Dr. Christopher Wing, a first-year resident working at Mount Carmel Grove City Hospital, keeps an eye on a patient inside the COVID-19 ward in December. Hospital workers struggled to keep up with all of the patients late last year.
California – California voters expressed their desire for increased compensation for doctors treating low-income patients last fall, but a missed federal deadline has left millions of dollars unclaimed, undermining those efforts. The delay, which stems from the state’s failure to submit required paperwork on time, means that the rate hikes promised under Proposition 35 will not begin as scheduled. Proposition 35, passed by 68% of voters in November, committed funds from a special tax on health insurance plans to increase payments for health care providers serving Medi-Cal patients, California’s Medicaid program. However, the state missed the March 31 deadline to submit paperwork to the federal government for approval.
The delay has resulted in unclaimed federal matching dollars that were meant to boost the Medi-Cal program, leaving doctors without the promised rate increases for the first quarter of the year. Additionally, the state’s failure to meet this deadline means that funding meant to benefit California’s low-income population is now unavailable, frustrating both lawmakers and health care providers. The Department of Health Care Services (DHCS), which oversees the implementation of Prop. 35, did not respond to CalMatters’ questions about the delay until after the article’s publication. In a statement released after the report, DHCS refuted claims of a missed deadline, stating that the process is ongoing and Proposition 35’s revenue will still be matched with federal funds as soon as the necessary payment methodologies are finalized.
Health Care Services Director Michelle Baass acknowledged in recent legislative hearings that the delay was due to unfilled positions on the advisory committee tasked with overseeing the spending of Prop. 35 funds. Although the committee is set to meet on April 14, questions remain about why the state failed to make the required appointments sooner. Governor Gavin Newsom’s office did not respond to inquiries about the delay. Some officials within the DHCS even admitted that they never believed the state would meet the March deadline.
The missed deadline has intensified frustration, especially since Medi-Cal’s reimbursement rates have not been updated in two decades. Lawmakers, including Assemblymember Dawn Addis, are disappointed with the slow progress on Prop. 35’s promises. “94% of Californians now have health care coverage, but so many folks can’t access providers,” said Addis, pointing out that the low reimbursement rates make it difficult for doctors to practice, particularly in rural areas.
In addition to concerns about Prop. 35’s delayed implementation, California is facing a potential federal funding cut tied to budget agreements, further complicating the Medi-Cal landscape. Lawmakers are also grappling with a $6 billion Medi-Cal deficit, with critics blaming Newsom’s expansion of the program to include immigrants who don’t have permanent legal status. The Governor acknowledged that Prop. 35’s cost increases have contributed to the deficit, but defended the expansion, which has seen one in three Californians gain health care coverage through Medi-Cal.
As California grapples with these challenges, the future of Medi-Cal and its ability to meet the needs of low-income residents remains uncertain.
