One thing the Pfizer-BioNTech and Moderna vaccines have in common: They last only six hours once the first dose is removed from a vial.

This article was published on Thursday, January 14, 2021 in Kaiser Health News.

By Rachana Pradhan

For Heather Suri, a registered nurse in Virginia, the race to vaccinate Americans against covid has thrown up some unprecedented obstacles.

The vaccines themselves are delicate and require a fair bit of focus over time. Consider Moderna's instructions for preparing its doses: Select the number of shots that will be given. Thaw the vials for 2.5 hours in a refrigerator set between 36 and 46 degrees. Then rest them at room temperature for 15 minutes. Do not refreeze. Swirl gently between each withdrawal. Do not shake. Inspect each vial for particulate matter or discoloration. Store any unused vaccine in refrigeration.

And then there's this: Once open, a vial is good for only six hours. As vaccines go, that's not very long. Some flu vaccine keeps almost a month.

"This is very different, administering this vaccine. The process, it takes a whole lot longer than any mass vaccination event that I've been involved with," said Suri, a member of the Loudoun Medical Reserve Corps who joined her first clinic Dec. 28, to vaccinate first responders.

Of the first two covid vaccines on the market, Moderna's is considered more user-friendly. Pfizer-BioNTech's shot must be stored in specialized freezers at 94 degrees below zero. Once out of deep freeze, it lasts just five days, compared with 30 days for Moderna's.

One thing the shots have in common: They last a paltry six hours once the first dose is removed from a vial. That short shelf life raises the stakes for the largest vaccination effort in U.S. history by forcing clinicians to anticipate the exact number of doses they'll need each day. If they don't get it right, precious stores of vaccine may go to waste.

During one recent clinic over several hours, Suri estimated she gave "maybe 25" shots, many fewer than the number of flu shots she's given during similar clinics over the years.

With covid, she said, "the vaccine itself slows things down."

The slow rollout has frustrated people who at Thanksgiving imagined millions of vaccines in arms by Christmas. Promises that 20 million would be vaccinated by New Year's fell well short: Just 2.8 million had the first of two required shots by the end of December, according to data from the Centers for Disease Control and Prevention.

Public health officials say many factors are at play, including a shortage of workers trained to administer shots, covid protocols that require physical distancing at clinics and vaccine allocation numbers from the federal government that fluctuate by the week.

And then there are the logistics of the first covid vaccines, which are complex and make hyper-vigilant practitioners wary of opening too many vials over the course of each day, for fear that anything unused will have to be tossed. Vaccine providers also report wasted or spoiled doses to public health authorities.

"If you get to the end of your clinic and every nurse has half a vial left, what are you going to do with that vaccine?" Suri said. "The clock is ticking. You don't want to waste those doses."

That impulse has led some health personnel to make dramatic decisions at the end of a day: calling non-front-line health workers or offering shots to whoever is at hand in, say, a grocery store, instead of scrambling to find the health workers and residents of nursing homes in the government's first tier for injections.

"We jumped and ran and got the vaccine," said Dr. Mark Hathaway, an OB-GYN in the District of Columbia who received the first dose of a Moderna vaccine on Dec. 26 along with his wife, a registered nurse specializing in nutrition. Both clinicians received vaccines faster than anticipated at a Unity Healthcare clinic when there were extra doses because fewer front-line healthcare workers than expected showed up.

"Healthcare workers have been priority 1a, so our first attempt has always been our staff," said Dr. Jessica Boyd, Unity Healthcare's chief medical officer. Since then, the community health center network has broadened its criteria for extra doses to include staff members or high-risk patients visiting a clinic, she said.

Health officials encourage using the doses to get as many Americans vaccinated as quickly as possible. Public health experts say the need to vaccinate people is especially urgent as a new and more contagious variant of the virus first detected in the United Kingdom is showing up in multiple states. Some states, including New York and California, have loosened their guidelines on who can get vaccinated after an outcry over healthcare providers throwing away doses that didn't meet officials' strict criteria.

