State Budget Update

Read CPEHN’s analysis of the 2022-2023 State Budget. From January to July, the Governor, Legislature, advocates, and community partners debated how California’s historic surplus should be used. 

Below is a chart that shows what was originally proposed and what was ultimately passed for health, public health, oral health, mental health, prevention, and more. 

California Pan-Ethnic Health Network
For Immediate Release
May 13, 2022
Contact: Monika Lee, (858) 353-7271

Governor Continues Strong Investments in Health Equity; More Action Needed to Address Racism as a Public Health Crisis 

Sacramento, CA – The California Pan-Ethnic Health Network released the following statement in response to the Governor’s May Budget Revision (FY 2022-2023) from Executive Director Kiran Savage-Sangwan. 

“We are pleased to see the Governor’s May Revision continue the strong commitments to health equity that were proposed in January and enacted over the past three years. The Governor recognizes that the Medi-Cal program is the foundation of health equity in California and has made important investments in reforming that program so that it meets the needs of all Californians. In particular, we celebrate the investments to bring California nearly to universal coverage by removing immigration status as a barrier to Medi-Cal coverage and keeping Covered California affordable.  

The May Revision builds on this foundation with several critical health equity investments: 

  • Extending the Medi-Cal Enrollment Navigator program, which will assist Californians with low incomes in accessing and navigating their coverage. The program is particularly important now as Medi-Cal eligibility expansions go into effect and the federal government contemplates ending the Public Health Emergency (PHE) and reinstating Medi-Cal redeterminations.  
  • Funding implementation of health information exchange by providing technical assistance and capacity building support so that health providers, including community-based organizations, are able to collect and exchange data and identify health disparities. 
  • Strengthening supports for pregnant and birthing people by improving access to doula care, a proven intervention for the unacceptable racial disparities in birth outcomes, and ensuring that California will remain a reproductive freedom and justice state.  

At the same time, we must do more to recognize racism as a public health crisis, and to fund interventions that tackle inequities at their root. Communities of color have borne the brunt of COVID-19 as well as the economic ramifications of the pandemic. Without targeted relief and transformative investment, this status quo will remain. We are disappointed to see the Health Equity and Racial Justice Innovation Fund, a bold investment in racial equity and community resilience, left out once again. We also urge the Governor and the Legislature to focus continued COVID-19 response funding and economic relief funding on the most vulnerable Californians. California led the nation in pandemic response due to a strong and equity-focused effort. We must double-down on that commitment now. We look forward to working with the Governor and the Legislature to build a Healthy California for All.” 

Highlights of the FY 2022-23 Revised State Budget Proposal:

Total Budget: $300.7B
Historic State Surplus: $97.5B (subject to Prop 2 & Prop 98); $49.2B discretionary surplus
 
Total General Fund Spending: $227.4B 
Total Spending for Health & Human Services: S64.7B (General Fund) 
Rainy Day Fund: $23.B 

Medi-Cal Adjustments 

The Medi-Cal Budget is $36.6 billion General Fund in 2022-23, a 1.7 billion General Fund increase from the January Govenor’s Budget Proposal 2022-2023. The May Revision assumes that caseload will increase by approximately 6.6 percent from 2020-21 to 2021-22 and increase by 0.6 percent from 2021-22 to 2022-23. Medi-Cal is projected to cover approximately 14.5 million Californians in 2022-23, over one-third of the state’s population. 

Key Changes: 

