In 2017, the Republicans who managed Congress tried mightily to slash federal spending on Medicaid, the government-funded well being program masking low-income households and people.
California, like different states, relies upon closely on federal {dollars} to supply look after its poorest residents. Analyses on the time confirmed the GOP’s proposals would lower Medicaid funds flowing from Washington by tens of billions of {dollars}, maybe much more, forcing state officers to rethink the scope of Medi-Cal.
However the GOP efforts resulted in failure — iconically crystallized by Arizona Republican Sen. John McCain, sick with terminal mind most cancers, issuing his decisive early-morning thumbs-down.
Greater than seven years later, right here we go once more.
With Donald Trump getting ready to reenter the White Home, bolstered as soon as extra by Republican majorities in each homes of Congress, expectations are excessive that the GOP will shortly resurrect its long-desired aim of slicing Medicaid.
Republicans need to finance giant tax cuts, and the GOP platform below Trump pledges to not contact Social Safety or Medicare. To make sure, that’s not set in stone. However for now, as my KFF colleagues have famous, Medicaid appears an terrible lot like low-hanging fruit. (KFF is a well being info nonprofit that features KFF Well being Information.)
Well being officers in California and throughout the nation are on edge about the potential of large-scale Medicaid cuts being enacted as quickly as subsequent 12 months. Such cuts would have an outsize impression within the Golden State, whose 14.7 million Medi-Cal enrollees exceed your complete populations of all however three different U.S. states. Medi-Cal offers well being protection for over 40% of the state’s kids and pays for almost 40% of births. It’s a essential supply of funding for security internet hospitals and group clinics.
And over 60% of its $161 billion price range this 12 months comes by means of Washington.
The potential for giant federal cuts to Medicaid could have been a think about Democratic Gov. Gavin Newsom’s determination to name a particular session of the state legislature this week.
California might search to offset a pointy drop in federal {dollars} with increased taxes or cuts to different state applications. However each these choices may very well be politically untenable. That’s why many well being specialists suppose leaders in Sacramento would nearly definitely have to think about shrinking Medi-Cal.
That might imply slicing any variety of elective advantages, equivalent to dental companies, optometry, and bodily remedy. It may also imply rolling again a few of the bold growth Medi-Cal has undertaken lately. That might embrace some points of California Advancing and Innovating Medi-Cal, a $12 billion program of companies that handle sufferers’ social and financial wants along with their medical ones.
Some observers concern federal cuts might have an effect on the roughly 1.5 million immigrants dwelling within the U.S. with out authorization who’re enrolled in Medi-Cal at an annual price of over $6 billion, almost all of it funded by the state. However others say a extra seemingly route can be to scale back funds throughout the board to the managed care plans that cowl 94% of Medi-Cal enrollees, quite than goal any particular teams of individuals.
“Medicaid is on the chopping block, and I don’t suppose that’s hypothesis,” says Gerald Kominski, a senior fellow on the UCLA Middle for Well being Coverage Analysis. “It’s broadly considered by potential members of Trump’s administration as a program that’s too broad and must be introduced below management.”
Whether or not they can succeed this time stays to be seen. However extra on that later.
Individuals who have adopted earlier GOP efforts to downsize Medicaid say quite a lot of beforehand tried strategies is likely to be again on the desk this time. They may embrace outright caps on federal Medicaid {dollars}; elimination of the core Reasonably priced Care Act coverage below which the feds pay 90% of the price of increasing protection to a wider swath of low-income adults; a piece requirement, which might depress enrollment; and rule modifications supposed to make it more durable for states to attract federal Medicaid {dollars} by way of the usage of taxes on well being care insurers generally known as MCOs.
The primary Trump administration proposed however later dropped modifications to the principles governing such taxes. If related modifications have been adopted this time round, they may trigger monetary complications in California, which has often used MCO taxes to offset Medi-Cal spending from state coffers.
Proposition 35, just lately handed by California voters, is also in danger. The initiative requires the MCO tax to turn out to be a everlasting fixture in 2027, pending federal approval, with the aim of financing billions of {dollars} in new Medi-Cal spending, primarily to extend funding for medical doctors and different suppliers. A federal rule change might upend these intentions.
Termination of the federal authorities’s 90% protection of the ACA Medicaid growth would put a gaping gap within the Medi-Cal price range. Medi-Cal spent over $34 billion in fiscal 12 months 2023 masking the roughly 5 million individuals who enrolled on account of the growth, and almost $31 billion of that quantity was paid by the federal authorities.
If the feds’ share dropped again to its common Medi-Cal fee of fifty%, California must pony up almost $14 billion extra to maintain the growth enrollees lined — and that’s only for a 12 months.
A extra bold GOP push, together with each spending caps and a rollback of federal help for the Medicaid growth, might actually ship California officers scrambling.
In 2017, the state’s Division of Well being Care Companies issued an evaluation displaying {that a} legislative proposal filed by a gaggle of Republican U.S. senators to cap Medicaid spending and finish enhanced funding for the ACA growth, together with another cuts, would lead to almost $139 billion of misplaced federal funding to California from 2020 to 2027.
“There are nearly limitless modifications state leaders might make to Medi-Cal if they’re compelled to try this,” says David Kane, a senior legal professional on the Western Middle on Regulation & Poverty. “And we concern that burden will nearly definitely damage poor individuals and immigrants essentially the most.”
However large Medicaid cuts aren’t a foregone conclusion. In spite of everything, when Trump was within the White Home in 2017, Republicans additionally had Home and Senate majorities and nonetheless didn’t obtain their aim. The political stars may very well be aligning otherwise this time, however the GOP has solely a razor-thin majority within the Home.
A decade into the ACA’s Medicaid growth, some 21 million individuals throughout the nation have protection by way of it, embedding this system extra deeply within the nation’s well being care panorama. In accordance with a 2023 examine from Georgetown College, Medicaid and the associated Youngsters’s Well being Insurance coverage Program cowl a better proportion of the inhabitants in rural counties than in city ones. And as we all know, rural America leans strongly Republican.
Will GOP members of Congress, confronted with a vote on slicing Medicaid, buck their very own constituents?
Edwin Park, one of many authors of that Georgetown examine, thinks there’s an opportunity large cuts will be averted. “Giant numbers of People are both on Medicaid, have members of the family on Medicaid, or know any person on Medicaid,” says Park, a analysis professor at Georgetown’s McCourt College of Public Coverage. “Hopefully its recognition and its significance will win the day.”
This text was produced by KFF Well being Information, which publishes California Healthline, an editorially unbiased service of the California Well being Care Basis.
