[{"_1":2,"_100":-5,"_101":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76,88],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6542630,"mediaKeyId","3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d","parentId",3408362,"title","Administration's Prop 35 spending plan aims some funds at provider rates and some at program costs; providers urge clarity","audioSeconds",1246,"startMs",12720000,"endMs",13966000,"viewUrl","/Search/View?dp=1&key=3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d&start=12720&end=13966","thumbnailUrl","https://assets.pipeline.soar.com/3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d/thumbnail_12720000.jpg","articleUrl","/articles/6542630/California/Administrations-Prop-35-spending-plan-aims-some-funds-at-provider-rates-and-some-at-program-costs-providers-urge-clarity","mediaUrl","https://secure.pipeline.soar.com/6542630-2eb5dfedc1f9d89aee1c294cda99619b/orig.mp4?Expires=1770911495&Signature=g24kFmmokJWqbWKfnMrla-xdmf3pfID47H-f528p~eWXKMaTntoGNjiD4MX0OvXvfaGb77DkIrfn23iBJSVS1su2rrB7tNYE1dci~bcR~v0UoC0DZ8J89sVz1bofiO6XcY7YkDBps0UqmCxTECr60O8ibQpN6Ok3QoQXki7CrLF4QVZ0MliTCq6ABq-6tKZtMfBFjSTkhKOTV2ldPYnnIHsaGJ3GmosK2PrjtkE-CYXMOD2HvCn4aDskTRPB5PPJ1LctIl5D8eYbTMNfd7zSd6hFc1M8JB5xi7q2-4OcH9~ng2gJih1LgVzzRjN1HE8~Z6bdxjmOIj2TQMaxGacCFA__&Key-Pair-Id=KUT5TJCACFTXG","author","California State Assembly","date","2025-05-19T00:00:00Z","article","The subcommittee reviewed the administration's proposed expenditure plan for Proposition 35 (the managed‑care organization tax and spending package approved by voters in 2024). The Legislative Analyst's Office summarized how the measure works and flagged choices the committee will face about using the funds for base costs versus new augmentations.

What Prop 35 does: LAO staff reminded members that Prop 35 makes the managed‑care organization (MCO) tax permanent and sets domains and limits for how the money can be spent. The measure raises revenue that the department may allocate to augment provider payments or to offset general‑fund costs for Medi‑Cal. The administration's May Revision included a two‑year spending plan for calendar years 2025 and 2026.

Administration plan and allocations

Linda Harrington and other DHCS staff presented the administration's plan, summarized in the department materials and the LAO handout. Key elements included:
- A total plan of roughly $22.7 billion across the spending domains for the two calendar years, with about $7.5 billion estimated annually from the MCO tax to support the Medi‑Cal program.
- Targeted rate maintenance for primary care, maternity care and some mental‑health services (DHCS cited $356 million in 2025 and $374 million in 2026 to maintain base thresholds such as 87.5% of Medicare for certain emergency‑department physician pay).
- Approximately $1.6 billion across 2025–26 described as supporting increases in managed‑care base rates for primary and specialty care, ground emergency medical transportation and hospital outpatient procedures.
- Supplemental payments and targeted directed payments: community clinic directed payments ($50 million per year), dedicated reproductive‑health investments ($90 million per year for education, midwifery pipeline and loan repayment), behavioral‑health workforce and data‑sharing investments (about $300 million per year), graduate medical education and designated‑public‑hospital support.

Concerns from providers and analysts

Provider groups and hospital associations expressed concern that the administration's proposal used a substantial share of Prop 35 revenue to help cover base Medi‑Cal costs (a budget solution) rather than directing the funds to the targeted provider‑rate augmentations some voters expected. Hospitals, public health systems and physician groups voiced worries that redirecting funds to general‑fund savings would reduce the measure's capacity to strengthen provider capacity and access in underserved areas.

LAO considerations and timeline

The LAO noted that the spending rules change in 2027, which constrains planning beyond the two‑year horizon the administration put forward. The office encouraged the legislature to weigh whether proposed uses match the measure's intent and to consider alternatives if the committee prefers a different mix of base versus supplemental payments.

