Plans to repeal the Affordable Care Act may lead to more costs for states, beneficiaries and health care providers, according to policy analysts.
President Donald Trump and his administration want to turn Medicaid into a block grant program, which means the federal government would give California a fixed amount of funding for Medi-Cal, the state’s version of Medicaid.
Currently, the federal government covers 50 percent of the state’s Medi-Cal cost and 95 percent for Medi-Cal expansion.
Edwin Park, vice president for Health Policy at the Center on Budget and Policy Priorities, says block grants reduce federal Medicaid spending and shifts costs to states.
“If state’s exceed their cap, state’s are responsible for 100 percent of Medicaid cost above that cap, whether it’s a cap on the whole program under a block grant or a cap on a per beneficiary under a per capita cap,” he says.
Park says states would have to work with the flexibility given through block grants, raise taxes, or make cuts to their budget to offset funding reductions.
But he says when costs rise faster than expected, cuts are more likely to occur, which could result in cuts to eligibility, benefits and provider payments.
“On top of repeal of Medicaid expansion, another 14 to 21 million Medicaid beneficiaries nationwide would lose coverage and likely end up uninsured, and provider rates would be cut more than 30 percent,” Park says.
In California, one-third of residents are enrolled in Medi-Cal.
The $100 billion program receives $66.8 billion from the federal government but under a repeal, the state would lose $17.3 billion for Medi-Cal.
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