VOTE YES ON PROP 40
Vote Yes on Prop 40 to help keep hospitals, clinics, and emergency rooms available. Our families should not be the ones left to absorb the consequences of Washington’s choices.
The facts at a glance
Federal changes put about 2 million Medi-Cal members at risk of losing coverage, according to DHCS. [4]
After administrative expenses, 90% of Prop 40 revenue is directed to healthcare. [3]
Prop 40 provides funding to prevent or reduce healthcare closures and service cuts. [3]
What changed in Washington
The federal law HR 1—commonly called the “One Big Beautiful Bill”—changed Medicaid eligibility, enrollment, and financing while extending or expanding major tax reductions for ultra-wealthy taxpayers and businesses. The Congressional Budget Office’s 2026 outlook describes a large reduction in projected Medicaid spending relative to its previous baseline. [1]
The tax reductions were not limited to billionaires. Very wealthy households benefited too. One concrete example: the IRS says the law increased the basic federal estate-and-gift-tax exclusion to $15 million for 2026. We should not talk about the healthcare cuts as though they happened separately from those tax choices. [2]
In California, Medicaid is Medi-Cal
The Department of Health Care Services warned in its January 2026 transition plan that about 2 million Medi-Cal members were at risk of losing coverage because of the new federal eligibility and enrollment requirements. This is a risk estimate—not a count of 2 million people who have already lost coverage. [4]
For a family, coverage is not an abstract budget line. It is the ability to arrange treatment, continue a prescription and seek help without first confronting the full cost of care. Those are the stakes behind the financing debate.
Prop 40 brings in money with a healthcare purpose
After administrative expenses, 90% of the measure’s revenue goes to a healthcare account. The permitted uses for account funds include healthcare coverage, support for hospitals and other providers, and preventing or mitigating facility closures and reductions in clinical services. [3]
The law specifically allows a response to federal funding reductions. It also permits support for healthcare access and safety-net capacity. That gives California a funding tool, rather than forcing the state to rely only on the resources already available. [3]
Protecting care is bigger than one insurance card
A functioning care system needs both coverage and places to use it. Funding that supports providers and keeps services available can matter alongside funding for insurance. That is why the measure names both kinds of spending. [3]
Prop 40 cannot repeal federal eligibility requirements, and it does not automatically preserve each person’s current coverage. California would have to decide how to use the funds within the measure’s rules. The point is to give the state resources to respond—not to pretend a state ballot measure can rewrite federal law. [3][4]
A targeted contribution for a public need
The tax is directed at covered billionaire wealth and applicable trusts, not ordinary wages. The measure also allocates 10% of funds after administrative expenses to public education and food assistance, and protects against replacing existing state funding for the designated purposes. [3]
That is the choice we are asking voters to make: ask billionaires to pay their fair share toward essential services rather than accept diminished access to care as inevitable.
A few more answers
Will Prop 40 reverse the federal law?
No. It creates a state funding source. Federal eligibility rules remain a separate issue; spending must be designed within the applicable legal framework. [3][4]
Does it guarantee my local hospital stays open?
No individual facility is guaranteed a particular outcome. Preventing or reducing closures and service cuts is, however, an expressly authorized use of the money. [3]
The people and institutions behind the evidence
Healthcare evidence publisher; no endorsement inferred
California Department of Health Care Services
Documents the federal changes and Medi-Cal coverage risks. No campaign endorsement is inferred. [4]
source publisher; not a campaign endorser
Congressional Budget Office
Provides official federal budget analysis, not an endorsement of the California measure. [1]
source publisher; not a campaign endorser
Internal Revenue Service
Provides the cited tax guidance. Its guidance is not an endorsement of Proposition 40. [5]
People and organizations backing a Yes vote
First-party endorsement
California Nurses Association
California Nurses Association supports California Proposition 40 (2026).
