The California Medical Association (CMA) and coalition partners are pushing back on Governor Gavin Newsom’s proposal to “sweep” Managed Care Organization (MCO) Tax revenue to help close the state’s budget shortfall, instead of using the funds as intended –to ensure that our health care system has the resources needed to provide meaningful access to care for all Californians.  

Physicians are urged to contact their legislators today and tell them that our health care system is in crisis, and this funding is critical to ensure that the patients of California can get the care they need, when and where they need it. 

In 2023, CMA, along with a coalition of other health care organizations, struck a landmark budget agreement with the California Legislature and the Newsom Administration. This agreement used MCO tax revenue to provide long-overdue increases to Medi-Cal reimbursement rates for primary and specialty care, as well as make other significant investments throughout our health care infrastructure.

Governor Newsom’s revised proposal for 2024-25 state budget revealed updated information 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.

While the Medi-Cal rate increases that took effect in 2024 were preserved, CMA was immensely disappointed to see that the governor proposed sweeping funding for Medi-Cal provider rate increases that were scheduled to go into effect in 2025. The governor is also proposing to eliminate $75 million for graduate medical education this fiscal year. This funding is crucial to ensure that the state can take care of its patients and train the next generation of physicians.

Please contact your legislators today to join us in opposing these cuts. Click here now to urge your legislators to reinstate the MCO Tax agreement!