The tiers "are simply recommendations, and they should never stand in the way of getting shots in arms instead of keeping vaccine in the freezer or wasting vaccine in the vial," Health and Human Services Secretary Alex Azar said Jan. 6, referring to CDC guidelines saying healthcare workers and residents and staff of long-term care facilities should be first in line, then people at least 75 years old. The Trump administration this week also said it would make more shots available by releasing second doses and urged states to broaden rules to allow anyone 65 or older and any resident with a serious medical condition to get a shot.

Pfizer-BioNTech's ultra-cold storage requirements have made it less ideal for local public health departments and rural areas.

Both of the available vaccines arrive in multidose vials — Pfizer-BioNTech's contains about five doses, Moderna's 10. Neither contains preservatives and they are viable for only six months frozen. By contrast, during the H1N1 pandemic roughly a decade ago, the swine flu vaccines lasted 18 weeks to 18 months, Sen. Chuck Grassley (R-Iowa) wrote in a May 2010 letter to then-HHS Secretary Kathleen Sebelius.

"We can't get the vaccine out fast enough; we have people dying. But, at the same time, we have to get it right," said Claire Hannan, executive director of the Association of Immunization Managers.

The added risk of losing doses due to quick expiration is another thing "causing angst," Hannan said. "You can't just draw it up and let it sit. It can't just sit out like that."

The Trump administration fell significantly short of its promise that 20 million Americans would be vaccinated by the end of December, partly the result of a disjointed and underfunded public health system that has received limited guidance from federal officials. As of Jan. 11, 25.5 million vaccine doses had been distributed nationwide but only 9 million administered, according to the CDC.

Federal officials have released sparse data about who is getting vaccinated, but state information has shown significant variation in vaccination rates depending on the facility. New York Gov. Andrew Cuomo on Jan. 4 said New York City's public hospital system had used only 31% of its allocated vaccines, while private health systems NewYork-Presbyterian and Northwell Health had used 99% and 62%, respectively.

"When you target a priority group, it's inefficient. When you open it up to a larger group, it's efficient … but you're not going to have enough supply," Hannan said. "You still have the challenge of getting those healthcare workers vaccinated and no matter any way you slice it, you still have limited supply. You can't please everyone."

While Pfizer's vaccine has largely been earmarked for large institutions like hospitals and nursing homes, Moderna's has been more widely distributed to smaller sites like public health departments and clinics run by volunteers. State and local officials have begun or will soon vaccinate other priority populations, including police officers, teachers and other K-12 school employees, and seniors overall.

Unlike the covid vaccines, many flu vaccines come in prefilled syringes — each syringe's cap is removed only when a shot is given, which speeds the process and eases some concerns about storage. However, relying on prefilled syringes during a pandemic has its own complications, according to Michael Watson, former president of Valera, a Moderna subsidiary: They take up more fridge space. They're more expensive. And they can't be used for frozen products, he said.

"For all these reasons, a vial was the best and only option," he said.

In Ohio, Eric Zgodzinski, health commissioner for Toledo-Lucas County, said two-thirds of first responders the county surveyed said they would get the vaccine. Still, he said, his department has encountered situations in which a covid vaccine dose is left over in an open vial and officials have turned to a waiting list to find someone who can arrive within minutes to get a jab.

His department also has an internal running list of potential vaccine takers, including health department staffers, people in congregate care settings or those who had scheduled vaccination appointments for later on.

"We're not going to open up a vial for one individual and figure out nine other people right away," said Zgodzinski, whose department planned to distribute 2,200 doses of the Moderna vaccine the week of Jan. 4.

"If I have one dose left, who can I give it to?" he added. "A shot in the arm for anybody is better than it being wasted."

San Francisco editor Arthur Allen and senior correspondent JoNel Aleccia contributed to this report.

Rachana Pradhan: rpradhan@kff.org, @rachanadixit

The initial rollout has been uneven at best because of a lack of a federal strategy on how it should work, with states, hospitals, nursing homes and pharmacies often making decisions on their own about who gets vaccinated and when.

This article was published on Wednesday, January 13, 2021 in Kaiser Health News.

By Phil Galewitz

Last week, after finishing inoculations of some front-line hospital staff, Jupiter Medical Center was left with 40 doses of precious covid vaccine. So, officials offered shots to the South Florida hospital's board of directors and their spouses over age 65.