Support appears in CNA’s California ballot-measure list. [6]
First-party support and sponsorship
SEIU United Healthcare Workers West
SEIU United Healthcare Workers West supports California Proposition 40 (2026).[7]
Keep reading
THE PAIRED PAGE
Can a One-Time Tax Really Help Protect Healthcare?
Read the detailed page →
WHY VOTE YES
Protect Healthcare Jobs and the Businesses Around Them
Read the detailed page →
WHY VOTE YES
Where the Money Goes: Healthcare, Education and Food
Read the detailed page →
WHY VOTE YES
A Billionaire Tax—Not a Tax on Ordinary Paychecks
Read the detailed page →
CHECK THE EVIDENCE
Sources behind this page
Each reference identifies what it establishes. A cited agency or researcher is not automatically a campaign endorser.
01The Budget and Economic Outlook: 2026 to 2036
Congressional Budget Office · February 2026 · Official federal budget analysis
Explains the enacted 2025 reconciliation law’s tax and Medicaid changes. The law retained a 37% top income-tax rate rather than the scheduled 39.6%, and CBO projected $1.2 trillion less federal Medicaid spending over 2026–2035. These are comparisons with the prior-law baseline—not a claim that all healthcare spending ended.
Where to look: Chapter 5 and Appendix A: the 2025 reconciliation act
https://www.cbo.gov/publication/62105
02What’s new — Estate and gift tax
Internal Revenue Service · Live guidance checked September 10, 2026 · Official tax guidance
Public Law 119-21 increased the federal estate and gift tax exclusion to $15 million for 2026. This is one documented tax benefit for large fortunes; it does not mean only billionaires received tax reductions.
Where to look: Working Families Tax Cuts; basic exclusion amounts
https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
03Proposition 40: text of proposed laws
California Secretary of State · 2026 voter guide · Proposed law
The actual proposed rules on taxpayer eligibility, valuation, payments, spending, and reporting. Tax payments begin in 2027; audit authority and special trust rules remain. Section 50310 governs possible amendments.
Where to look: Gov. Code §16355, PDF pp. 4–5; Rev. & Tax. Code §§50301, 50303–50304, 50308–50312, PDF pp. 5–13.
https://vig.cdn.sos.ca.gov/2026/general/pdf/prop40-text-proposed-laws.pdf
04California Releases Plan to Support Medi-Cal Members Through Federal Changes
California Department of Health Care Services · January 29, 2026 · Government healthcare evidence
About 2 million Medi-Cal members are at risk from federal eligibility and enrollment changes, some beginning in October 2026. Additional state funding does not itself repeal those federal eligibility rules.
Where to look:
https://www.dhcs.ca.gov/news/california-releases-plan-to-support-medi-cal-members-through-federal-changes-2/
05Topic no. 409: Capital gains and losses
Internal Revenue Service · Undated; checked September 10, 2026 · Official tax guidance
Explains sale proceeds, adjusted basis, and capital gains; used for the distinction between wealth and realized income.
Where to look: Opening explanation of capital assets and realization
https://www.irs.gov/taxtopics/tc409
06California endorsements
California Nurses Association; hosted by National Nurses United · Undated live roster; checked September 10, 2026 · First-party endorsement
The California Nurses Association’s statewide ballot-measure roster lists support for Prop 40.
Where to look: California Statewide Ballot Measures
https://www.nationalnursesunited.org/california-endorsements
07Prop 40: The California Billionaire Tax Act
SEIU United Healthcare Workers West · Undated live page; checked September 10, 2026 · First-party campaign support
SEIU-UHW’s own page supporting and sponsoring the proposal.
Where to look:
https://www.seiu-uhw.org/ca-billionaire-tax-act/
About this page. Published as a review draft by the Yes on 40 campaign, which advocates passage of the measure. Sources were checked on September 10, 2026. Research estimates, proposed legal provisions and endorsements are identified separately. This page is not individual tax or legal advice. Send corrections with the relevant source to the campaign’s press contact.
Vote Yes on Prop 40.
Vote Yes on Prop 40. California can choose to protect care instead of allowing Washington’s cuts to hurt our families.