SACRAMENTO, CA — With just over seven weeks remaining before election day, the No on 40 coalition today launched its “Weekly Whopper” series, starting with a fact check on the false and misleading claim that Proposition 40 will address California’s healthcare needs. In truth, Proposition 40 relies on an unstable revenue source, has no safeguards to ensure funds are actually directed to patient care or lower costs, and will ultimately harm the healthcare workforce and safety net it purports to protect.
KEY QUESTIONS: If Prop. 40 is the right solution, why are the very groups proponents claim will benefit most – doctors, community clinics, hospitals, and healthcare providers – all so strongly opposed? What safeguards does Prop. 40 include to ensure funding actually goes to patient care and lower healthcare costs instead of being used as a Sacramento slush fund or to pad insurance and pharmaceutical company profits?
THE CLAIM: Proposition 40 will address California’s healthcare needs.
THE FACTS:
California’s leading healthcare groups are all opposed: The California Medical Association, California Primary Care Association, Planned Parenthood Affiliates of California, California Hospital Association, California Children’s Hospital Association, United Domestic Workers, and others are all saying no to 40.
It was drafted without meaningful input from these leaders. Prop. 40 is being pushed by a single special interest, with a long history of using ballot measures as blunt negotiating tools. None of California’s biggest healthcare leaders were included in the development of this measure – and it shows.
There are no safeguards to ensure funds go to patient care: In the measure’s 30+ pages, just one paragraph is dedicated to how funds will be spent on healthcare – and that text lacks necessary specificity and accountability to ensure Prop. 40 actually addresses California’s healthcare challenges. There is nothing to guarantee that care improves or costs come down for Californians.
Health insurance and pharmaceutical companies stand to profit: Under Prop. 40 health insurance and pharmaceutical companies stand to benefit the most. There are no protections against these companies from padding their profits and bonuses at the expense of California’s taxpayers and patients. Health insurers already make billions from Medi-Cal, and under Prop. 40 will see even more.
Sacramento politicians hold the pursestrings: Prop. 40 gives the California State Legislature and next administration the equivalent of a blank check, without the safeguards to protect funds from being repurposed and repackaged however they see fit. This is all but guaranteed. Just look at how new revenue originally intended for healthcare – like the Prop. 56 tobacco tax passed by voters in 2016 – has been diverted to backfill budget shortfalls.
It will not collect the revenue promised: Even if 40 passes, it won’t collect the promised revenue. According to Stanford University research, due to the departure of a number of top entrepreneurs, innovators, and investors before residency restrictions kicked in, the measure is estimated to collect less than half of the roughly $100 billion projected.
It will blow a bigger hole in California’s safety net: These departures have already removed more than half a trillion dollars – or nearly 30% of aggregate billionaire wealth – from the state’s tax base. This means Prop. 40 will not only fail to deliver the revenue promised, but it will also blow a massive hole in California’s budget, safety net, and economy as the revenue base continues to crumble.
It dedicates one-time funds to ongoing needs: Prop. 40 also repeats a cruel and irresponsible cycle, in which the state commits temporary, one-time revenues toward ongoing needs only to slash services and programs when funds run dry. Patients, providers, and healthcare programs need reliable, sustainable investment, not a short-term scheme that makes future budget cuts inevitable.
WHAT THEY’RE SAYING:
California Primary Care Association (CPCA) President & CEO Francisco Silva:
“It’s unfathomable that proponents of [Prop 40] are claiming their efforts are intended to help Medi-Cal, while at the very same time they are advocating for policies that will decimate the very safety-net and workforce that Medi-Cal patients rely on. Proponents have a long history of promoting flawed and deceptive proposals that actually harm patients. This measure is no different.”
California Medical Association (CMA) President Rene Bravo, MD:
“California physicians support a strong Medi-Cal program, but [Prop 40] is the wrong way to address the state’s health care funding challenges and was developed without input from the physicians, hospitals, clinics, and other providers who care for Medi-Cal patients every day. [Prop 40] relies on an unstable revenue source, provides no clear accountability for how the money would be spent, and does not offer the long-term funding solution that patients and health care professionals need.”
Planned Parenthood Affiliates of California (PPAC) President & CEO Jodi Hicks:
“While Planned Parenthood Affiliates of California recognizes the need to address the devastating impacts of H.R. 1 and ongoing attacks on health care, [Prop 40]’s uncertain impacts on the state budget and lack of specificity on health care allocations will do more harm than good in the long term. In order to protect access to care for the millions of patients that safety net providers like Planned Parenthood serve, we have opposed this measure and urge our health care partners to do the same in order to work towards a real long term solution.”
California Children’s Hospital Association President & CEO Ann-Louise Kuhns:
“California’s children deserve a stable, sustainable health care system. The one-time tax proposed by Prop 40 doesn’t provide that stability. Worse, the measure jeopardizes existing revenue that children on Medi-Cal, including those with the most medically complex conditions, rely upon for their care.”
California Hospital Association (CHA):
“The California Hospital Association is aligned with a broad coalition of health care organizations, unions, and everyday Californians in opposition to a ballot measure that would impose a tax on California’s wealthiest residents. While access to health care in California is more precarious than ever, [Prop 40] is simply the wrong answer. This measure would only temporarily generate funding and threaten the overall health of California’s finances over the long term, further jeopardizing resources for life-saving health care services. This is the wrong time to add uncertainty into California’s health care system, with dozens of hospitals already at risk of closure and access to care for Californians deteriorating in real time. California can’t afford this poorly designed tax measure.”