The 2026-27 Budget: Medi-Cal Analysis

Mar 2, 2026 - Rather, the lower revenues are due to the interaction of H.R.  1 ’s new proportionality rules with Proposition  35 ’s limit on taxing commercial enrollment. As we noted in our recent report Considering Medi‑Cal in the Midst of the Changing Fiscal and Policy Landscape , the state likely could amend Proposition 35 with a three‑fourths vote in each house, so long as the changes are consistent with the purpose and intent of the measure.
https://lao.ca.gov/Publications/Report/5146

The 2025-26 Budget: MCO Tax and Proposition 35

Feb 26, 2025 - Assessment and Recommendations for Legislative Oversight While Limited in Detail, Administration ’s Approach to Proposition  35 Appears Reasonable. At the moment, the administration does not have a complete Proposition  35 implementation plan to assess.
https://lao.ca.gov/Publications/Report/4992

Considering Medi-Cal in the Midst of a Changing Fiscal and Policy Landscape

Oct 24, 2025 - Proposition  35, however, limits the size of the tax on commercial enrollment to nominal amounts. (The box below provides more information on Proposition  35 ’s interaction with federal rules.) As a result, the health plan tax under H.R.  1 likely will raise tens of millions of dollars annually, rather than the billions of dollars it currently  generates.
https://lao.ca.gov/Publications/Report/5083

The 2026-27 Budget: Medi-Cal Fiscal Outlook

Nov 19, 2025 - General Fund Backfill Needed Due to Proposition   35 (2024). Our baseline outlook also projects costs to rise due to Proposition  35. The measure made a longstanding provider tax on health plans (known as the Managed Care Organization [MCO] Tax) permanent in state law.
https://lao.ca.gov/Publications/Report/5092

The 2025-26 Budget: Medi-Cal Fiscal Outlook

Nov 20, 2024 - Under current law, previously planned MCO tax-supported augmentations cannot go into effect if voters pass Proposition  35. Instead, Proposition  35 will determine which services and areas receive increased funding.
https://lao.ca.gov/Publications/Report/4941

The 2025-26 California Spending Plan: Health

Oct 16, 2025 - As Figure  6 shows, the largest activity supported by the Proposition  35 spending plan is underlying growth in managed care costs. According to DHCS, managed care plans have increased rates for certain services (such as primary care) in the last few years.
https://lao.ca.gov/Publications/Report/5075

The 2026-27 Budget: Department of Developmental Services

Mar 13, 2026 - This federal HCBS funding has historically supported about 35  percent to 45  percent of total costs in DDS. Of the DDS consumers enrolled in Medi ‑Cal, the majority (about 60  percent based on the most recent available data) qualify automatically because they receive Supplemental Security Income/State Supplementary Payment (SSI/SSP).
https://lao.ca.gov/Publications/Report/5157

The 2025-26 Budget: Health Care Access and Information

Feb 20, 2025 - Moreover, as part of recent federal legislation, Medicare out ‑of ‑pocket costs for insulin are capped at $35, just slightly higher than the $30 cost per vial intended for the CalRx product. These  developments could limit the potential savings effect of CalRx.
https://lao.ca.gov/Publications/Report/4979

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - The reason for the reduction is the recent voter approval of Proposition  35 (2024), which requires the state to spend less MCO tax money on offsetting General Fund spending and more money on provider rate increases.
https://lao.ca.gov/Publications/Report/4951

Mental Health Services Act: Revenue Volatility and the Governor’s Proposal to Reduce Allowable County Reserves

Jul 13, 2023 - In the first few years of experience, counties received a surge in revenue during 2020-21 (60  percent), followed by healthy growth in 2021-22 (8  percent), and a large decline in revenue in 2022-23 (35  percent).
https://lao.ca.gov/Publications/Report/4780