  • Reproductive Health:  With reproductive freedoms changing across the United States, CPEHN is pleased to see an investment on reproductive justice and rights for Californians in the following areas:  
  • Uncompensated Care Funding for Reproductive Health Services ($40 million General Fund one-time, available over six years) for the Department of Health Care Access and Information to award grants to reproductive health care providers to offset the cost of providing care to low- and moderate-income individuals who do not have health care coverage for abortion care services. 
  • California Reproductive Justice and Freedom Fund ($15 million General Fund one-time) for the Department of Public Health to award grants to 
  • community-based reproductive health, rights, and justice organizations to conduct medically accurate and culturally competent outreach and education on sexual health and reproductive health issues. 
  • Comprehensive Reproductive Rights Website ($1 million General Fund one-time) for the Department of Public Health to develop and maintain a website providing accurate and updated information to the public on the right to abortion care under state law, information about reproductive health care providers, and options for coverage for reproductive services including state-funded coverage and programs. 
  • Research on the Unmet Needs for Reproductive Health Care Services ($1 million General Fund one-time) for the Department of Public Health to research the unmet needs for access to reproductive health care services 
  • Unwinding the Public Health Emergency (PHE): To ensure timely continuity of coverage for Medi-Cal beneficiaries when PHE ends and redetermination resume, the May revise includes the following:  
  • Health Enrollment Navigators Project ($60 million and $30 million General Fund, available over four years):  Health enrollment navigators help eligible beneficiaries retain Medi-Cal coverage by assisting with annual renewals, reporting updated contact information, and engaging in outreach regarding application assistance and enrollment. Health enrollment navigators will also provide more targeted outreach and enrollment to support individuals newly eligible for Medi-Cal through coverage expansions, such as the expansion for all income-eligible Californians regardless of immigration status.  

CPEHN and partners look forward to working with the Administration and Legislature on the details of an improved and enhanced navigator program. CPEHN is also sponsoring AB 2680 (Arambula), which seeks to look at lessons learned from the existing navigator program established in AB 74 (2018), in order to better serve the needs of our communities. Take Action by sending in a letter of support to Assembly Appropriations here. 

  • Coverage Ambassadors—DHCS is enlisting counties, CBOs, state and local government partners, Medi-Cal managed care plans, providers, and others to be Coverage Ambassadors to amplify messaging on various platforms related to the continuity of coverage for beneficiaries in preparation for the end of the PHE. 
  • Media and Outreach Campaign—An April 1 Budget proposal included $25 million ($12.5 million General Fund) for a media and outreach campaign to encourage beneficiaries to update their contact information with their counties, and to educate beneficiaries of the implications of their eligibility once the COVID-19 PHE ends. 
  • Transitions to Covered California—DHCS and Covered California are actively working to implement Chapter 845, Statutes of 2019 (SB 260) to support a seamless transition of eligible individuals from Medi-Cal coverage to a Covered California health plan. 
  • Separate Billing by Federally Qualified Health Centers (FQHCs) for COVID- 19 Vaccine Administration ($47 million total funds ($7 million General Fund): to continue separate billing by FQHCs for COVID-19 vaccines. 
  • Presumptive Eligibility for Individuals 65 and older, Blind, or Disabled ($73 million total funds ($37 million General Fund)): to continue presumptive eligibility for these populations. 
  • Increases funds to Doula Benefit (The estimated annual cost is $10.8 million ($4.2 million General Fund)): The May Revision proposes an increase to the maximum reimbursement rate per birth from an average of $450 to $1,094 per birth to better align with rates in other Medicaid programs as well as an implementation shift from July 2022 to January 2023. CPEHN applauds the Administration for investing the additional funds to attract and sustain the workforce and ensure opportunities and roles are accessible to racially and ethnically diverse individuals and those with intersecting identities. 

Other Medi-Cal Changes/Adjustments: 

  • Increases Funds to Expansion of Full-Scope Medi-Cal Coverage Regardless of Immigration Status ($834million in 2023 and $2.6 billion annually thereafter)- the May Revision proposes an increase in $15 million total funds ($12 million General Fund) and $155 million total funds ($132 million General Fund) respectively towards this expansion and is due to an increase in estimated number of people eligible based on more recent data. We urge the Legislature and the Administration to expand Medi-Cal to all undocumented adults this year, while also preventing unnecessary age outs for those turning 26 before the implementation of this proposal.  
  • Increases funds to Equity and Practice Transformation Payments: (one-time funds of $700 million total funds including an addition $150 million General Fundin the May Revise): The May revise proposes an additional $300 million total funds towards Equity and Practice Transformation Payments which will advance equity; address gaps in preventive, maternity, and behavioral health care measures; reduce COVID-19 driven disparities; support upstream interventions to address social drivers of health and improve early childhood outcomes; and prepare practices to accept risk-based contracts and move towards value-based care. CPEHN has been advocating for many years for the state to tie health care payments in Medi-Cal to concrete, year-over-year goals for the reduction of health disparities. While this is a promising first step, we must continue to strengthen requirements on plans and providers for the collection of comprehensive, granular demographic data including for smaller subpopulations in order to ensure more equitable care for all. 
  • NEW: Village San Francisco and Yurok Tribe of California Regional Wellness Center (one-time $15 million General Fund): to support the construction of a Regional Wellness Center for substance abuse and behavioral health services for the Yurok Tribe of California. The May Revision also proposes one-time $15 million General Fund to support the construction of the Village San Francisco, Friendship House facility that will offer health care, behavioral health, and social support services) 
  • NEW: Medi-Cal Provider Equity Payments (one-time $400 million ($200 million General Fund)): for provider payments focused on advancing equity and improving quality in children’s preventive, maternity, and integrated behavioral health care.  
     