Ending

Committee members said they want clearer administrative detail, including how uniform dollar supplemental payments would be implemented for 2026 and which provider types and billing codes would be included. DHCS said it would continue stakeholder engagement and provide more specifics as the budget process proceeds.","mediaType","Video","parentTitle","Assembly Budget Subcommittee No. 1 on Health","oneSentenceSummary","The subcommittee reviewed the administration's proposed Proposition 35 spending plan, which splits revenue between provider payments, workforce investments and limited program support while reserving some funds to address base Medi‑Cal costs.","taxTitle","California State Assembly, House, Legislative, California","taxId",17099,"location","California","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6542635,"Lawmakers and DHCS spar over May Revision Medi‑Cal cuts as public voices opposition",12572,0,12572000,"/Search/View?dp=1&key=3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d&start=0&end=12572","https://assets.pipeline.soar.com/3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d/thumbnail_0.jpg","/articles/6542635/California/Lawmakers-and-DHCS-spar-over-May-Revision-MediCal-cuts-as-public-voices-opposition","https://secure.pipeline.soar.com/6542635-2dc7919632ad83eb8f967f02765369e9/orig.mp4?Expires=1770911495&Signature=oOfyX8DBOMB7k1OkCiAJ5OaL2Jw3Aitso7HKrfDvVQsTb9QLNbCvR74uR83ALThxu9JsCaA6fWQ-MzOooplrVEoZfHhg3anvuEfBe736m5IsGMBcFQAVJ2edzeJoZw7P~773xHVSF5uZWBLhVMeBVjC0Zh-Bw21gIOWxZULBnrwOIQhrZ3nvpJ~Cvxz-yoxJ8QYLyP1sgj5VlFT7~XR4mdtrv8ucVsjSrxexLYmrTUvyzL2gsCiu7qjTjSO7KqGWlX3xhDao8ZzHdF1toq1rxk07g9JAqv7zNP4jezXPHIDa3vmswgJiPvlp-KZkeUYxkxtgc8RlYG3vbEkH8fHqVg__&Key-Pair-Id=KUT5TJCACFTXG","Assemblymember Dawn Addis, chair of the Assembly Budget Subcommittee No. 1 on Health, convened a hearing to review the governor's May Revision proposals affecting Medi‑Cal and other health programs, drawing sustained public comment and sharp questioning from legislators.

The May Revision proposes roughly $12 billion in general‑fund solutions and identifies the Medi‑Cal program as a major target for reductions and cost controls. \"We are making decisions that shape real lives,\" Addis told the room as she opened the hearing.

Why it matters: Medi‑Cal is California's largest health program; witnesses at the hearing said it covers about \"just under 15,000,000 Californians.\" Committee members and advocates warned that proposals in the May Revision would concentrate burdens on low‑income Californians, older adults, people with disabilities and people without satisfactory immigration status.

Key proposals described by DHCS

Michelle Voss, introduced in testimony as director of the Department of Health Care Services, outlined the department's May Revision package and the administration's rationale for the proposals. Her overview included:
- A proposed freeze on new enrollment for the state's full‑scope, state‑only Medi‑Cal expansion for adults 19 and older with \"unsatisfactory immigration status,\" effective no sooner than Jan. 1, 2026. DHCS estimated that the freeze would reduce new enrollees by 32,000 in the budget year and accumulate to 672,000 by budget year plus three if continued.
- A proposed $100 monthly premium for adults 19 and older in that same population, to take effect no sooner than Jan. 1, 2027; DHCS included $30 million in contractor costs in the budget year to build premium‑collection systems and cited net savings of about $1.1 billion in the year following implementation due to disenrollments and premium revenue.
- Elimination of full‑scope dental and long‑term‑care benefits for the same population (dental elimination effective July 1; long‑term care effective Jan. 1), and termination of certain wrap (PPS) payments to FQHCs/RHCs for that population.
- Pharmacy‑focused changes: a rebate aggregator to capture supplemental drug rebates for the state‑only population (targeting about $5 billion in general‑fund savings across proposals), removal of certain optional drug classes (over‑the‑counter vitamins and tests), the exclusion of GLP‑1 drugs when prescribed for weight loss, and expanded utilization management including prior authorization and step‑therapy protocols.
- Reinstatement of the Medi‑Cal asset test (resources counted at $2,000 for a single adult and $3,000 for a couple) no sooner than Jan. 1, 2026; DHCS estimated roughly $94 million general‑fund savings in the budget year.
- Elimination of the acupuncture optional benefit (savings of about $5.4 million in 2025 and $13.1 million ongoing) and authority to implement utilization management for outpatient hospice services; suspension of the skilled‑nursing facility workforce and quality incentive program (WQIP) and the temporary pause of the SNF backup power requirement until dollars are appropriated.

