How could potential cuts and changes in Medi-Cal affect Californians?
Over the next two weeks, Congress will again consider massive spending cuts, cuts that could dramatically affect the 15 million Californians who rely on Medi-Cal.
President Donald Trump and the Republican-controlled House and Senate are trying to craft a budget blueprint that will shrink the size of government while extending massive tax cuts that are due to expire this year.
One of the most attractive spending cut targets to Republican leaders is Medicaid, the joint federal-state program that provides health care for 83 million people nationwide, including in California where the program is called Medi-Cal. Most beneficiaries are people with lower incomes.
The precise impact of the cuts is not immediately clear, but changes could be coming as soon as this fall.
Here’s what we know as Congress prepares to debate the program’s future:
Where do things stand?
What’s being considered this month by Trump and Republican congressional leaders is an outline of the entire federal budget. Their plan would cover spending beginning with fiscal 2026, which starts Oct. 1. No specific programs receive final funding from this legislation.
The House passed its version of the plan earlier this month and it included $880 billion in cuts over 10 years in areas overseen by the Energy and Commerce Committee, which writes health care legislation. Since Medicaid is a huge part of that budget, it’s been assumed it’s a big target.
The Senate hasn’t agreed to any such cut. Its budget version only dealt with border security and defense. Its leaders and Trump are now ironing out a compromise with the House that is expected to be similar to what the House passed.
They’re hoping that this compromise will get final votes by April 11, when Congress is scheduled to begin a two week recess.
What’s ahead for Trump and Congress?
If and when that plan passes, congressional committees will then begin filling in the blanks. Republicans run the committees.
The committees will write bills detailing where funds should be spent and cut. It’s likely there will be no agreement on those bills until sometime this summer or fall, if then.
Congress in recent years has rarely agreed on such specific spending legislation – that’s why it keeps passing incremental spending bills that keep the government open for limited periods of time.
Lawmakers have been reluctant to actually approve spending cuts that would hurt people in their district. And as the calendar moves closer to the 2026 campaign season, Democrats are hoping vulnerable Republicans become more reluctant to vote for big Medicaid cuts.
Rep. David Valadao, R-Hanford, and seven other GOP lawmakers have already written to House Speaker Mike Johnson of Louisiana that “slashing Medicaid would have serious consequences, particularly in rural and predominantly Hispanic communities where hospitals and nursing homes are already struggling to keep their doors open.” Valadao is considered one of the nation’s most vulnerable Republicans.
How Californians could be impacted
No one knows for sure what services, if any, could be cut.
“It’s impossible to know at this point just who could be impacted. What is clear is that reducing revenue requires covering fewer people, reducing benefits or paying health care providers less,” said Kristof Stremikis, director of market analysis and insight for California Health Care Foundation, a nonpartisan health care advocacy group.
A major area that would be affected involves hospitals in the Central Valley, which depend heavily on Medi-Cal to continue operating.
Energy and Commerce Chairman Brett Guthrie, R-Ky., said at a Washington Post event last week that there is a way to “get a handle on the large growth” without removing any benefits.
Among ideas for doing that would be cutting the federal aid to states that expanded Medicare in recent years or tighten eligibility for the program.
None of that will be easy.
“To reduce eligibility, states would have to make tough choices about what enrollment groups to apply eligibility restrictions to given variation in enrollment and spending per enrollee across groups,” according to a Kaiser Family Foundation analysis.
Also at risk are benefits regarded as optional, including home- and community-based services for seniors and people with disabilities, said the Washington-based Center on Budget and Policy Priorities, a progressive research group.
Trump and Republicans insist that people who qualify for help will get it. “Social Security, Medicare, Medicaid, people don’t have to worry,” Trump told Newsmax earlier this month. Of those who say people who need help won’t get it, he added, “They make up stories. They’re liars.”
Can the state help?
A key to Medicaid’s future in California is likely to depend on how much the state is willing to spend.
Gov. Gavin Newsom recently asked the Legislature to approve an additional $2.8 billion to cover this year’s costs after taking out a $3.44 billion loan to pay bills.
How much the state will make up the difference should Medicaid be subject to severe cuts is uncertain.
“California will continue to work collaboratively with our federal partners to ensure that families in our state are healthy and our communities are vibrant places to live and work,” said Anthony Cava, media relations manager at the California Department of Health Care Services.
“While we don’t typically speculate on the potential impacts of federal action, we remain committed to protecting Californians’ access to the critical services and programs they need,” he said..
But Drew Altman, Kaiser’s president and CEO, wrote in a column that he was not optimistic about what states could do.
“Whatever the arguments for and against the Medicaid cuts that end up being proposed and however the politics play out, don’t expect very many states to replace lost federal funding,” he said.
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