But that decision sparked outrage among workers left unvaccinated, including those at one of the hospital's urgent care clinics, or who believe the hospital was currying favor with wealthy insiders before getting all its staffers protected, according to a hospital employee who spoke on the condition of not being named.

The move also prompted dozens of calls from donors looking to get vaccinated.

The hospital received 1,000 doses of the Moderna vaccine two days before Christmas, fewer than half of what it requested from the state to cover its workforce. Officials prioritized delivering the vaccine to front-line medical workers who requested it, performing inoculations on Christmas Eve or the holiday weekends.

Patti Patrick, a hospital vice president, said the hospital acted appropriately in its offerings of the vaccine, which has a short shelf life once vials are opened. Neither she nor other administrators who don't work directly with patients were included in this first round of shots.

"This was a simple way to move 40 doses very quickly" before it spoiled, she said.

She added that all front-line staff from the health system, including the clinics, were given the opportunity to get the shots.

Jupiter is not the only hospital in the nation facing questions about its handling of the vaccines. The initial rollout — aimed at healthcare workers and nursing home residents — has been uneven at best because of a lack of a federal strategy on how it should work, with states, hospitals, nursing homes and pharmacies often making decisions on their own about who gets vaccinated and when.

In some hospitals, administrators and other personnel who have no contact with patients or face no risk at work from the virus are getting shots, while patients — and even front-line staff — who are at heightened risk for covid complications are being passed by. Some administrators who have been working remotely throughout the pandemic have been vaccinated, especially at hospitals that decided to allocate doses by age group rather than exposure risk.

Although states and federal health groups laid out broad guidelines on how to prioritize who gets the vaccine, in practice what's mattered most was who controlled the vaccine and where the vaccine distribution was handled.

Stanford Healthcare in California was forced to rework its priority list after protests from front-line doctors in training who said they had been unfairly overlooked while the vaccine was given to faculty who don't regularly see patients. (Age was the important factor in the university's algorithm.)

Members of Congress have called for an investigation following media reports that MorseLife Health System, a nonprofit that operates a nursing home and assisted living facility in West Palm Beach, Florida, vaccinated donors and members of a country club who donated thousands of dollars to the health company.

At least three other South Florida hospital systems — Jackson Health, Mount Sinai Medical Center and Baptist Health — have offered vaccines to donors in advance of the general public, while administering the shots to front-line employees, The Miami Herald reported.

Like Jupiter Medical, the hospitals insist that those offered shots were 65 and older, as prioritized by state officials.

Staffing Problems at Hospitals

An advisory board to the Centers for Disease Control and Prevention designated hospitals and nursing homes to get covid vaccines first because their workers and residents were considered at highest risk, and most states have followed that recommendation. But in many cases, the health institutions have found demand from staffers, some of whom are leery of the voluntary shot, is less than anticipated.

In addition, the arrival of promised shipments has been unpredictable. While the federal government approved the first covid vaccine on Dec. 14, some hospitals did not receive allotments until after Christmas.

That was the case at Hendry Regional Medical Center in Clewiston, Florida, which got 300 doses from the state. The hospital vaccinated 30 of its 285 employees between Dec. 28 and Jan. 5, said R.D. Williams, its chief executive officer. Some employees preferred to wait until after New Year's weekend out of concern about side effects, he said.

The vaccine has been reported to commonly cause pain at the injection site and sometimes produce fever, lethargy or headache. The reactions generally last no more than a few days.

"I'm happy with how it's going so far," Williams said. "I know many of our employees want to be vaccinated, but I don't see it as a panacea that they have to have it today," he said, noting that staffers already have masks and gloves to protect themselves from the virus.

The hospital is also trying to coordinate vaccination schedules so 10 people at a time get the shot to ensure none of the medication is wasted after the multidose vials are thawed. Once vaccine is thawed, it must be used within hours to retain its effectiveness.

As of Jan. 6, Howard University Hospital in Washington, D.C., had vaccinated slightly more than 900 health workers since its first doses arrived Dec. 14. It has received 3,000 doses.

