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Q&A

Understanding Proposition 1

Implications for Californians and the State’s Behavioral Health System

January 2024 | By Monica Davalos and Adriana Ramos-Yamamoto

Candid shot of small group of young people sitting in circle and laughing while casually chatting during a group therapy session.

key takeaway

California voters will decide on March 5th, 2024, whether to pass Proposition 1, a two-part initiative aiming to improve access to behavioral health services. This includes funding for treatment facilities, housing support, and changes to the Mental Health Services Act.

Millions of Californians who cope with behavioral health conditions — mental illness or substance use disorders — rely on services and supports that are primarily provided by California’s 58 counties. Improving California’s behavioral health system is critical to ensure access to these services for all Californians, regardless of race, age, gender identity, sexual orientation, or county of residence.

In recent years, state policymakers have launched various initiatives to transform California’s behavioral health system with the goal of improving access for Californians. The most recent of these initiatives is Prop. 1. Last year, state policymakers passed, with strong support from Governor Gavin Newsom, Senate Bill 326 and Assembly Bill 531. Together, these bills placed Prop. 1 on the March 2024 ballot.

On March 5, 2024, California voters will vote on Prop. 1, a two-part measure that would 1) amend California’s Mental Health Services Act and 2) create a $6.38 billion general obligation bond. The bond would fund:

  • Behavioral health treatment and residential facilities,
  • Supportive housing for veterans and individuals at risk of or experiencing homelessness with behavioral health challenges.

This initiative presents beneficial aspects as well as potentially adverse consequences for Californians. This Q&A provides a high-level overview of Prop. 1, including how Californians with behavioral health conditions might be impacted by its passage as well as implications for the state budget.

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Key Terms

Why Does Prop. 1 Matter for Californians?

Prop. 1 would impact how many Californians access mental health services and substance use disorder treatment in their communities. It would restructure a key funding source for county behavioral health services in ways that would increase housing supports but might adversely impact counties’ ability to provide behavioral health services.

The Mental Health Services Act (MHSA), which Prop. 1 would amend, accounts for about one-third of funding for county behavioral health services. The MHSA is essential in supporting services for Californians across different ages, addressing a spectrum of mild to severe behavioral health conditions.

Prop. 1 would also authorize a statewide bond to create mental health and substance use treatment beds, and housing with supportive services for unhoused Californians with behavioral health challenges. Increased supportive housing and access to treatment facilities is crucial for Californians. Capital funds accessed through the bond portion of Prop. 1 will slightly impact the state’s ability to make budgetary decisions year-to-year. However, the capacity of the state to issue future voter-approved bonds will decrease because California has a limited ability to finance bond measures.

Changes to the MHSA will impact a system that currently supports all Californians with behavioral health conditions. In contrast, the bond focuses on individuals with behavioral conditions who are at risk of or experiencing homelessness, which is a smaller portion of the unhoused population.

As thousands of Californians across the state experience the devastating effects of homelessness and barriers to behavioral health care, policymakers are asking Californians to consider if redirecting MHSA funds and authorizing a new general obligation bond is the right approach to addressing the state’s behavioral health and homelessness crises.

What Problem Is Prop. 1 Trying to Address?

Prop. 1 aims to support Californians who are most affected by severe behavioral health conditions (mental illness and substance use disorders) and homelessness. This initiative is designed to create designated funding for mental health services and housing or treatment units for people with behavioral health conditions who are or at risk of experiencing homelessness.

In early 2023, over 181,000 Californians were counted as experiencing homelessness — the traumatic effects of which can seriously harm individuals’ well-being. Research suggests the trauma of experiencing homelessness can cause people to develop mental health problems and worsen existing behavioral health challenges and coping behaviors like substance use.

There are data challenges in quantifying exactly how many unhoused Californians have a mental health condition or substance use disorder. The 2023 homelessness point-in-time count showed 25% of the 181,399 people experiencing homelessness in California had a severe mental illness and 24% had a substance use disorder. However, while there is likely overlap between these individuals, the full extent is not reported.

Access to mental health care and substance use disorder treatment can be challenging for Californians who are unhoused. A recent statewide study found that nearly 4 in 5 unhoused Californians surveyed reported experiencing a serious mental health condition at some point in life, and those with current mental health conditions reported limited access to treatment. Additionally, 1 in 5 unhoused Californians who reported regular substance use and wanted treatment were not able to receive it.

These challenges are compounded by California’s shortage of adult psychiatric and community residential beds, which prevents Californians with serious behavioral health conditions from accessing critical behavioral health services.

What Is the Mental Health Services Act?

In 2004, California voters approved the Mental Health Services Act (Prop. 63), which created a 1% surtax on personal incomes above $1 million to provide increased funding for mental health services. Its passage signified a commitment to improving mental health outcomes for Californians, with a focus on prevention, early intervention, and community-based care. This tax supports about one-third of the state’s public mental health system.

The Mental Health Services Act has five main goals:

How Are Mental Health Services Act Funds Used Today?

