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Graham-Cassidy Threatens the Health Coverage of Low-Income Californians: Seven Key Takeaways

Call to Action

Western Center encourages all of its partners, allies, and supporters to contact Congress todayIndivisble has set up a webpage, Calls to Kill Trumpcare, which allows for peer-to-peer calling to constituents in states with key swing Senators.  SEIU, Health Access, and others are setting up phone banks around the state at FightandResist.org. Should Graham-Cassidy pass through the Senate, it will be given an up or down vote on a very short timeframe in the House.


The Graham-Cassidy bill, the latest attempt to repeal the Affordable Care Act (ACA), is an all-out attack on health programs serving low-income people and goes beyond prior proposals to roll back the gains made with the ACA.  States like California that expanded their Medicaid programs (known as Medi-Cal in California) are specifically targeted through an unequal funding scheme.  Graham-Cassidy is worse than previous repeal attempts because it would end all funding for the Medicaid expansion group, not just phase it down.  Graham-Cassidy replaces federal funding and the subsidies available through Covered California with a meager, temporary block grant that does not match current expenditures.  It then spreads those meager funds more widely by including the states that chose not to expand their Medicaid programs until it ends them completely.

Here are Western Center’s Seven Takeaways on how the Graham-Cassidy Bill would hurt our Medi-Cal population:

  1. Graham-Cassidy would raise the number of uninsured Californians, reversing the historic gains in coverage achieved under the ACA.

While proponents of ACA repeal efforts argue that the ACA is failing, the numbers don’t support that claim in states that followed the law and implemented the Medicaid expansion.  According to recent US Census data, California dropped its uninsured rate from 17.2% in 2013 to 7.3% in 2016.  Based on the California Health Interview Survey, the poor and people of color made the biggest gains in health coverage since the ACA was implemented – precisely the groups who were previously left out of health coverage, and stand to be shut-out again under Graham-Cassidy.

  1. Millions of Californians would lose their coverage – mostly people on Medi-Cal.

UC Berkeley Labor Center estimates 6.7 million Californians would lose coverage should Graham-Cassidy pass.  This includes nearly 4 million people in the Medi-Cal expansion adult category that would be zeroed out by the bill, 1.3 million Californians who would lose their Covered California plans (the majority of whom need the financial assistance offered by the program to be able to afford the cost of health coverage), and another 1.4 million children, seniors, and persons with disabilities on Medi-Cal.

  1. The state of California would lose $27.8 billion a year by 2026; $57.5 billion in 2027.

The combination of the elimination of the Medicaid expansion replaced with a small temporary block grant and the per capita cap would result in a loss of $27.8 billion a year in federal funds to the state of California.  Once the temporary block grant disappears and the per capita caps deepen, California would lose $57.5 billion a year in federal funds beginning in 2027.  To put this in context, our entire state General Fund (amounts raised through state taxes to run our state government including programs like Medi-Cal), is just over $125 billion for the next fiscal year, meaning we cannot simply replace such large losses at the state level.

  1. All Medi-Cal populations are at risk, including children, seniors, and persons with disabilities.

The Graham-Cassidy bill does not just eliminate the Medi-Cal expansion and Covered California plans that came with the ACA.  It also contains a per capita cap measure that would threaten children, seniors, and persons with disabilities as California is forced to deal with significant cuts.  The per capita cap limits federal payments to states based on historic spending and an annual growth rate that does not match the projected growth rate of the Medi-Cal program.  California already runs a fiscally tight program with provider reimbursement rates among the lowest in the nation.  Faced with such a cut in federal funds, California would be forced to cut eligibility for poor children, seniors, and persons with disabilities; cut benefits; or cut provider rates even further.

  1. Graham-Cassidy removes key consumer protections from Medi-Cal.

Medi-Cal has some key consumer protections that create a “no-wrong door” structure designed to make it easier for low-income people, who often have additional language and health coverage literacy barriers, to access health care.  Medi-Cal application has been simplified, eligibility is renewed through a streamlined, prepopulated form, and there are many places to apply.  Like its predecessors earlier this year, Graham-Cassidy cuts at these gains by stopping hospitals from enrolling eligible patients, and not allowing states to pay bills that applicants incurred prior to signing up for the program.

  1. Graham-Cassidy adds bureaucratic barriers designed to keep eligible people from getting Medi-Cal.

Similarly, Graham-Cassidy allows states to impose additional renewal periods in their Medicaid program or impose work requirements as a condition of receiving Medicaid.  As mentioned above, additional renewal requirements undermine the “no-wrong door” structure that has enabled so many people get health coverage.  Work requirements impose additional hurdles while ignoring that many adults who are not working and receiving Medicaid are not working because they are sick.  While California leaders may be philosophically opposed to adding such barriers to its program, when faced with a $57.5 billion loss of federal funds, they will have little choice.

  1. Block grants destroy antipoverty programs.

Even in if the block grant portion of Graham-Cassidy is renewed before 2027, we have already seen what happens to antipoverty programs when they are converted from entitlement programs to block grants. Block grants do not grow with program need and do not guarantee coverage to all who are eligible. Before welfare reform, the Aid to Families for Dependent Children covered 60-80% of the eligible population.  Once federal cash welfare was converted to Temporary Assistance for Needy Families (known as CalWORKs in California), we saw a decline that led to only 23% of eligible families nationwide receiving assistance – that’s 23% of families living below 50% of the federal poverty level.

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