What is it?

Prop 35 permanently authorizes a tax on managed care organizations (MCOs) to fund Medi-Cal programs. Medi-Cal is California's Medicaid, a government program that subsidizes health insurances for adults and children with limited income. MCOs provide the majority of Californians with healthcare – Kaiser Permanente, Anthem Blue Cross, and Blue Shield are all examples of MCOs that provide care through Medi-Cal.

This tax will immediately be allocated to the cost of the tax on Medi-Cal enrollment and administrative costs. In 2025 and 2026, this tax will provide $2.7 billion to Medi-Cal and health workforce programs, and $2 billion to the general fund to offset Medi-Cal funding. The tax also includes provisions for subsidizing drug prices beginning in 2027.

Why vote Yes?

At the end of the day, Prop 35 is a budget set-aside, which impairs how legislators can make decisions about the budget. But that said, it locks in funding for important Medi-Cal services that should not be subject to political jockeying.

Consider it this way: every year, California politicians have to balance the budget, which is a highly political process consisting of what (and who) gets funding and what (and who) doesn't. One way that the budget is made highly political is when well-coordinated campaigns bring measures to the ballot box that force politicians to spend the budget a certain way. That's what a budget set-aside is.

And that is what is happening here. Prop 35 requires that California spend the money earned from a federal Medicaid tax loophole on a set of provisions that are outlined in this ballot measure.

The simplest way to understand this ballot proposition is as follows:

A bunch of medical groups came together to figure out how the money from a federal Medicaid loophole should be spent. Here's a partial list of Medi-Cal service changes that would receive funding if Prop 35 passes, provided by the Legislative Analyst's Office:

While we are generally opposed to budget set-asides, we believe that Prop 35 reflects the needs of doctors and practitioners represented by the medical associations in support of this bill, including the California Medical Association, the California Dental Association, Planned Parenthood, the Hospital Council of Northern and Central California, and Stanford Health Care to name just a few. A full list of the coalition is available online.

Vote YES to ensure that these critical Medi-Cal services receive funding for the years to come, and that the funding needs of doctors and practitioners are respected.