In a move that could profoundly affect California’s healthcare system, Congress is considering an $800 billion reduction to Medicaid funding over the next decade. This proposal threatens to strip health coverage from approximately 70 million Americans, with California’s Medi-Cal program—serving nearly 15 million residents—facing significant repercussions. This topic was discussed by multiple experts on a panel organized by American Community Media.
Potential Financial Impact on California
Medi-Cal, California’s Medicaid program, operates with a budget of $161 billion, over 60% of which is federally funded. The proposed cuts could result in a loss of $10 billion to $20 billion annually for the state. Such a substantial decrease would compel state officials to make difficult decisions regarding service reductions, eligibility restrictions, or seeking alternative funding sources. “Taking away health insurance, leaving people subject to medical bills without the protection of Medicaid health insurance means costs go up, not down. This is the exact opposite of what was promised to the American people. And this is all being done to take resources away from working people and middle class people and give them to giant corporations and billionaires so they can buy more yachts and jewelry. And that is not what America wants. That is not what America voted for”, claimed Stan Dorn, who has directed Health Policy Project for UnidosUS, the nation’s largest Hispanic civil rights and advocacy organization.
Vulnerable Populations at Risk
The proposed cuts would disproportionately impact vulnerable groups, including seniors and individuals with disabilities. Approximately 2.2 million seniors and people with disabilities are enrolled in Medi-Cal. These individuals rely on the program for services not covered by Medicare, such as dental, vision, hearing, and long-term care. Reductions in funding could lead to decreased access to these essential services, potentially forcing individuals into institutional care settings. “Medicaid pays for the majority of long-term care in this country, so five out of eight seniors in nursing homes are covered by Medicaid . Similarly for children, Medicaid acts as a primary payer for the vast majority of children in low and moderate wage families and it also acts as a wraparound coverage for children with serious disabilities”, said Joan Alker, Executive Director and Co-Founder of the Center for Children and Families (CCF).
Healthcare providers, particularly those serving low-income communities, are bracing for the fallout. Community health centers, which rely heavily on Medicaid reimbursements, may face closures or service reductions. This would not only limit healthcare access for Medi-Cal beneficiaries but also result in job losses within the healthcare sector, exacerbating economic challenges in vulnerable communities.
The proposed cuts have ignited a political firestorm in California. Advocacy groups and healthcare organizations are mobilizing to oppose the reductions. The California Medical Association has urged Congress to protect access to care and oppose Medicaid cuts, emphasizing the detrimental impact on millions of Californians, including children, seniors, and low-income working families.
“Educating people about the benefit of Medicaid is really important. Most people don’t know everything that Medicaid does. That is not just a support for low income kids and families. More veterans get health care from Medicaid than from the VA. More nursing homes get It’s the biggest funder for nursing homes in many cases. It’s the biggest help and I think most people don’t know that”, explained Anthony Wright, Executive Director for Meet Families USA.
As Congress deliberates on the proposed Medicaid cuts, the stakes are particularly high for California. The potential loss of billions in federal funding threatens to destabilize Medi-Cal, jeopardizing healthcare access for millions of residents. The coming months will be crucial as policymakers, healthcare providers, and communities navigate the potential implications of these federal decisions.