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 reduce 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 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 rapidly resurrect its long-desired objective of chopping Medicaid.
Republicans need to finance massive tax cuts, and the GOP platform underneath Trump pledges to not contact Social Safety or Medicare. To make certain, that’s not set in stone. However for now, as my KFF colleagues have noted, 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 for large-scale Medicaid cuts being enacted as quickly as subsequent yr. Such cuts would have an outsize impression within the Golden State, whose 14.7 million Medi-Cal enrollees exceed the whole 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 neighborhood clinics.
And over 60% of its $161 billion price range this yr comes by means of Washington.
The potential for large federal cuts to Medicaid might have been a consider Democratic Gov. Gavin Newsom’s resolution to name a special session of the state legislature this week.
California may search to offset a pointy drop in federal {dollars} with greater 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 definitely have to think about shrinking Medi-Cal.
That would imply chopping any variety of optional benefits, reminiscent of dental providers, optometry, and bodily remedy. It may also imply rolling again a few of the bold growth Medi-Cal has undertaken in recent times. That would embody 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 worry federal cuts may have an effect on the approximately 1.5 million immigrants residing within the U.S. with out authorization who’re enrolled in Medi-Cal at an annual value of over $6 billion, almost all of it funded by the state. However others say a extra doubtless route could be to cut back funds throughout the board to the managed care plans that cover 94% of Medi-Cal enrollees, fairly 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 broadly considered by potential members of Trump’s administration as a program that’s too broad and must be introduced underneath 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 embody outright caps on federal Medicaid {dollars}; elimination of the core Inexpensive Care Act coverage underneath which the feds pay 90% of the price of increasing protection to a wider swath of low-income adults; a piece requirement, which may depress enrollment; and rule adjustments meant to make it tougher for states to attract federal Medicaid {dollars} by means of using taxes on well being care insurers often called MCOs.
The primary Trump administration proposed however later dropped adjustments to the principles governing such taxes. If comparable adjustments had been adopted this time round, they may trigger monetary complications in California, which has steadily used MCO taxes to offset Medi-Cal spending from state coffers.
Proposition 35, not too long ago 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 objective of financing billions of {dollars} in new Medi-Cal spending, primarily to extend funding for docs and different suppliers. A federal rule change may 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 yr 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 charge of fifty%, California must pony up almost $14 billion extra to maintain the growth enrollees coated — and that’s only for a yr.
A extra bold GOP push, together with each spending caps and a rollback of federal assist for the Medicaid growth, may 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 adjustments state leaders may make to Medi-Cal if they’re compelled to try this,” says David Kane, a senior legal professional on the Western Heart on Regulation & Poverty. “And we worry that burden will nearly definitely damage poor folks and immigrants essentially the most.”
However massive Medicaid cuts should not 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 objective. The political stars might be aligning in a different way 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 Kids’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 examine, thinks there’s an opportunity massive cuts could be averted. “Massive numbers of Individuals are both on Medicaid, have relations on Medicaid, or know anyone on Medicaid,” says Park, a analysis professor at Georgetown’s McCourt Faculty of Public Coverage. “Hopefully its reputation 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.