Success has been limited by reluctance among workers to get a vaccine and a lack of personnel trained to administer it, CEO Anita Jenkins said.

"We still have a hospital to run and have patients in the hospital with heart attacks and other conditions, and we don't have additional staff to run the vaccine clinics," she said.

While some hospitals offer the vaccine only to front-line workers who interact with patients, Howard makes it available to everyone, including public relations staff, cafeteria workers and administrators. Jenkins defended the move because, she said, it's the best way to protect the entire hospital.

She noted such employees as information technology personnel who don't see patients may be around doctors and nurses who do. "Working in a hospital, almost everyone runs into patients just walking down the hallway," she said.

At Eisenhower Health, a nonprofit hospital based in Rancho Mirage, California, 2,300 of the 5,000 employees have been vaccinated.

"Our greatest challenge has been managing the current patient surge and staffing demands in our acute and critical care areas while also trying to ensure we have adequate staffing resources to operate the vaccine clinics," said spokesperson Lee Rice.

A Non-System of Inequitable Distribution

Arthur Caplan, a bioethicist at NYU Langone Medical Center in New York City, said hospitals should not be inoculating board members ahead of hospital workers unless those people have a crucial role in running the hospital.

"That seems, to me, jostling to the head of the line and trying to reward those who may be potential donors," he said. But he acknowledged that the hospitals' vaccination systems are not always rational or equitable.

Covid vaccines need to get out as quickly as possible, he added, but hospitals can give them only to people they are connected with.

Caplan noted he was vaccinated at an NYU outpatient site last week, even though his primary care doctor hadn't yet gotten the vaccine because his clinic had not received any doses.

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

While supporters see an increased tobacco tax as more revenue for the state, a disincentive for kids to smoke and a win for public health, the measure could also allow America's premium tobacco companies to gain market share.

This article was published on Tuesday, January 12, 2021 in Kaiser Health News. This story also ran on Fortune.

By Vignesh Ramachandran

Big Tobacco did something unusual in Marlboro Country last fall: It stood aside while Colorado voters approved the state’s first tobacco tax hike in 16 years.

The industry, led by Altria Group, one of the world’s largest tobacco companies, has spent exorbitantly in the past to kill similar state ballot initiatives. In 2018, Altria’s lobbying arm spent more than $17 million to help defeat Montana’s tobacco tax ballot initiative. That same year, it spent around $6 million to help defeat South Dakota’s similar measure.

And four years ago, Altria was the leading funder in a successful $16 million campaign to quash Colorado’s previous proposed tobacco tax increase.

In November, by contrast, Altria didn’t spend a penny in opposition and Colorado voters overwhelmingly approved the tax with two-thirds support. Likewise, in Oregon, Big Tobacco stayed on the sidelines while a tax hike passed there.

The tax measures are major wins for anti-smoking advocates after a string of defeats but, in an example of how politics makes strange bedfellows, Colorado’s tax might not have been possible without Altria’s help. And, advocates said, the way those measures passed could provide a blueprint for states to follow in future elections.

In Colorado, Altria, the parent company of Marlboro cigarette maker Philip Morris, insisted that a minimum price be included in the proposal, according to The Colorado Sun, citing emails between political consultants and Gov. Jared Polis’ office. So while supporters see an increased tobacco tax as more revenue for the state, a disincentive for kids to smoke and a win for public health, the measure could also allow America’s premium tobacco companies to gain market share.

The Colorado measure will increase the total state-levied tax from 84 cents to eventually $2.64 per pack by 2027. The tax rate on vaping products, not currently taxed, will be 30% of the manufacturer’s list price in 2021, gradually increasing to 62% by 2027. The proposition also set the minimum price per pack of cigarettes at $7 as of Jan. 1 and that floor rises to $7.50 in 2024. The change could effectively help premium cigarette companies corner the market, since discount cigarettes would rise to at least $7.

Discount cigarette companies Liggett Group, Vector Tobacco and Xcaliber International — which funded opposition to the tax initiative, Proposition EE — tried to sue the state over the minimum tax provision, alleging “Philip Morris will reap huge benefits from the new legislation” and the changes will “destroy their ability to compete in Colorado.” In December, a federal judge rejected the company’s request for a preliminary injunction. A spokesperson for Liggett said the company plans to appeal.

