Last month, California Governor Gavin Newsom released the May Revise (Revise) of his initial 2022-23 state budget proposal, projecting the largest spending plan of $300.6 billion for the fiscal year.[1] The governor's initial budget, introduced in January, proposed a $286.4 billion spending plan. The May Revise addresses many of the concerns that have arisen since the release of the initial budget proposal, including the expiration of federal subsidies provided during the COVID-19 pandemic and a broad-based relief package addressing rising inflation concerns. In this post, we provide an overview of the final budget proposal comparing the initial proposal and new proposals from the Revise that may impact healthcare cost, access, and affordability for Californians.
New Healthcare Proposals in the May Revise
Notably, the Revision includes $227.6 billion (originally $217.5 billion in initial budget) for all health and human services programs in 2022-23.[2] Though the Revise leaves many of the initial healthcare proposals unchanged, it builds upon those efforts by including new investments enhancing healthcare access and affordability and providing COVID-19 support.[3]
Specifically, in furthering affordability and access, the May Revise proposes an additional $57 million General Fund—building upon the $68 million in the initial proposal—to expand access to reproductive care. This funding boost followed the leaked US Supreme Court’s draft option which would roll back constitutional abortion protections, which if taken effect, would cause an influx of patients traveling to California from other states that would restrict access to abortion.
The May Revise also includes major proposals supporting future COVID-19 relief. Specifically, the May Revise proposes $176.5 million towards the COVID-19 Public Health Emergency (PHE) Unwinding Operational Plan to help inform and prepare Medi-Cal beneficiaries, providers, managed care plans, counties, and other stakeholders of upcoming changes come the end of the federal PHE, which is set to expire on July 15, 2022.[4] Another significant part of the Revise is ensuring middle-class Californians have access to state healthcare subsidies should the PHE federal subsides expire.[5] The May Revise also includes The SMARTER Plan, a set of strategies for the State to implement as the State moves into the next phase of COVID-19, e.g., to prepare for future surges or variants.[6]
Final Budget Proposal with May Revision Updates
Early in the legislative session, the California Legislative Beat covered the major healthcare proposals in Governor Newsom's January Budget Proposal. Most of the original proposals went unaddressed in the Revise. In the chart below, we summarize those initial proposals and include any new changes from the Revise. The most significant updates reflected in the Revise are definitive plans to 1) reduce insulin costs by establishing the CalRx Biosimilar Insulin Initiative to implement partnerships for increased generic manufacturing of essential medicines; and 2) reinstitute California subsidies for Covered California to fill the void of the expected federal subsidy expiration.
Proposal | Goals | Budget |
Establishing Office of Health Care Affordability within the new Department of Health Care Access and Information (See The Source Blog post for detailed information) |
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Reducing Cost of Insulin |
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Supporting Healthcare Affordability Through Covered California |
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Expanding Comprehensive Medi-Cal to All Income-Eligible Populations, Regardless of Immigration Status |
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Eliminating Certain AB 97 Provider Rate Reductions |
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Reducing Medi-Cal Premiums to Zero
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Increasing Access to Reproductive Care |
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What’s Next in the Budget Process
Next in the budget process, the Legislature will decide whether they will adopt the Governor’s revised budget. The Legislature will have to act quickly to pass a balanced budget bill by June 15. Following passage of a balanced budget bill, the Governor may exercise his “line item veto” authority to reduce or eliminate any item within the budget bill. He will have until June 30 to sign the budget bill, which will then take effect at the beginning of the new fiscal year starting July 1.
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[1] Ben Christopher, California’s $100 Billion Surplus: What to Know About Newsom’s Spending Plan, Cal Matters (May 13, 2022), https://calmatters.org/politics/2022/05/newsom-budget-spending/.
[2] 2022-23 May Revision – Health and Human Services, State of California, at p. 67, https://www.ebudget.ca.gov/2022-23/pdf/Revised/BudgetSummary/HealthandHumanServices.pdf (last visited June 9, 2022).
[3] Id.
[4] Id. at 75.
[5] Id. at 69.
[6] Id. at 86-88.
[7] Id.
[8] 2022-23 Governor’s May Revision – Department of Health Care Services Highlights, Department of Health Care Services (DHCS), at p. 13, https://www.dhcs.ca.gov/Documents/Budget-Highlights/DHCS-FY-2022-23-MR-Highlights.pdf (last visited June 9, 2022).
[9] Id. at 8.