The state could be forced to rebuild its public insurance program because the impact of the bill would affect one-third of its residents.
California risks losing $114.6 billion in federal funds within a decade for its Medicaid program under the Senate health care bill, a decline that would require the state to completely dismantle and rebuild the public insurance program that now serves one-third of the state, health leaders said Wednesday.
The reductions in the nation’s largest Medicaid program would start at $3 billion in 2020 and would escalate to $30.3 billion annually by 2027, according to an analysis released by the state departments of finance and health care services.
“It is not Medicaid reform,” Jennifer Kent, director of the state Department of Health Care Services, said in an interview. “It is not entitlement reform. It is simply a huge funding reduction in the Medicaid program. We are deeply concerned what that means for the long-term viability of the program as it stands today.”
Medicaid covers a staggering 13.5 million low-income Californians — children, people with disabilities, nursing home residents and others. About 3.8 million of them, many of whom are chronically ill, became eligible for coverage under the Affordable Care Act, informally known as Obamacare.
California would face the biggest losses of any state, according to a report issued Wednesday by the consulting firm Avalere Health. Federal funding would drop by 26 percent over 10 years, the report said. Many states, including Alabama, Georgia, Texas and Florida, would face a drop of less than 10 percent.
The Senate bill to repeal and replace the ACA would be a “massive and significant fiscal shift” of responsibility from the federal government to states, according to the analysis. It would force difficult decisions about who and what to cover and how much to pay doctors, hospitals and clinics, the report said.
In addition to expanding its Medicaid population early and vigorously under Obamacare, the state began covering undocumented immigrant children last year. California’s program, known as Medi-Cal, also provides dental care and other services that are optional under federal Medicaid rules.
The state’s Medicaid director, Mari Cantwell, said Republican proposals present a fundamental problem that can’t be solved by making cuts around the edges.
“Nothing is safe — no population, no services,” Cantwell said. “It is really disheartening and honestly horrifying to think about the world under this Senate bill and what it would mean.”