SACRAMENTO, Calif. — Medi-Cal, California’s complicated, $174.6 billion Medicaid program, gives medical health insurance for practically 15 million residents with low incomes and disabilities. The state enrolls twice as many individuals as New York and greater than 3 times as many as Texas — the 2 states with the most important variety of Medicaid individuals after California.
Enrollment is excessive as a result of California goes past federal eligibility necessities, opening Medi-Cal to extra low-income residents. The state additionally gives a broad vary of advantages, reminiscent of imaginative and prescient, dental, and maternity care — a few of which is essentially paid for by federal {dollars} however which additionally impacts state spending.
However recently, Medi-Cal has discovered itself in political crosshairs.
Democrats say the largest menace to Medi-Cal is $880 billion in GOP funds cuts being mulled in Washington, D.C., which well being specialists say would require eligibility restrictions, reminiscent of work necessities, or program cuts to yield sufficient financial savings over a decade. Republicans argue that Medicaid prices have spiked as a consequence of fraud and abuse they usually criticize state Democrats for making the profit accessible to immigrants no matter authorized standing.
In March, Gov. Gavin Newsom’s administration borrowed $3.4 billion to cowl an surprising overrun in Medi-Cal, and lawmakers in April appropriated an further $2.8 billion for the remainder of the fiscal yr. Though the Democratic governor acknowledged a necessity for changes, he has defended the state’s efforts to get extra folks lined. In 2022, California’s uninsured fee for residents below age 65 hit a report low of 6.2%, based on the California Well being Care Basis.
As lawmakers debate funding for the protection web program, right here’s what’s at stake for California’s largest well being program.
Who’s Lined?
Greater than a 3rd of Californians rely on Medi-Cal or the intently associated Kids’s Well being Insurance coverage Program to see a physician, therapist, or dentist. They depend on this system to get drugs and entry remedy. It may also be a lifeline for households by permitting folks with disabilities and seniors to remain of their houses and offering protection to their caregivers. It additionally funds nursing take care of seniors.
The overwhelming majority of enrollees qualify as a result of they earn 138% or much less of the federal poverty degree: $21,597 yearly for a person individual or $44,367 for a household of 4. Whereas that’s low for a state the place the median family revenue tops $96,000, it’s way more beneficiant than Alabama’s household eligibility restrict, which is eighteen% of the federal poverty degree, or Florida’s, at 26%.
In contrast to Alabama or Florida, California extends protection to low-income adults with out dependents. The state additionally covers extra folks with disabilities who work, inmates, and different residents who wouldn’t qualify for the profit program if California lawmakers hadn’t expanded this system past what the federal authorities requires.
Based on state estimates, Medi-Cal covers about 7.3 million low-income households and an extra 5 million adults, most of whom don’t have dependents. An extra million folks with disabilities depend on this system.
Medi-Cal additionally picks up the tab for 1.4 million residents 65 and older for advantages not lined by Medicare, reminiscent of long-term care and dental, listening to, and imaginative and prescient care.
Nearly all of grownup Medi-Cal recipients below 65 work, based on a KFF overview of March 2024 census information. In California, about 42% of nondisabled adults on Medi-Cal work full time and an extra 20% work half time. These not employed had been mostly caring for a member of the family, attending college, or ailing.
Simply over half of Medi-Cal recipients are Latino, about 16% white, 9% Asian or Pacific Islander, and seven% Black, based on state enrollment information. That differs from the nation as a complete, the place about 40% of individuals below age 65 who use Medicaid are white, 30% Hispanic, 19% Black, and 1% Indigenous folks.
The place Does the Cash Come From?
The federal authorities pays for about 60% of the Medi-Cal program. Of its practically $175 billion funds this fiscal yr, Washington, D.C., is predicted to contribute $107.5 billion.
An extra $37.6 billion comes from the state’s normal fund. The ultimate $29.5 billion comes from different sources together with hospital charges, a managed-care group tax, tobacco tax income, and drug rebates.
California receives 50% in matching federal {dollars} for core providers, reminiscent of protection to kids and low-income pregnant girls. But it surely will get a 90% match for the roughly 5 million Californians it has added to rolls below the Medicaid growth approved by the Inexpensive Care Act.
The place Does It Go?
On common, Medi-Cal prices $8,000 per recipient, however prices differ extensively, based on a March evaluation by the California Legislative Analyst’s Workplace.
For example, folks with disabilities account for 7% of enrollees however 19% of Medi-Cal’s spending, with a median annual value of $21,626.
In the meantime, the associated fee to cowl seniors averages roughly $15,000. And senior enrollment, at 1.4 million, has skyrocketed, growing 40% since 2020 as lawmakers eased the principles for what number of belongings folks 65 and older may have and nonetheless qualify for this system.
California additionally foots a lot of the invoice to cowl about 1.6 million immigrants with out authorized standing — roughly $8.4 billion of the $9.5 billion, Division of Finance program funds supervisor Guadalupe Manriquez stated throughout a current Meeting Price range Committee listening to.
What Might Get Lower?
President Donald Trump in March stated that he wouldn’t “contact Social Safety, Medicare, Medicaid” however give attention to getting the “fraud out of there.” Nevertheless, well being specialists say Medicaid providers could be gutted if Congress follows by way of on huge spending reductions to pay to increase Trump’s tax cuts.
Congressional Republicans have mentioned implementing work necessities for nondisabled adults, which may have an effect on a minimum of 1 million Medicaid enrollees in California, probably the most of any state, based on an evaluation by the City Institute.
Lawmakers additionally may roll again the Medicaid growth below the Inexpensive Care Act, also referred to as Obamacare, which handed in 2010 and allowed extra folks to qualify for Medicaid primarily based on revenue. California, 39 different states, and Washington, D.C., have chosen to undertake “Medicaid growth,” by which the federal authorities pays for 90% of protection for these enrollees.
Such a transfer would value California billions every year if it opted to proceed protection for the roughly 5 million further enrollees who’ve gained protection below the growth.
Republicans may additionally make it harder for states reminiscent of California to proceed to attract federal help by way of supplier taxes such because the MCO tax, one thing the primary Trump administration proposed however later dropped. The tax on managed care plans brings in about $5 billion a yr and was endorsed by voters in a poll initiative final fall, however the federal authorities has been complaining for years about how states levy such taxes on insurance coverage and hospitals. If it restricts how states gather these taxes, it might doubtless trigger a funding hole in California.
If federal cuts happen, Newsom officers acknowledge, the state couldn’t soak up the price of present applications. Republicans are pressuring Democrats who management the legislature to finish Medi-Cal protection of residents with out authorized standing — one thing neither Newsom nor Democratic legislative leaders have expressed a willingness to do.
State leaders additionally may very well be confronted with slicing non-obligatory advantages reminiscent of dental care and optometry, trimming providers aimed toward enhancing recipients’ high quality of life, or lowering funds to managed care plans that cowl 94% of Medi-Cal recipients.
That’s what California lawmakers did throughout the Nice Recession, slicing reimbursement charges to suppliers and eliminating advantages together with eye and dental take care of adults. The governor on the time, Republican Arnold Schwarzenegger, went a step additional, chopping $61 million from counties’ Medi-Cal funding in a funds bloodletting that he stated contained “the great, the dangerous, and the ugly.”
This text was produced by KFF Well being Information, which publishes California Healthline, an editorially impartial service of the California Well being Care Basis.