The majority of MHSA funding (95%) goes directly to counties, which have some flexibility in how to use these funds.

Under current law, a small percentage of MHSA dollars (5%) is reserved for state-level administration.

How Would Prop. 1 Change Mental Health Services Act Spending?

Prop. 1 proposes significant revisions to the Mental Health Services Act (MHSA). These include:

  • Changing its name to the Behavioral Health Services Act (BHSA),
  • Expanding its scope to encompass treatment for substance use disorders.

Additionally, it would modify how MHSA funds are allocated, and introduce changes related to oversight, accountability, and the community planning process. This overview will focus on outlining the new funding structure under Prop. 1.

Under Prop. 1, counties would continue to receive the bulk of BHSA funds (90%). However, the allocation across different spending categories would change, without an increase in revenues. Counties would allocate their BHSA funds as follows:

Prop. 1 could provide some exemptions for counties with a population of less than 200,000. In addition, during the first two years of implementation, counties might have the flexibility to transfer up to 14% of their funding between these categories, with a limit of 7% per category. However, this flexibility is still pending state approval and has not been confirmed.

Another notable change is that Prop. 1 would shift a small percentage of dollars from counties to the state (from about 5% of total MHSA funding to about 10%). This would result in about $140 million annually redirected to the state budget. However, this amount could be higher or lower depending on the total amount of revenue collected from the tax.

Prop. 1 would also revise the allocation of state-level funds:

  • At least 3% to the Department of Health Care Access and Information to implement a statewide behavioral health workforce initiative.
  • At least 4% to the California Department of Public Health for population-based mental health and substance use disorder prevention programs. A minimum of 51% of these funds must be used for programs serving Californians who are 25 years or younger.

It’s worth noting that Prop. 1 would not change the tax on people with incomes over $1 million per year. This means counties would be expected to expand their scope of services without an increase in revenue. In fact, county leaders have repeatedly raised concerns about the disruption that Prop. 1 could cause. Specifically, the MHSA restructuring could result in significantly less funding for core services, which could lead to counties:

  • Canceling contracts with community-based organizations. 
  • Closing programs that are currently serving Californians.
  • Reducing county staffing.

If passed, the exact impact of Prop. 1 will vary by county and depend on how much revenue is collected in any given year. It’s important to keep in mind that the MHSA funds services for Californians of all ages for a range of conditions — mild to moderate to severe. The restructuring of MHSA funding would target a subset of this population. Therefore, programs and services for prevention and early intervention in some counties, for instance, could experience disruptions due to the new prioritization of funding.

What Can We Expect from the Behavioral Health Infrastructure Bond?

The Behavioral Health Infrastructure Bond would create a $6.38 billion general obligation bond for:

  • Infrastructure development of treatment and residential care facilities,
  • Supportive housing units for veterans and other Californians with serious mental health conditions and substance use disorders.

These funds are estimated to create up to 4,350 housing units, with 2,350 set aside for veterans, and 6,800 mental health and substance use treatment places for an approximate total of 11,150 new behavioral health and supportive housing units statewide. An estimated 26,700 outpatient treatment slots will also be created that may serve thousands of Californians annually.

Projects funded by the Behavioral Health Infrastructure Bond will be eligible for local streamlined review processes if they meet select criteria. The bond funds will be allocated as follows:

First Look: Understanding the governor's 2024-25 state budget proposal

Learn about the key pieces of the 2024-25 California budget proposal, and explore how the governor prioritized spending and determined cuts amid a sizable projected state budget shortfall.

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What Would the Infrastructure Bond Mean for the State Budget?

Under Prop. 1, the state would issue up to $6.38 billion in general obligation (GO) bonds, with the funds going toward:

  • Grants or loans for vital treatment and residential care facilities,
  • Supportive housing units.

California voters have a record of funding large infrastructure projects through bonds as it does allow the state to access impactful funding amounts that are designed to serve public interests at large over many years.

In issuing bonds, the state must repay the bond debt service (which is the principal bond amount plus interest) through General Fund dollars. The most recent cost estimate assumes a 30-year debt service resulting in projected payments of roughly $310 million per year. Under this estimate, it would cost the state approximately $9.3 billion to repay the total bond debt, not including the cost of inflation. California currently spends roughly 2.5% of the state budget on repaying various bond obligations voters have decided on in the past.

While there are ways to equitably reform the state budget’s revenue streams, policymakers must balance the yearly limited discretionary flexible dollars in the General Fund. GO bonds in essence prioritize increased debt-service payments to be drawn from the General Fund over potential ongoing or one-time funding. Repaying the bond portion of Prop. 1 is a trade-off that will slightly reduce the flexible dollars left for other vital public services that may already serve Californians with behavioral health conditions and those at risk of or experiencing homelessness. It also challenges the state’s capacity to fund future voter-approved bonds since California has limitations on financing bond measures.

