Late last week Governor Gavin Newsom released his proposed May Revision to the 2024-25 state budget, revealing disappointing news about the state's financial outlook. Despite efforts to reduce the projected shortfall earlier this year, the current deficit for the 2024-25 budget year is $27.6 billion, with a projected deficit of $28.4 billion for 2025-26.

Last year, the Governor and the Legislature made a historic investment in the Medi-Cal system and health care workforce, including provider rate increases that began on January 1, 2024. These increases were slated to be significantly expanded in 2025, benefiting primary care, specialty care, emergency department care, increasing residency slots and more.

In his May Revision to the budget, the Governor proposes to maintain the provider rates that became effective on January 1, 2024, but have not yet been paid to providers. However, he calls for redirecting funds from the Managed Care Organization (MCO) Tax, intended to fund much broader provider rate increases scheduled for implementation in the 2024-25 state budget, to the general fund to address the state's budget deficit. CMA and our coalition partners will be pushing back on the Governor’s proposal to “sweep” this revenue intended to increase access to health care and will keep you informed about how to get involved.

The proposed revisions to the budget underscore the importance of passing our ballot measure in November, the Protect Access to Healthcare Act, to ensure continued investment in Medi-Cal and the health care workforce.

The Coalition to Protect Access to Care, chaired by the California Medical Association (CMA), has gathered over 800,000 signatures to qualify the Protect Access to Healthcare Act for the November 2024 ballot. Once passed by the voters, this ballot measure will make the MCO tax permanent and ensure that the majority of the revenue goes towards investments in the Medi-Cal system and the health care workforce, including physician loan repayment and Graduate Medical Education (GME).

In response to the May revision of the state budget, CMA president Tanya W. Spirtos, M.D., said, “CMA expresses deep disappointment in the Governor's proposal to reverse course when it comes to investment in the Medi-Cal system that provides coverage to one in every three Californians and half our state’s children and in building the health care workforce. During challenging fiscal times, meaningful access to health care becomes even more critical in sustaining healthy and productive communities and driving our economy forward.”

Passage of the November ballot measure is essential to safeguarding the budget deal negotiated last year and ensuring the continuation of increased Medi-Cal provider rates starting January 1, 2025. Over the next month, CMA will continue actively engaging with legislators and the Governor to advocate for maintaining these critical investments in health care in this year’s budget.

As the budget process unfolds, CMA encourages its members to stay informed and engaged in advocating for these vital health care investments. More information and updates on the ballot measure can be found at cmadocs.org/access.