Blue Shield of California engages in the state budget process each year, supporting policies that ensure all Californians have access to high-quality health care at an affordable price.
How does the budget process work? The Governor is constitutionally required to present a balanced budget proposal to the California State Legislature by January 10 of each year. Taking into account anticipated tax revenues as well as projected operating surplus, this January, Governor Gavin Newsom announced his proposed budget spending plan for the 2022-2023 fiscal year, called the California Blueprint.
The Governor customarily revises his January Proposed Budget during the Spring, also known as the May Revision. On May 13, 2022, Governor Newsom unveiled his May Revision for the 2022-2023 State Budget, which accounts for an updated revenue picture, following April income tax collections. This updated California Blueprint represents an opportunity to flesh out details on high-level health care proposals introduced in his January Proposed Budget.
Concurrent to the Governor’s presentation of the proposed State Budget, the Legislature introduces and reviews the Governor’s proposal in bill form. The Assembly and Senate Budget Subcommittees convene from January through May to hear presentations of the Governor’s Proposed Budget, and after these hearings, legislative leadership in both houses release their own budget blueprints outlining their budget priorities. Legislative leaders and the Governor then meet to reconcile discrepancies between their proposed plans and finalize the spending budget by the June 15 Constitutional deadline.
The Assembly and Senate have met this Constitutional deadline by passing the legislative version of the 2022-2023 State Budget in both houses on June 13. Legislative leadership remains in ongoing negotiations with the Governor to reconcile differences between the joint legislative budget agreement and the Governor’s proposed budget plan. Any reconciliation will be passed in subsequent legislation known as budget bill juniors.
What does the 2022-2023 State Budget look like? The Governor’s May Revision reflects a $300.7 billion balanced budget package, including an unprecedented projected operating surplus of $97.5 billion which is double what was presented in January 2022 ($45.7 billion). The Governor’s revised budget proposal includes $227.6 billion for all health and human services programs during the 2022-2023 fiscal year – $64.7 billion General Fund and $160.2 billion other funds. The additional surplus indicated in the May Revision directs nearly $1.5 billion dollars towards health priorities like the State’s COVID-19 response, children’s mental health, and reproductive health.
On June 1, 2022, legislative leadership from the Assembly and Senate announced a joint legislative budget agreement for the 2022-2023 fiscal year, accounting for budget priorities from both houses and incorporating elements from the Governor’s budget proposal (Delivering Prosperity & Strengthening the Future by Putting California’s Wealth to Work).
What are Blue Shield’s priorities within the state budget process? The state has a historic opportunity to establish a pathway to truly enact universal coverage and make health care sustainably affordable. Blue Shield is proud to support a few key priorities contained in Governor Newsom’s budget:
- Establishing the Office of Health Care Affordability;
- Reducing the Cost of Insulin;
- Achieving Universal Health Care Coverage through Medi-Cal Expansions; and
- Advancing Health Information Exchange.
Prioritizing the Establishment of the Office of Health Care Affordability. Standing up the Office of Health Care Affordability (Office) remains a top Blue Shield priority, and the Governor’s Proposed Budget formally establishes and provides funding for the Office. The Office will be tasked with increasing price and quality transparency, developing specific strategies and cost targets for the different sectors of the health care industry, and imposing financial consequences for entities that fail to meet these targets.
Combating the Rising Costs of Insulin. Earmarked in the Governor’s Proposed Budget is a one-time $100 million General Fund investment towards the manufacturing of biosimilar insulin, driving down the exorbitant insulin costs for affected Californians. 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. This proposal is the product of prior legislation that Blue Shield supported, requiring the State to manufacture and/or contract with a manufacturer to produce generic drugs like insulin.
Supporting the Expansion of Full-Scope Medi-Cal Coverage, Regardless of Immigration Status. Blue Shield is aligned with the Governor’s commitment to California achieving universal health care coverage, including prioritizing expanding Medi-Cal Coverage for undocumented individuals. While eligible older adults (age 50+) can receive full-scope Medi-Cal benefits, undocumented adults ages 26-49 will also become eligible as soon as January 1, 2024.
Improving Health Information Exchange. Continuing Blue Shield’s successful advocacy of Assembly Bill 133 last year which initiated steps towards creating the first statewide Health and Human Services Data Exchange Framework, the Governor’s May Revision for the 2022-2023 fiscal year proposes appropriating funds to provide technical assistance to small or under-resourced providers, particularly small physician practices, rural hospitals, and community-based organizations. The May Revision also allocates monies towards education and technical assistance for entities new to health information exchange. These actions align with Blue Shield’s belief that statewide data exchange is foundational to advancing health equity. Blue Shield is working to refine these budget proposals to better align with the data exchange framework that will soon be finalized.