NO on Prop 35: Permanent Funding For Medi-Cal Health Care Services.

Medi-Cal provides health services to over 15 million low-income Californians.  Prop 35 is a well-meaning but misguided effort to try to provide more and steady funding for Medi-Cal and potentially improve reimbursement rates for medical providers. Prop 35 would change the temporary tax that helps fund Medi-Cal to a permanent tax on Managed Care Organizations (MCOs) and require the tax proceeds to be used to support only Medi-Cal and other health programs – making that money unavailable for other priorities and making it difficult to respond to future changes to Medi-Cal that might be mandated by the federal government.

The League of Women Voters of California is generally opposed to “ballot-box budgeting,” which limits the legislature’s flexibility to make budgetary decisions and adjust priorities based on emerging and essential needs. Budgetary decisions should be made by the legislature, not by earmarking funds through ballot initiatives. Earmarking can undermine the state’s fiscal stability and its ability to effectively respond to changing conditions. While there is no organized opposition to the measure, Governor Newsom has expressed concerns that it hamstrings the state’s flexibility. 

Another problem is that Prop 35 could inadvertently decrease overall revenue. This is because the proposition imposes a low cap on taxes collected from non-Medi-Cal enrollees. This cap is designed to prevent the tax from becoming overly burdensome on non-Medi-Cal health plans, but it also introduces a potential risk. If the federal government changes the rules to require a greater share of the tax to come from commercial enrollees, this cap could limit the amount of total revenue that can be collected, potentially reducing the overall effectiveness of the tax.

Vote NO on Proposition 35