Capitol Alert

Rate hike for healthcare providers gets no mention in tobacco tax petition language

Packs of cigarettes in 2013. A California tobacco tax measure received clearance to begin gathering signatures Friday, with a title and summary that makes no mention of healthcare reimbursement rates.
Packs of cigarettes in 2013. A California tobacco tax measure received clearance to begin gathering signatures Friday, with a title and summary that makes no mention of healthcare reimbursement rates. AP

A tobacco-tax initiative proposed for the November 2016 ballot would raise as much as $1 billion to increase reimbursement rates for healthcare providers, about three-quarters of the estimated revenue that would be generated by the $2-per-pack tax hike.

But Friday’s title and summary from the Attorney General’s Office makes no mention of higher reimbursement rates, a priority of the California Medical Association and some other supporters of the effort, which has raised $2 million.

A Harris spokeswoman was not immediately available for comment. Friday’s title-and-summary clears the way for proponents to begin gathering signatures. They have until Jan. 5, 2016 to gather 365,880 valid voter signatures.

Friday’s title notes that money raised by the tobacco tax would “fund healthcare, tobacco use prevention, research and law enforcement.” And according to the summary, the measure “allocates revenues primarily to increase funding for existing healthcare programs and services,” and also “for tobacco use prevention/control programs, for tobacco-related disease research, for state/local agencies to enhance tobacco law enforcement.”

The proposed initiative’s actual wording allocates 82 percent of the money to a Healthcare Treatment Fund. The proposal reads that, “to the extent possible...reimbursement for healthcare, services, and treatment shall be increased to a level comparable to Medicare reimbursement for the same services based on the Departments specific criteria, including but not limited to, ensuring critical access, specific geographic shortages of services or ensuring quality care...”

The Legislative Analyst’s Office, in its review of the proposal, notes that increasing reimbursement rates could take $790 million to $1.06 billion raised by the tax annually. That compares to $110 million to $140 million in estimated revenue for tobacco-cessation programs.

The medical association, healthcare worker unions and others have tried for years to get lawmakers to reverse the recession-era cut in provider rates for Medi-Cal, the state-federal healthcare program for the poor. Critics argue that the lower rates hinder patients’ access to specialty health care. The Brown administration, though, has questioned the need for higher rates.

A healthcare special session includes discussion of raising reimbursement rates, with a tobacco tax among the possible revenue sources. Yet any tax would require a two-thirds vote of the Legislature.

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