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San Francisco Marin Medical Society Blog

Medi-Cal Spared Despite Large State Budget Deficit

Governor Newsom recently released his 2024-25 State Budget proposal, projecting a nearly $40 billion shortfall resulting from the substantial stock market decline and COVID-related delay in income tax collections. Despite the significant deficit, the Governor proposed maintaining funding levels for Medi-Cal and health care in general. This includes the unprecedented increase in Medi-Cal provider payment rates passed last year as part of the Managed Care Organization (MCO) tax), though some physician may see less of an increase than anticipated under the Governor’s proposal. Given the size of the deficit, not all services were spared. The Governor proposed cuts or delays to numerous housing-related projects and funds. He also called for a delay of the state’s new health care $25 minimum wage. The nonpartisan Legislative Analyst’s Office deemed the budget proposal “plausible, but optimistic.” Click here to read CMA’s statement on the budget. It is important to remember that this is just the first step in the process. Negotiations between the Legislature, Governor, and stakeholders will continue throughout the Spring until a final budget is passed in June2024.

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