CalAIM Adjustments: 

  • Increases funds to CalAIM ($1.1 billion in 2021-22, $3.1 billion in 2022-23): The May Revision updates to CalAIM which includes in part: 
  • Population Health Management Service: The Population Health Management Service is now anticipated to go live statewide in July 2023, with additional PHM Service capabilities incrementally phased in thereafter. DHCS intends to launch the PHM Service with a subset of key target partners from January 2023 to June 2023 to optimize 
  • Transitions to Managed Care: Under CalAIM, various populations are shifting to managed care as their primary delivery system. The Department continues work to carefully identify which additional individuals will need to transition. Once that work is completed and proper noticing is provided to both the Medi-Cal managed care plans and members, the additional populations will transition to mandatory managed care in January 2023. 
  • Justice Package: The estimated cost of inmate pre-release has been updated to reflect the inclusion of expanded pharmacy services as part of the package of benefits provided up to 90 days pre-release. 

Oral Health-Key Changes Include:  

  • Adjusts Proposition 56 Funding for Supplemental Payments for Dentists ($295 million): The Department of Health Care Services receives funding from Proposition 56 to increase the level of reimbursement payments to Medi-Cal dentists. Because revenue collected from Proposition 56 has declined as the use of tobacco declines, the May Revise adjusts Proposition 56 funding to $295 million from the General Fund to provide supplemental payments. 
  • Establishes new General Fund Support for the Dental Transformation Initiative: The Dental Transformation Initiative (DTI) was extended in 2021 during the extension of the Medi-Cal 2020 waiver, and concluded on December 31, 2021. This year, there is an expectation that the total waiver allotment will be surpassed, which would result in a deficit in payments for DTI claims. For this reason, the Department of Health Care Services proposes to support the DTI deficit with $30.2 million in FY 2022-23.  

Mental Health  

Behavioral Health Adjustments 

The unmet need for mental health care in California is devastating. We see it in our families in our communities, and in ourselves. The collective trauma of the COVID-19 pandemic has only intensified this need, particularly for young people.  The May Revision includes $290 million over three years to prevent and address youth suicide in school and community-based settings. While mental health care is considered an essential benefit that must be provided by health insurers, there are still significant racial disparities present in the actual utilization of non-severe mental health services. CPEHN urges the Legislature and Administration to invest $15 million from the General Fund in FY 2022-2023 and $12 million ongoing to augment Californian’s capacity to support culturally and linguistically appropriate access to non-severe mental health services for children, youth and adults within Medi-Cal.  

Other Adjustments  

Community Assistance, Recovery and Empowerment (CARE) Court Program – The Governor’s May Revision allocates large sums of money toward expanding involuntary treatment for unhoused people living with severe mental illness. Legal and disability right advocates say the policy framework accompanying these new investments bypass existing requirements, ignore the evidence, undermine civil liberties, and perpetuate racial disparities. CARE Court will disproportionately harm Black, Indigenous and People of Color communities who are significantly more likely to be homeless and diagnosed with such conditions due to decades of unfair housing policy and inaccessible mental health care. The breakdown of investments are as follows, with the largest sum of money in the Care Court proposal allocated to the judicial branch to conduct hearing processes.  

