SACRAMENTO, Calif. — Medi-Cal, California’s advanced, $174.6 billion Medicaid program, offers medical health insurance for almost 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 offers a broad vary of advantages, corresponding to imaginative and prescient, dental, and maternity care — a few of which is basically paid for by federal {dollars} however which additionally impacts state spending.
However currently, 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, corresponding to work necessities, or program cuts to yield sufficient financial savings over a decade. Republicans argue that Medicaid prices have spiked attributable to fraud and abuse and so they 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 individuals coated. In 2022, California’s uninsured charge for residents beneath age 65 hit a file low of 6.2%, based on the California Well being Care Basis.
As lawmakers debate funding for the security internet program, right here’s what’s at stake for California’s largest well being program.
Who’s Coated?
Greater than a 3rd of Californians rely upon Medi-Cal or the carefully associated Kids’s Well being Insurance coverage Program to see a physician, therapist, or dentist. They depend on this system to get medication and entry therapy. It can be a lifeline for households by permitting individuals with disabilities and seniors to remain of their houses and offering protection to their caregivers. It additionally funds nursing look after seniors.
The overwhelming majority of enrollees qualify as a result of they earn 138% or much less of the federal poverty stage: $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 much more beneficiant than Alabama’s household eligibility restrict, which is eighteen% of the federal poverty stage, or Florida’s, at 26%.
Not like Alabama or Florida, California extends protection to low-income adults with out dependents. The state additionally covers extra individuals 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 individuals with disabilities depend on this system.
Medi-Cal additionally picks up the tab for 1.4 million residents 65 and older for advantages not coated by Medicare, corresponding to long-term care and dental, listening to, and imaginative and prescient care.
Nearly all of grownup Medi-Cal recipients beneath 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 faculty, or sick.
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 an entire, the place about 40% of individuals beneath age 65 who use Medicaid are white, 30% Hispanic, 19% Black, and 1% Indigenous individuals.
The place Does the Cash Come From?
The federal authorities pays for about 60% of the Medi-Cal program. Of its almost $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 common 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 companies, corresponding to protection to youngsters and low-income pregnant ladies. Nevertheless it will get a 90% match for the roughly 5 million Californians it has added to rolls beneath the Medicaid enlargement licensed by the Reasonably priced Care Act.
The place Does It Go?
On common, Medi-Cal prices $8,000 per recipient, however prices range broadly, based on a March evaluation by the California Legislative Analyst’s Workplace.
As an illustration, individuals with disabilities account for 7% of enrollees however 19% of Medi-Cal’s spending, with a median annual price of $21,626.
In the meantime, the price to cowl seniors averages roughly $15,000. And senior enrollment, at 1.4 million, has skyrocketed, rising 40% since 2020 as lawmakers eased the foundations for what number of property individuals 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 mentioned throughout a latest Meeting Finances Committee listening to.
What Might Get Lower?
President Donald Trump in March mentioned 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 companies could be gutted if Congress follows via on large 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, essentially the most of any state, based on an evaluation by the City Institute.
Lawmakers additionally may roll again the Medicaid enlargement beneath the Reasonably priced Care Act, also called Obamacare, which handed in 2010 and allowed extra individuals to qualify for Medicaid based mostly on revenue. California, 39 different states, and Washington, D.C., have chosen to undertake “Medicaid enlargement,” during which the federal authorities pays for 90% of protection for these enrollees.
Such a transfer would price California billions every year if it opted to proceed protection for the roughly 5 million further enrollees who’ve gained protection beneath the enlargement.
Republicans may additionally make it more durable for states corresponding to California to proceed to attract federal help via 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 could seemingly trigger a funding hole in California.
If federal cuts happen, Newsom officers acknowledge, the state couldn’t soak up the price of current packages. 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 reducing non-obligatory advantages corresponding to dental care and optometry, trimming companies geared 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 in the course of the Nice Recession, reducing reimbursement charges to suppliers and eliminating advantages together with eye and dental look after 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 mentioned contained “the great, the unhealthy, 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.