Another consideration is the ongoing operating costs that will be needed to adequately sustain the facilities produced through Prop. 1. As explained above, the MHSA restructuring does designate 30% to housing interventions which includes rental and operating subsidies. The funds can presumably help sustain facilities that are projected to be secured through the bond funding. However, it is uncertain whether these funds and those from other sources will be sufficient and accessed efficiently to ensure adequate upkeep, staffing, and proper care for the Californians receiving housing and services through these projects.

The infrastructure projects funded under the bond would build on existing state programs that received one-time funding through previous budget allocations or voter-approved bonds which are close to being depleted.

How Might Californians Be Impacted by Prop. 1?

The proposal presents various promising aspects. First of all, the expansion of services to substance use disorder treatment is positive. This broadened scope recognizes that mental health challenges and substance use disorders sometimes occur together. In fact, more than 1 in 4 adults living with a serious mental illness also have a substance use disorder. This underscores the importance of providing treatment for both conditions.

Another positive aspect of this proposal is the prioritization of treatment facilities and supportive housing infrastructure for Californians at risk of or experiencing homelessness with behavioral health conditions. Due to racism, ableism, and other forms of discrimination, some Californians are more likely to experience the devastating effects of homelessness at some point in their lifetime. This disparity is particularly stark for Black, Indigenous and Pacific Islander Californians, adults without children, older adults, and transgender and other LGBTQ+ individuals.

Notably, the new investments and prioritization of funds under Prop. 1 target a small but important share of the unhoused population. The majority of unhoused Californians face short-term homelessness (61%), for which deeply affordable permanent housing is needed. For those who are chronically homeless (39%) and may have behavioral health challenges, the increased supportive housing units are crucial if they are appropriately sustained with wraparound supportive services.

One concern about Prop. 1 is the restructuring of funding under the Mental Health Services Act (MHSA). While the exact consequences of this change are not entirely clear for each county, it could have adverse effects. The MHSA has been instrumental in providing innovative, community-based services for historically underserved communities, including people of color and LGBTQ+ communities. Given that county leaders have expressed that this initiative could result in less funding for core services, Prop. 1 could negatively impact services for Californians of color and LGBTQ+ communities that are currently supported by MHSA funding.

A key flaw of this initiative is that it expands the scope of the MHSA and prioritizes funding for people who are or at risk of experiencing homelessness without increasing the tax or providing new revenue to support existing county behavioral health programs. This approach is concerning, as it redirects funds originally allocated for a specific purpose to address a different need.

What Are Supporters and Opponents Saying?

supporters

Supporters claim that Prop. 1 would prioritize existing funds and generate new funds for Californians with the most severe behavioral health needs and those living in encampments. Other supporters assert that the proposition is a beneficial component in advancing the variety of interventions needed to address California’s housing and homelessness challenges. Supporters of Prop. 1 include California Big City Mayors as well as some behavioral health and housing advocates.

opponents

Opponents, including disability rights advocates and peer support advocates, argue that Prop. 1 represents a significant regression in the treatment of mental illness and substance use disorders, likening its impact to a 50-year setback. This perspective stems from allowing funding to be used for involuntary or forced treatment facilities. Opponents also claim that Prop. 1 could result in reduced mental health services for Black, Indigenous, and other people of color and LGBTQ+ Californians.

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California’s aid to low-income seniors and people with disabilities cannot compete with the high cost of housing. The Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants help over 1 million low-income older adults and people with disabilities pay for housing and other necessities. However, the current individual grant of $1,183 is less than the Fair Market Rent (FMR) for a studio apartment in 25 counties.

Cuts during the Great Recession still impact the SSI/SSP program today. During this period, the state repealed the Cost of Living Adjustment (COLA) for the SSP grant. Had the COLA been protected, the SSP grant would be almost double what it is today.

Boosting the SSI/SSP grant levels is essential to helping low-income Californians make ends meet. Along with protecting recent improvements, state leaders can take further action by increasing the maximum grant for individuals and restoring the annual state COLA. 

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key takeaway

Despite recent strides in increasing CalWORKs grants, persistent challenges remain in addressing deep poverty for California families. By advancing reforms, state leaders can lift families out of poverty and ensure economic security for Californians.

The California Work Opportunity and Responsibility to Kids (CalWORKs) program plays a crucial role in supporting children and families with low incomes. CalWORKs not only aids families financially, by providing modest monthly cash grants to over 650,000 children across the state, but also assists parents in overcoming employment barriers.1Based on Budget Center analysis of Department of Social Services data for September 2022, the most recent month with available statewide data. Although recent increases in CalWORKs grants have helped prevent deep poverty for many families, there is still work to do to ensure the prosperity of all CalWORKs families.

