California grabbed the first opportunity to expand Medicaid and ran with it, helping cut the number of uninsured people in half in a few short years.
Thanks in part to billions of dollars in federal funding, a third of California’s residents — including half its children — are insured by Medi-Cal, the state’s version of Medicaid.
Now, with the election of Donald Trump and a Republican-controlled Congress, the state that bet so heavily on the Medicaid expansion is bracing to see how much of its work will be undone. While no one knows yet exactly what will happen, many policymakers and advocates fear the federal government will end or severely limit funding for the expansion.
Medi-Cal cuts could restrict who is eligible for coverage, slash health care benefits, limit access to doctors and reduce payment rates to medical providers — already among the lowest in the nation, health policy experts and advocates said. Medi-Cal covers a host of services for low-income residents, including maternity care, prescription drugs, long-term care services, mental health treatment and hospital stays.
Trump pledged during the election campaign to repeal and replace the Affordable Care Act. The health law allowed states to expand their Medicaid programs, and California received more than $15 billion from the federal government for the expansion in 2016-17, according to the state Department of Health Care Services.
Trump also has said he supports funding Medicaid with block grants, essentially annual lump sum payments to states. Block grants would give states more flexibility in running their Medicaid programs but leave them responsible for covering any costs that exceeded the amount allocated. In addition, Republicans have expressed support for caps on spending per enrollee.
A new report by the Commonwealth Fund said that establishing limits on federal Medicaid spending would “effectively reverse a 50-year trend of expanding Medicaid in order to protect the most vulnerable Americans.” Block grants or per-capita caps would create funding gaps for states, likely cutting the number of Medicaid-eligible people and reducing coverage for beneficiaries, the report said.
California has made tough choices in the past in response to budget shortfalls. Health officials have cut dental coverage, frozen children’s enrollment, reduced doctor payments and closed adult day centers. But this time, the state could be forced to slice deeply into a much bigger program.
Linda Nguy, policy advocate for the Western Center on Law and Poverty, said she and others are fighting to preserve the current system.
“We do not want to see the gains made for so many people pulled back,” she said.