Lingering pain from a car crash two months ago, on top of an already hardscrabble life, has Angulo worried about her pregnancy. So, she was relieved when a mobile street medicine van from St. John’s Community Health pulled up near her encampment last month.

“Thank God that we have them,” she said.

, which operates 28 clinics, mostly in L.A. County, is part of the nation’s network of nonprofit community clinics that care for the poorest Americans. Around 80% of its 144,000 patients, including Angulo, have Medi-Cal, California’s version of the Medicaid program for people with low incomes or disabilities.

But federal cuts to Medicaid spending under the Republican-passed One Big Beautiful Bill Act, compounded by in Sacramento, could cost St. John’s up to one-third of its $240 million annual revenue, requiring cuts to services that might include street medicine, said Jim Mangia, the president and CEO.

Smaller, more cash-strapped clinics in L.A. County could face harsher consequences, including closure, if the lost funding is not replaced.

That’s why Mangia, along with a coalition of community clinics, health care workers, and advocates, is pushing for a five-year, in the nation’s most populous county to help backfill the projected loss of federal and state dollars. St. John’s has contributed at least $2 million to the campaign so far.

Louise McCarthy, president and CEO of the Community Clinic Association of Los Angeles County, said there aren’t a lot of options to save the health care system from disaster.

“Our backs are up against the wall,” she said. “This has the potential to be a game changer. It will be an absolutely significant offset to the losses.”

The L.A. County Board of Supervisors last month for inclusion on the June 2 primary ballot, over the objection of some cities within the county. Their leaders argued the tax would put a strain on consumers and business owners. Most of an in annual revenue generated would be used to protect safety-net health care at community clinics, hospitals, and schools.

Scrambling To Stay Afloat

Nationally, the GOP budget law is expected to cut federal Medicaid spending by over 10 years, and it could lead to an increase of in the number of people left uninsured. The L.A. ballot proposal is among many local and state initiatives nationwide, as clinics, hospitals, health care workers, advocates, and legislators scramble for new money to help offset the spending cuts.

In Michigan, where the federal law is projected to cost the state , Democratic Gov. Gretchen Whitmer’s office has proposed on tobacco, vape products, online gambling, sports betting, and digital advertising, which it projects would raise hundreds of millions of dollars annually.

In Rhode Island, a group of state legislators hopes to ease some of the pain caused by the federal cuts with a that includes a tax on digital ads and a 3% surcharge on taxable incomes above roughly $640,000.

“The goal is not to replace the revenue; it’s to mitigate the damage,” said Democratic state Rep. Brandon Potter, one of the legislators involved.

In Washington, Democratic state Rep. Shaun Scott recently introduced legislation to address the loss of federal dollars with on large companies, applied to employee salaries exceeding $125,000 a year.

In California, the GOP law will slash the to Medi-Cal by an a year, or 25%. Enrollment in Medi-Cal could by 2028 as a result of the federal and state spending cuts, according to an analysis by the UCLA Center for Health Policy Research and the University of California-Berkeley Labor Center.

In July, California will slash Medi-Cal payments that community clinics receive for certain services provided to patients with “unsatisfactory” immigration status by about . Those patients include permanent residents in the country for less than five years, refugees, asylees, and other lawfully present people.

Bracing for a ‘New Reality’?

Advocates and health care experts say finding new revenue is the only way to avoid a crisis in California’s health care system.

“Are we going to let the gaps created by federal policies and state budget cuts leave millions of people uninsured?” said Laurel Lucia, deputy executive director of programs at the UC Berkeley Labor Center. “I think a lot of that question comes down to revenues.”

Some medical professionals say that new revenue is needed in the short term but that the country needs to address its notoriously expensive health care system.

“This new reality is that we have to do our work with less money going into the future,” said Hector Flores, of the Los Angeles County Medical Association. “So, this is an opportunity for us to look at how we can do things better.”

In the meantime, efforts to raise taxes for health care abound.

Voters in Santa Clara County, home to Silicon Valley, last November approved a five-year 0.625% to offset federal Medicaid cuts. A will be on the June ballot in Contra Costa County.

The best-known initiative, and a hotly contested one, is a union-sponsored ballot proposal in California for a on the state’s . Democratic Gov. Gavin Newsom strongly opposes it; Sen. Bernie Sanders (I-Vt.) stumped for it in California recently and has a national version in Congress.

Proponents of the temporary wealth tax say it would raise , which would mostly be used to backfill lost federal and state dollars in Medi-Cal and other safety-net programs. Proponents are trying to collect nearly 875,000 signatures needed to get it on the November ballot.

“We are on the precipice of a collapse of our health care system. So the most fortunate among us pay a modest tax that will hold us over and allow us to figure out a long-term solution,” said Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, the measure’s chief sponsor. “They would still be incredibly wealthy after that.”

Billionaires Push Back

The plan has stirred considerable controversy, not just in the Golden State but nationwide, and has generated strong and others.

Critics argue the measure could prompt billionaires to leave California, putting a damper on innovation, jobs, and tax receipts. And, some warn, the measure could end up in a legal quagmire, as those deemed liable to pony up challenge it on multiple fronts.

“If this passed, you would expect it to be tied up in court for some time,” said Jared Walczak, a visiting fellow at the California Tax Foundation. “It is fairly plausible that no revenue could come in for a number of years, if there’s ever any revenue at all.”

The prospect of such complications has led some health care advocates to focus instead on local initiatives that could start generating revenue more quickly, such as the proposed sales tax in L.A. County.

That one has critics too, including leaders of multiple cities within the county who to reject a proposal they argued would add to the affordability worries of consumers and put a strain on businesses.

Kathryn Barger, a Republican and the only L.A. County supervisor to oppose putting the measure on the June ballot, said in a statement that the proposed tax would make the county “less affordable for families and less appealing for consumers to shop and businesses to operate.”

But supporters say safety-net health care is already feeling the impact of diminished funding. Last month, for example, L.A. County’s Department of Public Health announced it was due to $50 million in federal, state, and local funding cuts.

Medi-Cal enrollees are worried, too. “We get a lot of calls from panicked patients afraid they’re going to lose their Medi-Cal. Dozens of calls a day, hundreds of calls a week,” said St. John’s Mangia.

“We tell them that we’re working on a solution and hopefully we’ll have that solution come June.”

This <a target="_blank" href="/health-industry/federal-cuts-state-tax-increases-budget-shortfalls-health-clinics-los-angeles-california/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Martha Santana-Chin, the daughter of Mexican immigrants, grew up on Medi-Cal, California’s version of Medicaid, the government-run health care program for people with low incomes and disabilities. Today, she is CEO of L.A. Care, which runs by far the biggest Medi-Cal health plan, with more than 2.2 million enrollees, exceeding the Medicaid and Children’s Health Insurance Program enrollments in .

“If it weren’t for safety nets like the Medi-Cal program, I think, many people would be stuck in poverty without an ability to get out,” she said. “For me personally, not having to worry about health care allowed me to really focus on what I needed to focus on, which was my education.”

As she begins her second year steering L.A. Care, Santana-Chin is grappling with federal and state spending cuts that complicate her task of providing health care to the poor and medically vulnerable enrollees in Medicaid. The insurer also provides Affordable Care Act marketplace plans through Covered California.

Santana-Chin warns that the GOP’s One Big Beautiful Bill Act, enacted last year and also known as HR 1, could result in 650,000 enrollees falling off L.A. Care’s Medi-Cal rolls by the end of 2028. This will strain the plan’s finances as revenues decline. The insurer had revenues of $11.7 billion in the last fiscal year.

HR 1 is expected to cut more than $900 billion from Medicaid over the next 10 years — including in California, according to the Department of Health Care Services, which runs Medi-Cal.

Like other states facing big deficits, California has reduced its Medicaid spending through such steps as freezing new enrollments for immigrants without legal status and reintroducing an . And that’s before the state reckons with the spending cuts that likely will be required by the withdrawal of so many federal dollars under HR 1.

Santana-Chin oversaw Medi-Cal and Medicare operations for the for-profit insurer Health Net before taking the helm of L.A. Care in January 2025, nearly three years after state regulators over violations they said compromised the health and safety of its members. L.A. Care paid to the state and agreed to contribute $28 million to community health projects.

In a wide-ranging interview, Santana-Chin talked to Â鶹ŮÓÅ Health News senior correspondent Bernard J. Wolfson about the financial headwinds facing L.A. Care and why she believes health care shouldn’t be restricted based on a person’s immigration status. This interview has been edited for length and clarity.

Q: You grew up on Medicaid. How has that shaped your views now that you run one of the largest Medicaid plans in the country?

What really motivates me is knowing that many of the people that we’re serving are just like my family. They’ve struggled and have had to have their own children translate things that were very difficult to translate. I remember doing that for my own mother. You know, basic human dignity requires that you have access to health care.

Q: Has anything you’ve dealt with at Health Net or L.A. Care reminded you of your childhood experiences in Medi-Cal?

Back then they didn’t cover transportation, and we didn’t have a vehicle. Today, one of the issues we’ll hear from our members is the need to make sure we have trustworthy transportation that shows up on time, where the drivers treat them with respect. Had I had that, had my mother had that, life would have been much easier.

Q: What do you think the impact of HR 1 will be?

It’s going to devastate the delivery system. The state obviously isn’t going to be able to make up for the shortfalls in federal funding, and over the course of the next several years, funding is going to be less and less, and the people we cover are going to decrease significantly. We are expecting between now and the end of 2028 that we’re going to see 650,000 people drop off the rolls. That’s just L.A. Care.

Q: That’s over a quarter of your Medi-Cal enrollment.

Yes, it’s very, very significant. The reductions in payment and the rise in uncompensated care are really going to impact our delivery system. As the delivery system gets destabilized and hospitals and other health care providers are forced to close services or reduce the number of sites they have, it’s going to impact access. And it’s not only going to impact those that lose coverage.

Q: How will L.A. Care respond?

Obviously, we’re going to see a significant drop in revenue. We’re very focused on making sure that we are operating as efficiently as we can operate. And we are looking at creative ways to use technology to empower our people to do higher-level work. Mostly supporting our call center agents with smarter technology that helps them answer questions and resolve problems more quickly. Some of it is automating processes on the claims payment side.

Q: What do you have to say to congressional Republicans who passed HR 1?

We are at a point of inflection in the health care delivery system. And we have to recognize that some of the components of HR 1 will have long-term unintended consequences — maybe they were intended; I’ve got to believe that some of these things are not. There’s probably a need to reconsider some of the things that were passed.

Q: Such as?

Work requirements are an example of something that many people did believe was the right thing to do to be good stewards of the health care dollar. It is very complex and is going to cause people to lose coverage that actually do qualify. It’s unfortunate, and that would be something that I would urge folks to reconsider.

Q: What impact do you expect from California’s decision to freeze Medi-Cal enrollment for immigrants without legal status?

It doesn’t matter what immigration status you are. If you are a human being and you need health care, you’re going to try to access health care wherever you can. That’s going to put a strain on the delivery system if you’re uninsured.

Q: What has L.A. Care done to address the state’s concerns in 2022 that it delayed authorizing care and addressing patient grievances?

There has been quite a bit of investment in the L.A. Care infrastructure over the last several years — our IT platforms, our data. There’s also quite a bit of investment in adding new capacity, adding bandwidth to many of the teams, more folks to help support the work.

Q: How have federal immigration raids in L.A. affected L.A. Care members and the broader community?

It absolutely has had a chilling effect. Families are afraid to come in. They’re not taking their children to get vaccinated. I’ve had numerous providers in emergency departments say that they have experienced a drop in the volume of individuals coming in. One of our case managers was really distraught because there was an individual that decided to forgo serious lifesaving treatment because of fear.

This <a target="_blank" href="/health-care-costs/la-care-ceo-martha-santana-chin-interview-gop-cuts-medicaid/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

California, Massachusetts, Connecticut, and have set caps on health care spending in a bid to rein in the intense financial pressure felt by many families, individuals, and employers who every year face increases in premiums, deductibles, and other health-related expenses.

Hospitals and other health care providers are citing Republicans’ One Big Beautiful Bill Act, signed by President Donald Trump in July, as one more reason to challenge those limits.

The law is expected to reduce federal Medicaid spending by over a decade, which mathematically should help the overall health care system meet the caps. But the law is also expected to increase the number of uninsured Americans, mostly Medicaid beneficiaries, by an estimated . Health care analysts predict hospitals and other providers will raise prices to cover the double whammy of lost Medicaid revenue and the cost of caring for an influx of newly uninsured patients.

Whether regulators in some states will allow providers to justify higher prices and exceed the spending caps is unclear. Only can penalize providers financially if they fail to meet targets.

“Are we going to say, ‘That’s OK’? Or are we going to say, ‘Well, you exceeded the target. We’re still going to penalize you for that’?” said Richard Pan, a former state lawmaker and a member of the California Office of Health Care Affordability’s board. “That has not yet been decided.”

The California Hospital Association, the industry’s main state lobbying group, in October asking a state court to strike down the spending caps, which it argued fail to account for all the cost pressures hospitals face. Those pressures, it said, include an aging, sicker population; the of labor; expensive advances in medical technology; large capital outlays on required seismic retrofitting; and changes in federal policy, including the One Big Beautiful Bill Act. The hospital group’s lawsuit also asserted that the state affordability office, by hastily imposing ill-considered cost-cutting targets, was undermining its other key mission of improving health care access, quality, and equity.

California’s affordability office last year set a five-year target to cap statewide spending growth, starting at 3.5% in 2025 and declining to 3% by 2029. The annual caps apply to a wide range of health care entities, including hospitals, medical groups, insurers, and other payers.

Earlier this year, it imposed much lower spending growth caps — starting at 1.8% in 2026 and declining to 1.6% by 2029 — for .

“The spending caps set by politically appointed bureaucrats could force cuts that result in many Californians traveling farther for care, facing longer emergency room wait times, experiencing more overcrowding, and losing access to critical services,” Carmela Coyle, the hospital association’s president and CEO, said in an October press release.

The California attorney general’s office, which will represent the affordability agency, has not yet filed a response to the hospital group’s complaint and did not respond to a request for comment.

Hospitals’ Pushback

California is not the only state taking a close look at hospital prices, which are widely considered a of health care costs.

“States, armed with information that points to payments to hospitals as a driver of what is way beyond affordable commercial premiums, have begun to take increasingly targeted actions focused on commercial hospital prices,” said Michael Bailit, founder of the Needham, Massachusetts-based consultancy , which has advised multiple states, including California, on ways to tame health care spending. “It is not surprising that the hospital industry is going to oppose such state actions.” 