Skepticism from the Legislative Analyst's Office and questions from lawmakers

Jason Constanturos of the Legislative Analyst's Office told the committee the LAO had identified three focal points for the Medi‑Cal review: (1) the size and drivers of revised Medi‑Cal spending estimates, (2) the design and distributional effects of the proposed budget solutions, and (3) shifting federal policy and regulatory uncertainty.

The LAO and multiple legislators urged DHCS to model alternatives to broad proposals such as a flat $100 premium and an outright enrollment freeze. \"This feels like a very blunt approach,\" one legislator said, pressing the department for finer modeling and the assumptions behind its scoring.

Department of Finance perspective

Megan Sabah of the Department of Finance said the May Revision assumes significant baseline growth in Medi‑Cal costs that outpace revenue and noted this is the third consecutive deficit budget for the state. Finance officials characterized many of the Medi‑Cal proposals as difficult but intended to preserve overall coverage rather than make large eligibility changes to the encompassed population.

Stakeholder and public comment

More than four dozen speakers representing labor, provider groups, advocacy organizations and individual Medi‑Cal beneficiaries spoke during a lengthy public‑comment period. Common objections included opposition to the enrollment freeze for undocumented adults, the $100 monthly premium, reinstating the asset test, elimination of dental and long‑term‑care benefits for adults 19 and over in the state‑only population, and cuts to supplemental payments that support clinics and family‑planning providers.

Planned Parenthood affiliates, the California Primary Care Association, FQHCs, dental associations and county behavioral‑health directors all warned that the combined package could force clinic closures or reduce services. Multiple speakers noted that cutting state supplemental payments can also reduce federal matching dollars that flow to the state.

Points of process and next steps

Committee members repeatedly asked DHCS for more detailed modeling of the proposals'distributional and fiscal effects and pressed for alternatives that target resources more precisely. LAO staff recommended that if the legislature seeks to change a proposal substantially, legislators should pair any change with offsets of comparable size elsewhere in the budget.

The subcommittee paused the evening after the Medi‑Cal discussion and scheduled deeper review of the Proposition 35 spending plan and Proposition 56 funding that followed on the agenda.

