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Governor Remains Focused on Healthcare in New Budget

The $222 billion state budget for fiscal year 2020-2021 submitted by Gov. Gavin Newsom in January shows a continuing priority on the expansion and accessibility of healthcare. Overall, the 2020 budget proposal mirrors themes and items from the 2019 budget, with signs of the Governor expanding previous priorities.

Here are some highlights that build on items initiated in last year’s budget and reappearing in 2020:

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Medi-Cal Expansion. The Governor’s budget proposes expanding comprehensive Medi-Cal coverage to income-eligible seniors aged 65 and older, regardless of immigration status, beginning no sooner than January 1, 2021. The proposal assumes 27,000 seniors will gain coverage and would include eligibility to both Medi- Cal and In Home Supportive Services programs. This is building on the Governor’s 2019 proposal passed by the Legislature to expand coverage to adults up to age 26, also regardless of immigration status.

Reforms Aimed at Improving Healthcare Affordability. The Governor’s budget proposes several new reforms aimed at improving affordability of healthcare for Californians. Just as in 2019 with the passage of the individual mandate and additional statefunded subsidies (in addition to federal subsidies) for health insurance (i.e., Covered California), the Governor is extending the scope with two major proposed initiatives in 2020.

  1. The first is to establish an Office of Healthcare Affordability responsible for increasing price transparency and developing cost containment strategies for the healthcare industry.
  2. The second is to build on last year’s efforts to control drug spending by establishing (1) a uniform statewide schedule of prices at which drugs would have to be sold, and (2) a state contract with drug manufacturers to create California’s own brand of generic drugs that would be available for purchase statewide. If passed, it would create a first-in-the-nation proposal to market and sell generic prescription drugs for California residents under a government-run operation.

Increased Tobacco-Related Taxes for Healthcare. In the Governor’s 2019 budget, he increased funding from Prop. 56 tobacco tax investments by more than $1 billion. In 2020, Governor Newsom is proposing a tax increase on e-cigarette products. The proposal would increase taxes on vaping cartridges based on nicotine levels, raising current taxes by $2 for each 40 milligrams of nicotine in the product. The California Medical Association would like to see these new dollars directed to healthcare workforce development programs like the physician loan repayment program and graduate medical education funding already established under the Proposition 56 tobacco tax.

Link to California State Budget 2020-2021:

Gabriela Villanueva is CAP’s Government and External Affairs Specialist. Questions or comments related to this article should be directed to