In its lawsuit, the California Hospital Association said the affordability office’s own report showed that pharmaceutical and insurance companies are largely responsible for high costs.

Hospitals in some states with cost growth limits, including and , have expressed objections similar to the ones raised in the California lawsuit. They could follow their counterparts in California if their lawsuit succeeds, said Peter Lee, who led California’s Affordable Care Act marketplace, Covered California, for and is now a at Stanford Medicine’s Clinical Excellence Research Center.

Lee said the work of California’s affordability office and similar agencies in other states is just about the only systemwide effort being made to cut health care costs. They are basically saying, “‘Look, health care is taking money away from education, it is taking money away from the environment, it is taking money away from everything in the public sector, and in the private sector it is taking money away from wages,’” he said. “‘We don’t know how you, the health system, are going to do it, but it is your job not just to provide quality but to lower costs. Here’s the target.’”

To be sure, achieving the cost savings that California and those other states are seeking is no easy lift. It will ultimately require persuading large, financially powerful players that compete fiercely for health care dollars to adopt a different mindset and begin cooperating to reduce costs instead. And that, in many cases, will mean lower revenue.

But the status quo, as many people know all too well, means continued financial pain for millions.

In early 2020, Estevan Rodriguez, a bartender at California’s Monterey Beach Hotel, had surgery for a staph infection in his leg. The bill came to nearly $168,000. His insurance paid most of it, but he still owed $5,665, which took him two years to pay, more than $200 every month. “It may not be a lot to some people, but it was a lot to me,” Rodriguez said.

He said he dropped his Hulu subscription, switched to a lower-cost cellphone, and got cheaper car insurance. He started going to food banks rather than the grocery store, he said, and had a lot less time with his kids, because he was constantly working to pay off the hospital bill.

, where Rodriguez had his surgery, is one of the seven hospitals identified by California’s affordability office as high-cost. A attributed high hospital prices in Monterey County to a lack of market competition “rather than higher operating costs or superior quality of care.”

The Monterey hospital referred a request for comment about its “high-cost” designation to the California Hospital Association. CHA spokesperson Jan Emerson-Shea declined to comment beyond the language of the lawsuit and Coyle’s press release statement.

Reduced Competition

Health care analysts worry the One Big Beautiful Bill Act will reduce market competition even further by stressing already weak hospitals, leading some to shut services, merge with larger health systems, or close. One study estimates are at risk of closing nationwide.

Less competition, in addition to fewer Medicaid dollars and an increase in uninsured patients, will only strengthen the incentive of health systems with the requisite market clout to raise their commercial prices, increasing premiums for employers and individuals.

“We think commercial prices will continue to increase as health care providers, and hospitals in particular, will seek to preserve or increase their revenue,” said Rachel Block, a program officer at the Milbank Memorial Fund, a foundation that focuses on health equity.

That in turn could pose a challenge to state affordability regulators tasked with overseeing compliance with growth targets for health care spending.

California’s affordability office is required to consider mitigating factors, including changes in federal and state laws. But some of its board members have expressed skepticism about letting hospitals offset Medicaid losses with higher commercial prices.

“There’s a lot of talk about using HR 1 and other federal policies as an excuse to raise prices on commercial payers,” Ian Lewis, an affordability office board member and policy director for UNITE HERE Local 2, a hospitality workers union in the Bay Area, said at the agency’s , referring to the One Big Beautiful Bill. “There’s no more blood to be squeezed from this stone.”

This <a target="_blank" href="/health-care-costs/health-costs-spending-affordability-hospitals-california-one-big-beautiful-bill/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

And, they warn, the economic burden will steer many medical students to lucrative specialties in more affluent, urban areas rather than lower-paying primary care jobs in underserved and rural communities, where doctors are in shortest supply.

“The growing financial barriers may deter some individuals from pursuing a career in medicine, particularly those from low-income backgrounds,” said Deena McRae, a psychiatrist and associate vice president for academic health sciences at University of California Health.

The new federal loan limits, which are enshrined in the GOP legislation signed by Trump on July 4, professional degree students can borrow at $50,000 a year, up to a maximum of $200,000 — well below the average cost of a four-year medical school education.

For students who graduated this year with an MD degree from a four-year medical school in the United States, the median cost of attendance was $318,825, according to Kristen Earle, director of student financial services at the . And for those who entered a U.S. medical school in the 2024-25 academic year, the median first-year cost was $83,700.

Health care experts and politicians on both sides of the aisle agree that medical schools must find ways to lower their costs, but critics of the loan caps say limiting federal lending isn’t the answer. Congressional Republicans, who voted for the caps, say they are intended to stem a sharp rise in federal student lending over the past two decades that has driven the cost of attendance higher.

“Uncapped loan limits gave no incentives for schools to reduce any of their costs, recognizing that taxpayers, students, or students’ families would eventually foot the bill,” said Sara Robertson, a spokesperson for the GOP-controlled House Committee on Education and Workforce. “Our reforms and loan limits will put downward pressure on costs to provide better outcomes and lower debt for all students.”

The budget law brings back caps for graduate and professional education that Congress eliminated in 2006. Since then, students have been able to get federal loans that cover the total cost of their degree programs. Reimposing the caps, along with other changes to federal student loans, is expected to over 10 years, according to the Congressional Budget Office.

Whether the new federal loan policy will push down tuition costs remains to be seen.

Robertson pointed to a by the National Bureau of Economic Research showing that the more generous federal lending policy since 2006 has led to “significantly higher program prices” in graduate education. The study also found that the additional federal support failed to increase enrollment in graduate programs, including for underrepresented students.

However, by the Association of American Medical Colleges shows that cost-of-living increases, not tuition, drove up the expense of studying medicine in recent years.

Students already in medical school who have taken out federal loans before the new rules take effect on July 1 will be exempted from the cap. But students whose loans are capped under the new law will need to make up the difference, in many cases by taking out private sector loans, which typically have less flexible repayment terms and require a strong credit rating — a heavy lift for students from low-income communities.

Robertson cited a 2017 analysis showing that of graduate students could have obtained a private loan at a lower interest rate than any available federal loan. Federal loans, however, come with advantages that private loans don’t. For instance, federal loans can include monthly repayments calibrated to income, and they offer two debt forgiveness paths, including the program, which erases the balance for those who work in a government or nonprofit organization and make their monthly payments for 10 years.

Critics and proponents agree on at least one thing: Now is the time for medical schools to think creatively about lowering costs for students. This might include reduced tuition, more chances for debt forgiveness, and accelerated programs that allow students to graduate in three years rather than four, reducing costs by 25% and getting them more quickly into paid jobs.

“I hope that coming out of this, medical schools and others find a way to seize the moment and help us figure out how to reduce the total cost of medical school,” said Martha Santana-Chin, CEO of L.A. Care. “Maybe this is an opportunity for us to rethink how the system is working.”

Roughly a fifth of medical schools offering an MD degree have accelerated programs, including the University of California-Davis, according to the .

A data analysis of eight medical schools led by the NYU Grossman School of Medicine, whose core MD curriculum is three years, shows that students in three-year programs derive a lifetime financial gain totaling over $240,000 due to the cost savings of less time in medical school, interest not paid on the corresponding amount not borrowed, and faster progression to a salaried position.

In addition to lowering costs, accelerated medical programs seek to address health care workforce shortages by training physicians more quickly. And with the new loan caps about to make it more difficult for many students to finance their medical education, these programs suddenly have a new timeliness.

Students who spend three years in medical school instead of four have lower debt and get to a higher salary sooner, said Caroline Roberts, a family physician and director of rural education at the University of North Carolina’s School of Medicine. UNC offers a three-year track for students who want to be primary care doctors and work in rural areas of the state, where doctor shortages are a major problem.

Zoe Priddy, who is in her second year of UNC’s three-year program, said that if the federal loan limits had been in place at the time she was making plans to attend medical school, she would have needed a job that paid better than the research lab where she worked after completing her undergraduate degree.

“I would have had to change my trajectory if I still wanted to pursue medicine, and I don’t know if it would have been possible for me,” Priddy said. However, the lower debt associated with the three-year track “eased my decision” to go into pediatrics, a lower-paying specialty, she said.

This <a target="_blank" href="/health-industry/medical-school-federal-loan-caps-doctor-shortage-trump-law/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Health care analysts say the nation’s significantly if federal lawmakers do not agree to renew covid-era tax credits, which Congress authorized in 2021 to supplement ACA subsidies.

They’re popular too. According to a , more than three-quarters of adults, including 59% of Republicans, say they want Congress to extend the enhanced tax credits for people with low and moderate incomes. Â鶹ŮÓÅ is a health information nonprofit that includes Â鶹ŮÓÅ Health News, the publisher of California Healthline.

The additional credits have lowered premiums, helped millions of Americans afford the cost of ACA insurance, and lowered the .

Last week, President Donald Trump might be in the works. And Republican U.S. Rep. Marjorie Taylor Greene of Georgia, long aligned with the “Make America Great Again” movement, appeared to endorse an extension of the tax credits, saying in that she was “absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year.”

However, Republican leaders want to first, while Democrats want a deal in a bill that ends the shutdown.

If the supplemental subsidies are not extended beyond this year, the amount subsidized consumers pay for their ACA health plans is expected to on average. That would be a painful cost-of-living increase for most of the country’s more than 24 million marketplace enrollees, including almost 90% of the nearly 2 million people in Covered California, the . Analysts say the loss of enhanced credits would lead millions to drop their coverage nationally, including hundreds of thousands in California.

The federal government shutdown stems primarily from a disagreement between Democratic lawmakers, who want to extend the tax credits, and Republicans opposed to the cost and, in many cases, to the landmark health care law itself. One estimate puts the over 10 years. The Democrats hope their stance can help them win back the House in next year’s midterm elections, as they did in 2018 following a failed GOP effort to repeal the ACA.

Open enrollment season for 2026 ACA health plans starts Nov. 1 in most states, including California, and enrollees still have no clue whether their premiums will rise exorbitantly next year.

“People need to be able to shop for health plans,” says Jessica Altman, executive director of Covered California. “We are at a pivotal moment.”

In July, Covered California sent notices to enrollees breaking out the enhanced portion of their federal subsidy that is set to expire. The idea was to give them a warning of how much their costs might rise if they chose to keep the same health plan next year.

In one case, a common scenario for middle-income enrollees, the entire subsidy of $200 a month would go away. Another enrollee stood to lose one-third of a total $600 per month in aid, according to sample notices provided by Covered California.

The additional tax credits have provided financial assistance to many middle-income health plan shoppers who didn’t qualify for the original subsidies and increased the amount of aid for many others.

Senate Majority Leader John Thune in late September left the door open to extending the otherwise-expiring tax credits but said “it would have to come with some reforms.”

Those might include changes that would reduce the number of enrollees eligible for the extra financial aid, based on income, and reduce or eliminate zero-premium plans, which have become widely available with the advent of the additional tax credits.

If the enhanced subsidies end, Covered California projects its enrollees receiving enhanced subsidies will see their premium costs rise an average of 97%. But the increases will not be borne equally. Depending on age, income, and location, some people will see smaller jumps while others could see their out-of-pocket costs triple, Altman says.

, especially in the northern and eastern counties, and along the Monterey Coast, will see disproportionately large cost increases, according to projections from Covered California. Enrollees with incomes over $62,600 will lose financial aid altogether, leaving some who are ages 55-64 with premium bills as high as .

Without the enhanced subsidies, “we’re going to see more people experiencing medical debt, more people being either uninsured or underinsured,” says Cary Sanders, senior policy director at the nonprofit California Pan-Ethnic Health Network. “And that is the quickest way for families to lose their economic security.”

Covered California estimates about 400,000 people would leave the exchange and likely go without insurance. And that, health care professionals and advocates warn, will only heap stress — in the form of more crowded emergency rooms and community clinics — on an already stressed health care system.

But the proportional impact in California will be smaller than in some Republican-led states such as Florida, Texas, and Georgia. Since those states did not embrace the ACA’s Medicaid expansion, millions of residents thronged to Obamacare marketplace plans, particularly after the enhanced tax credits made coverage eminently more affordable.

From 2020 to 2025, grew nearly 2.5 times in Florida to 4.7 million — more than double California’s marketplace enrollment. In Texas, it more than tripled to just under 4 million. Georgia’s tripled, too, to 1.5 million.

California has about $190 million for 2026 in state funds to help offset the loss of the enhanced premium subsidies. But that money is currently used to help offset enrollee deductibles, coinsurance payments, and other out-of-pocket expenses. And it’s a drop in the bucket compared with the in financial aid Covered California enrollees currently receive from the expiring tax credits.

“A lot of people are going to be shocked at what they’re facing,” says Rachel Linn Gish, a spokesperson for the nonprofit advocacy group Health Access California. “They’re going to have to make super hard choices of, ‘Do I cut back on my groceries, or my rent, or do I go uninsured?’”

Very soon, Covered California and other ACA marketplaces will have to send out formal open enrollment letters, notifying enrollees precisely what to expect for 2026 coverage.

Covered California typically sends those letters out Oct. 1 but has delayed them to around Oct. 15 in the hope that Washington will provide clarity. For now, Covered California has two versions of the letter on ice, one with tax credit extensions and one without.

Altman says she is hoping for congressional action before sending the one with whopping premium increases. But she may have no choice.

“That’s the default here, as in the thing that will happen if nothing changes,” Altman says. “It is also the worst-case scenario, unfortunately.”

She fears that if Covered California informs enrollees that their rates will likely rise sharply, it will scare many away, even if Congress later agrees to extend the credits.

This <a target="_blank" href="/health-care-costs/covered-california-aca-marketplace-federal-government-shutdown-premiums/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Owlett is one of four residents in the inaugural class of a three-year family medicine residency program run by the local nonprofit . She is the kind of doctor the organization seeks to draw to the far north of California, a region with .

That’s because Owlett knows in her gut what a lack of health care means, having seen family members drive hours to see a specialist or simply forgo care in her hometown of Wellsboro, a hamlet in Pennsylvania. She did rural training at medical school in Colorado. And because her husband attended Chico State, the couple has a strong social network here, making them likely to remain.

“With the growing family medicine residency program here, it’s a great opportunity to bring more doctors into the area, and I’d love to be a part of that,” Owlett said.

