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 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.
But 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.
More than seven years later, right here we go once more.
With Donald Trump making ready to reenter the White House, 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 reducing Medicaid.
Republicans wish to finance massive tax cuts, and the GOP platform beneath Trump pledges to not contact Social Security or Medicare. To make sure, that’s not set in stone. But for now, as my KFF colleagues have noted, Medicaid seems an terrible lot like low-hanging fruit. (KFF is a well being data nonprofit that features KFF Health News.)
Health 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 influence 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 is a vital 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 large federal cuts to Medicaid might 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 larger taxes or cuts to different state applications. But each these choices may very well be politically untenable. That’s why many well being specialists suppose leaders in Sacramento would nearly actually have to contemplate shrinking Medi-Cal.
That might imply reducing any variety of optional benefits, comparable to dental companies, optometry, and bodily remedy. It may additionally imply rolling again among the bold enlargement Medi-Cal has undertaken in recent times. That might embody some elements of California Advancing and Innovating Medi-Cal, a $12 billion program of companies that deal with 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 residing 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. But others say a extra doubtless route could be to scale back funds throughout the board to the managed care plans that cover 94% of Medi-Cal enrollees, somewhat than goal any particular teams of individuals.
“Medicaid is on the chopping block, and I don’t think that’s speculation,” says Gerald Kominski, a senior fellow on the UCLA Center for Health Policy Research. “It is widely viewed by potential members of Trump’s administration as a program that is too broad and needs to be brought under control.”
Whether they will succeed this time stays to be seen. But extra on that later.
People who’ve adopted earlier GOP efforts to downsize Medicaid say quite a lot of beforehand tried strategies could be again on the desk this time. They might embody outright caps on federal Medicaid {dollars}; elimination of the core Affordable Care Act coverage beneath 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 using taxes on well being care insurers generally known as MCOs.
The first Trump administration proposed however later dropped modifications to the principles governing such taxes. If related modifications have been adopted this time round, they might trigger monetary complications in California, which has incessantly used MCO taxes to offset Medi-Cal spending from state coffers.
Proposition 35, just lately handed by California voters, may be 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 enlargement would put a gaping gap within the Medi-Cal price range. Medi-Cal spent over $34 billion in fiscal 12 months 2023 overlaying the roughly 5 million individuals who enrolled because of the enlargement, 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 enlargement 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 assist for the Medicaid enlargement, might actually ship California officers scrambling.
In 2017, the state’s Department of Health Care Services 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 enlargement, together with another cuts, would end in almost $139 billion of misplaced federal funding to California from 2020 to 2027.
“There are almost limitless changes state leaders could make to Medi-Cal if they are forced to do that,” says David Kane, a senior lawyer on the Western Center on Law & Poverty. “And we fear that burden will almost certainly hurt poor people and immigrants the most.”
But huge Medicaid cuts are usually not a foregone conclusion. After all, when Trump was within the White House in 2017, Republicans additionally had House and Senate majorities and nonetheless didn’t obtain their aim. The political stars may very well be aligning in another way this time, however the GOP has solely a razor-thin majority within the House.
A decade into the ACA’s Medicaid enlargement, some 21 million people throughout the nation have protection by it, embedding this system extra deeply within the nation’s well being care panorama. According to a 2023 study from Georgetown University, Medicaid and the associated Children’s Health Insurance 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 reducing Medicaid, buck their very own constituents?
Edwin Park, one of many authors of that Georgetown research, thinks there’s an opportunity huge cuts might be averted. “Large numbers of Americans are either on Medicaid, have family members on Medicaid, or know somebody on Medicaid,” says Park, a analysis professor at Georgetown’s McCourt School of Public Policy. “Hopefully its popularity and its importance will win the day.”
This article was produced by KFF Health News, which publishes California Healthline, an editorially unbiased service of the California Health Care Foundation.
Bernard J. Wolfson:
[email protected],
@bjwolfson
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