“When it came to entities like Altria and other stakeholders that we engaged in the legislative process, I think that they saw the writing on the wall,” said Jake Williams, executive director of Healthier Colorado and one of the key organizers behind Proposition EE. “And it helped us get through the legislative process, not just with Democratic votes, but Republican votes to refer the measure to the ballot.”

Altria officials said in a statement that their tobacco companies oppose excise tax increases, but they did not say whether they had worked with Colorado lawmakers.

“Altria did not advocate for or against Proposition EE, and after evaluating the content and intent of this measure, Colorado voters decided to vote in favor of it, some aspects of which were focused on tobacco harm reduction and may help transition adult smokers to a non-combustible future,” the statement said.

Polis’ office did not respond to a request for comment. The Colorado Attorney General’s Office said it would not comment on matters under active litigation. State Democratic Sen. Dominick Moreno and Rep. Julie McCluskie, both state sponsors for the legislation, declined to comment for the same reason. Fellow Democrats Rep. Yadira Caraveo and Sen. Rhonda Fields, also state sponsors for the legislation, did not respond to requests for comment.

Colorado campaign finance records show Altria and Altria’s lobbying arm in 2020 contributed to funds that support both Democratic and Republican candidates in the state — a pattern playing out nationally.

Williams said Altria’s absence of public opposition wasn’t the only factor in the initiative’s success. The tax revenue will initially fund revenue lost during the covid-19 pandemic, then fund tobacco use prevention and eventually preschool education.

The American Lung Association, which supported the Colorado measure, said it believes tobacco taxes are among the most effective ways to reduce tobacco use, especially among youths, who are more sensitive to changes in price. The organization cites studies that found every 10% increase in the price of cigarettes reduces consumption by about 4% for adults and 7% for teens.

“Without tobacco industry opposition, it’s very popular among the public,” Thomas Carr, the association’s director of national policy, said of the tax increase. “We’ve long seen it in polling on the subject.”

There was no major industry opposition to the Oregon increase, either. Its tobacco tax increase — Measure 108 — also got a resounding two-thirds of support. But Oregon didn’t negotiate with Altria lobbyists or set a minimum price provision, according to Elisabeth Shepard, campaign manager for Yes for a Healthy Future.

“I don’t know what the [Colorado] deal was,” Shepard said. “All I know is that before it even made it to the ballot, Altria indicated that they were not going to oppose the measure and stuck with their word.”

While Shepard worried until Election Day whether Big Tobacco would swoop in with opposition in Oregon, it didn’t. She believes her campaign worked because the effort had early resources and money, the tax was targeted to fund the Oregon Health Plan (the state’s Medicaid), and her campaign’s coalition had 300 endorsers, including those in health and business communities.

“We had the left, we had the right, we had the far-right, we had the far-left,” Shepard said.

Her campaign paid its advisory committee members, including representatives from affected communities such as Indigenous Oregonian tribes. At least 30% of American Indian and Alaska Native adults in the state smoke cigarettes. Oregon’s measure increases tobacco taxes $2 per pack, from $1.33 to $3.33, as well as creates a new tax for e-cigarettes. The revenues will help fund an estimated $300 million for the state’s health plan.

Altria did not respond to a request for comment about Oregon tobacco taxes, but the company has previously said it opposed Oregon’s measure.

Shepard believes her campaign model could work in other states. Other anti-smoking advocates took note of the 2020 election.

“We certainly support establishing minimum prices for all tobacco products in conjunction with tobacco tax increases, as we know increasing the price of tobacco products is one of the most effective ways to reduce tobacco use,” said Cathy Callaway, director of state and local campaigns for the American Cancer Society Cancer Action Network.

It could just come down to a state’s voters and its politics, according to Mark Mickelson, a former Republican in South Dakota’s legislature. Mickelson was behind creating his state’s failed 2018 tobacco tax ballot initiative.

“We just got beat,” Mickelson said. The opposition “got ahead of us on the message. They had a lot more money and had just played on doubts that the [tax revenue] money would go to tech ed.”

