RELEASE: Republican health bill’s deep cuts to Medicaid will hit California hard

UC Berkeley Labor Center

For Immediate Release

New study details how the American Health Care Act’s (AHCA) proposed cuts to the Medicaid expansion would affect coverage and healthcare funding in California.

CONTACT: Jacqueline Sullivan, (510) 642-0052 (office), (510) 604-2289 (cell)

March 22, 2017

Berkeley – The Republican proposal to dismantle the Affordable Care Act (ACA) calls for dramatic reductions in federal funding for Medicaid, threatening the health coverage of millions of low-income adults in California over the next decade.

According to new projections from UC Berkeley’s Center for Labor Research and Education (Labor Center), the state will have to increase spending by nearly $10 billion annually by 2027 to maintain coverage for the 3.7 million people who have benefited from the expansion of Medi-Cal, California’s Medicaid program.

Under the ACA, California expanded Medi-Cal coverage to adults whose income was at or below 138 percent of the poverty line, or about $16,000 a year for a single adult. Nearly one in ten Californians have enrolled in Medi-Cal because of the federal Medicaid expansion.

The federal government currently covers at least 90% of the costs of Medi-Cal enrollees who became eligible under the expansion. But in 2020, if California decides to continue enrolling new beneficiaries under the expansion, the state would have to pay 50% of costs instead of 10%.

The new brief, “Medi-Cal Expansion under the AHCA: Severe Coverage and Funding Loss unless State Backfills Billions in Federal Cuts,” looks at the impact that the proposed Medicaid expansion cuts would have on Medi-Cal enrollment, the California budget, and the Medi-Cal funding that supports the state’s healthcare system.

“The AHCA would put the state in a very difficult position — either figure out how to make up for the billions in lost federal funding or see millions lose Medi-Cal coverage over the next decade,” said Laurel Lucia, Director of the Health Care Program at CLRE.

Key findings

If California is not able to make up the lost federal funding under the AHCA and decides to continue eligibility only for individuals enrolled in the expansion as of the end of 2019, the state would experience severe coverage and healthcare funding losses including:

  • 3.7 million fewer Californians would be enrolled in Medi-Cal by 2027;
  • The state’s healthcare system would lose nearly $25 billion in annual Medi-Cal funding by 2027, including $22 billion in federal funding;
  • The state’s healthcare system would lose a cumulative total of $130 billion in federal and state Medi-Cal funding between 2020 and 2027.

Certain parts of the state would be especially harmed if California is not able to fully maintain the Medi-Cal expansion due to the federal cuts.

  • In the San Joaquin Valley, more than 465,000 would be projected to lose Medi-Cal coverage in 2027 and the local healthcare system would lose more than $3 billion in Medi-Cal funding annually.
  • By 2027, in Los Angeles County, more than 1.1 million would lose their Medi-Cal coverage and the local healthcare system would lose $7.8 billion a year.

The brief includes projections of Medi-Cal coverage and funding losses by county, Congressional District, California Senate District, and California Assembly District.

“If California cannot maintain the Medi-Cal expansion, the consequences would be widespread – worse access to healthcare for those who lose Medi-Cal, financial instability for providers, and employment losses in healthcare and other industries,” said Lucia.

Laurel Lucia, Director, Health Care Program, Center for Labor Research and Education at UC Berkeley,, (510) 642-1851 (office), (510) 432-2565 (cell)

Ken Jacobs, Chair, Center for Labor Research and Education at UC Berkeley,, (510) 643-2621 (office), (415) 516-3135 (cell)