The Impact of Deep Poverty on California’s Children

Deep poverty — which occurs when a family’s income falls below half the official federal poverty line (FPL) — takes a toll on both children and the state. This hinders the development of a healthy society and economy. In 2022, approximately 6.6% of children in California were living in deep poverty.2Based on Budget Center analysis of US Census Bureau, American Community Survey data for 2022. Children experiencing poverty are more likely to face poverty in adulthood, impacting their overall well-being. When family incomes fall short of meeting basic needs, children may struggle to concentrate in school, face increased health risks in crowded living conditions, and endure heightened stress levels, negatively affecting their immune system and neurological development.3Mercedes Ekono, Yang Jiang, Sheila Smith, Young Children in Deep Poverty (National Center for Children in Poverty, January 2016). Allowing poverty to persist jeopardizes the prosperity of the entire state.

CalWORKs Advances: A Closer Look at Recent Progress

Despite facing cuts during and after the Great Recession, such as reduced grant levels and the elimination of the annual state cost-of-living adjustment (COLA), CalWORKs has seen positive developments in recent years. The 2022-2023 state budget marked a significant milestone with an effective 21% increase in CalWORKs grants — the largest since the program began in 1998. The 2023-2024 budget continued this trend with a 3.6% increase. For CalWORKs families, these advancements represent crucial steps toward eliminating deep poverty.

However, some CalWORKs families still receive grants below the deep poverty line. CalWORKs grants are adjusted according to the number of people in the household who are eligible for cash assistance. However, family members may be excluded from grant calculations if they:

  • have exceeded the time limit for assistance
  • are sanctioned for not meeting work requirements
  • are ineligible due to their immigration status

About 37% of CalWORKs families only receive aid for the children in the household, excluding the parents.4Based on Budget Center analysis of Department of Social Services data for September 2022, the most recent month with available statewide data. This amounts to 240,000 children in households that are not guaranteed a grant above the deep poverty threshold. This is only a baseline scenario, as some families may have one excluded parent while the other receives aid. Families of three with one excluded family member receive a maximum monthly grant that is as low as 42.5% of the FPL. This leaves them without sufficient assistance for basic needs.

Enhancing CalWORKs to Lift Families Out of Poverty

State leaders can help California families avoid deep poverty by increasing CalWORKS grants for families with excluded family members, similar to those not facing such exclusions. Simultaneously, leaders can strive to reduce the number of families that face exclusions by reforming CalWORKs sanctions. State leaders can ensure that no family in the CalWORKs program lives in deep poverty by:

  • Eliminating non-federally required sanctions.
  • Reducing the length of time parents are excluded from aid.
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  • 1
    Based on Budget Center analysis of Department of Social Services data for September 2022, the most recent month with available statewide data.
  • 2
    Based on Budget Center analysis of US Census Bureau, American Community Survey data for 2022.
  • 3
    Mercedes Ekono, Yang Jiang, Sheila Smith, Young Children in Deep Poverty (National Center for Children in Poverty, January 2016).
  • 4
    Based on Budget Center analysis of Department of Social Services data for September 2022, the most recent month with available statewide data.

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key takeaway

California’s uninsured rate reached an all-time low in 2022, but the state must now work to maintain this progress. State leaders must ensure equitable access to health coverage as they process Medi-Cal renewals, which were temporarily suspended during the COVID-19 pandemic.

Consistent access to health care is necessary for everyone to be healthy and thrive. During the pandemic, millions of Californians with low incomes were able to stay continuously enrolled in Medi-Cal (California’s state Medicaid program) due to a federal pandemic-era policy.1A provision in the federal Families First Coronavirus Response Act passed in March 2020 required states to provide continuous coverage for Medicaid beneficiaries in exchange for enhanced federal funding during the federally declared Public Health Emergency (PHE). The Consolidated Appropriations Act of 2023, which federal policymakers passed in December 2022, delinked the continuous coverage provision from the PHE, thereby ending this provision on March 31, 2023. Partly as a result of this federal policy, Medi-Cal enrollment in California reached an all-time high — with over 15 million people enrolled — while the uninsured rate dropped to a historic low (6.5%).

Earlier this year, California began processing Medi-Cal renewals for the first time since the start of the pandemic. Recent data reveal an alarming trend: More than 500,000 Californians have lost Medi-Cal coverage during recent months. Although not everyone who loses Medi-Cal coverage becomes uninsured, the majority of people who lost coverage did so because of paperwork challenges. Certain groups, including immigrants, older adults, and people with disabilities, are at greater risk of losing Medi-Cal coverage during this continuous coverage “unwinding” period.

State leaders have implemented measures to reduce barriers to accessing and maintaining Medi-Cal coverage. Still, policymakers can take additional steps to prevent Californians who remain eligible for Medi-Cal from losing coverage. This includes pausing procedural terminations and investing in health navigators. By taking additional action, state leaders can strive to ensure that all Californians, regardless of race, age, disability, or immigration status, can access and maintain the critical health coverage they need to be healthy and thrive.

What is health equity?

When everyone has the opportunity to be as healthy as possible and no one is disadvantaged from achieving this because of their race, gender identity, sexual orientation, the neighborhood they live in, or any other socially defined circumstance.