Owlett exemplifies what leaders in rural Northern California want more of: doctors trained locally who stay to work in the area. They have ambitious plans to attract more Owletts and expand the medical workforce, but recent state and federal spending cuts will pull dollars out of an already frayed health system, exacerbating the shortage of care and making their efforts more challenging.

“We need help up here, and cutting funding is not going to help us,” said Debra Lupeika, associate dean for rural and community-based education at the University of California-Davis School of Medicine and a family physician at the tribal Rolling Hills Clinic in Red Bluff, about 40 miles northwest of Chico. “We are in dire straits. We need doctors.”

California’s far northern region is a collection of sparsely populated counties stretching from just north of Sacramento all the way up to Oregon and from the Pacific coast to the Nevada border. The shortages are so pervasive that support for one of the costliest solutions — a proposed $200 million health care training campus — transcends partisanship.

“It’s about what are the priorities, right? And health care certainly is a priority — should be a priority,” said California Assembly Republican Leader James Gallagher, who represents Chico and the surrounding area. “I think it’s been pretty bipartisan, this kind of stuff.”

Republicans in Congress, including the nine GOP lawmakers in California’s delegation, voted in July to cut nearly a trillion dollars from Medicaid. Area Rep. Doug LaMalfa said the “those eligible for benefits continue to receive them.” Meanwhile, the Democratic-controlled California legislature has its health care coverage for immigrants who lack legal status.

California’s health care shortage is driven by the struggles of rural hospitals; an aging physician workforce; the inherent appeal to up-and-coming doctors of more urban areas; and the financial pressures of doing business in a region with a high proportion of , especially Medi-Cal, the state’s version of the Medicaid program, for people with low incomes and disabilities.

Almost everyone who lives up here is affected by the shortages, ranging from people with complex medical needs to those with simple, straightforward ones.

When Lupeika’s 24-year-old daughter, Ashley, injured her shoulder this summer, she couldn’t get an MRI for nearly a month, despite her severe pain.

Ginger Alonso, an assistant professor of political science and public administration at Chico State, said she drives 70 miles to Redding for OB-GYN care.

The long waits or distances people must travel often lead them to delay or forgo care. As a result, they show up at emergency rooms, urgent care, or community clinics with illnesses that are more severe than they would have been had they received medical attention sooner.

“We see sicker patients, bottom line,” said Tanya Layne, a primary care physician in Chico who recently closed her private practice for financial reasons and works at an urgent care clinic in town, owned by Enloe Health, which also runs the sole hospital in town.

Patients walk through the door with undiagnosed cancers, uncontrolled asthma, raging diabetes, and severely high blood pressure, Layne said.

In many northern counties, specialists in acutely short supply include neurologists, gastroenterologists, rheumatologists, endocrinologists, OB-GYNs, oncologists, and urologists.

“We have whole areas with no specialists at all, or where specialists are so overworked that the waits are really long, and people are forgoing care,” said Doug Matthews, a Chico-based colorectal surgeon and regional medical director of Partnership HealthPlan, which provides Medi-Cal coverage in 24 northern counties.

The health care shortage in the region grew more acute after the catastrophic 2018 Camp Fire devastated the town of Paradise, 15 miles east of Chico, shuttering and sending dozens of doctors out of the region.

In response, local leaders created , which launched a four-year residency in psychiatry last year followed by the family medicine program this year. The group also runs a program to expose high school students to potential careers in health care, and it is behind early plans for the $200 million “interprofessional” health care campus that would train future doctors, nurses, physician assistants, and others.

The startup cost would likely need to come from California’s state legislature, but lawmakers are limited by severe budget pressures. Nevertheless, James Schlund, a radiologist and board member of the organization, is discussing it with officials from UC Davis and Touro University.

“We are building the coalition,” Schlund said, “to go to the legislature with an empty bucket and ask them to fill it with money at the hardest of possible times.”

Meanwhile, medical and political leaders in Chico and Redding, the two largest cities in California’s far north, are each exploring building a medical school, possibly in collaboration and under the auspices of UC Davis, which considers rural medicine integral to its mission.

A medical school, paired with more residency slots, would keep graduating students in the area long enough for them to establish roots, buy homes, and start families, boosting the supply of local physicians, said Paul Dhanuka, a gastroenterologist and member of the Redding City Council.

But some say the region’s small population makes it a challenge to train more residents.

“The number of residents you can accommodate is limited by the ability to get the right kinds of patients with the right kind of cases that give the residents the training they need,” said Duane Bland, a physician who runs the family practice residency program at Mercy Medical Center in Redding.

Dhanuka said that in sparsely populated areas, a low number of childbirths limits how many residents can be trained in family medicine. But that is not the case with other specialties such as surgery, psychiatry, cardiology, and gastroenterology. And, he said, across the whole northern region, “there are multiple hospitals as well as clinics which absolutely are looking for more residency participation.”

Residency programs are largely funded with federal dollars through Medicare, and that funding is not at imminent risk — though the number of residency slots paid for by Washington has not significantly increased in about 30 years.

However, some graduate medical education is state-funded, and in California many of those slots rely on revenue generated from a tax on Medi-Cal health plans, which California voters earmarked for that and other purposes last fall by passing . That revenue is projected to under changes in the budget law and a similar rule proposed by the Centers for Medicare & Medicaid Services.

“We could lose that Prop. 35 funding,” said Mark Servis, vice dean for medical education at the UC Davis School of Medicine. “And we have been planning on it for over a year as a way to build out graduate medical education.”

Servis and other medical educators also worry about new caps on federal student loans, which could deter lower-income students, including those in rural areas, from medical school.

Altogether, the financial constraints will only make the health care shortage worse — in large part because of its impact on the region’s smaller, weaker hospitals and the burden on those that remain.

It’s already begun: Glenn Medical Center in Willows, about 30 miles from Chico, announced last month it its ER and hospital services in October after losing its federal designation as a “critical access” hospital, which afforded it higher payments and more regulatory flexibility.

A $50 billion rural health care fund in the budget law will offset a little more than a third of the money that rural areas are expected to lose because of the Medicaid cuts, from Â鶹ŮÓÅ. And it’s not clear how, or to which states, that money will be distributed.

Civic and medical industry leaders in Chico and Redding say the message needs to get out that a robust health care system will serve the interests of everyone, across political lines.

“Health care is such a human need, because we all hurt the same, regardless of race, color,” Dhanuka said. “We can address this. And we don’t need to take sides on this.”

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/medicaid/rural-northern-california-health-care-shortages-residency-program-funding-cuts/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

And presto: You’ve got people dropping coverage; rising costs; and a smaller, sicker group of enrollees, which translates to higher premiums.

The Trump administration and congressional Republicans have just checked that achievement off their list.

They have done it with the sprawling President Donald Trump signed on July 4 and a related set of released by the Centers for Medicare & Medicaid Services that will govern how the ACA marketplaces are run.

Among the many provisions, there’s this: Large numbers of lawfully present immigrants currently enrolled in Obamacare health plans will lose their subsidies and be forced to pay full fare or drop their coverage.

Wait. What?

I understand that proponents of the new policies think the government spends too much on taxpayer subsidies, especially those who believe the ACA marketplaces are rife with fraud. It makes sense that they would support toughening enrollment and eligibility procedures and even slashing subsidies. But taking coverage away from people who live here legally is not health care policy. It’s an echo of the federal immigration raids in Los Angeles and elsewhere.

“It’s creating a very hostile environment for them, especially after having to leave their countries because of some very traumatic experiences,” says Arturo Vargas Bustamante, a professor of health policy and management at UCLA’s Fielding School of Public Health. “For those who believe health care is a human right, this is like excluding that population from something that should be a given.”

In Covered California, 112,600 immigrants, or nearly 6% of total enrollees, stand to lose their federal tax subsidies when the policy takes effect in 2027, according to data provided by the exchange. In the Massachusetts and Maryland marketplaces, the figure is closer to 14%, according to their directors, Audrey Morse Gasteier and Michele Eberle, respectively.

It’s not clear exactly how much financial aid those immigrants currently receive in ACA marketplaces. But in Covered California, for example, the average for all subsidized enrollees is $561 per month, which covers 80% of the $698 average monthly premium per person. And immigrants, who tend to have lower-than-average incomes, are likely to get more of a subsidy.

The immigrants who will lose their subsidies include victims of human trafficking and domestic violence, as well as refugees with asylum or with some temporary protected status. And “Dreamers” will no longer be eligible for ACA marketplace health plans because they will not be considered lawfully present. Immigrants who are not in the country legally cannot get coverage through Covered California or most other ACA marketplaces.

The nearly 540,000 Dreamers in the United States arrived in the U.S. as kids without immigration papers and were granted temporary legal status by President Barack Obama in 2012. Of those, an estimated 11,000 have ACA health plans and would lose them, including 2,300 in Covered California.

Supporters of the policy changes enshrined in the CMS rule and budget law think it’s high time to rein in what they say are abuses in the system that started under the Biden administration with expanded tax credits and overly flexible enrollment policies.

“It’s about making Obamacare lawful and implementing it as drafted rather than what Biden turned it into, which was a fraud and a waste-infused program,” says Brian Blase, president of Arlington, Virginia-based Paragon Health Institute, which produces policy papers with a free-market bent and influenced the Republican-driven policies.

But Blase doesn’t have much to say about the termination of Obamacare subsidies for lawfully present immigrants. He says Paragon has not focused much on that subject.

Jessica Altman, executive director of Covered California, expects most immigrants who lose subsidies will discontinue their enrollment. “If you look at where those populations fall on the income scale, the vast majority are not going to be able to afford the full cost of the premium to stay covered,” she says.

Apart from the human hardship cited by Bustamante, the exodus of immigrants could compromise the financial stability of coverage for the rest of Covered California’s . That’s because immigrants tend to be younger than the average enrollee and use fewer medical resources, thus helping offset the costs of older and sicker people who are more expensive to cover.

shows that immigrant enrollees targeted by the new federal policies pose significantly lower medical risk than U.S. citizens. And a significantly higher percentage of immigrants in the exchange are ages 26 to 44, while 55- to 64-year-olds make up a smaller percentage.

Still, it would be manageable if immigrants were the only younger people to leave the exchange. But that is unlikely to be the case. More red tape and higher out-of-pocket costs — especially if enhanced tax credits disappear — could lead a lot of young people to think twice about health insurance.

The covid-era enhanced tax credits, which have ACA marketplace enrollment since their advent in 2021, are set to expire at the end of December without congressional action. And, so far, Republicans in Congress do not seem inclined to renew them. Ending them would reverse much of that enrollment gain by jacking up the amount consumers would have to spend on premiums out of their own pockets at Covered California and more than .

And by the Congressional Budget Office shows that a consequent exodus of younger, healthier people from the marketplaces would lead to even greater costs over time.

Enhanced tax credits aside, consumers face additional hurdles: The annual enrollment period for Covered California and other marketplaces will be shorter than it is now. Special enrollment periods for people with the lowest incomes will be effectively eliminated. So will automatic renewals, which have greatly simplified the process for a majority of enrollees at Covered California and some other marketplaces. Enrollees will no longer be able to start subsidized coverage, as they can now, before all their information is fully verified.

“Who are the people who are going to decide to go through hours and hours of onerous paperwork?” says Morse Gasteier. “They’re people who have chronic conditions. They have health care issues they need to manage. The folks we would expect not to wade through all that red tape would be the younger, healthier folks.”

California and 20 other states this month challenged some of that red tape in a to stop provisions of the CMS rule that erect “unreasonable barriers to coverage.” California Attorney General Rob Bonta said he and his fellow attorneys general hoped for a court ruling before the rule takes effect on Aug. 25.

“The Trump administration claims that their final rule will prevent fraud,” Bonta said. “It’s obvious what this is really about. It’s yet another political move to punish vulnerable communities by removing access to vital care and gutting the Affordable Care Act.”

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/health-care-costs/column-covered-california-immigrants-stabilize-aca-marketplace-trump-health-policy/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

, passed in both the House and the Senate without a single Democratic vote, is expected to reverse many of the health coverage gains of the Biden and Obama administrations. Their policies made it easier for millions of people to access health care and reduced the U.S. uninsured rate to record lows, though Republicans say the trade-off was far higher costs borne by taxpayers and increased fraud.

Under the legislation Trump’s expected to sign on Friday, Independence Day, reductions in federal support for Medicaid and Affordable Care Act marketplaces will cause nearly 12 million more people to be without insurance by 2034, the Congressional Budget Office estimates. That in turn is expected to undermine the finances of hospitals, nursing homes, and community health centers — which will have to absorb more of the cost of treating uninsured people. Some may reduce services and employees or close altogether.

Here are five ways the GOP’s plans may affect health care access.

Need Medicaid? Then Get a Job

The deepest cuts to health care spending come from a proposed Medicaid work requirement, which is expected to end coverage for millions of enrollees who do not meet new employment or reporting standards.

In 40 states and Washington, D.C., all of which have expanded Medicaid under the Affordable Care Act, some Medicaid enrollees will have to regularly file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month, or that they qualify for an exemption, such as caring for a young child. The new requirement will start as early as January 2027.

The bill’s requirement doesn’t apply to people in the 10 largely GOP-led states that have not expanded Medicaid to nondisabled adults.

Health researchers say the policy will have little impact on employment. Most working-age Medicaid enrollees who don’t receive disability benefits already work or are looking for work, or are unable to do so because they have a disability, attend school, or care for a family member, , a health information nonprofit that includes Â鶹ŮÓÅ Health News.

State experiments with work requirements have been plagued with administrative issues, such as eligible enrollees’ losing coverage over paperwork problems, and budget overruns. Georgia’s work requirement, which officially launched in July 2023, has cost more than $90 million, with of that spent on health benefits, according to the , a nonpartisan research organization.

“The hidden costs are astronomical,” said Chima Ndumele, a professor at the Yale School of Public Health.

Less Cash Means Less Care in Rural Communities

Belt-tightening that targets states could translate into fewer health services, medical professionals, and even hospitals, especially in rural communities.

The GOP’s plan curtails a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes, and other providers and to private managed-care companies.

States often use the federal money generated through the taxes to pay the institutions more than Medicaid would otherwise pay. Medicaid generally pays lower fees for care than Medicare, the program for people over 65 and some with disabilities, and private insurance. But thanks to provider taxes, some hospitals are paid more under Medicaid than Medicare, , a health research nonprofit.

Hospitals and nursing homes say they use these extra Medicaid dollars to expand or add new services and improve care for all patients.

