Governor Jerry Brown on January 10 released his proposed state budget for the 2017-2018 fiscal year. Disappointingly, Brown's $120 billion budget appropriates $1.2 billion of the Proposition 56 tobacco tax money to cover cost increases for the Medi-Cal program. Although the measure was written to explicitly prohibit the governor from using the new revenue to offset general fund obligations, Governor Brown's budget does exactly that – rather than using those funds to improve California's dismal provider reimbursement rates, as the voters intended.

“We’re disappointed that Governor Brown’s budget ignores the will of voters who supported the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56) by proposing to offset general fund obligations with tobacco tax revenues rather than investing in the overburdened Medi-Cal system to improve access to care,” said President Ruth E. Haskins, M.D., president of the California Medical Association (CMA). “The language of Prop. 56 was clear – the people voted overwhelmingly in support of improving payments for programs and providers to ensure that patients can see a doctor when and where they need one.”

Last year, CMA co-sponsored Prop. 56 to save lives put at risk by tobacco products and improve the access to and quality of medical services for all Californians – especially our most vulnerable communities who rely on Medi-Cal for basic care. Ample research demonstrates that the Medi-Cal system is struggling from persistent underfunding. As a result, California ranks among the lowest in the nation in payments to providers. These chronically low reimbursement rates have a direct effect on Medi-Cal patients’ ability to receive timely treatment from a physician.

Currently, poor provider reimbursement rates mean that only 40 percent of California’s physicians provide 80 percent of Medi-Cal visits. As a result, more than half of Medi-Cal enrollees report difficulty finding a primary or specialty care physician. Medi-Cal patients are more likely than those with private insurance or Medicare to postpone needed care due to long appointment wait times, leading to unnecessary, costly emergency room visits. Not only do these unnecessary emergency visits increase state costs; they inflate emergency room wait times for Californians experiencing true medical emergencies. To fix these problems, California must increase rates so that it is viable for more physicians to participate in the system.

With more than 14 million Californians relying on Medi-Cal programs to provide basic and specialty care for serious diseases, the stakes are high. Californians voted for the tobacco tax to remove these barriers to reliable and quality care. California cannot afford to continue starving this program by diverting Prop. 56 revenues to cover the state’s general fund obligations.

“We must honor the will of the voters and use the estimated $1 billion in new health care revenue for its intended purpose, instead of writing a blank check to the general fund,” said Dr. Haskins. “We look forward to working with the legislature and the Brown administration to develop a solution that doesn’t supplant the will of California voters or put low-income families and communities at risk.”