California’s Health Coverage Landscape: Progress, Disparities, and the Path to Equitable Coverage

California has made significant strides in expanding access to health coverage. This progress is primarily due to the federal Affordable Care Act (ACA) and, more recently, the state’s efforts to expand comprehensive Medi-Cal coverage to income-eligible undocumented Californians. The percentage of Californians without health coverage decreased to 6.5% in 2022, down from the previous record low of 7% in 2021. These recent improvements in health coverage highlight the significant progress that California has made over the last decade when the uninsured rate was over 17%.

While access to health coverage has improved for all racial/ethnic groups in California over the last decade, racial disparities in coverage persist. Notably, gains in health coverage were significantly lower for Californians who identified as American Indian or Alaska Native (AI/AN), who had the highest uninsured rate. The uninsured rate of AI/AN Californians was nearly double that of the overall Californian population. Racial disparities were also evident for Latinx Californians, who had the second-highest uninsured rate. This is particularly concerning given that people identifying as Latinx account for over 40% of the state’s population.

The racial disparities in health coverage highlight the profound and enduring impact of racism, which blocks Californians of color from equal access to health care. For example, some people of color may hesitate to seek coverage because they distrust the government and health care systems that are responsible for past and ongoing mistreatment against them, their families, and their communities. Another instance of a racist policy is the exclusion of undocumented immigrants, driven by racial and xenophobic biases, from enrolling in federally funded Medicaid coverage or purchasing coverage through the ACA marketplaces.2Undocumented immigrants are not eligible to enroll in federally funded Medicaid coverage or purchase coverage through the ACA Marketplaces. In recent years, California has allocated state funding to expand eligibility for full-scope Medi-Cal to undocumented immigrants.

While California has made significant progress in increasing health coverage, there is much more work to be done to ensure equitable access to health coverage for all Californians. Addressing the racial disparities in health coverage requires targeted outreach and education efforts along with other antiracist policy actions to improve health and well-being for Californians of color.

Many Californians Are Losing Medi-Cal Coverage Due to Paperwork Challenges

On April 1, 2023, California began the process of redetermining eligibility for Medi-Cal enrollees for the first time since the onset of the COVID-19 pandemic. The California Department of Health Care Services (DHCS) publishes data showing the number of Californians who become disenrolled as a result of the redetermination process (i.e., undergo a procedural termination).3The California Department of Health Care Services (DHCS) publishes interactive Medi-Cal dashboards detailing statewide and county-level demographic data on Medi-Cal application processing, enrollments, redeterminations, and renewal outcomes. DHCS also provides valuable insight into the circumstances leading to the disenrollment of Medi-Cal beneficiaries, which are categorized as follows:

  • Procedural: an individual loses coverage due to issues with their renewal paperwork.4In this issue brief, the term "paperwork" is used in place of the term "procedural." This may be a result of a Medi-Cal enrollee not receiving or returning requested forms on time, or other issues with the application system.
  • Over Income: an individual's income exceeds the Medi-Cal eligibility threshold, potentially making them eligible for coverage through Covered California — the state’s health insurance marketplace. 
  • Other Reasons: an individual moves out of the state, voluntarily disenrolls, or passes away.

Nearly 9 in 10 Californians (89.2%) who lost Medi-Cal coverage in August 2023 did so because they did not complete the renewal paperwork or had incorrect or missing information in their forms. Although not everyone who loses Medi-Cal coverage becomes uninsured, the data reveal a troubling trend.5Medi-Cal members have 90 days after their disenrollment to provide the necessary outstanding information to their local Medi-Cal office to restore their coverage. After the 90 days, people can submit a new application. Historically, California has seen a reinstatement rate of about 4% over the 90-day period.

Completing the renewal process often involves complex paperwork and documentation requirements, which can be difficult to navigate. Additionally, some Californians have experienced extended call wait times when attempting to contact county Medi-Cal workers regarding their application.

Certain groups, including older adults and people with disabilities, are at greater risk of losing Medi-Cal coverage during the unwinding period.6Jennifer Tolbert and Meghana Ammula, 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision (Kaiser Family Foundation, June 2023). Immigrants and their family members face unique obstacles to remaining covered, such as language barriers, privacy concerns, and fear of immigration consequences. As such, many Californians who are losing Medi-Cal coverage due to paperwork challenges may still meet the eligibility criteria.7Of the redeterminations that were received and processed in August 2023, about 20% were ineligible. See California Department of Health Care Services, Medi-Cal Continuous Coverage Unwinding Dashboard (August 2023), 14.

The high disenrollment rate due to paperwork challenges underscores the need to further streamline the renewal process and alleviate the paperwork burden on beneficiaries during the unwinding period and beyond. Addressing these challenges is essential to ensure that those who are eligible for Medi-Cal continue to receive vital health coverage.