Rural hospitals typically operate on thin profit margins and rely on payments from Medicaid taxes to sustain them. Researchers from the who examined the original House version of the bill concluded it would push more than 300 rural hospitals — many of them in Kentucky, Louisiana, California, and Oklahoma — toward service reductions or closure.

Republicans in the Senate tacked a $50 billion fund onto the legislation to cushion the blow to rural hospitals. The money will be distributed starting in 2027 and continue for five years.

Harder To Get, and Keep, ACA Coverage

For those with Obamacare plans, the new legislation will make it harder to enroll and to retain their coverage.

ACA marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year. They’ll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.

People applying for coverage outside that period — for instance because they lose a job or other insurance or need to add a newborn or spouse to an existing policy — will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums. Today, they get up to 90 days of premium help during the application process, which can take weeks.

Republican lawmakers and some conservative policy think tanks, including , say the changes are needed to reduce fraudulent enrollments, while opponents say they represent Trump’s best effort to undo Obamacare.

The legislation also does not call for an extension of more generous premium subsidies put in place during the covid pandemic. If Congress doesn’t act, those enhanced subsidies will expire at year’s end, resulting in premiums rising by next year, according to Â鶹ŮÓÅ.

On Medicaid? Pay More To See Doctors

Many Medicaid enrollees can expect to pay more out-of-pocket for appointments.

Trump’s legislation requires states that have expanded Medicaid to charge enrollees up to $35 for some services if their incomes are between the federal poverty level (this year, $15,650 for an individual) and 138% of that amount ($21,597).

Medicaid enrollees often don’t pay anything when seeking medical services because studies have shown charging even small copayments prompts low-income people to forgo needed care. In recent years, some states have added charges under $10 for certain services.

The policy won’t apply to people seeking primary care, mental health care, or substance abuse treatment. The bill allows states to enact even higher cost sharing for enrollees who seek emergency room care for nonemergencies. But if Medicaid patients fail to pay, hospitals and other providers could be left to foot the bill.

Cuts for Lawfully Present Immigrants

The GOP plan could cause at least hundreds of thousands of immigrants who are lawfully present — including asylum-seekers, victims of trafficking, and refugees — to lose their ACA marketplace coverage by cutting off the subsidies that make premiums affordable. The restriction won’t apply to green-card holders.

Because the immigrants who will lose subsidies under the legislation tend to be younger than the overall U.S. population, their exit would leave an older, sicker, and costlier population of marketplace enrollees, further pushing up marketplace premiums, according to marketplace directors in California, Maryland, and Massachusetts and health analysts.

Taking health care access away from immigrants living in the country legally “will do irreparable harm to individuals we have promised to protect and impose unnecessary costs on local systems already under strain,” John Slocum, executive director of Refugee Council USA, an advocacy group, said .

The bill reflects the Trump administration’s restrictive approach to immigration. But because it ran afoul of Senate rules, the legislation doesn’t include a proposal that would have reduced federal Medicaid payments to states such as California that use their own money to cover immigrants without legal status.

Â鶹ŮÓÅ Health News chief Washington correspondent Julie Rovner contributed reporting.

This <a target="_blank" href="/health-industry/one-big-beautiful-bill-medicaid-work-requirements-affordable-care-act-immigrants/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

No state has more to lose than California, whose Medicaid program, called Medi-Cal, covers nearly 15 million residents with low incomes and disabilities. That’s twice as many as New York and three times as many as Texas.

by the Centers for Medicare & Medicaid Services, echoed in the Republican as well as a more drastic Senate bill, would significantly curtail the federal dollars many states draw in matching funds from what are known as provider taxes. Although it’s unclear how much states could lose, the revenue up for grabs is big. For instance, California has netted an estimated $8.8 billion this fiscal year from its tax on and took in about $5.9 billion last year from hospitals.

California Democrats are already facing a , and they have drawn political fire for scaling back some key health care policies, including for immigrants without permanent legal status. And a loss of provider tax revenue could add billions to the current deficit, forcing state lawmakers to make even more unpopular cuts to Medi-Cal benefits.

“If Republicans move this extreme MAGA proposal forward, millions will lose coverage, hospitals will close, and safety nets could collapse under the weight,” Gov. Gavin Newsom, a Democrat, said in a statement, referring to President Donald Trump’s “Make America Great Again” movement.

The proposals are also a threat to , a ballot initiative California voters approved last November to make permanent the tax on managed care organizations, or MCOs, and dedicate some of its proceeds to raise the pay of doctors and other providers who treat Medi-Cal patients.

All states except Alaska have at least one provider tax on managed care plans, hospitals, nursing homes, emergency ground transportation, or of health care businesses. The federal government spends billions of dollars a year matching these taxes, which generally lead to more money for providers, helping them balance lower Medicaid reimbursement rates while allowing states to protect against economic downturns and budget constraints.

New York, Massachusetts, and Michigan would also be among the states hit hard by Republicans’ drive to scale back provider taxes, which allow states to boost their share of Medicaid spending to receive increased federal Medicaid funds.

In a May 12 statement announcing its proposed rule, CMS described a “loophole” as “,” and said California had financed coverage for over 1.6 million “illegal immigrants” with the proceeds from its MCO tax. CMS said its proposal would save more than $30 billion over five years.

“This proposed rule stops the shell game and ensures federal Medicaid dollars go where they’re needed most — to pay for health care for vulnerable Americans who rely on this program, not to plug state budget holes or bankroll benefits for noncitizens,” Mehmet Oz, the CMS administrator, said in the statement.

Medicaid allows coverage for noncitizens who are legally present and have been in the country for at least five years. And California uses state money to pay for almost all of the Medi-Cal coverage for immigrants who are not in the country legally.

California, New York, Michigan, and Massachusetts together account for more than 95% of the “federal taxpayer losses” from the loophole in provider taxes, CMS said. But nearly every state would feel some impact, especially under the provisions in the reconciliation bill, which are more restrictive than the CMS proposal.

None of it is a done deal. The CMS proposal, published May 15, has not been adopted yet, while the House and Senate bills must be negotiated into one and passed by both chambers of Congress. But the restrictions being contemplated would be far-reaching.

by Michigan’s Department of Health and Human Services, ordered by Democratic Gov. Gretchen Whitmer, found that a reduction of revenue from the state’s hospital tax could “destabilize hospital finances, particularly in rural and safety-net facilities, and increase the risk of service cuts or closures.” Losing revenue from the state’s MCO tax “would likely require substantial cuts, tax increases, or reductions in coverage and access to care,” it said.

CMS declined to respond to questions about its proposed rule.

The Republicans’ House-passed reconciliation bill, though not the CMS proposal, also prohibits any new provider taxes or increases to existing ones. The Senate version, released June 16, would gradually reduce the allowable amount of many provider taxes.

The American Hospital Association, which represents nearly 5,000 hospitals and health systems nationwide, said the proposed moratorium on new or increased provider taxes “to make significant cuts to Medicaid to balance their budgets, including reducing eligibility, eliminating or limiting benefits, and reducing already low payment rates for providers.”

Because provider taxes draw matching federal dollars, Washington has a say in how they are implemented. And the Republicans who run the federal government are looking to spend far fewer of those dollars.

In California, the insurers that pay the MCO tax are reimbursed for the portion levied on their Medi-Cal enrollment. That helps explain why the tax rate on Medi-Cal enrollment is sharply higher than on commercial enrollment. Over 99% of the tax money the insurers pay comes from their Medi-Cal business, which means most of the state’s insurers get back almost all the tax they pay.

That imbalance, which CMS describes as a loophole, is one of the main things Republicans are trying to change. If either the CMS rule or the corresponding provisions in the House reconciliation bill were enacted, states would be required to levy provider taxes equally on Medicaid and commercial business to draw federal dollars.

California would likely be unable to raise the commercial rates to the level of the Medi-Cal ones, because state law constrains the legislature’s ability to do so. The only way to comply with the rule would be to lower the tax rate on Medi-Cal enrollment, which would sharply reduce revenue.

CMS has warned California and other states for years, including under the Biden administration, that it was considering significant changes to MCO and other provider taxes. Those warnings were never realized. But the risk may be greater this time, some observers say, because the effort to shrink provider taxes is embedded in both Republican reconciliation bills and intertwined with a broader Republican strategy — and set of proposals — to by $800 billion or more.

“All of these proposals move in the same direction: fewer people enrolled, less generous Medicaid programs over time,” said Edwin Park, a research professor at Georgetown University’s McCourt School of Public Policy.

California’s MCO tax is expected to net California $13.9 billion over the next two fiscal years, . The state’s hospital tax is expected to bring in an estimated $9 billion this year, up sharply from last year, according to the Department of Health Care Services, which runs Medi-Cal.

Losing a significant slice of that revenue on top of other Medicaid cuts in the House reconciliation bill “all adds up to be potentially a super serious impact on Medi-Cal and the California state budget overall,” said Kayla Kitson, a senior policy fellow at the California Budget & Policy Center.

And it’s not only California that will feel the pain.

“All states are going to be hurt by this,” Park said.

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/health-industry/mco-medicaid-provider-taxes-matching-funds-threatened-cms-house-california/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

California’s Affordable Care Act health insurance exchange covers nearly residents and 89% of them receive federal subsidies that reduce their premiums. Many middle-income households got subsidies for the first time after Congress expanded them in 2021, which helped generate a boom in enrollment in ACA exchanges nationwide.

From the original and enhanced subsidies, Covered California enrollees currently get $563 a month on average, lowering the average monthly out-of-pocket premium from $698 to $135, according to data from Covered California.

The 2021 subsidies are set to expire at the end of this year unless Congress renews them. If they lapse, enrollees would be on the hook to pay an average of $101 a month more for health insurance — not counting any premium hikes in 2026 and beyond. And those middle-income earners who did not qualify for subsidies before would lose all financial assistance — $384 a month, on average — which Soni fears could prompt them to drop out.

At the same time, vaccination rates for children 2 and under declined among 7 of the 10 Covered California health plans subject to its new quality-of-care requirements. Soni, a Los Angeles native who came to Covered California in May 2023, oversees that program, in which health plans must meet performance targets on blood pressure control, diabetes management, colorectal cancer screening, and childhood vaccinations — or pay a financial penalty.

Lack of access to such key aspects of care disproportionately affects underserved communities, making Covered California’s effort one of health equity as well. Soni, a Harvard-trained primary care doctor who sees patients one day a week at an urgent care clinic in Los Angeles County’s public safety net health system, is familiar with the challenges those communities face.

Covered California reported last November that its health plans improved on three of the four measures in the first year of the program. But childhood immunizations for those under 2 declined by 4%. The decline is in line with , which Soni attributed to postpandemic mistrust of vaccines and “more skepticism of the entire medical industry.”

Most parents have heard at least one untrue statement about measles or the vaccine for it, and many don’t know what to believe, according to an .

Health plans improved on the other three measures, but not enough to avoid penalties, which yielded $15 million. The exchange is using that money to fund another effort Soni manages, which helps 6,900 Covered California households buy groceries and contributes to over 250 savings accounts for children who get routine checkups and vaccines. Some of the penalty money will also be used to support primary care practices around California.

In addition to her bifurcated professional duties, Soni is the mother of two young children, ages 4 and 7. Â鶹ŮÓÅ Health News senior correspondent Bernard J. Wolfson spoke with Soni about the impact of possible federal cuts and the exchange’s initiative to improve care for its enrollees. This interview has been edited for length and clarity.

Q: Covered California has record enrollment of nearly 2 million, boosted by the expanded federal subsidies passed under the Biden administration, which end after this year. What if Congress does not renew them?

A: Our estimates are that it will approach 400,000 Californians who would drop coverage immediately. We hear every day from our folks that they’re really living on the margins. Until they got some of those subsidies, they could not afford coverage.

As a primary care doctor, I am the one to treat folks who show up with preventable cancers because they were too afraid to think about what their out-of-pocket costs would be. I don’t want to go back to those days.

Q: Congress is considering billions in cuts to Medicaid. How would that affect Covered California and the state’s population more broadly, given that more than 1 in 3 Californians are on Medi-Cal, the state’s version of Medicaid?

A: Those are our neighbors, our friends. Those are the people working in the restaurants we eat at. Earlier cancer screenings, better chronic disease control, lower maternal mortality, more substance use disorder treatment: We know that Medicaid saves lives. We know it helps people live longer and better. As a physician, I would be hard-pressed to argue for rolling back anything that saves lives. It would be very distressing to watch that come to California.

Q: Why did Covered California undertake the Quality Transformation Initiative?

A: We were incredibly successful at covering nearly 2 million, but frankly we didn’t see improvements in quality, and we continue to see gaps for certain populations in terms of outcomes. So, I think the question became much more imperative: Are we getting our money’s worth out of this coverage? Are we making sure people are living longer and better, and if not, how do we up the ante to make sure they are?

Q: There’s a penalty for not meeting the targets, but no bonuses for meeting them: You meet the goals or else, right?

A: We don’t say it like that, but that is true. And we didn’t make it complicated. It’s only four measures. It’s things that as a primary care doctor I know are important, that I take care of when I see people in my practice. We said get to the 66th percentile on these four measures, and there’s no dollars that you have to pay. If you don’t, then we collect those funds.

Q: And you use the penalty money to fund the grocery assistance and child savings accounts.

A: That’s exactly right. We had this opportunity to think about what would we use these dollars for and how we actually make a difference in people’s lives. So, we cold-called hundreds of people, we sent surveys out to thousands of folks, and what we heard overwhelmingly was how expensive it is to live in California; that folks are making trade-offs between food and transportation, between child care and food — just impossible decisions.

Q: You will put up to $1,000 a child into those savings accounts, right?

A: That’s right. It’s tied to doing those healthy behaviors, going to child well visits and getting recommended vaccines. We looked at the literature, and once you get to even just $500 in an account, the likelihood of a kid going to a two- or four-year school increases significantly. It’s actually because they’re hopeful about their future, and it changes their path of upward mobility, which we know changes their health outcome.

Q: Given the rise in vaccine skepticism, are you worried that the recent measles outbreak could grow?

A: I am very concerned about it. I was actually reading some posts from a physician colleague who trained decades earlier and was talking about all the diseases that my generation of physicians have never seen. We don’t actually know how to diagnose and take care of a number of infectious diseases because they mostly have been eradicated or outbreaks have been really contained. So, I feel worried. I’ve been brushing off my old textbooks.

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/health-care-costs/covered-california-chief-medical-officer-monica-soni-q-and-a-vaccination-rates/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Lingering pain from a car crash two months ago, on top of an already hardscrabble life, has Angulo worried about her pregnancy. So, she was relieved when a mobile street medicine van from St. John’s Community Health pulled up near her encampment last month.

