Proposition 35 is confusing to California voters. Here is what you need to know

State government runs the single largest health care system in California, with an estimated 40% of
state residents enrolled in the Medi-Cal program. Yet Medi-Cal has long paid doctors and other
providers at below-market rates, which threatens their participation and undermines the entire
program. Proposition 35 on your November ballot is a partial cure to this problem and deserves
support.

Medi-Cal financing is a complicated relationship between the state, the federal government and the
participating doctors, hospitals, nurses and clinics. The simple version is that Prop. 35 divides an
existing pot of federal funds to better reimburse safety net clinics, nurses, emergency rooms and
other providers.

But nothing is simple in health care. Patient advocates such as The Children Partnership worry that
guaranteed funds for providers could come at the cost of decreasing access to the program or
benefits such as dental care that all Californians need.

If voters reject Prop. 35, there is no guarantee that this federal money would go to health care
because legislators in recent years have used some of those funds to solve their annual budget
problems. Overall, it makes sense to support Prop. 35, guarantee that this money goes to an
important need while continuing the never-ending fight to provide health care to every Californian.

The financing mechanism in question is known as a Managed Care Organization tax. Medi-Cal is
California’s version of the federal Medicaid program. If states decide to impose a tax on health
plans providing Medicaid, the federal government will provide even more money toward care. It’s a
rare tax that pays for itself, and then some. For California, this pot of money is in the billions of
dollars.

The federal government has given California a lot of discretion on how to use this money. That has
prompted an annual tug-of-war of whether this money should help solve an overall budget shortfall
or be dedicated to Medi-Cal to address a specific need. Paying the state’s providers a more
reasonable level of compensation, meanwhile, has largely been left for another day.

Most of California’s Medi-Cal provider community tried to end this tug-of-war by deciding how to
share this pot of money amongst themselves for improved service reimbursements. What’s more,
they decided how to phase in these higher reimbursements in the coming two years to give the
Legislature some transition time. It may be no coincidence that Prop. 35’s full impact on the state
budget only kicks in when Gov. Gavin Newsom has left office in 2026.

It was no small feat for such disparate health needs to agree on how to share in greater
reimbursements. Funding for abortion and family planning, for example, will increase by $90 million
come 2026. Behavior health service reimbursements will increase by $300 million. Emergency
rooms, $255 million. Community hospital outpatient procedures, $245 million.

This helps to shore up the financial foundations of a rapidly expanding program. In 2013, Medi-Cal
covered only 23% of Californians. That has increased to 41.2%, which is more Californians getting
health coverage through their employers. Fairly compensating Medi-Cal providers is not an option.
It is a necessity to keep the state running.

No opponent to Prop. 35 filed a formal argument against it that will run in any ballot pamphlet in the
state. There is some opposition. The patient advocate organizations concerned about Prop. 35 do
not make a strong case for rejecting this measure. Medi-Cal could have even less money in its annual legislative fight for funds. While community clinics may have gotten short-changed in this division of MCO tax revenues, legislators could solve this in the budget process if they chose to.

Supported by groups such as Planned Parenthood and the American Academy of Pediatrics, Prop.
35 is a classic sausage of a compromise. But it leaves our health care system in better shape, not
worse. A vote for Prop. 35 signals that voters want to spend federal health care dollars on the
actual care. Nobody is suggesting that this solves the health care system’s problems. But it will
make things slightly saner.