Policy Recommendations to Support Equitable Access to Health Coverage Amidst the Unwinding Period

State leaders have taken steps to mitigate the impact of the continuous coverage unwinding period and better support access to health coverage. Earlier this year, the California Department of Health Care Services (DHCS) set forth a detailed plan with a guiding principle to maximize the continuity of coverage for Medi-Cal beneficiaries. These actions include: 

  • Providing one-time funding support to local county offices, which are responsible for determining the initial and continuing Medi-Cal eligibility for an individual or a family.
  • Authorizing Covered California to enroll individuals in a qualified health plan when they lose Medi-Cal coverage.
  • Engaging community partners to serve as “Coverage Ambassadors” to share information with Medi-Cal beneficiaries about how to maintain Medi-Cal coverage.

State leaders can build on previous policy changes by taking action on the following recommendations:

By taking these steps, state leaders can work towards ensuring that all eligible individuals, regardless of age, disability, or immigration status, can access and maintain the critical health coverage they need in order to be healthy and thrive.

Health & Safety Net
  • 1
    A provision in the federal Families First Coronavirus Response Act passed in March 2020 required states to provide continuous coverage for Medicaid beneficiaries in exchange for enhanced federal funding during the federally declared Public Health Emergency (PHE). The Consolidated Appropriations Act of 2023, which federal policymakers passed in December 2022, delinked the continuous coverage provision from the PHE, thereby ending this provision on March 31, 2023.
  • 2
    Undocumented immigrants are not eligible to enroll in federally funded Medicaid coverage or purchase coverage through the ACA Marketplaces. In recent years, California has allocated state funding to expand eligibility for full-scope Medi-Cal to undocumented immigrants.
  • 3
    The California Department of Health Care Services (DHCS) publishes interactive Medi-Cal dashboards detailing statewide and county-level demographic data on Medi-Cal application processing, enrollments, redeterminations, and renewal outcomes.
  • 4
    In this issue brief, the term "paperwork" is used in place of the term "procedural."
  • 5
    Medi-Cal members have 90 days after their disenrollment to provide the necessary outstanding information to their local Medi-Cal office to restore their coverage. After the 90 days, people can submit a new application. Historically, California has seen a reinstatement rate of about 4% over the 90-day period.
  • 6
    Jennifer Tolbert and Meghana Ammula, 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision (Kaiser Family Foundation, June 2023).
  • 7
    Of the redeterminations that were received and processed in August 2023, about 20% were ineligible. See California Department of Health Care Services, Medi-Cal Continuous Coverage Unwinding Dashboard (August 2023), 14.

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About this event

Making sure every Californian has access to quality health care should be a top priority for policymakers. Despite significant progress toward universal coverage over the last decade, we know that racial disparities in coverage persist. In addition, many Californians are losing access to health care, including our state’s Medi-Cal system. 

We’ll explore the recent downward trend in Medi-Cal coverage and learn what state leaders can do to ensure that all Californians can access and maintain the health coverage they need in order to be healthy and thrive.

You’ll hear from a panel featuring a researcher, an advocate, a community health worker, and a state official, each offering their unique perspective on efforts to expand health care coverage and build a robust health workforce that reflects communities throughout California.

Speakers

  • Adriana Ramos-Yamamoto, Senior Policy Analyst (moderator)
  • Maria Lemus, Executive Director, Vision y Compromiso
  • Celia Valdez, Director of Health Coverage, Maternal and Child Health Access
  • Elizabeth Landsberg, Director, California Department of Healthcare Access and Information

Thank you to our event sponsors

Blue Shield of California Foundation, Heising Simons Foundation, James Irvine Foundation, Hilton Foundation

About the California Budget & Policy Center

The California Budget & Policy Center is a research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.

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Key Takeaway

Over 50% of eligible students do not participate in SNAP, and the complexity of the rules is a major contributor.

All Californians should have the opportunity to pursue higher education without sacrificing their basic needs. However, food insecurity among college students is an ongoing problem. For example, a 2019 survey of California community college students revealed that over half had trouble paying for their meals.

Over 50% of Eligible College Students Don’t Participate in SNAP

While there are safety net programs in place, such as the Supplemental Nutrition Assistance Program (SNAP) — or CalFresh, as it is known in California — to help people put food on the table, people who are enrolled in college at least half-time face significantly more complex rules to qualify.

A recent government report estimated that over 50% of eligible students did not participate in SNAP. The report pointed to the complexity of student-specific eligibility rules as a likely contributor to low enrollment rates. To qualify, students enrolled at least half-time must meet the regular income eligibility criteria and also meet one of eight additional requirements.1Under SNAP/CalFresh, people are considered students if they are enrolled in an institution of higher education at least half-time, are between the ages of 18 and 49, and are deemed mentally and physically fit. Students who are enrolled less than half-time are not classified as “students” under CalFresh. These students only have to meet the regular income eligibility criteria to receive benefits. Four of these requirements are geared toward parents or caretakers. The other four require that students:

  • Be in their final semester.
  • Work at least 20 hours a week.
  • Participate in work study, or enroll in an employment training program.

If they do not meet these requirements, they cannot receive CalFresh regardless of their income or needs.