The average state cigarette tax is $1.88 per pack, but it varies across the country — as high as $4.35 in New York but only 44 cents in North Dakota, where a 2016 ballot initiative to increase that to $2.20 was defeated.

Tax increases can translate into hundreds of millions of dollars in new revenue for states, said Richard Auxier, senior policy associate at the nonpartisan Urban-Brookings Tax Policy Center.

“It’s a little easier to pass a tax on someone else, which is often how this is seen — passing this tax on smokers, rather than passing it on all working people, [compared to] if you were to increase income tax or … a sales tax.”

But not all voters get a say.

In Kentucky, which isn’t a referendum state, Republican state Rep. Jerry Miller said there’s not a lot of sympathy for tobacco companies anymore.

“The agriculture community, which used to be on the same page with cigarette companies, are now always in opposition because the cigarette companies are always trying to tweak their formula to use cheaper tobacco,” he said.

Miller’s recent vaping tax bill failed in the state legislature, but he’s working on a new one.

“We don’t have that tradition or the mechanism that somebody collects 10,000 signatures and they get a referendum on a ballot,” he said. “That’s why things like this have to go through the legislature — and so it really just depends on the state [government].”

Newsom's 2021-22 fiscal year spending plan does not include additional public health money for local health departments steering California's pandemic response.

This article was published on Tuesday, January 12, 2021 in Kaiser Health News.

By Angela Hart

SACRAMENTO, Calif. — The coronavirus pandemic doomed Gov. Gavin Newsom's ambitious plans last year to combat homelessness, expand behavioral health services and create a state agency to control soaring healthcare costs.

But even as the pandemic continues to rage, California's Democratic governor said Friday he plans to push forward with those goals in the coming year, due to a rosier budget forecast buoyed by higher tax revenue from wealthy Californians who have fared relatively well during the crisis.

Newsom's $227.2 billion budget blueprint also prioritizes billions to safely reopen K-12 schools shuttered by the pandemic, $600 payments for nearly 4 million low-income Californians — in addition to federal stimulus payments — and coronavirus relief grants and tax credits for hard-hit small businesses.

However, his 2021-22 fiscal year spending plan does not include additional public health money for local health departments steering California's pandemic response, which have been chronically underfunded. He vowed to support cities and counties by boosting state testing and contact tracing capacity, speeding vaccination efforts and funding state-run surge hospitals that take overflow patients.   

Newsom said Friday his budget reflects a "pandemic-induced reality" with investments aimed at spurring California's economic recovery by helping businesses and people living in poverty. Wealth and income disparities, he added, "must be addressed."

But Democrats in control of the state legislature, county leaders and social justice groups say that will be difficult to achieve because Newsom's spending plan does not sufficiently fund health and social safety-net programs.

And without additional public health money, local leaders worry California will not be able to adequately control the spread of the virus.

"County public health is drowning," said Graham Knaus, executive director of the California State Association of Counties. "We are triaging right now between testing, contact tracing and vaccination, and it's impacting the response to the pandemic."

Newsom's budget proposal is the first step in a months-long negotiation process with the Democratic-controlled legislature, which has until June 15 to adopt the state budget that takes effect July 1. Lawmakers have become increasingly frustrated with the governor's response to the pandemic, including his unilateral spending decisions in response to the emergency. Newsom is also facing a burgeoning recall effort, backed by heavyweight Republicans such as former San Diego Mayor Kevin Faulconer, who is considering challenging Newsom in the 2022 California gubernatorial election.

Newsom said he expects to make some tough calls on spending even though the state anticipates a $15 billion budget surplus for the coming fiscal year, largely because a state fiscal analysis projected deficits in subsequent years.

"While we are enjoying the fruits of a lot of one-time energy and surplus, it's not permanent and we have to be mindful of over-committing," Newsom said, explaining why he didn't include funding to expand Medicaid to more unauthorized immigrants.

Some lawmakers say they will nonetheless press Newsom to use higher-than-expected revenues — and perhaps seek new taxes — to expand health coverage to more Californians.

