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 take care of its poorest residents. Analyses on the time confirmed the GOP’s proposals would minimize 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 led to 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 making 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 purpose of chopping Medicaid.
Republicans wish 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 noted, Medicaid appears to be like 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 entire populations of all however three different U.S. states. Medi-Cal supplies well being protection for over 40% of the state’s youngsters and pays for almost 40% of births. It’s a essential supply of funding for security web hospitals and neighborhood clinics.
And over 60% of its $161 billion finances 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 choice to name a special 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 might be politically untenable. That’s why many well being specialists assume leaders in Sacramento would nearly actually have to contemplate shrinking Medi-Cal.
That would imply chopping any variety of optional benefits, resembling dental providers, optometry, and bodily remedy. It may additionally imply rolling again a number of the formidable growth Medi-Cal has undertaken in recent times. That would embrace some elements of California Advancing and Innovating Medi-Cal, a $12 billion program of providers that handle sufferers’ social and financial wants along with their medical ones.
Some observers concern federal cuts might have an effect on the approximately 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 probably route could be to scale back funds throughout the board to the managed care plans that cover 94% of Medi-Cal enrollees, reasonably than goal any particular teams of individuals.
“Medicaid is on the chopping block, and I don’t assume that’s hypothesis,” says Gerald Kominski, a senior fellow on the UCLA Heart for Well being Coverage Analysis. “It’s extensively seen 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 a wide range of beforehand tried strategies may 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 meant to make it tougher for states to attract federal Medicaid {dollars} by means of using taxes on well being care insurers generally known as MCOs.
The primary Trump administration proposed however later dropped modifications to the foundations governing such taxes. If related modifications have been adopted this time round, they might trigger monetary complications in California, which has steadily used MCO taxes to offset Medi-Cal spending from state coffers.
Proposition 35, lately handed by California voters, is also in danger. The initiative requires the MCO tax to turn into a everlasting fixture in 2027, pending federal approval, with the purpose 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 finances. Medi-Cal spent over $34 billion in fiscal 12 months 2023 masking the roughly 5 million individuals who enrolled because 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 coated — and that’s only for a 12 months.
A extra formidable 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 analysis showing {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 lawyer on the Western Heart on Regulation & Poverty. “And we concern that burden will nearly actually harm poor folks and immigrants probably the most.”
However massive Medicaid cuts aren’t a foregone conclusion. In any case, when Trump was within the White Home in 2017, Republicans additionally had Home and Senate majorities and nonetheless didn’t obtain their purpose. The political stars might 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 people throughout the nation have protection by means of it, embedding this system extra deeply within the nation’s well being care panorama. In line with a 2023 study 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 chopping Medicaid, buck their very own constituents?
Edwin Park, one of many authors of that Georgetown research, thinks there’s an opportunity massive cuts will be averted. “Giant numbers of People are both on Medicaid, have members of the family on Medicaid, or know someone on Medicaid,” says Park, a analysis professor at Georgetown’s McCourt Faculty of Public Coverage. “Hopefully its recognition and its significance will win the day.”
This text was produced by KFF Health News, which publishes California Healthline, an editorially unbiased service of the California Health Care Foundation.