“Thank God that we have them,” she said.

, which operates 28 clinics, mostly in L.A. County, is part of the nation’s network of nonprofit community clinics that care for the poorest Americans. Around 80% of its 144,000 patients, including Angulo, have Medi-Cal, California’s version of the Medicaid program for people with low incomes or disabilities.

But federal cuts to Medicaid spending under the Republican-passed One Big Beautiful Bill Act, compounded by in Sacramento, could cost St. John’s up to one-third of its $240 million annual revenue, requiring cuts to services that might include street medicine, said Jim Mangia, the president and CEO.

Smaller, more cash-strapped clinics in L.A. County could face harsher consequences, including closure, if the lost funding is not replaced.

That’s why Mangia, along with a coalition of community clinics, health care workers, and advocates, is pushing for a five-year, in the nation’s most populous county to help backfill the projected loss of federal and state dollars. St. John’s has contributed at least $2 million to the campaign so far.

Louise McCarthy, president and CEO of the Community Clinic Association of Los Angeles County, said there aren’t a lot of options to save the health care system from disaster.

“Our backs are up against the wall,” she said. “This has the potential to be a game changer. It will be an absolutely significant offset to the losses.”

The L.A. County Board of Supervisors last month for inclusion on the June 2 primary ballot, over the objection of some cities within the county. Their leaders argued the tax would put a strain on consumers and business owners. Most of an in annual revenue generated would be used to protect safety-net health care at community clinics, hospitals, and schools.

Scrambling To Stay Afloat

Nationally, the GOP budget law is expected to cut federal Medicaid spending by over 10 years, and it could lead to an increase of in the number of people left uninsured. The L.A. ballot proposal is among many local and state initiatives nationwide, as clinics, hospitals, health care workers, advocates, and legislators scramble for new money to help offset the spending cuts.

In Michigan, where the federal law is projected to cost the state , Democratic Gov. Gretchen Whitmer’s office has proposed on tobacco, vape products, online gambling, sports betting, and digital advertising, which it projects would raise hundreds of millions of dollars annually.

In Rhode Island, a group of state legislators hopes to ease some of the pain caused by the federal cuts with a that includes a tax on digital ads and a 3% surcharge on taxable incomes above roughly $640,000.

“The goal is not to replace the revenue; it’s to mitigate the damage,” said Democratic state Rep. Brandon Potter, one of the legislators involved.

In Washington, Democratic state Rep. Shaun Scott recently introduced legislation to address the loss of federal dollars with on large companies, applied to employee salaries exceeding $125,000 a year.

In California, the GOP law will slash the to Medi-Cal by an a year, or 25%. Enrollment in Medi-Cal could by 2028 as a result of the federal and state spending cuts, according to an analysis by the UCLA Center for Health Policy Research and the University of California-Berkeley Labor Center.

In July, California will slash Medi-Cal payments that community clinics receive for certain services provided to patients with “unsatisfactory” immigration status by about . Those patients include permanent residents in the country for less than five years, refugees, asylees, and other lawfully present people.

Bracing for a ‘New Reality’?

Advocates and health care experts say finding new revenue is the only way to avoid a crisis in California’s health care system.

“Are we going to let the gaps created by federal policies and state budget cuts leave millions of people uninsured?” said Laurel Lucia, deputy executive director of programs at the UC Berkeley Labor Center. “I think a lot of that question comes down to revenues.”

Some medical professionals say that new revenue is needed in the short term but that the country needs to address its notoriously expensive health care system.

“This new reality is that we have to do our work with less money going into the future,” said Hector Flores, of the Los Angeles County Medical Association. “So, this is an opportunity for us to look at how we can do things better.”

In the meantime, efforts to raise taxes for health care abound.

Voters in Santa Clara County, home to Silicon Valley, last November approved a five-year 0.625% to offset federal Medicaid cuts. A will be on the June ballot in Contra Costa County.

The best-known initiative, and a hotly contested one, is a union-sponsored ballot proposal in California for a on the state’s . Democratic Gov. Gavin Newsom strongly opposes it; Sen. Bernie Sanders (I-Vt.) stumped for it in California recently and has a national version in Congress.

Proponents of the temporary wealth tax say it would raise , which would mostly be used to backfill lost federal and state dollars in Medi-Cal and other safety-net programs. Proponents are trying to collect nearly 875,000 signatures needed to get it on the November ballot.

“We are on the precipice of a collapse of our health care system. So the most fortunate among us pay a modest tax that will hold us over and allow us to figure out a long-term solution,” said Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, the measure’s chief sponsor. “They would still be incredibly wealthy after that.”

Billionaires Push Back

The plan has stirred considerable controversy, not just in the Golden State but nationwide, and has generated strong and others.

Critics argue the measure could prompt billionaires to leave California, putting a damper on innovation, jobs, and tax receipts. And, some warn, the measure could end up in a legal quagmire, as those deemed liable to pony up challenge it on multiple fronts.

“If this passed, you would expect it to be tied up in court for some time,” said Jared Walczak, a visiting fellow at the California Tax Foundation. “It is fairly plausible that no revenue could come in for a number of years, if there’s ever any revenue at all.”

The prospect of such complications has led some health care advocates to focus instead on local initiatives that could start generating revenue more quickly, such as the proposed sales tax in L.A. County.

That one has critics too, including leaders of multiple cities within the county who to reject a proposal they argued would add to the affordability worries of consumers and put a strain on businesses.

Kathryn Barger, a Republican and the only L.A. County supervisor to oppose putting the measure on the June ballot, said in a statement that the proposed tax would make the county “less affordable for families and less appealing for consumers to shop and businesses to operate.”

But supporters say safety-net health care is already feeling the impact of diminished funding. Last month, for example, L.A. County’s Department of Public Health announced it was due to $50 million in federal, state, and local funding cuts.

Medi-Cal enrollees are worried, too. “We get a lot of calls from panicked patients afraid they’re going to lose their Medi-Cal. Dozens of calls a day, hundreds of calls a week,” said St. John’s Mangia.

“We tell them that we’re working on a solution and hopefully we’ll have that solution come June.”

This <a target="_blank" href="/health-industry/federal-cuts-state-tax-increases-budget-shortfalls-health-clinics-los-angeles-california/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Martha Santana-Chin, the daughter of Mexican immigrants, grew up on Medi-Cal, California’s version of Medicaid, the government-run health care program for people with low incomes and disabilities. Today, she is CEO of L.A. Care, which runs by far the biggest Medi-Cal health plan, with more than 2.2 million enrollees, exceeding the Medicaid and Children’s Health Insurance Program enrollments in .

“If it weren’t for safety nets like the Medi-Cal program, I think, many people would be stuck in poverty without an ability to get out,” she said. “For me personally, not having to worry about health care allowed me to really focus on what I needed to focus on, which was my education.”

As she begins her second year steering L.A. Care, Santana-Chin is grappling with federal and state spending cuts that complicate her task of providing health care to the poor and medically vulnerable enrollees in Medicaid. The insurer also provides Affordable Care Act marketplace plans through Covered California.

Santana-Chin warns that the GOP’s One Big Beautiful Bill Act, enacted last year and also known as HR 1, could result in 650,000 enrollees falling off L.A. Care’s Medi-Cal rolls by the end of 2028. This will strain the plan’s finances as revenues decline. The insurer had revenues of $11.7 billion in the last fiscal year.

HR 1 is expected to cut more than $900 billion from Medicaid over the next 10 years — including in California, according to the Department of Health Care Services, which runs Medi-Cal.

Like other states facing big deficits, California has reduced its Medicaid spending through such steps as freezing new enrollments for immigrants without legal status and reintroducing an . And that’s before the state reckons with the spending cuts that likely will be required by the withdrawal of so many federal dollars under HR 1.

Santana-Chin oversaw Medi-Cal and Medicare operations for the for-profit insurer Health Net before taking the helm of L.A. Care in January 2025, nearly three years after state regulators over violations they said compromised the health and safety of its members. L.A. Care paid to the state and agreed to contribute $28 million to community health projects.

In a wide-ranging interview, Santana-Chin talked to Â鶹ŮÓÅ Health News senior correspondent Bernard J. Wolfson about the financial headwinds facing L.A. Care and why she believes health care shouldn’t be restricted based on a person’s immigration status. This interview has been edited for length and clarity.

Q: You grew up on Medicaid. How has that shaped your views now that you run one of the largest Medicaid plans in the country?

What really motivates me is knowing that many of the people that we’re serving are just like my family. They’ve struggled and have had to have their own children translate things that were very difficult to translate. I remember doing that for my own mother. You know, basic human dignity requires that you have access to health care.

Q: Has anything you’ve dealt with at Health Net or L.A. Care reminded you of your childhood experiences in Medi-Cal?

Back then they didn’t cover transportation, and we didn’t have a vehicle. Today, one of the issues we’ll hear from our members is the need to make sure we have trustworthy transportation that shows up on time, where the drivers treat them with respect. Had I had that, had my mother had that, life would have been much easier.

Q: What do you think the impact of HR 1 will be?

It’s going to devastate the delivery system. The state obviously isn’t going to be able to make up for the shortfalls in federal funding, and over the course of the next several years, funding is going to be less and less, and the people we cover are going to decrease significantly. We are expecting between now and the end of 2028 that we’re going to see 650,000 people drop off the rolls. That’s just L.A. Care.

Q: That’s over a quarter of your Medi-Cal enrollment.

Yes, it’s very, very significant. The reductions in payment and the rise in uncompensated care are really going to impact our delivery system. As the delivery system gets destabilized and hospitals and other health care providers are forced to close services or reduce the number of sites they have, it’s going to impact access. And it’s not only going to impact those that lose coverage.

Q: How will L.A. Care respond?

Obviously, we’re going to see a significant drop in revenue. We’re very focused on making sure that we are operating as efficiently as we can operate. And we are looking at creative ways to use technology to empower our people to do higher-level work. Mostly supporting our call center agents with smarter technology that helps them answer questions and resolve problems more quickly. Some of it is automating processes on the claims payment side.

Q: What do you have to say to congressional Republicans who passed HR 1?

We are at a point of inflection in the health care delivery system. And we have to recognize that some of the components of HR 1 will have long-term unintended consequences — maybe they were intended; I’ve got to believe that some of these things are not. There’s probably a need to reconsider some of the things that were passed.

Q: Such as?

Work requirements are an example of something that many people did believe was the right thing to do to be good stewards of the health care dollar. It is very complex and is going to cause people to lose coverage that actually do qualify. It’s unfortunate, and that would be something that I would urge folks to reconsider.

Q: What impact do you expect from California’s decision to freeze Medi-Cal enrollment for immigrants without legal status?

It doesn’t matter what immigration status you are. If you are a human being and you need health care, you’re going to try to access health care wherever you can. That’s going to put a strain on the delivery system if you’re uninsured.

Q: What has L.A. Care done to address the state’s concerns in 2022 that it delayed authorizing care and addressing patient grievances?

There has been quite a bit of investment in the L.A. Care infrastructure over the last several years — our IT platforms, our data. There’s also quite a bit of investment in adding new capacity, adding bandwidth to many of the teams, more folks to help support the work.

Q: How have federal immigration raids in L.A. affected L.A. Care members and the broader community?

It absolutely has had a chilling effect. Families are afraid to come in. They’re not taking their children to get vaccinated. I’ve had numerous providers in emergency departments say that they have experienced a drop in the volume of individuals coming in. One of our case managers was really distraught because there was an individual that decided to forgo serious lifesaving treatment because of fear.

This <a target="_blank" href="/health-care-costs/la-care-ceo-martha-santana-chin-interview-gop-cuts-medicaid/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

California, Massachusetts, Connecticut, and have set caps on health care spending in a bid to rein in the intense financial pressure felt by many families, individuals, and employers who every year face increases in premiums, deductibles, and other health-related expenses.

Hospitals and other health care providers are citing Republicans’ One Big Beautiful Bill Act, signed by President Donald Trump in July, as one more reason to challenge those limits.

The law is expected to reduce federal Medicaid spending by over a decade, which mathematically should help the overall health care system meet the caps. But the law is also expected to increase the number of uninsured Americans, mostly Medicaid beneficiaries, by an estimated . Health care analysts predict hospitals and other providers will raise prices to cover the double whammy of lost Medicaid revenue and the cost of caring for an influx of newly uninsured patients.

Whether regulators in some states will allow providers to justify higher prices and exceed the spending caps is unclear. Only can penalize providers financially if they fail to meet targets.

“Are we going to say, ‘That’s OK’? Or are we going to say, ‘Well, you exceeded the target. We’re still going to penalize you for that’?” said Richard Pan, a former state lawmaker and a member of the California Office of Health Care Affordability’s board. “That has not yet been decided.”

The California Hospital Association, the industry’s main state lobbying group, in October asking a state court to strike down the spending caps, which it argued fail to account for all the cost pressures hospitals face. Those pressures, it said, include an aging, sicker population; the of labor; expensive advances in medical technology; large capital outlays on required seismic retrofitting; and changes in federal policy, including the One Big Beautiful Bill Act. The hospital group’s lawsuit also asserted that the state affordability office, by hastily imposing ill-considered cost-cutting targets, was undermining its other key mission of improving health care access, quality, and equity.

California’s affordability office last year set a five-year target to cap statewide spending growth, starting at 3.5% in 2025 and declining to 3% by 2029. The annual caps apply to a wide range of health care entities, including hospitals, medical groups, insurers, and other payers.

Earlier this year, it imposed much lower spending growth caps — starting at 1.8% in 2026 and declining to 1.6% by 2029 — for .

“The spending caps set by politically appointed bureaucrats could force cuts that result in many Californians traveling farther for care, facing longer emergency room wait times, experiencing more overcrowding, and losing access to critical services,” Carmela Coyle, the hospital association’s president and CEO, said in an October press release.

The California attorney general’s office, which will represent the affordability agency, has not yet filed a response to the hospital group’s complaint and did not respond to a request for comment.

Hospitals’ Pushback

California is not the only state taking a close look at hospital prices, which are widely considered a of health care costs.

“States, armed with information that points to payments to hospitals as a driver of what is way beyond affordable commercial premiums, have begun to take increasingly targeted actions focused on commercial hospital prices,” said Michael Bailit, founder of the Needham, Massachusetts-based consultancy , which has advised multiple states, including California, on ways to tame health care spending. “It is not surprising that the hospital industry is going to oppose such state actions.” 