Ending

Lawmakers said they expect more detailed modeling from the administration and the LAO before agreeing to final budget tradeoffs. Members and dozens of public commenters urged the committee to seek alternatives that reduce harm to low‑income Californians, older adults and reproductive‑health providers while addressing the state's fiscal gap.","Assemblymember Dawn Addis, chair of the Assembly Budget Subcommittee No. 1 on Health, convened a hearing to review the governor's May Revision proposals affecting Medi‑Cal and other health programs, drawing sustained public comment and sharp questioning from legislators.",{"_33":89,"_35":36,"_37":38,"_39":90,"_41":91,"_43":92,"_45":93,"_47":94,"_49":95,"_51":96,"_53":97,"_55":56,"_57":58,"_59":98,"_61":62,"_63":64,"_65":99,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6542625,"May Revision proposes eliminating Prop 56 supplemental payments for family planning and dental; lawmakers, advocates say cuts would hollow out care",999,14040000,15039000,"/Search/View?dp=1&key=3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d&start=14040&end=15039","https://assets.pipeline.soar.com/3408362-f2fbde50604c6cf8fada9e1d5f4a7c9d/thumbnail_14040000.jpg","/articles/6542625/California/May-Revision-proposes-eliminating-Prop-56-supplemental-payments-for-family-planning-and-dental-lawmakers-advocates-say-cuts-would-hollow-out-care","https://secure.pipeline.soar.com/6542625-0232cc9470a462b39590cad0344ef550/orig.mp4?Expires=1770911495&Signature=kwZ1v3mNetGfZKSk0nVU9QSAJdWSdU6VA3W~9DMBz4A2kbA-fVYS9zu0E8QrPALkfizUQsA7BKyGOU-7ToWpPJ64kKe3vRtAoIuVFqbB3KoSmRXWBUHlmeIJwmNFskaGPKVgZLReaDx-fetwTD~c8ucKKISTQpCPUaKGir2OXfMcOaJ~zbccAwLd7D2vlWDbAkd9XPppf8uhHoiaeDFtY6GrxTR5q8-EnAIR7maXLE11vZ6KvDDYV5K48VKdHsPW-QECeweRZOaA2HZTPrbBc8eTEDBlRI~Rjer-uGAau51xomiGodtqOpj7E6hWeLtPgWa8iiSWLPDQCLzCGPP0Hw__&Key-Pair-Id=KUT5TJCACFTXG","The subcommittee examined the administration's proposal to end supplemental payments funded in whole or in part by Proposition 56 and instead devote available revenue to other Medi‑Cal costs.

What was proposed and what the LAO said

Karina Hendren of the Legislative Analyst's Office explained that Proposition 56 (tobacco tax) historically funded supplemental provider payments, but revenues have declined as tobacco consumption has fallen. The May Revision would eliminate supplemental payments for dental services, family planning and women's health and use the Prop 56 revenue to support physician base‑rate increases and other Medi‑Cal needs.

Fiscal tradeoffs

The administration said eliminating the supplemental payments would reduce state general‑fund costs by about $156 million, but LAO staff and committee members emphasized that doing so also reduces associated federal matching funds. Witnesses and lawmakers cited a total‑fund reduction of roughly $470 million (state plus federal) tied to the proposed elimination, meaning the general‑fund savings come with loss of roughly $300+ million in federal matching revenue.

Access and provider impact concerns

Multiple committee members and scores of public commenters — including Planned Parenthood affiliates, county clinics, dental associations and family‑planning advocates — warned the cuts risk reduced hours, clinic closures and diminished access to cancer screening, STI testing and abortion‑related care. Advocates said some Planned Parenthood affiliates rely on supplemental payments and that losing the funding could force closures or reduce service lines.

Administration and DOF response

Department of Finance representatives and DHCS officials said the state faces a difficult fiscal picture and that Prop 56 revenues have declined substantially since 2017, making continued support of the supplemental payments increasingly reliant on general‑fund allocations. Finance emphasized the proposals are part of a larger package to close a multi‑billion‑dollar budget gap and said the administration is open to legislative alternatives.

Ending

Lawmakers signaled deep reluctance about the proposed Prop 56 eliminations and asked for additional analysis of programmatic effects, alternatives that preserve federal match where possible, and clearer information about baseline reimbursement levels for common reproductive‑health procedures.","The LAO and administration described a May Revision plan to discontinue Prop 56 supplemental payments for family planning, women's health and dental and to repurpose the revenue stream toward other Medi‑Cal base costs; lawmakers and provider groups warned the move would forgo federal matching funds and could close clinics and reduce access","actionData","errors"]

Article not found

Administration's Prop 35 spending plan aims some funds at provider rates and some at program costs; providers urge clarity

Lawmakers and DHCS spar over May Revision Medi‑Cal cuts as public voices opposition

May Revision proposes eliminating Prop 56 supplemental payments for family planning and dental; lawmakers, advocates say cuts would hollow out care