California hospitals are asking voters to approve a ballot initiative that would permanently extend Medi-Cal's hospital fee program. The fees paid by hospitals generate billions in federal matching funds that subsidize healthcare services for children, seniors and low-income citizens.
The initiative, Proposition 52, would also make it harder for lawmakers to use Medi-Cal funds for anything other than their intended purpose by requiring voter approval to divert the money.
Current law requires the legislature to renew the program—it has been renewed four times since established in 2009—while the initiative would require a supermajority vote to end it.
Lawmakers have diverted funds from the program only once—$400 million to shore up the budget in 2012—but the California Hospital Association argues it could happen again during an economic downturn, when people need Medi-Cal services most.
The initiative has gained support from both political parties in the state. It's also backed by several large health systems and hospitals, such as Dignity Health, the Children's Hospital of Los Angeles, Sutter Health and Adventist Health, which have donated millions in support of the initiative.
Service Employees International Union-United Healthcare Workers West opposes Proposition 52 and initially sponsored a campaign to defeat it, donating more than $4 million. But the union has since decided to refocus its efforts on other issues.
Despite a lack of opponents, Proposition 52 faces an uphill battle because it's complex and has to fight for voters' attention on a ballot crowded with 18 statewide propositions, including one that would tie drug prices paid by state agencies to discounts negotiated by the U.S. Veterans Administration.
And if voters approve the initiative on hospital fees, extending the program still requires federal approval.
In the 2015-16 budget year, $4.6 billion in hospital fee program revenue was matched with $4.4 billion in federal funding, resulting in $8.1 billion in total Medi-Cal payments and grants to hospitals, according to the legislative analyst's office analysis.
“The program is essential to stabilize Medicaid funding in California,” said Shelly Schlenker, Dignity Health's vice president of public policy, advocacy and government relations. “As the largest private provider of Medi-Cal services, the quality assurance fee is necessary for Dignity Health to maintain access to services in our communities and across the state.”
