Governor signs historic legislation to renew MCO Tax and expand Medi-Cal patient access to care
Largest Medi-Cal rate increase in California history to begin next year
Dear friends and colleagues,
With Governor Gavin Newsom’s signature on the Medi-Cal Managed Care Organization (MCO) Tax legislation, it’s official: California is entering a new era by committing to historic investments in Medi-Cal and our health care system.
I could not be prouder of the California Medical Association (CMA), the Coalition to Protect Access to Care and state leaders for seizing this opportunity on behalf of California patients.
You can find all the information about the agreement in our fact sheet and FAQ, but to summarize, the reinstatement of the MCO Tax will raise $19.4 billion, the majority of which will be invested in Medi-Cal and our health care system. That money will go toward increasing Medi-Cal reimbursement rates for primary and specialty care, supporting behavioral health and family planning, training hundreds of additional physicians annually and a whole host of other needs in our health care system.
Needless to say, it’s a big deal.
The new law includes significant investments throughout our health care infrastructure, including long-overdue reimbursement rate increases, which will be the largest ever in state history.
Over the past several years, we’ve seen massive expansions in eligibility and benefits for Medi-Cal – and rightfully so, as Medi-Cal provides essential health services for roughly a third of Californians, including some of our most vulnerable patients. But the missing piece was always funding to back up these expansions. How could we provide health care to all while still ranking 47th in the country for Medicaid reimbursement rates?
Those days are over with these rates increases, which begin with primary care, maternity care and non-specialty behavioral health in 2024 and expand further in 2025. The rate increases will go a long way toward increasing provider participation in the Medi-Cal program and will greatly bolster access and equity in our health care system.
I would like to extend a big thank you to our physician members, Dustin Corcoran (our CMA CEO), and everyone who made this happen – from physicians and patients who shared their stories to the staff, coalition members and lawmakers who negotiated this deal with us. But most importantly, I want to thank the health care providers who care for Medi-Cal patients and demonstrate why it’s such a vital program.
There are remaining details that need to be ironed out for the 2025 calendar year, and we look forward to working on those in the coming months. But in the meantime, I hope we can take stock and appreciate this monumental achievement.
For more information, see our MCO Fact Sheet and FAQ.
Best wishes for a healthy future,
Donaldo Hernandez, M.D.
President, California Medical Association