weeklong homelessness tour across the state, beginning in Grass Valley. “The tour comes as Newsom has announced a plan for a statewide measure to be placed on the November ballot that would require localities and the state to meet aggressive goals to house the homeless,” Thaddeus Miller wrote in the Fresno Bee. Other tour stops included the Central Valley and the Bay Area.

Essential Coverage will not publish on Martin Luther King Jr. Day, but we’ll be back on January 27. In the meantime, tweet at me with #EssentialCoverage or email me.

Xenia Shih Bion

Xenia Shih Bion is a communications officer at CHCF, where she helps to lead communications around the foundation’s work to create health equity. She is the founding author of the “Essential Coverage” column in The CHCF Blog. Read More

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