A stacked bar chart showing the community college enrollment by age in the fall of 2022 where nearly three-quarters of students enrolled at least half-time are under the age of 25.

CalFresh Requirements Need to Be Simplified for College Students

Given the increasingly high costs of attending college, students with low incomes face a significant disadvantage and a higher likelihood of experiencing food insecurity. In fact, within the California Community Colleges (CCC) system, which serves high percentages of people of color and people with low incomes, over half of all students are enrolled at least half-time. Therefore, these students would need to meet the burdensome requirements to access CalFresh. Nearly three-quarters of these students are under the age of 25, which makes them less likely to meet requirements geared toward parents and families. This suggests that most students in need of food assistance would have to take on jobs on top of their heavy course loads. This could significantly impact their ability to meet their educational goals.

Under federal COVID-19 relief policies, additional exemption criteria were granted to allow more students to receive CalFresh. The expansion allowed students eligible for federal or state work study, regardless of whether they participated, or those with $0 in expected family contributions to qualify for CalFresh if they met the regular income requirements. As a result, student applications for CalFresh more than quadrupled in 2021.2Aaron Kunst, Andrew Cheyne, Becky Silva, and Ruben E. Canedo, CalFresh for College Students: Equitable and Just Access (California Association of Food Banks, March 2022), 4, https://www.cafoodbanks.org/wp-content/uploads/2022/03/College-CalFresh-WhitePaper-final-March2022.pdf. However, these federal exemptions ended in June 2023. Students who qualified for CalFresh via these exemptions will no longer be eligible at their renewal date.

Policymakers Can Ensure College Students Have Better Access to Food Assistance

College students should have the same opportunity as any other Californian to access CalFresh. Policymakers have a responsibility to support college students in meeting their educational goals to ensure a skilled workforce in California.

Federal policymakers can help reduce student hunger by:

  • Reinstating COVID-19 expansions to SNAP.
  • Completely removing the additional red tape that students face to put students on equal footing with everyone else.

In the meantime, state policymakers can continue to support students by investing in administrative support and ensuring that the program is accessible to all eligible students.

Support for this report was provided by the Hilton Foundation.

Health & Safety Net
  • 1
    Under SNAP/CalFresh, people are considered students if they are enrolled in an institution of higher education at least half-time, are between the ages of 18 and 49, and are deemed mentally and physically fit. Students who are enrolled less than half-time are not classified as “students” under CalFresh. These students only have to meet the regular income eligibility criteria to receive benefits.
  • 2
    Aaron Kunst, Andrew Cheyne, Becky Silva, and Ruben E. Canedo, CalFresh for College Students: Equitable and Just Access (California Association of Food Banks, March 2022), 4, https://www.cafoodbanks.org/wp-content/uploads/2022/03/College-CalFresh-WhitePaper-final-March2022.pdf.

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key takeaway

State policymakers must continue to invest in the health workforce in order to meet the needs of Californians. This includes investments in community-led efforts to promote health, such as community health workers and promotores de salud.

Access to health care services is important for everyone’s health and well-being. The state’s workforce must meet the needs of Californians to achieve equitable access to timely and culturally competent health services. While state policymakers have made considerable investments in recent years to bolster the health workforce, investments in various health workforce areas still fall short.

“State leaders must provide ongoing investments in the health workforce to meet the needs of all Californians.”

Investments to Increase Provider Participation in Medi-Cal Are Critical

More than 15 million Californians with modest incomes — nearly half of whom are Latinx — receive free or low-cost health care through Medi-Cal (California’s Medicaid program). In order to better support the millions of Californians who rely on the state’s health safety net, policymakers have taken steps to increase provider participation in Medi-Cal.

Specifically, this year’s 2023-24 budget includes $237.4 million to increase Medi-Cal provider rates effective January 1, 2024. Rate increases are targeted to:

  • primary care, which includes nurse practitioners and physical assistants,
  • maternity care (i.e., obstetrics/gynecology physicians and doulas),
  • and non-specialty mental health services, such as for mental health evaluation and treatment.

The governor’s administration also plans for additional Medi-Cal provider rate increases in future years for hospital outpatient procedures and services, family planning services, emergency physician services, and more.

related resource

See our Report: Californians Need State Leaders to Make Health Care More Affordable to learn how state leaders can use revenues to make progress on health care affordability.

Policymakers Should Also Invest in Community-Led Efforts to Promote Health 

California is home to people with diverse cultural and ethnic backgrounds. Therefore, policymakers should invest in workforce strategies that leverage community-led efforts to improve health. This includes investing in community health workers and promotores de salud, frontline public health workers who are trusted members of their communities. They serve as liaisons between the community and health and social service providers in order to facilitate access to services and improve service delivery. Community health workers and promotores provide services in a way that is linguistically and culturally responsive to the needs of the communities they serve.