  • Judicial Branch—$39.5 million General Fund in 2022-23 and $37.7 million ongoing for the Judicial Branch to conduct CARE Court hearings.  
  • Training and Technical Assistance—$15.2 million General Fund in 2022-23, $1.1 million General Fund annually between 2023-24 and 2026-27, and $1.3 million General Fund annually ongoing for the Department of Health Care Services to provide training and technical assistance to counties, data collection, and evaluation.  
  • Supporter Program—$10 million General Fund ongoing to the Department of Aging.  

Behavioral Health Services for American Indian and Alaska Native Communities ($30 million)  

  • Substance Abuse and Behavioral health Services for the Yurok Tribe ($15 million) – The May Revision includes one-time to support the construction of a Regional Wellness Center for substance abuse and behavioral health services for the Yurok Tribe, the largest Tribe in California.  
  • Construction of Village San Francisco, Friendship House ($15 million) – The May Revision includes funds to expand Village San Francisco facilities to provide integrated care, including traditional Native Healing services, to address the significant disparities in mental health for Native American communities.  

CalHOPE Extension—The May Revision includes $10.9 million General Fund in 2021-22 and proposes $80 million General Fund in 2022-23 and $40 million General Fund in 2023-24 to continue operating a statewide emotional support line, including crisis counseling services, to Californians.  

Other Health Programs  

  • Reducing the Cost of Insulin (includes $100 million General Fund one-time): The CalRx Biosimilar Insulin Initiative to implement partnerships for increased generic manufacturing of essential medicines. Through a contractual partnership, the Department of Health Care Access and Information (HCAI) will invest $50 million towards the development of low-cost interchangeable biosimilar insulin products and an additional $50 million towards a California-based insulin manufacturing facility. 

Public Health/Prevention  

CPEHN is disappointed to see that Governor Newsom’s 2022-23 May Revision budget proposal continues to fall short in putting resources behind community-based organizations and community-based solutions which are key to address the racial and social injustices emerged and exacerbated during the COVID-19 pandemic.  

  • Fails to include the Health Equity and Racial Justice Fund (HERJF): Governor Newsom’s 2022-23 May Revision budget proposal once again fails to include an investment through the Health Equity and Racial Justice Fund, a $100 million budget proposal led by CPEHN, Latino Coalition for a Healthy California, Public Health Institute, and other grassroots community partners since early 2021. Although the HERJF proposal was included in the Senate’s Budget Plan this year, the Governor’s May Revise once again missed critical opportunities to build a comprehensive, resilient and equitable public health infrastructure in California. A strong public health infrastructure for the 21st century must be able to carry out all foundational public health services, actively promote partnerships and collaboration across public, private, ad non-profit sectors, and most importantly directly recognize and uplift the roles and contributions of community-based non-profit organizations (CBOs). This also means directly funding CBOs who serve and fill the gaps for Black, Indigenous and People of Color and other historically excluded and oppressed communities that institutions have failed to care for, as evidenced throughout the COVID-19 pandemic.  
  • Fails to address institutionalized racism or ensure antiracism is an essential public health vision and strategy: Governor’s May Revise once again fails to acknowledge that racism is a public health crisis in the state of California, despite advocacy from Black, Indigenous and People of Color led organizations and advocates in the last two years. The budget proposal yet again fails to commit actions to tackle institutionalized racism within the state government, nor does it strengthen governmental or non-profit infrastructure to implement and promote racial equity efforts across the state. In contrary, dozens of cities and counties in California successfully passed resolutions and/or actions plans to address systemic racism during 2020’s nationwide racial justice uprisings due to the police killing of George Floyd, Breonna Taylor, and Ahmaud Arbery. Some local governments followed up with concrete actions to create racial equity offices and initiatives, including Los Angeles County’s Anti-racism, Diversity and Inclusion Initiative, Ventura County’s Office of Diversity, Equity and Inclusion, and San Bernardino County’s Equity Vision Element Workgroup. Many of these local racial equity-focused governmental infrastructures are actively involved in strategic and budgetary decisions on local governments’ COVID-19 relief efforts such as how the American Rescue Plan Act Local Relief Funds are being implemented on local levels.  
  • Includes additional funding for the COVID-19 response SMARTER Plan, though the plan lacks racial equity focus: The 2022-23 Revised May budget proposal includes $1.8 billion for specific items and a $250 million Contingency Fund to implement the “SMARTER” plan, or the next phase of COVID-19 response plan that the state administration released in February 2021. Key investments from this plan include $140 million for medical surge and vaccination staffing, $530 million for testing kits including school testing, $93 million for vaccines boosters and expanded programs for young children, as well as $230 million for the Office of Community Partnerships and Strategic Communications to continue supporting COVID-19 vaccine-related public education and outreach. The state’s SMARTER Plan does not have any explicit racial, social or gender equity focus to address the disparities Black/African American, Latino/a/x, Asian American and Pacific Islander, and Indigenous and other people of color have continued to experience during COVID-19.  

