California voters approved a measure aimed at limiting AIDS Healthcare Foundation spending

California voters approved Proposition 34, a measure from a lobbying group aimed at limiting spending by the AIDS Healthcare Foundation, which bankrolled several housing control programs and criticized the measure as unconstitutional retaliation.

The Associated Press called the move Wednesday evening. According to the California Secretary of State, the measure is ahead 50.8% to 49.2%.

As written, Proposition 34 applies to health care providers who have spent more than $100 million in any 10-year period on things other than direct patient care and have operated more than 500 multifamily homes for “serious health and safety violations.”

If a health care provider meets that standard it will be required to spend 98% of the revenue from the state-sponsored drug program on direct patient care.

The measure was sponsored by the California Apartment Assn., whose campaign committee said the new rules would apply to many associations and noted that the language of the plan does not single out any particular group.

In the weeks leading up to the election, much of the advertising in favor of the same did not single out a specific health care provider, but emphasized that Proposition 34 would save taxpayers money while increasing spending on patient care.

However, the housing association singled out the AIDS Healthcare Foundation by name as a target during the campaign and no other healthcare organization has such a well-publicized history of housing health and safety complaints and spending money on things outside of direct patient care. .

The AIDS Healthcare Foundation has bankrolled three plans to dramatically expand rent control in recent years, including Proposition 33 on this year’s ballot.

All of those measures were defeated, but they forced the real estate industry to spend hundreds of millions of dollars in opposition.

The AIDS Healthcare Foundation, or AHF, earns a lot of money from the federal drug program in question. The program, known as 340B, requires drugmakers to sell their drugs at discounts to certain health care providers, who in turn charge health insurance companies more for the drugs.

According to California’s nonpartisan Legal Analyst’s Office, the program is supposed to allow providers like AHF to help low-income patients, but the law “does not directly limit how providers spend their money from federal drug rebates.”

Proposition 34’s restrictions could hamper AHF’s ability to fund rent control alternatives or use the apartments it owns in and around Skid Row, which has been plagued by vermin, elevator failures and other problems, according to a Times investigation published last fall.

In a statement, AHF president Michael Weinstein said the organization will continue to fight for employers.

“The results of Propositions 33 and 34 prove only one thing: When billionaires spend more than $170 million lying and confusing voters, they are guaranteed to win,” Weinstein said.

What happened next is unclear.

Before the election, the AHF unsuccessfully sued to remove Proposition 34 from the ballot, arguing that it was unconstitutional because it was too union-centric.

However, one legal expert told The Times that courts are generally reluctant to remove measures before an election and that there was a good chance a judge would find the measure unconstitutional if it passed.

In an email, AHF spokesperson, Jacki Schechner, said the organization will decide what legal action should be taken once it sees how the law will be implemented.

The Yes on 34 campaign declared victory last week, before the race was called by the Associated Press, saying voters had taken action to close a “loophole” that allows health care organizations to spend money earmarked for patients on “luxury condos, CEO bonuses, naming rights . in sports fields, and in political campaigns.”