In its lawsuit, the California Hospital Association said the affordability office’s own report showed that pharmaceutical and insurance companies are largely responsible for high costs.

Hospitals in some states with cost growth limits, including and , have expressed objections similar to the ones raised in the California lawsuit. They could follow their counterparts in California if their lawsuit succeeds, said Peter Lee, who led California’s Affordable Care Act marketplace, Covered California, for and is now a at Stanford Medicine’s Clinical Excellence Research Center.

Lee said the work of California’s affordability office and similar agencies in other states is just about the only systemwide effort being made to cut health care costs. They are basically saying, “‘Look, health care is taking money away from education, it is taking money away from the environment, it is taking money away from everything in the public sector, and in the private sector it is taking money away from wages,’” he said. “‘We don’t know how you, the health system, are going to do it, but it is your job not just to provide quality but to lower costs. Here’s the target.’”

To be sure, achieving the cost savings that California and those other states are seeking is no easy lift. It will ultimately require persuading large, financially powerful players that compete fiercely for health care dollars to adopt a different mindset and begin cooperating to reduce costs instead. And that, in many cases, will mean lower revenue.

But the status quo, as many people know all too well, means continued financial pain for millions.

In early 2020, Estevan Rodriguez, a bartender at California’s Monterey Beach Hotel, had surgery for a staph infection in his leg. The bill came to nearly $168,000. His insurance paid most of it, but he still owed $5,665, which took him two years to pay, more than $200 every month. “It may not be a lot to some people, but it was a lot to me,” Rodriguez said.

He said he dropped his Hulu subscription, switched to a lower-cost cellphone, and got cheaper car insurance. He started going to food banks rather than the grocery store, he said, and had a lot less time with his kids, because he was constantly working to pay off the hospital bill.

, where Rodriguez had his surgery, is one of the seven hospitals identified by California’s affordability office as high-cost. A attributed high hospital prices in Monterey County to a lack of market competition “rather than higher operating costs or superior quality of care.”

The Monterey hospital referred a request for comment about its “high-cost” designation to the California Hospital Association. CHA spokesperson Jan Emerson-Shea declined to comment beyond the language of the lawsuit and Coyle’s press release statement.

Reduced Competition

Health care analysts worry the One Big Beautiful Bill Act will reduce market competition even further by stressing already weak hospitals, leading some to shut services, merge with larger health systems, or close. One study estimates are at risk of closing nationwide.

Less competition, in addition to fewer Medicaid dollars and an increase in uninsured patients, will only strengthen the incentive of health systems with the requisite market clout to raise their commercial prices, increasing premiums for employers and individuals.

“We think commercial prices will continue to increase as health care providers, and hospitals in particular, will seek to preserve or increase their revenue,” said Rachel Block, a program officer at the Milbank Memorial Fund, a foundation that focuses on health equity.

That in turn could pose a challenge to state affordability regulators tasked with overseeing compliance with growth targets for health care spending.

California’s affordability office is required to consider mitigating factors, including changes in federal and state laws. But some of its board members have expressed skepticism about letting hospitals offset Medicaid losses with higher commercial prices.

“There’s a lot of talk about using HR 1 and other federal policies as an excuse to raise prices on commercial payers,” Ian Lewis, an affordability office board member and policy director for UNITE HERE Local 2, a hospitality workers union in the Bay Area, said at the agency’s , referring to the One Big Beautiful Bill. “There’s no more blood to be squeezed from this stone.”

This <a target="_blank" href="/health-care-costs/health-costs-spending-affordability-hospitals-california-one-big-beautiful-bill/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

And, they warn, the economic burden will steer many medical students to lucrative specialties in more affluent, urban areas rather than lower-paying primary care jobs in underserved and rural communities, where doctors are in shortest supply.

“The growing financial barriers may deter some individuals from pursuing a career in medicine, particularly those from low-income backgrounds,” said Deena McRae, a psychiatrist and associate vice president for academic health sciences at University of California Health.

The new federal loan limits, which are enshrined in the GOP legislation signed by Trump on July 4, professional degree students can borrow at $50,000 a year, up to a maximum of $200,000 — well below the average cost of a four-year medical school education.

For students who graduated this year with an MD degree from a four-year medical school in the United States, the median cost of attendance was $318,825, according to Kristen Earle, director of student financial services at the . And for those who entered a U.S. medical school in the 2024-25 academic year, the median first-year cost was $83,700.

Health care experts and politicians on both sides of the aisle agree that medical schools must find ways to lower their costs, but critics of the loan caps say limiting federal lending isn’t the answer. Congressional Republicans, who voted for the caps, say they are intended to stem a sharp rise in federal student lending over the past two decades that has driven the cost of attendance higher.

“Uncapped loan limits gave no incentives for schools to reduce any of their costs, recognizing that taxpayers, students, or students’ families would eventually foot the bill,” said Sara Robertson, a spokesperson for the GOP-controlled House Committee on Education and Workforce. “Our reforms and loan limits will put downward pressure on costs to provide better outcomes and lower debt for all students.”

The budget law brings back caps for graduate and professional education that Congress eliminated in 2006. Since then, students have been able to get federal loans that cover the total cost of their degree programs. Reimposing the caps, along with other changes to federal student loans, is expected to over 10 years, according to the Congressional Budget Office.

Whether the new federal loan policy will push down tuition costs remains to be seen.

Robertson pointed to a by the National Bureau of Economic Research showing that the more generous federal lending policy since 2006 has led to “significantly higher program prices” in graduate education. The study also found that the additional federal support failed to increase enrollment in graduate programs, including for underrepresented students.

However, by the Association of American Medical Colleges shows that cost-of-living increases, not tuition, drove up the expense of studying medicine in recent years.

Students already in medical school who have taken out federal loans before the new rules take effect on July 1 will be exempted from the cap. But students whose loans are capped under the new law will need to make up the difference, in many cases by taking out private sector loans, which typically have less flexible repayment terms and require a strong credit rating — a heavy lift for students from low-income communities.

Robertson cited a 2017 analysis showing that of graduate students could have obtained a private loan at a lower interest rate than any available federal loan. Federal loans, however, come with advantages that private loans don’t. For instance, federal loans can include monthly repayments calibrated to income, and they offer two debt forgiveness paths, including the program, which erases the balance for those who work in a government or nonprofit organization and make their monthly payments for 10 years.

Critics and proponents agree on at least one thing: Now is the time for medical schools to think creatively about lowering costs for students. This might include reduced tuition, more chances for debt forgiveness, and accelerated programs that allow students to graduate in three years rather than four, reducing costs by 25% and getting them more quickly into paid jobs.

“I hope that coming out of this, medical schools and others find a way to seize the moment and help us figure out how to reduce the total cost of medical school,” said Martha Santana-Chin, CEO of L.A. Care. “Maybe this is an opportunity for us to rethink how the system is working.”

Roughly a fifth of medical schools offering an MD degree have accelerated programs, including the University of California-Davis, according to the .

A data analysis of eight medical schools led by the NYU Grossman School of Medicine, whose core MD curriculum is three years, shows that students in three-year programs derive a lifetime financial gain totaling over $240,000 due to the cost savings of less time in medical school, interest not paid on the corresponding amount not borrowed, and faster progression to a salaried position.

In addition to lowering costs, accelerated medical programs seek to address health care workforce shortages by training physicians more quickly. And with the new loan caps about to make it more difficult for many students to finance their medical education, these programs suddenly have a new timeliness.

Students who spend three years in medical school instead of four have lower debt and get to a higher salary sooner, said Caroline Roberts, a family physician and director of rural education at the University of North Carolina’s School of Medicine. UNC offers a three-year track for students who want to be primary care doctors and work in rural areas of the state, where doctor shortages are a major problem.

Zoe Priddy, who is in her second year of UNC’s three-year program, said that if the federal loan limits had been in place at the time she was making plans to attend medical school, she would have needed a job that paid better than the research lab where she worked after completing her undergraduate degree.

“I would have had to change my trajectory if I still wanted to pursue medicine, and I don’t know if it would have been possible for me,” Priddy said. However, the lower debt associated with the three-year track “eased my decision” to go into pediatrics, a lower-paying specialty, she said.

This <a target="_blank" href="/health-industry/medical-school-federal-loan-caps-doctor-shortage-trump-law/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Health care analysts say the nation’s significantly if federal lawmakers do not agree to renew covid-era tax credits, which Congress authorized in 2021 to supplement ACA subsidies.

They’re popular too. According to a , more than three-quarters of adults, including 59% of Republicans, say they want Congress to extend the enhanced tax credits for people with low and moderate incomes. Â鶹ŮÓÅ is a health information nonprofit that includes Â鶹ŮÓÅ Health News, the publisher of California Healthline.

The additional credits have lowered premiums, helped millions of Americans afford the cost of ACA insurance, and lowered the .

Last week, President Donald Trump might be in the works. And Republican U.S. Rep. Marjorie Taylor Greene of Georgia, long aligned with the “Make America Great Again” movement, appeared to endorse an extension of the tax credits, saying in that she was “absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year.”

However, Republican leaders want to first, while Democrats want a deal in a bill that ends the shutdown.

If the supplemental subsidies are not extended beyond this year, the amount subsidized consumers pay for their ACA health plans is expected to on average. That would be a painful cost-of-living increase for most of the country’s more than 24 million marketplace enrollees, including almost 90% of the nearly 2 million people in Covered California, the . Analysts say the loss of enhanced credits would lead millions to drop their coverage nationally, including hundreds of thousands in California.

The federal government shutdown stems primarily from a disagreement between Democratic lawmakers, who want to extend the tax credits, and Republicans opposed to the cost and, in many cases, to the landmark health care law itself. One estimate puts the over 10 years. The Democrats hope their stance can help them win back the House in next year’s midterm elections, as they did in 2018 following a failed GOP effort to repeal the ACA.

Open enrollment season for 2026 ACA health plans starts Nov. 1 in most states, including California, and enrollees still have no clue whether their premiums will rise exorbitantly next year.

“People need to be able to shop for health plans,” says Jessica Altman, executive director of Covered California. “We are at a pivotal moment.”

In July, Covered California sent notices to enrollees breaking out the enhanced portion of their federal subsidy that is set to expire. The idea was to give them a warning of how much their costs might rise if they chose to keep the same health plan next year.

In one case, a common scenario for middle-income enrollees, the entire subsidy of $200 a month would go away. Another enrollee stood to lose one-third of a total $600 per month in aid, according to sample notices provided by Covered California.

The additional tax credits have provided financial assistance to many middle-income health plan shoppers who didn’t qualify for the original subsidies and increased the amount of aid for many others.

Senate Majority Leader John Thune in late September left the door open to extending the otherwise-expiring tax credits but said “it would have to come with some reforms.”

Those might include changes that would reduce the number of enrollees eligible for the extra financial aid, based on income, and reduce or eliminate zero-premium plans, which have become widely available with the advent of the additional tax credits.

If the enhanced subsidies end, Covered California projects its enrollees receiving enhanced subsidies will see their premium costs rise an average of 97%. But the increases will not be borne equally. Depending on age, income, and location, some people will see smaller jumps while others could see their out-of-pocket costs triple, Altman says.

, especially in the northern and eastern counties, and along the Monterey Coast, will see disproportionately large cost increases, according to projections from Covered California. Enrollees with incomes over $62,600 will lose financial aid altogether, leaving some who are ages 55-64 with premium bills as high as .

Without the enhanced subsidies, “we’re going to see more people experiencing medical debt, more people being either uninsured or underinsured,” says Cary Sanders, senior policy director at the nonprofit California Pan-Ethnic Health Network. “And that is the quickest way for families to lose their economic security.”

Covered California estimates about 400,000 people would leave the exchange and likely go without insurance. And that, health care professionals and advocates warn, will only heap stress — in the form of more crowded emergency rooms and community clinics — on an already stressed health care system.

But the proportional impact in California will be smaller than in some Republican-led states such as Florida, Texas, and Georgia. Since those states did not embrace the ACA’s Medicaid expansion, millions of residents thronged to Obamacare marketplace plans, particularly after the enhanced tax credits made coverage eminently more affordable.

From 2020 to 2025, grew nearly 2.5 times in Florida to 4.7 million — more than double California’s marketplace enrollment. In Texas, it more than tripled to just under 4 million. Georgia’s tripled, too, to 1.5 million.

California has about $190 million for 2026 in state funds to help offset the loss of the enhanced premium subsidies. But that money is currently used to help offset enrollee deductibles, coinsurance payments, and other out-of-pocket expenses. And it’s a drop in the bucket compared with the in financial aid Covered California enrollees currently receive from the expiring tax credits.

“A lot of people are going to be shocked at what they’re facing,” says Rachel Linn Gish, a spokesperson for the nonprofit advocacy group Health Access California. “They’re going to have to make super hard choices of, ‘Do I cut back on my groceries, or my rent, or do I go uninsured?’”

Very soon, Covered California and other ACA marketplaces will have to send out formal open enrollment letters, notifying enrollees precisely what to expect for 2026 coverage.

Covered California typically sends those letters out Oct. 1 but has delayed them to around Oct. 15 in the hope that Washington will provide clarity. For now, Covered California has two versions of the letter on ice, one with tax credit extensions and one without.

Altman says she is hoping for congressional action before sending the one with whopping premium increases. But she may have no choice.

“That’s the default here, as in the thing that will happen if nothing changes,” Altman says. “It is also the worst-case scenario, unfortunately.”

She fears that if Covered California informs enrollees that their rates will likely rise sharply, it will scare many away, even if Congress later agrees to extend the credits.

This <a target="_blank" href="/health-care-costs/covered-california-aca-marketplace-federal-government-shutdown-premiums/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Owlett is one of four residents in the inaugural class of a three-year family medicine residency program run by the local nonprofit . She is the kind of doctor the organization seeks to draw to the far north of California, a region with .

That’s because Owlett knows in her gut what a lack of health care means, having seen family members drive hours to see a specialist or simply forgo care in her hometown of Wellsboro, a hamlet in Pennsylvania. She did rural training at medical school in Colorado. And because her husband attended Chico State, the couple has a strong social network here, making them likely to remain.

“With the growing family medicine residency program here, it’s a great opportunity to bring more doctors into the area, and I’d love to be a part of that,” Owlett said.

Owlett exemplifies what leaders in rural Northern California want more of: doctors trained locally who stay to work in the area. They have ambitious plans to attract more Owletts and expand the medical workforce, but recent state and federal spending cuts will pull dollars out of an already frayed health system, exacerbating the shortage of care and making their efforts more challenging.