Human Services 

The May Revise includes an investment of $296.2M in 2022-23 to increase CalWORKS Maximum Aid Payment levels. In addition, the Revise includes $6.5B General Fund dollars to increase monthly caseloads of the In-Hoe Supportive Services Program (IHSS). IHSS provides essential domestic and in-home supportive services to low-income, disabled, children, and seniors in need. These increases will allow California to expand the social safety net to ensure vulnerable Californians have access to key support systems.  

CPEHN is also pleased to see a maintained investment of $1.7B towards building up the Care Economy however, we are concerned about the Governor’s intent to potentially use community-based support systems, such as community health workers/promotores (CHW/Ps), to support with the implementation of proposals like Care Court. We will continue to monitor these developments.  

Immigrant Programs  

CPEHN is pleased to see continued investments to immigrant legal services in the 2022-23 May Revised Budget. While no augmentations were made to programs like One California, the Administration has allocated $2.5M one-time General Fund dollars, for 2022-23 and 2023-24, to bolster the work of the California Immigrant Justice Fellowship. Lack of accessible legal services continues to place a burden on hard-to-reach, rural immigrant communities. Many of these regions have severe immigration attorney shortages meaning that Californians are even more hard pressed to find quality, legal services when they need them most. The Fellowship will create a sustainable pipeline to fulfill shortages and ensure more Californians have access to legal services.  

However, CPEHN stands with our immigrant rights partners throughout California to urge the Governor and the Legislature to fully expand CalFresh to include all Californians, regardless of immigration status, and to establish the SafetyNet4All which would provide unemployment benefits to excluded immigrant workers. While we appreciate Food4All expansions to those aged 55 and above, food insecurity remains rampant. The COVID-19 pandemic has exacerbated the ability for everyday Californians to put food on the table for their families and loved ones and this is especially true for immigrant communities who have faced unprecedented levels of unemployment and reduced work hours. It is essential for the Governor and Legislature to step up and deliver necessary benefits to the communities that have been hit hardest by the pandemic. We urge the inclusion of Food4All and SafetyNet4All in the Final Budget.  

Public Safety/Criminal Justice CPEHN is disappointed to see that Governor Newsom’s 2022-23 May Revise budget proposal doubles down on multiple January budget proposal items which rely on the state’s criminal legal systems to respond to community safety, health and social needs. 

  • Includes $13.9 billion total funding for the California Department of Corrections and Rehabilitation (CDCR): Governor’s May Revise maintained the expanded funding plan from January of $13.9 billion ($13.3 billion General Fund and $603.2 million other funds) to CDCR, despite concerns raised from multiple legislators and community advocates. Of this total amount, $3.7 billion General Fund is for “health care programs, which provide incarcerated individuals with access to mental health, medical, and dental care services that are consistent with the standards and scope of care appropriate within a custodial environment.” This proposal ignores multi-year reports from the California State auditor detailing the “the reality and inertia of decades of substandard care” at CDCR and that CDCR has failed to adequately provide health care including mental health care for incarcerated community members. 
  • Increases funding for Department of Justice on crime surveillance: The May Revision includes an additional $7.9 million General Fund in 2022-23, and $6.7 million ongoing to build upon investments in January including “combatting retail theft” and building “anti-crime taskforces” around the state. 
  • Increases funding for local policing: The May Revision includes an additional $20 million one-time General Fund to set up grants for counties to create “mobile probation centers” modeled after Placer County, and an additional $50 million one-time General Fund to fund “health and wellness” benefits specifically for law enforcement officers.