Our View: Vote NO on Proposition 34; Vote YES on Proposition 35

Two healthcare propositions appear on the November ballot. Proposition 34 would restrict the spending of revenue derived from a federal pharmaceutical discount. Proposition 35 would permanently impose a tax on some managed care health insurance providers and designate how the money can be spent. Vote NO on Proposition 34 and YES on Proposition 35.

Proposition 34

Less about patient care and more about political rivalry, Proposition 34 pits powerful groups, such as the California Apartment Association, against Michael Weinstein, the longtime president of the Los Angeles-based AIDS Healthcare Foundation, that has spent millions of dollars on two unsuccessful earlier statewide rent control ballot measures. Another measure on this November's ballot is Proposition 33. It is the foundation's third effort to pass statewide rent control.

Voters are mere pawns in an ongoing battle to use the electoral system to further the ambitions of self-interested combatants. For that reason, voters should reject Proposition 34. (In an earlier editorial, The Californian recommended voters reject the equally cynical Prop. 33.)

Proposition 34 targets a federal pharmaceuticals discount given to healthcare providers who serve low-income, at-risk people. The arrangement, which dates back to 1992, allows these organizations to sell the discounted medications at retail prices and use the profits to expand their services to disadvantaged groups.

Proposition 34 would require some of these providers to spend 98% of the revenue on "direct patient care."

But the trick is that the targeted "some providers" is so narrowly defined in Proposition 34 that the requirement likely only applies to Weinstein and his AIDS Healthcare Foundation.

It would only apply to providers that spend at least $100 million on expenses other than direct care, and that also own and operate apartment buildings that have received at least 500 severe health and safety violations in the last decade.

The foundation operates HIV/AIDS clinics in 15 states. It also has many rental properties. including some on LA's Skid Row, that have received health and safety complaints.

Under Weinstein's leadership, the foundation has become embroiled in state and local housing politics. It has aggressively lobbied and campaigned against legislation requiring local governments to permit dense housing. In 2017, it backed a partial development moratorium in Los Angeles and sued to halt construction of residential high rises.

Because Proposition 34 has been so narrowly framed to apply specifically to Weinstein and his foundation, court challenges are expected to bog down its implementation for years to come — maybe indefinitely. Vote NO on Proposition 34.

Proposition 35

Proposition 35 would permanently impose a tax on managed care health insurance providers that arrange or provide services on a monthly payment basis. The measure also designates how the tax revenues can be used.

The tax has been imposed for years. Last summer, as it was set to once again sunset, Gov. Gavin Newsom and state lawmakers extended it to help Medi-Cal provide health services to an expanded group of Californians.

Healthcare providers have long complained that Medi-Cal reimbursement rates are inadequate. Expanding Medi-Cal coverage will only exacerbate the shortfall.

The state legislative analyst estimates renewal of the tax will generate between $6 billion and $9 billion annually through 2026.

In extending the tax, legislators dedicated some revenues to increase provider reimbursement rates. However, providers insist rate increase assurances are needed to prevent service shortages and long patient waits.

Proposition 35 would designate how the tax revenue can be spent and limit the ability of the Legislature and governor to divert the money for other uses. At least a vote of three-quarters of the members of the Assembly and state Senate would be needed to amend Proposition 35 in the future. Proposition 35 also would establish a committee to advise the Department of Health Care Services on use of the tax money.

Initially, Proposition 35 would allow the tax revenues to be used according to Newsom's and the Legislature's recently adopted state budget plan. The money would be used to somewhat increase providers' reimbursement rates, and to train healthcare workers, among other things. Beginning in 2027, a formula will be implemented to designate funding for specific uses.

Proposition 35 enjoys overwhelming support. It is backed by the Coalition to Protect Access to Care, which includes a range of groups involved in healthcare. Among them are the California Hospital Association, the California Medical Association, Planned Parenthood Affiliates of California, labor unions, emergency responders and community health centers. Both the California Democratic Party and the California Republican Party support it.

Although there is no "official" opposition, Newsom indicated he opposes the measure because restricting the use of tax revenues "hamstrings" the ability of future legislators and governors to balance the state budget. Vote YES on Proposition 35.