California Governor Gavin Newsom (D) didn’t let the dust settle from taking office before announcing several sweeping proposals regarding healthcare. On Monday, Governor Newsom outlined an expansion to the state’s Medicare program, aptly named Medi-Cal, which would increase subsidies for middle-class families, require all consumers in the state to have health insurance and cover illegal immigrants residing in the state. Medi-Cal, which already covers undocumented children until they turn 19, would increase the age cut-off to 26 to mirror the Affordable Care Act. Should this go into effect, California would become the first state to cover immigrants without legal status who are younger than 26, the cost of which is estimated at $250 million a year. Since the Affordable Care Act prohibits federal dollars from covering immigrants residing in the U.S. illegally, the expenses would fall solely on California.
Amidst the mass of proposals, an executive order was signed by Newsom that would create a surgeon general oversight position and consolidate the state’s prescription drug purchases into a state-run program. Dr. Nadine Burke Harris will serve as California’s first surgeon general, much of her practice has focused on the treatment of childhood trauma and how the proper treatment of which could serve as preventative treatment for future ailments as those children age. A state-run program is believed to lower drug costs for the state and for consumers while improving prescription drug pricing transparency. Prior to the order, Medi-Cal and the state agencies separately negotiated prescription drug prices, but with the changes, California will become the largest single purchaser of prescription drugs. Small businesses and individuals will also be able to join the state-run collective at the same bulk purchasing points.
Governor Newsom campaigned on a universal healthcare platform but stopped short of a single-payer system that would cover all residents’ healthcare costs. Despite not running on a single-payer platform, Californians are considering Newsom’s universal healthcare to be a first step down that path. However, in order for a true single-payer system to be implemented in California, a budget measure would have to be passed on the ballot by California voters for the state to take on the sizeable cost of a single-payer program, which would certainly not comply with the state’s budget rules that the budget not spend more on any other program than education. In an effort to eventually move toward single payer, Newsom sent a letter to the White House and Congress asking for changes in federal laws that would allow the state the regulatory freedom to overhaul the state’s healthcare system. In the past, CMS Administrator Seema Verma said that she would not approve any state waivers that would help create a single-payer system. It is expected that CMS officials will respond accordingly to Governor Newsom’s request.