The Riggs Report: Health care repeal spells budget trouble for CA

Medi-Cal funding faces big cuts

California was a notably enthusiastic early supporter of the Affordable Care Act after it was signed into law by then-President Barack Obama in 2010. The state pursued newly available federal dollars in an effort to reduce the number of uninsured.

Given current efforts to repeal and replace the law, that early embrace may cost the state dearly.

The ACA included substantial federal funds to expand Medi-Cal, the state’s safety net for children, seniors, and low- to moderate-income workers. According to state records, about 3.6 million more Californians have gained health care coverage since 2010 by enrolling in Medi-Cal.

All told, more than 13.5 million of the state’s residents are in the Medi-Cal program—a number that amounts to one in three Californians. In other words, it is a huge part of the health care landscape here.

The replacement plan drafted by House Republicans puts the federal dollars set aside for Medi-Cal expansion on the chopping block. Instead of matching funds, the plan would provide states with block grants capped at a certain level beginning in 2020.

The Sacramento-based California Budget and Policy Center puts it this way in their analysis: “In California, which receives almost $70 billion per year in federal funds for Medi-Cal, a cap would reduce annual federal support by billions—and potentially tens of billions—of dollars relative to current law.”

That cost shift would leave California’s next governor and a future legislature with the choice of back-filling billions of dollars from the state budget or ditching the Medi-Cal expansion, dropping millions of people from coverage.

The current replacement plan is not a done deal; conservative members of the House Freedom Caucus dislike it and are looking for another option. However, these members are also acutely aware that President Donald Trump, a supporter of the current plan, is popular to their base voters in their home districts.

The question now is whether these conservatives, who are encouraged by a torrent of opposition from conservative groups like the Club for Growth, are willing to defy not just their own House leadership, but Trump as well.

Unless Trump can strike a deal and quell the rebellion, the repeal and replacement plan may get bogged down instead of speeding through the House and Senate as GOP leaders had been hoping.