“We need help up here, and cutting funding is not going to help us,” said Debra Lupeika, associate dean for rural and community-based education at the University of California-Davis School of Medicine and a family physician at the tribal Rolling Hills Clinic in Red Bluff, about 40 miles northwest of Chico. “We are in dire straits. We need doctors.”

California’s far northern region is a collection of sparsely populated counties stretching from just north of Sacramento all the way up to Oregon and from the Pacific coast to the Nevada border. The shortages are so pervasive that support for one of the costliest solutions — a proposed $200 million health care training campus — transcends partisanship.

“It’s about what are the priorities, right? And health care certainly is a priority — should be a priority,” said California Assembly Republican Leader James Gallagher, who represents Chico and the surrounding area. “I think it’s been pretty bipartisan, this kind of stuff.”

Republicans in Congress, including the nine GOP lawmakers in California’s delegation, voted in July to cut nearly a trillion dollars from Medicaid. Area Rep. Doug LaMalfa said the “those eligible for benefits continue to receive them.” Meanwhile, the Democratic-controlled California legislature has its health care coverage for immigrants who lack legal status.

California’s health care shortage is driven by the struggles of rural hospitals; an aging physician workforce; the inherent appeal to up-and-coming doctors of more urban areas; and the financial pressures of doing business in a region with a high proportion of , especially Medi-Cal, the state’s version of the Medicaid program, for people with low incomes and disabilities.

Almost everyone who lives up here is affected by the shortages, ranging from people with complex medical needs to those with simple, straightforward ones.

When Lupeika’s 24-year-old daughter, Ashley, injured her shoulder this summer, she couldn’t get an MRI for nearly a month, despite her severe pain.

Ginger Alonso, an assistant professor of political science and public administration at Chico State, said she drives 70 miles to Redding for OB-GYN care.

The long waits or distances people must travel often lead them to delay or forgo care. As a result, they show up at emergency rooms, urgent care, or community clinics with illnesses that are more severe than they would have been had they received medical attention sooner.

“We see sicker patients, bottom line,” said Tanya Layne, a primary care physician in Chico who recently closed her private practice for financial reasons and works at an urgent care clinic in town, owned by Enloe Health, which also runs the sole hospital in town.

Patients walk through the door with undiagnosed cancers, uncontrolled asthma, raging diabetes, and severely high blood pressure, Layne said.

In many northern counties, specialists in acutely short supply include neurologists, gastroenterologists, rheumatologists, endocrinologists, OB-GYNs, oncologists, and urologists.

“We have whole areas with no specialists at all, or where specialists are so overworked that the waits are really long, and people are forgoing care,” said Doug Matthews, a Chico-based colorectal surgeon and regional medical director of Partnership HealthPlan, which provides Medi-Cal coverage in 24 northern counties.

The health care shortage in the region grew more acute after the catastrophic 2018 Camp Fire devastated the town of Paradise, 15 miles east of Chico, shuttering and sending dozens of doctors out of the region.

In response, local leaders created , which launched a four-year residency in psychiatry last year followed by the family medicine program this year. The group also runs a program to expose high school students to potential careers in health care, and it is behind early plans for the $200 million “interprofessional” health care campus that would train future doctors, nurses, physician assistants, and others.

The startup cost would likely need to come from California’s state legislature, but lawmakers are limited by severe budget pressures. Nevertheless, James Schlund, a radiologist and board member of the organization, is discussing it with officials from UC Davis and Touro University.

“We are building the coalition,” Schlund said, “to go to the legislature with an empty bucket and ask them to fill it with money at the hardest of possible times.”

Meanwhile, medical and political leaders in Chico and Redding, the two largest cities in California’s far north, are each exploring building a medical school, possibly in collaboration and under the auspices of UC Davis, which considers rural medicine integral to its mission.

A medical school, paired with more residency slots, would keep graduating students in the area long enough for them to establish roots, buy homes, and start families, boosting the supply of local physicians, said Paul Dhanuka, a gastroenterologist and member of the Redding City Council.

But some say the region’s small population makes it a challenge to train more residents.

“The number of residents you can accommodate is limited by the ability to get the right kinds of patients with the right kind of cases that give the residents the training they need,” said Duane Bland, a physician who runs the family practice residency program at Mercy Medical Center in Redding.

Dhanuka said that in sparsely populated areas, a low number of childbirths limits how many residents can be trained in family medicine. But that is not the case with other specialties such as surgery, psychiatry, cardiology, and gastroenterology. And, he said, across the whole northern region, “there are multiple hospitals as well as clinics which absolutely are looking for more residency participation.”

Residency programs are largely funded with federal dollars through Medicare, and that funding is not at imminent risk — though the number of residency slots paid for by Washington has not significantly increased in about 30 years.

However, some graduate medical education is state-funded, and in California many of those slots rely on revenue generated from a tax on Medi-Cal health plans, which California voters earmarked for that and other purposes last fall by passing . That revenue is projected to under changes in the budget law and a similar rule proposed by the Centers for Medicare & Medicaid Services.

“We could lose that Prop. 35 funding,” said Mark Servis, vice dean for medical education at the UC Davis School of Medicine. “And we have been planning on it for over a year as a way to build out graduate medical education.”

Servis and other medical educators also worry about new caps on federal student loans, which could deter lower-income students, including those in rural areas, from medical school.

Altogether, the financial constraints will only make the health care shortage worse — in large part because of its impact on the region’s smaller, weaker hospitals and the burden on those that remain.

It’s already begun: Glenn Medical Center in Willows, about 30 miles from Chico, announced last month it its ER and hospital services in October after losing its federal designation as a “critical access” hospital, which afforded it higher payments and more regulatory flexibility.

A $50 billion rural health care fund in the budget law will offset a little more than a third of the money that rural areas are expected to lose because of the Medicaid cuts, from Â鶹ŮÓÅ. And it’s not clear how, or to which states, that money will be distributed.

Civic and medical industry leaders in Chico and Redding say the message needs to get out that a robust health care system will serve the interests of everyone, across political lines.

“Health care is such a human need, because we all hurt the same, regardless of race, color,” Dhanuka said. “We can address this. And we don’t need to take sides on this.”

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/medicaid/rural-northern-california-health-care-shortages-residency-program-funding-cuts/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

And presto: You’ve got people dropping coverage; rising costs; and a smaller, sicker group of enrollees, which translates to higher premiums.

The Trump administration and congressional Republicans have just checked that achievement off their list.

They have done it with the sprawling President Donald Trump signed on July 4 and a related set of released by the Centers for Medicare & Medicaid Services that will govern how the ACA marketplaces are run.

Among the many provisions, there’s this: Large numbers of lawfully present immigrants currently enrolled in Obamacare health plans will lose their subsidies and be forced to pay full fare or drop their coverage.

Wait. What?

I understand that proponents of the new policies think the government spends too much on taxpayer subsidies, especially those who believe the ACA marketplaces are rife with fraud. It makes sense that they would support toughening enrollment and eligibility procedures and even slashing subsidies. But taking coverage away from people who live here legally is not health care policy. It’s an echo of the federal immigration raids in Los Angeles and elsewhere.

“It’s creating a very hostile environment for them, especially after having to leave their countries because of some very traumatic experiences,” says Arturo Vargas Bustamante, a professor of health policy and management at UCLA’s Fielding School of Public Health. “For those who believe health care is a human right, this is like excluding that population from something that should be a given.”

In Covered California, 112,600 immigrants, or nearly 6% of total enrollees, stand to lose their federal tax subsidies when the policy takes effect in 2027, according to data provided by the exchange. In the Massachusetts and Maryland marketplaces, the figure is closer to 14%, according to their directors, Audrey Morse Gasteier and Michele Eberle, respectively.

It’s not clear exactly how much financial aid those immigrants currently receive in ACA marketplaces. But in Covered California, for example, the average for all subsidized enrollees is $561 per month, which covers 80% of the $698 average monthly premium per person. And immigrants, who tend to have lower-than-average incomes, are likely to get more of a subsidy.

The immigrants who will lose their subsidies include victims of human trafficking and domestic violence, as well as refugees with asylum or with some temporary protected status. And “Dreamers” will no longer be eligible for ACA marketplace health plans because they will not be considered lawfully present. Immigrants who are not in the country legally cannot get coverage through Covered California or most other ACA marketplaces.

The nearly 540,000 Dreamers in the United States arrived in the U.S. as kids without immigration papers and were granted temporary legal status by President Barack Obama in 2012. Of those, an estimated 11,000 have ACA health plans and would lose them, including 2,300 in Covered California.

Supporters of the policy changes enshrined in the CMS rule and budget law think it’s high time to rein in what they say are abuses in the system that started under the Biden administration with expanded tax credits and overly flexible enrollment policies.

“It’s about making Obamacare lawful and implementing it as drafted rather than what Biden turned it into, which was a fraud and a waste-infused program,” says Brian Blase, president of Arlington, Virginia-based Paragon Health Institute, which produces policy papers with a free-market bent and influenced the Republican-driven policies.

But Blase doesn’t have much to say about the termination of Obamacare subsidies for lawfully present immigrants. He says Paragon has not focused much on that subject.

Jessica Altman, executive director of Covered California, expects most immigrants who lose subsidies will discontinue their enrollment. “If you look at where those populations fall on the income scale, the vast majority are not going to be able to afford the full cost of the premium to stay covered,” she says.

Apart from the human hardship cited by Bustamante, the exodus of immigrants could compromise the financial stability of coverage for the rest of Covered California’s . That’s because immigrants tend to be younger than the average enrollee and use fewer medical resources, thus helping offset the costs of older and sicker people who are more expensive to cover.

shows that immigrant enrollees targeted by the new federal policies pose significantly lower medical risk than U.S. citizens. And a significantly higher percentage of immigrants in the exchange are ages 26 to 44, while 55- to 64-year-olds make up a smaller percentage.

Still, it would be manageable if immigrants were the only younger people to leave the exchange. But that is unlikely to be the case. More red tape and higher out-of-pocket costs — especially if enhanced tax credits disappear — could lead a lot of young people to think twice about health insurance.

The covid-era enhanced tax credits, which have ACA marketplace enrollment since their advent in 2021, are set to expire at the end of December without congressional action. And, so far, Republicans in Congress do not seem inclined to renew them. Ending them would reverse much of that enrollment gain by jacking up the amount consumers would have to spend on premiums out of their own pockets at Covered California and more than .

And by the Congressional Budget Office shows that a consequent exodus of younger, healthier people from the marketplaces would lead to even greater costs over time.

Enhanced tax credits aside, consumers face additional hurdles: The annual enrollment period for Covered California and other marketplaces will be shorter than it is now. Special enrollment periods for people with the lowest incomes will be effectively eliminated. So will automatic renewals, which have greatly simplified the process for a majority of enrollees at Covered California and some other marketplaces. Enrollees will no longer be able to start subsidized coverage, as they can now, before all their information is fully verified.

“Who are the people who are going to decide to go through hours and hours of onerous paperwork?” says Morse Gasteier. “They’re people who have chronic conditions. They have health care issues they need to manage. The folks we would expect not to wade through all that red tape would be the younger, healthier folks.”

California and 20 other states this month challenged some of that red tape in a to stop provisions of the CMS rule that erect “unreasonable barriers to coverage.” California Attorney General Rob Bonta said he and his fellow attorneys general hoped for a court ruling before the rule takes effect on Aug. 25.

“The Trump administration claims that their final rule will prevent fraud,” Bonta said. “It’s obvious what this is really about. It’s yet another political move to punish vulnerable communities by removing access to vital care and gutting the Affordable Care Act.”

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/health-care-costs/column-covered-california-immigrants-stabilize-aca-marketplace-trump-health-policy/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

, passed in both the House and the Senate without a single Democratic vote, is expected to reverse many of the health coverage gains of the Biden and Obama administrations. Their policies made it easier for millions of people to access health care and reduced the U.S. uninsured rate to record lows, though Republicans say the trade-off was far higher costs borne by taxpayers and increased fraud.

Under the legislation Trump’s expected to sign on Friday, Independence Day, reductions in federal support for Medicaid and Affordable Care Act marketplaces will cause nearly 12 million more people to be without insurance by 2034, the Congressional Budget Office estimates. That in turn is expected to undermine the finances of hospitals, nursing homes, and community health centers — which will have to absorb more of the cost of treating uninsured people. Some may reduce services and employees or close altogether.

Here are five ways the GOP’s plans may affect health care access.

Need Medicaid? Then Get a Job

The deepest cuts to health care spending come from a proposed Medicaid work requirement, which is expected to end coverage for millions of enrollees who do not meet new employment or reporting standards.

In 40 states and Washington, D.C., all of which have expanded Medicaid under the Affordable Care Act, some Medicaid enrollees will have to regularly file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month, or that they qualify for an exemption, such as caring for a young child. The new requirement will start as early as January 2027.

The bill’s requirement doesn’t apply to people in the 10 largely GOP-led states that have not expanded Medicaid to nondisabled adults.

Health researchers say the policy will have little impact on employment. Most working-age Medicaid enrollees who don’t receive disability benefits already work or are looking for work, or are unable to do so because they have a disability, attend school, or care for a family member, , a health information nonprofit that includes Â鶹ŮÓÅ Health News.

State experiments with work requirements have been plagued with administrative issues, such as eligible enrollees’ losing coverage over paperwork problems, and budget overruns. Georgia’s work requirement, which officially launched in July 2023, has cost more than $90 million, with of that spent on health benefits, according to the , a nonpartisan research organization.

“The hidden costs are astronomical,” said Chima Ndumele, a professor at the Yale School of Public Health.

Less Cash Means Less Care in Rural Communities

Belt-tightening that targets states could translate into fewer health services, medical professionals, and even hospitals, especially in rural communities.

The GOP’s plan curtails a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes, and other providers and to private managed-care companies.

States often use the federal money generated through the taxes to pay the institutions more than Medicaid would otherwise pay. Medicaid generally pays lower fees for care than Medicare, the program for people over 65 and some with disabilities, and private insurance. But thanks to provider taxes, some hospitals are paid more under Medicaid than Medicare, , a health research nonprofit.

Hospitals and nursing homes say they use these extra Medicaid dollars to expand or add new services and improve care for all patients.

Rural hospitals typically operate on thin profit margins and rely on payments from Medicaid taxes to sustain them. Researchers from the who examined the original House version of the bill concluded it would push more than 300 rural hospitals — many of them in Kentucky, Louisiana, California, and Oklahoma — toward service reductions or closure.

