The Office of Health Care Affordability in California has recently capped health care cost increases at 3%. This is a nation-leading initiative aimed at reducing rising health care costs and making critical care more affordable for the state’s residents.
The decision was based on the average annual change in median household income in California between 2002 and 2022, which was 3%, compared to the projected increase in the cost of practicing medicine in the United States by the Center for Medicare and Medicaid Services. Additionally, Californians have experienced a 5.4% annual increase in health care spending over the past two decades.
Governor Gavin Newsom emphasized the importance of making quality health care affordable, stating that it is a top priority for his administration. He sees this action as a crucial first step in addressing outrageous health care costs and making health care more accessible and affordable for all Californians.
The cap on cost increases will be phased in over five years to minimize disruptions and ensure maximum compliance, starting at 3.5% in 2025. This move is part of Governor Newsom’s larger effort to make health care more affordable and accessible for Californians, including his state’s CalRx Naloxone Initiative which has partnered with Amneal to reduce the cost of naloxone to just $24 per pack for the Naloxone Distribution Project, representing a 40% decrease compared to current market prices. This initiative aims to save lives and ensure that people have access to preventative care they need to stay healthy.
