California’s healthcare system is in a code blue second. Federal and state price range cuts threaten healthcare for tens of millions. Prices are skyrocketing. Medical doctors, nurses and hospitals are all stretched skinny, and affected person care isn’t getting any higher.
“Do no hurt” is the core moral precept of drugs. But Proposition 40 — the billionaire tax on the poll in California on Nov. 3 — would inflict long-term harm to our healthcare system and make California’s issues worse.
This initiative would ship billions to medical insurance firms with no accountability, no oversight and no assure that any of the cash would go to affected person care or to assist decrease healthcare prices.
This isn’t a minor drafting concern. It goes to the center of whether or not Proposition 40 would ship on its acknowledged goal to ease the disaster in healthcare.
It wouldn’t.
The measure would impose a one-time tax on billionaire wealth. Supporters say the cash would assist handle federal funding cuts and defend Medi-Cal, the state’s Medicaid program, which offers healthcare for tens of millions of low‑revenue Californians.
However California’s healthcare system will not be merely a community of docs and hospitals. Greater than 90% of Medi-Cal enrollees obtain their care by way of managed care plans, nearly all of that are operated by medical insurance firms. Managed care accounts for practically 70% of whole Medi-Cal spending. Below the state’s system, well being plans obtain per-patient funds that embody a revenue for the insurance coverage firm.
Put merely: Insurance coverage firms can anticipate billions extra in income from Proposition 40 with out new checks and balances or new necessities to enhance affected person companies or entry.
The query will not be whether or not managed care plans have a task in Medi-Cal. They do. The query is whether or not Proposition 40 offers sufficient safeguards. Would a onetime windfall be used to strengthen care fairly than merely pad insurance coverage firm income?
The measure’s language raises severe considerations. It says funds could also be used for a broad vary of functions, together with addressing reductions in federal funding, supporting well being protection applications, stopping facility closures and making funds to suppliers. That may be a checklist of attainable makes use of, not a binding dedication to any particular end result.
The measure additionally states that its funds can not supplant current state funding. However that provision will not be accompanied by the form of detailed protections present in earlier healthcare funding initiatives. That is the equal of giving Sacramento politicians the keys to the protected. The script has performed out nationwide: When new cash is allotted to a selected precedence, different funding for that precedence dries up — a shell sport that has occurred in lots of states when gambling revenue added cash to colleges after which legislatures reduce different training funding.
We’ve seen this bait and swap in California earlier than. Proposition 56, the tobacco tax permitted by voters in 2016, and Proposition 35, which was handed by voters in 2024 and made a tax on managed healthcare insurance policy everlasting, directed new income towards supplemental Medi-Cal funds and prohibited the substitute of current funding. However state officers nonetheless grabbed the cash for different, unrelated functions.
Proposition 40’s language is even much less particular than Propositions 56 and 35. It doesn’t set up a transparent requirement that new income lead to new healthcare spending. It doesn’t assure that suppliers will obtain increased reimbursement charges. And it doesn’t set up a selected mechanism to stop the Legislature from utilizing the cash to backfill current obligations.
Proposition 40’s supporters are proper to name consideration to the challenges going through Medi-Cal. However good intentions will not be sufficient. California voters should know the place the cash will go, who will management it, and whether or not it can produce lasting enhancements or just fatten income for medical insurance firms.
California ought to pursue reforms that defend sufferers, strengthen the healthcare workforce and supply steady assist for suppliers. Any new tax income ought to include enforceable spending necessities, clear oversight and clear proof that it’s enhancing entry to care.
California wants a sturdy resolution to its healthcare funding disaster. Proposition 40 falls brief. Its false guarantees won’t handle essentially the most urgent wants of sufferers, suppliers and our healthcare system. By delaying actual options, it might make our long-term issues worse.
Jennifer Kent is a former director of the California Division of Well being Care Companies.