Republicans in the Senate tacked a $50 billion fund onto the legislation to cushion the blow to rural hospitals. The money will be distributed starting in 2027 and continue for five years.

Harder To Get, and Keep, ACA Coverage

For those with Obamacare plans, the new legislation will make it harder to enroll and to retain their coverage.

ACA marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year. They’ll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.

People applying for coverage outside that period — for instance because they lose a job or other insurance or need to add a newborn or spouse to an existing policy — will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums. Today, they get up to 90 days of premium help during the application process, which can take weeks.

Republican lawmakers and some conservative policy think tanks, including , say the changes are needed to reduce fraudulent enrollments, while opponents say they represent Trump’s best effort to undo Obamacare.

The legislation also does not call for an extension of more generous premium subsidies put in place during the covid pandemic. If Congress doesn’t act, those enhanced subsidies will expire at year’s end, resulting in premiums rising by next year, according to Â鶹ŮÓÅ.

On Medicaid? Pay More To See Doctors

Many Medicaid enrollees can expect to pay more out-of-pocket for appointments.

Trump’s legislation requires states that have expanded Medicaid to charge enrollees up to $35 for some services if their incomes are between the federal poverty level (this year, $15,650 for an individual) and 138% of that amount ($21,597).

Medicaid enrollees often don’t pay anything when seeking medical services because studies have shown charging even small copayments prompts low-income people to forgo needed care. In recent years, some states have added charges under $10 for certain services.

The policy won’t apply to people seeking primary care, mental health care, or substance abuse treatment. The bill allows states to enact even higher cost sharing for enrollees who seek emergency room care for nonemergencies. But if Medicaid patients fail to pay, hospitals and other providers could be left to foot the bill.

Cuts for Lawfully Present Immigrants

The GOP plan could cause at least hundreds of thousands of immigrants who are lawfully present — including asylum-seekers, victims of trafficking, and refugees — to lose their ACA marketplace coverage by cutting off the subsidies that make premiums affordable. The restriction won’t apply to green-card holders.

Because the immigrants who will lose subsidies under the legislation tend to be younger than the overall U.S. population, their exit would leave an older, sicker, and costlier population of marketplace enrollees, further pushing up marketplace premiums, according to marketplace directors in California, Maryland, and Massachusetts and health analysts.

Taking health care access away from immigrants living in the country legally “will do irreparable harm to individuals we have promised to protect and impose unnecessary costs on local systems already under strain,” John Slocum, executive director of Refugee Council USA, an advocacy group, said .

The bill reflects the Trump administration’s restrictive approach to immigration. But because it ran afoul of Senate rules, the legislation doesn’t include a proposal that would have reduced federal Medicaid payments to states such as California that use their own money to cover immigrants without legal status.

Â鶹ŮÓÅ Health News chief Washington correspondent Julie Rovner contributed reporting.

This <a target="_blank" href="/health-industry/one-big-beautiful-bill-medicaid-work-requirements-affordable-care-act-immigrants/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

No state has more to lose than California, whose Medicaid program, called Medi-Cal, covers nearly 15 million residents with low incomes and disabilities. That’s twice as many as New York and three times as many as Texas.

by the Centers for Medicare & Medicaid Services, echoed in the Republican as well as a more drastic Senate bill, would significantly curtail the federal dollars many states draw in matching funds from what are known as provider taxes. Although it’s unclear how much states could lose, the revenue up for grabs is big. For instance, California has netted an estimated $8.8 billion this fiscal year from its tax on and took in about $5.9 billion last year from hospitals.

California Democrats are already facing a , and they have drawn political fire for scaling back some key health care policies, including for immigrants without permanent legal status. And a loss of provider tax revenue could add billions to the current deficit, forcing state lawmakers to make even more unpopular cuts to Medi-Cal benefits.

“If Republicans move this extreme MAGA proposal forward, millions will lose coverage, hospitals will close, and safety nets could collapse under the weight,” Gov. Gavin Newsom, a Democrat, said in a statement, referring to President Donald Trump’s “Make America Great Again” movement.

The proposals are also a threat to , a ballot initiative California voters approved last November to make permanent the tax on managed care organizations, or MCOs, and dedicate some of its proceeds to raise the pay of doctors and other providers who treat Medi-Cal patients.

All states except Alaska have at least one provider tax on managed care plans, hospitals, nursing homes, emergency ground transportation, or of health care businesses. The federal government spends billions of dollars a year matching these taxes, which generally lead to more money for providers, helping them balance lower Medicaid reimbursement rates while allowing states to protect against economic downturns and budget constraints.

New York, Massachusetts, and Michigan would also be among the states hit hard by Republicans’ drive to scale back provider taxes, which allow states to boost their share of Medicaid spending to receive increased federal Medicaid funds.

In a May 12 statement announcing its proposed rule, CMS described a “loophole” as “,” and said California had financed coverage for over 1.6 million “illegal immigrants” with the proceeds from its MCO tax. CMS said its proposal would save more than $30 billion over five years.

“This proposed rule stops the shell game and ensures federal Medicaid dollars go where they’re needed most — to pay for health care for vulnerable Americans who rely on this program, not to plug state budget holes or bankroll benefits for noncitizens,” Mehmet Oz, the CMS administrator, said in the statement.

Medicaid allows coverage for noncitizens who are legally present and have been in the country for at least five years. And California uses state money to pay for almost all of the Medi-Cal coverage for immigrants who are not in the country legally.

California, New York, Michigan, and Massachusetts together account for more than 95% of the “federal taxpayer losses” from the loophole in provider taxes, CMS said. But nearly every state would feel some impact, especially under the provisions in the reconciliation bill, which are more restrictive than the CMS proposal.

None of it is a done deal. The CMS proposal, published May 15, has not been adopted yet, while the House and Senate bills must be negotiated into one and passed by both chambers of Congress. But the restrictions being contemplated would be far-reaching.

by Michigan’s Department of Health and Human Services, ordered by Democratic Gov. Gretchen Whitmer, found that a reduction of revenue from the state’s hospital tax could “destabilize hospital finances, particularly in rural and safety-net facilities, and increase the risk of service cuts or closures.” Losing revenue from the state’s MCO tax “would likely require substantial cuts, tax increases, or reductions in coverage and access to care,” it said.

CMS declined to respond to questions about its proposed rule.

The Republicans’ House-passed reconciliation bill, though not the CMS proposal, also prohibits any new provider taxes or increases to existing ones. The Senate version, released June 16, would gradually reduce the allowable amount of many provider taxes.

The American Hospital Association, which represents nearly 5,000 hospitals and health systems nationwide, said the proposed moratorium on new or increased provider taxes “to make significant cuts to Medicaid to balance their budgets, including reducing eligibility, eliminating or limiting benefits, and reducing already low payment rates for providers.”

Because provider taxes draw matching federal dollars, Washington has a say in how they are implemented. And the Republicans who run the federal government are looking to spend far fewer of those dollars.

In California, the insurers that pay the MCO tax are reimbursed for the portion levied on their Medi-Cal enrollment. That helps explain why the tax rate on Medi-Cal enrollment is sharply higher than on commercial enrollment. Over 99% of the tax money the insurers pay comes from their Medi-Cal business, which means most of the state’s insurers get back almost all the tax they pay.

That imbalance, which CMS describes as a loophole, is one of the main things Republicans are trying to change. If either the CMS rule or the corresponding provisions in the House reconciliation bill were enacted, states would be required to levy provider taxes equally on Medicaid and commercial business to draw federal dollars.

California would likely be unable to raise the commercial rates to the level of the Medi-Cal ones, because state law constrains the legislature’s ability to do so. The only way to comply with the rule would be to lower the tax rate on Medi-Cal enrollment, which would sharply reduce revenue.

CMS has warned California and other states for years, including under the Biden administration, that it was considering significant changes to MCO and other provider taxes. Those warnings were never realized. But the risk may be greater this time, some observers say, because the effort to shrink provider taxes is embedded in both Republican reconciliation bills and intertwined with a broader Republican strategy — and set of proposals — to by $800 billion or more.

“All of these proposals move in the same direction: fewer people enrolled, less generous Medicaid programs over time,” said Edwin Park, a research professor at Georgetown University’s McCourt School of Public Policy.

California’s MCO tax is expected to net California $13.9 billion over the next two fiscal years, . The state’s hospital tax is expected to bring in an estimated $9 billion this year, up sharply from last year, according to the Department of Health Care Services, which runs Medi-Cal.

Losing a significant slice of that revenue on top of other Medicaid cuts in the House reconciliation bill “all adds up to be potentially a super serious impact on Medi-Cal and the California state budget overall,” said Kayla Kitson, a senior policy fellow at the California Budget & Policy Center.

And it’s not only California that will feel the pain.

“All states are going to be hurt by this,” Park said.

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/health-industry/mco-medicaid-provider-taxes-matching-funds-threatened-cms-house-california/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

California’s Affordable Care Act health insurance exchange covers nearly residents and 89% of them receive federal subsidies that reduce their premiums. Many middle-income households got subsidies for the first time after Congress expanded them in 2021, which helped generate a boom in enrollment in ACA exchanges nationwide.

From the original and enhanced subsidies, Covered California enrollees currently get $563 a month on average, lowering the average monthly out-of-pocket premium from $698 to $135, according to data from Covered California.

The 2021 subsidies are set to expire at the end of this year unless Congress renews them. If they lapse, enrollees would be on the hook to pay an average of $101 a month more for health insurance — not counting any premium hikes in 2026 and beyond. And those middle-income earners who did not qualify for subsidies before would lose all financial assistance — $384 a month, on average — which Soni fears could prompt them to drop out.

At the same time, vaccination rates for children 2 and under declined among 7 of the 10 Covered California health plans subject to its new quality-of-care requirements. Soni, a Los Angeles native who came to Covered California in May 2023, oversees that program, in which health plans must meet performance targets on blood pressure control, diabetes management, colorectal cancer screening, and childhood vaccinations — or pay a financial penalty.

Lack of access to such key aspects of care disproportionately affects underserved communities, making Covered California’s effort one of health equity as well. Soni, a Harvard-trained primary care doctor who sees patients one day a week at an urgent care clinic in Los Angeles County’s public safety net health system, is familiar with the challenges those communities face.

Covered California reported last November that its health plans improved on three of the four measures in the first year of the program. But childhood immunizations for those under 2 declined by 4%. The decline is in line with , which Soni attributed to postpandemic mistrust of vaccines and “more skepticism of the entire medical industry.”

Most parents have heard at least one untrue statement about measles or the vaccine for it, and many don’t know what to believe, according to an .

Health plans improved on the other three measures, but not enough to avoid penalties, which yielded $15 million. The exchange is using that money to fund another effort Soni manages, which helps 6,900 Covered California households buy groceries and contributes to over 250 savings accounts for children who get routine checkups and vaccines. Some of the penalty money will also be used to support primary care practices around California.

In addition to her bifurcated professional duties, Soni is the mother of two young children, ages 4 and 7. Â鶹ŮÓÅ Health News senior correspondent Bernard J. Wolfson spoke with Soni about the impact of possible federal cuts and the exchange’s initiative to improve care for its enrollees. This interview has been edited for length and clarity.

Q: Covered California has record enrollment of nearly 2 million, boosted by the expanded federal subsidies passed under the Biden administration, which end after this year. What if Congress does not renew them?

A: Our estimates are that it will approach 400,000 Californians who would drop coverage immediately. We hear every day from our folks that they’re really living on the margins. Until they got some of those subsidies, they could not afford coverage.

As a primary care doctor, I am the one to treat folks who show up with preventable cancers because they were too afraid to think about what their out-of-pocket costs would be. I don’t want to go back to those days.

Q: Congress is considering billions in cuts to Medicaid. How would that affect Covered California and the state’s population more broadly, given that more than 1 in 3 Californians are on Medi-Cal, the state’s version of Medicaid?

A: Those are our neighbors, our friends. Those are the people working in the restaurants we eat at. Earlier cancer screenings, better chronic disease control, lower maternal mortality, more substance use disorder treatment: We know that Medicaid saves lives. We know it helps people live longer and better. As a physician, I would be hard-pressed to argue for rolling back anything that saves lives. It would be very distressing to watch that come to California.

Q: Why did Covered California undertake the Quality Transformation Initiative?

A: We were incredibly successful at covering nearly 2 million, but frankly we didn’t see improvements in quality, and we continue to see gaps for certain populations in terms of outcomes. So, I think the question became much more imperative: Are we getting our money’s worth out of this coverage? Are we making sure people are living longer and better, and if not, how do we up the ante to make sure they are?

Q: There’s a penalty for not meeting the targets, but no bonuses for meeting them: You meet the goals or else, right?

A: We don’t say it like that, but that is true. And we didn’t make it complicated. It’s only four measures. It’s things that as a primary care doctor I know are important, that I take care of when I see people in my practice. We said get to the 66th percentile on these four measures, and there’s no dollars that you have to pay. If you don’t, then we collect those funds.

Q: And you use the penalty money to fund the grocery assistance and child savings accounts.

A: That’s exactly right. We had this opportunity to think about what would we use these dollars for and how we actually make a difference in people’s lives. So, we cold-called hundreds of people, we sent surveys out to thousands of folks, and what we heard overwhelmingly was how expensive it is to live in California; that folks are making trade-offs between food and transportation, between child care and food — just impossible decisions.

Q: You will put up to $1,000 a child into those savings accounts, right?

A: That’s right. It’s tied to doing those healthy behaviors, going to child well visits and getting recommended vaccines. We looked at the literature, and once you get to even just $500 in an account, the likelihood of a kid going to a two- or four-year school increases significantly. It’s actually because they’re hopeful about their future, and it changes their path of upward mobility, which we know changes their health outcome.

Q: Given the rise in vaccine skepticism, are you worried that the recent measles outbreak could grow?

A: I am very concerned about it. I was actually reading some posts from a physician colleague who trained decades earlier and was talking about all the diseases that my generation of physicians have never seen. We don’t actually know how to diagnose and take care of a number of infectious diseases because they mostly have been eradicated or outbreaks have been really contained. So, I feel worried. I’ve been brushing off my old textbooks.

This article was produced by Â鶹ŮÓÅ Health News, which publishes , an editorially independent service of the .Ìý

This <a target="_blank" href="/health-care-costs/covered-california-chief-medical-officer-monica-soni-q-and-a-vaccination-rates/">article</a&gt; first appeared on <a target="_blank" href="">Â鶹ŮÓÅ Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">