On May 14, 2021, Governor Gavin Newsom released his revised proposal for the 2021-2022 state budget. The $267.8 billion budget, includes $75.7 billion in surplus and $25 billion in new federal COVID-19 relief funding from the American Rescue Plan Act (ARPA).

The May Revision protects the Proposition 56 (tobacco tax) supplemental Medi-Cal provider payments, and continues other health and human service programs that had been threatened by last year’s budget reductions, including optional Medi-Cal benefits, in-home supportive services, and Department of Developmental Services provider rates. The budget also includes full Medi-Cal benefits for all individuals over 60, regardless of their documentation status; offers accelerated enrollment to all potential Medi-Cal beneficiaries; and expands post-partum Medi-Cal coverage.

"On behalf of the nearly 50,000 physicians, residents and medical student members of the California Medical Association (CMA), we are encouraged by another state budget that prioritizes health care and expands health care coverage for California residents,” said CMA President Peter N. Bretan, Jr., M.D. “Overall, the May Revision makes important investments and changes in patient coverage and developing the health care workforce California needs to meet current and future challenges. CMA looks forward to continuing to work with the Legislature and Administration to ensure these programs are up and running as quickly as possible, and that other, critical health care programs and policies are implemented.”

The COVID-19 pandemic has highlighted the inequalities rampant in California. Nowhere have these inequities been on greater display than in health care. From access to testing and hospital beds, as well as rates of infections, it is clear that lower-income areas of the state also equate to lower access to sufficient health care.

CMA is pleased to see that the Administration is making good on its promise to reduce health disparities and increase opportunities for many Californians that have traditionally not been recipients of quality health care.

CMA is disheartened, however that the Governor continues to promote a policy that reimburses for audio-only telehealth at only 65%, amounting to, essentially, a rate cut to physicians providing remote health care for Medi-Cal patients. Full reimbursement is currently available for Medi-Cal physicians for audio-only telehealth under the emergency COVID-19 regulations. CMA believes it is critical to retain this important tool in reducing health care disparities for Medi-Cal beneficiaries, and is working to oppose this policy.

Overwhelmingly, Medi-Cal patients opt to utilize audio-only telehealth over audio-visual telehealth. This could be due to a lack of good broadband connectivity, a need to take those telehealth visits on their mobile phones that have data limits, or for privacy reasons. Whatever the reasons, it makes little sense to eliminate an option for access to care, for those individuals who already lack it the most, further exacerbating existing inequities.

Under the Governor’s proposed telehealth policy, the only Californians who will be able to readily utilize telehealth are those with access to fast broadband, sufficient technology and commercial health coverage.

CMA and a broad coalition of health care providers and advocacy groups are also urging the legislature to pass AB 32 (Aguiar-Curry), which offers California a telehealth solution that is inclusive, fair and ensures equal access to care for all Californians. Policy changes outlined in AB 32 include: creating payment parity between Medi-Cal managed care plans and commercial plans and allowing virtual enrollment for limited scope Medi-Cal programs. Additionally, the intent of the bill is to continue the provision of telehealth in Medi-Cal programs, including video and audio-only technology, by making the telehealth flexibilities instituted during the public health emergency permanent.

If AB 32 passes, it will be a critical component of California’s telehealth policy infrastructure and would help pave the way for future health care innovation and advancement. 

Gov. Newsom’s proposed budget must still go through the legislative review process. CMA will continue to be active in conversations that affect the budget and ensure that physician voices and concerns are a central component in shaping the budget.

For more details of the budget as it relates to health care, see CMA’s budget summary (members only).