The following healthcare proposals factor heavily into Newsom's 2021-22 budget proposal.

Covid Relief

Newsom committed $4.4 billion in his budget to vaccine distribution, increased testing, contact tracing and other short-term pandemic expenses. Because that spending is related to the public health emergency, the state expects at least 75% to be reimbursed by the federal government and insurance payments.

He also proposed $52 million to fund costs at state-run surge hospitals, including support staff. And he is asking lawmakers to sign off on a covid relief package that would provide funding before the start of the fiscal year in July. It would include $2 billion to help school districts reopen classrooms to in-person instruction beginning in February by paying for protective equipment, ventilation systems and adequate testing. It would also commit billions to economic recovery, such as stimulus payments for individuals, and grants and tax credits for struggling small businesses.

Newsom also wants to increase the budget for the Department of Industrial Relations by $23 million to fund up to 113 additional workplace inspectors at the California Division of Occupational Safety and Health to police health order violations at businesses and enforce workplace safety laws.

Transforming Medi-Cal

Spending for Medi-Cal, the state's Medicaid program for low-income residents, is expected to grow in the coming year because of the economic impact of the pandemic — as is its enrollment. The program has roughly 13 million enrollees, or about one-third of the state population.

In the coming year, Newsom will also press forward with a major overhaul of Medi-Cal, through a project called CalAIM, to provide new benefits emphasizing mental healthcare and substance use treatment, and pay for some nontraditional costs such as housing assistance. The hope is the program would divert homeless and other vulnerable people away from expensive emergency room care and keep them out of jail.

State Medi-Cal officials estimate the program would cost $1.1 billion for the first year. The state is working with the federal Centers for Medicare & Medicaid Services to obtain approval for the program.

Newsom also wants to expand Medi-Cal benefits to cover over-the-counter cold medicine and blood glucose monitors for people with diabetes. His budget includes $95 million for a major expansion of telehealth services that would permanently provide higher payments for virtual doctor visits.

Controlling Healthcare Costs

Newsom is proposing a new state agency, the Office of Healthcare Affordability, which he said would help control healthcare costs. He budgeted $63 million over the next three years for the office, which would set healthcare cost targets for the healthcare industry — along with financial penalties for failing to meet future targets.

Powerful health industry groups said they are still assessing whether they will support the proposal. But some expressed concern last year when Newsom floated the idea. Doctors and hospitals routinely fight proposals in Sacramento that might limit their revenue.

Newsom acknowledged Friday the task would be "tough."

Battling Homelessness and Food Insecurity

Newsom is proposing a one-time infusion of $1.75 billion to battle homelessness.

Of that, Newsom said, $750 million would help counties purchase hotels and transform them into permanent housing for chronically homeless people. Another $750 million would allow counties to purchase facilities to treat people with mental illness or substance use disorders. And $250 million would help counties purchase and renovate homes for low-income older people.

Newsom's budget also includes $30 million to help overwhelmed food banks and emergency food assistance programs.

Lawmakers said they plan to negotiate for even more funding for homelessness and safety-net programs.

"We absolutely need to significantly increase our investment to address homelessness because the need is so intense," said Assembly member David Chiu (D-San Francisco). "And I don't think there's a single legislator who isn't incredibly concerned about the food insecurity we're seeing: lines around the block for food banks in what should be the wealthiest state in the country."

Expanding Health Coverage

Newsom did not include money in his proposed budget to expand Medi-Cal to unauthorized immigrants age 65 and older. He had previously promised to fund the proposal, estimated to cost $350 million per year once fully implemented, but he said Friday the state cannot afford to commit to ongoing costs with a projected budget deficit starting in fiscal year 2022-23. California already offers full Medicaid benefits for income-eligible unauthorized immigrants up to age 26.

Some lawmakers and healthcare advocates countered that providing health insurance for undocumented immigrants would save lives and reduce costs, especially during the pandemic, and vowed to continue to fight for the expansion.

"To say we are disappointed is describing it very lightly," said Orville Thomas, a lobbyist with the California Immigrant Policy Center. "These are Californians dying and getting sick at disproportionate rates during covid."

Angela Hart: ahart@kff.org, @ahartreports