Historic health care expansion to take center stage in California

California Democrats will debate substantial expansions to health care coverage for low-income residents as state elected officials begin negotiations over a record budget fueled by stock market booms and federal coronavirus relief funding. 

In a budget presentation Monday, Gov. Gavin Newsom (D) said he would propose spending about $2.2 billion annually to expand Medi-Cal, the state’s Medicaid program, to cover millions of uninsured residents. Newsom’s proposal would extend coverage to all residents, regardless of immigration status, beginning in January 2024. 

“California is poised to be, if this proposal is supported, the first state in the country to achieve universal access to health coverage,” Newsom told reporters in Sacramento. “We said we’re going to do it. We said it would take a few years. We’re committed to doing it.” 

But legislators have their own priorities, and the state Assembly will hold their own hearings Tuesday on a more ambitious proposal to create a first-in-the-nation single-payer health care system. 

The package of legislation before the Assembly’s Health Committee on Tuesday includes a new tax on businesses to fund the single-payer system. A previous version of the proposal, submitted in 2017, would have cost an estimated $400 billion. 

“I continue to feel the frustration, desperation, and quite frankly the anger that many Californians experience in their efforts to access quality and affordable health care,” Assemblyman Jim Wood (D), the chairman of the Health Committee, said in a statement last week. “Single payer health care can be the catalyst for change.” 

The debate over how far to push for reform pits two of California’s most powerful interest groups against each other. California Nurses United, a progressive union that backed Sen. Bernie Sanders (I-Vt.) during the 2016 and 2020 presidential contests, backs the single-payer proposal.  

The state Medical Association, doctors and hospital groups are on the other side. 

“It’s long past time to ensure every Californian can get the care they need when and where they need it, without risking massive medical debt or sacrificing other necessities like food or housing,” said Carmen Comsti, the lead regulatory policy specialist at the Nurse’s Association. “This is a priority for our state.” 

In its own statement, the California Medical Association praised Newsom’s proposal to expand coverage to the undocumented. 

“By positioning California to be the first state in the nation to fully realize universal health care access and coverage, Governor Newsom’s bold and balanced budget will strengthen our health care system and protect patients,” Robert Wailes, the association’s president, said in the statement.  

“As we enter the third year of the pandemic and face the nationwide surge of the Omicron variant, we must ensure our health care systems have the support needed to provide care to all Californians and we appreciate the Governor providing specific investments in health care workforce and increased funding vaccines, testing and booster shots.” 

About 3.2 million Californians are uninsured this year, representing 9.5 percent of the population, according to a study by scholars at the University of California-Berkeley Labor Center. Nearly two-thirds of the state’s undocumented residents, or about 1.3 million people under the age of 65, are uninsured, the report found. 

The expansion proposed by Newsom would cover an estimated 700,000 people who are currently uninsured. 

Newsom won office in 2018 on a pledge to back a single-payer health care system, but he has since backed more incremental change.  

In 2016, under Newsom’s predecessor Gov. Jerry Brown (D), the legislature expanded Medi-Cal eligibility to undocumented children and seniors. In 2020, the legislature again expanded the program to cover those up to the age of 26, and in 2021 they expanded access to low-income residents over 50. 

Newsom said Monday he had not yet reviewed the legislature’s proposal to create and pay for the single-payer system. 

The proposal was one element of a 300-page, $286.4 billion budget outlined by Newsom during a three-hour presentation on Monday. If adopted as proposed, California’s budget would grow by 9.1 percent over last year; the state has estimated it will have a $45.7 billion surplus, the ninth straight year the budget will have ended in the black and an unprecedented run of growth after the depths of the 2008 recession, when Brown was forced to cut more than $26 billion from existing spending. 

Newsom’s budget also includes a plan to make California the first state to manufacture its own supply of insulin to bring down costs for diabetics.  

Newsom called on legislators to allocate another $2.7 billion to expand coronavirus testing, vaccines and boosters, and to help hospitals and health systems bear the burden of overtaxed staff who have spent two years battling the pandemic. 

It would allocate $2 billion to combat California’s homelessness crisis, $2 billion in new grants and tax credits for affordable housing, and new funding for child care and small business aid. Newsom has also proposed spending $255 million on grants to local law enforcement agencies to create new units aimed at stopping smash-and-grab robberies, after a string of high-profile incidents in the Bay Area and Los Angeles in which organized mobs have overwhelmed stores and stolen merchandise. 

The initial budget document marks the starting point in negotiations between Newsom and legislators, who will hammer out details over the next several months. Democrats control supermajorities in both the state Assembly and the state Senate. 

“The Senate’s budget priority is to put California’s wealth to work for those who need it most — middle class families and those struggling to get by,” Senate President Toni Atkins (D) said in a statement Monday. “The Governor’s initial budget proposal is in line with that goal, and we are already working to ensure the final 2022-23 budget will meet the needs of the president, build for the future, and reflect the lessons of the past.”