Assembly Appropriations Committee Analysis Says AB 650 Would Cost Medi-Cal “Hundreds of Millions” and Increase Costs for Community Clinics by $500 million

For Immediate Release                                                                                          
May 18, 2021   
Contact: Molly Weedn 
molly@axiomadvisors.com

Sacramento, CA – Last week, the Assembly Committee on Appropriations released its fiscal analysis of Assembly Bill 650 (Muratsuchi), finding it would cost the state’s Medi-Cal program “hundreds of millions” which could balloon to $1 billion. The Assembly Appropriations Committee will be considering AB 650 when it takes up the suspense file on Thursday.

The Appropriations analysis also said that AB 650 would increase community clinic costs an estimated $500 million.

Notably, the analysis only evaluated the cost for state-sponsored programs. Proponents of the legislation estimate that overall, the bill would lead to at least $6 billion in additional health costs, which would further strain our health care system and jeopardize vital services at the worst possible time.

The committee analysis states that, “…as Medi-Cal covers nearly 35% of the population of the state as of March 2021, it is reasonable to assume there will be significant one-time cost pressure on Medi-Cal managed care rates associated with this significant increase in labor costs throughout the health care system.”

Opponents of AB 650 include community clinics, hospitals, physicians, skilled nursing facilities, assisted living providers, senior advocates, business leaders and others who warn the measure is arbitrary, inequitable, and costly.  AB 650 mandates extra pay bonuses to workers at private hospitals, district hospitals, clinics, physicians’ offices, surgery centers and other providers but arbitrarily excludes tens of thousands of workers at county and other public hospitals, county clinics, as well as smaller hospitals, clinics, physicians’ offices and health care providers with fewer than 100 employees.

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