State leaders have taken initial steps to integrate community health workers and promotores into the Medi-Cal workforce. For instance, state leaders established a community health worker benefit within the Medi-Cal program in July 2022. This allows these workers to be paid for providing services to Medi-Cal enrollees. These services include:

  • health education to help patients manage chronic health conditions,
  • and health navigation to assist people access health care services.

Additional ongoing investments are needed to develop a strong pipeline of community health workers and also to ensure that workers are paid fair wages.

State Policymakers Should Increase Health Workforce Opportunities for Youth

Youth and young adults have tremendous power to improve health outcomes within their communities — both in the immediate and long term. Examples of youth supporting youth are peer-to-peer programs in school settings and peer support specialists. Research shows that peer-to-peer supports help improve mental health outcomes, decrease substance use, and reduce hospital admission rates. Policymakers should invest in peer support programs that lead to meaningful career pathways for youth and young adults. Particularly, for individuals disconnected from school or employment.

Meeting the health needs of Californians will require significant long-term investment in youth workforce development programs. In 2019, the California Future Health Workforce Commission developed a strategic plan for addressing health workforce gaps. According to a recent progress report, policymakers have made progress on many of the priority recommendations. However, state leaders can do more to recruit and train students from rural areas and other historically underserved communities to practice in community health centers.

Bottom line: State policymakers must continue to build a health workforce that meets the needs of Californians. Policymakers should also invest in efforts to make sure that the health workforce better reflects the diversity of all Californians. This includes their race/ethnicity, disability status, gender identity, and sexual orientation. Doing so will require sustained, ongoing investment.

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All Californians deserve to be able to care for themselves or their loved ones when they are ill. While California is set to become the world’s fourth-largest economy, the state lags behind when comparing paid sick leave laws across the US (see Table). As a result, many California workers face the impossible decision of going to work while sick or losing their paycheck.

In California, state law mandates that eligible workers can earn up to 24 hours of paid sick leave, depending on how many hours they work. Employers may provide workers with more paid sick time. However, workers with low wages — who are disproportionately women and people of color — are far less likely to have additional employer-provided time off. This means many workers have just three days of paid sick leave for an entire year.

How are workers left behind in California?

Left behind: A father works as a janitor and has a daughter who gets the flu. He needs to stay home and care for her. He has earned the maximum amount of paid sick leave mandated by his state, but his employer doesn’t provide any further leave.

  • In California, he uses up his 24 hours to care for his daughter because she needs to stay home from school for three days. He is now left with zero paid sick leave for the remainder of the year.
  • In Colorado, he has 48 hours of paid sick leave. He uses 24 of those hours to care for his daughter, and has 24 hours left for other illnesses that arise.

Left behind: A grocery store cashier tests positive for COVID-19. She needs to stay home for at least five days. While she worked enough hours to accumulate the maximum amount of leave provided by her state, her employer does not provide additional leave.

  • In California, she uses up her 24 hours in the first three days — leaving her with no sick leave for the rest of the year — and must stay home for two more days, unpaid. She wants to stay home for more than five days to fully recover, but that would mean going even longer without pay or working while sick.
  • In New Mexico, she has 64 hours of paid sick leave. She uses 40 hours for her isolation period, and still has 24 hours remaining to further recover.

COVID-19 demonstrated the critical importance of paid sick leave. Unfortunately, the supplemental paid sick leave put in place during the early days of the pandemic has expired. Workers need more paid time off when they or their family members are sick. It’s time for California to catch up to the states that are leading on this issue.

Paid Sick Leave Policies in Effect in the US, 2023

StateHow Many Hours Employees Must Be Allowed to Earn*Applies to Which Employers?
WashingtonNo cap: 1 hour earned for every 40 hours workedAll employers
New Mexico 64 hoursAll employers
Colorado48 hoursAll employers
Minnesota**48 hoursAll employers
Vermont40 hoursAll employers
New Jersey40 hoursAll employers
New York40 or 56 hoursEmployers with < 100 workers (40 hours)***

Employers with 100+ workers (56 hours)
Oregon40 hoursEmployers with 10+ workers
Massachusetts40 hoursEmployers with 11+ workers
Arizona24 or 40 hoursEmployers with < 15 workers (24 hours)

Employers with 15+ workers (40 hours)
Maryland40 hoursEmployers with 15+ workers
Rhode Island40 hoursEmployers with 18+ workers
Connecticut40 hoursEmployers with 50+ workers
Michigan40 hoursEmployers with 50+ workers
Washington DC3, 5, or 7 daysEmployers with < 25 workers (3 days)

Employers with 25-99 workers (5 days)

Employers with 100+ workers (7 days)
California24 hoursAll employers

* Employers may choose to provide more paid sick leave than required by state law, but these laws establish a minimum requirement that workers can earn.

** This will go into effect on January 1, 2024.

*** For employers with 4 or fewer workers, the requirement to provide at least 40 hours of paid sick leave applies only if the employer’s annual net income exceeded $1 million in the previous tax year.

Source: Data from A Better Balance and Budget Center analysis of state paid sick leave laws

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