In 2017, the Republicans who managed Congress tried mightily to slash federal spending on Medicaid, the government-funded well being program overlaying 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 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 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 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 objective of slicing Medicaid.
Republicans need to finance massive tax cuts, and the GOP platform underneath 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 seems an terrible lot like low-hanging fruit. (KFF is a well being data 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 12 months. Such cuts would have an outsize affect 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 practically 40% of births. It’s a essential supply of funding for security web hospitals and group clinics.
And over 60% of its $161 billion finances this 12 months comes by the use of Washington.
The potential for large federal cuts to Medicaid might have been a consider Democratic Gov. Gavin Newsom’s choice to name a particular session of the state legislature this week.
California might search to offset a pointy drop in federal {dollars} with greater taxes or cuts to different state packages. However each these choices could possibly be politically untenable. That’s why many well being specialists assume leaders in Sacramento would nearly actually have to think about shrinking Medi-Cal.
That would imply slicing any variety of non-obligatory advantages, equivalent to dental companies, optometry, and bodily remedy. It may also imply rolling again a number of the formidable enlargement Medi-Cal has undertaken lately. That would embody some facets 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 worry federal cuts might have an effect on the roughly 1.5 million immigrants residing within the U.S. with out authorization who’re enrolled in Medi-Cal at an annual price of over $6 billion, practically all of it funded by the state. However others say a extra probably route can be to scale back funds throughout the board to the managed care plans that cowl 94% of Medi-Cal enrollees, slightly 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 Middle for Well being Coverage Analysis. “It’s extensively 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 might depress enrollment; and rule adjustments meant to make it more durable for states to attract federal Medicaid {dollars} via the usage of 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 have been adopted this time round, they might trigger monetary complications in California, which has continuously 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 develop into 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 might upend these intentions.
Termination of the federal authorities’s 90% protection of the ACA Medicaid enlargement would put a gaping gap within the Medi-Cal finances. Medi-Cal spent over $34 billion in fiscal 12 months 2023 overlaying the roughly 5 million individuals who enrolled because of the enlargement, and practically $31 billion of that quantity was paid by the federal authorities.
If the feds’ share dropped again to its common Medi-Cal price of fifty%, California must pony up practically $14 billion extra to maintain the enlargement enrollees lined — 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 enlargement, might actually ship California officers scrambling.
In 2017, the state’s Division of Well being Care Providers 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 enlargement, together with another cuts, would end in practically $139 billion of misplaced federal funding to California from 2020 to 2027.
“There are nearly limitless adjustments state leaders might make to Medi-Cal if they’re pressured to do this,” says David Kane, a senior lawyer on the Western Middle on Legislation & Poverty. “And we worry that burden will nearly actually harm poor individuals and immigrants essentially the most.”
However massive Medicaid cuts will not be 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 objective. The political stars could possibly be aligning in another way this time, however the GOP has solely a razor-thin majority within the Home.
A decade into the ACA’s Medicaid enlargement, some 21 million individuals throughout the nation have protection via 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 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 slicing Medicaid, buck their very own constituents?
Edwin Park, one of many authors of that Georgetown examine, thinks there’s an opportunity massive cuts might be averted. “Massive 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 Faculty of Public Coverage. “Hopefully its reputation and its significance will win the day.”
This text was produced by KFF Well being Information, which publishes California Healthline, an editorially impartial service of the California Well being Care Basis.Â
