Medi-Cal Under Threat: Who's Covered and What Could Be Cut?

Medi-Cal, California’s comprehensive Medicaid program with a budget of approximately $174.6 billion, provides essential health coverage to nearly 15 million residents—including low-income individuals and those with disabilities. This makes California’s program one of the largest in the nation, enrolling twice as many people as New York and over three times as many as Texas.

California’s enrollment exceeds federal eligibility standards, offering expanded access to many who wouldn't qualify elsewhere. The system includes a broad array of benefits such as vision, dental, maternity care, and coverage for individuals with disabilities, seniors, and even some undocumented immigrants—funded significantly by federal dollars.

However, Medi-Cal is facing political and financial uncertainties. The major concern stems from potential federal budget cuts proposed by Republicans, which could amount to nearly $880 billion over a decade. These cuts might force California to impose restrictions like work requirements or even reduce benefits, affecting millions of residents.

At the state level, recent financial strains include a borrowed $3.4 billion in March and an additional $2.8 billion approved in April to cover overruns. Governor Gavin Newsom’s administration champions the program’s expansion efforts, emphasizing its role in reducing the uninsured rate to a record low of 6.2% in 2022.

Who benefits from Medi-Cal? Over a third of Californians depend on this program for vital health services, including doctor visits, therapies, medications, and more. The program serves primarily those earning 138% or less of the federal poverty level (approximately $21,597 for individuals, $44,367 for families of four), but California extends coverage beyond federal mandates to include many low-income adults without dependents, individuals with disabilities, inmates, and others.

The program’s costs are largely supported federally—about 60%—with the rest coming from the state’s general fund, hospital fees, tobacco taxes, and rebates. Medi-Cal’s expenditures average around $8,000 per person, with higher costs for those with disabilities and seniors.

Looking ahead, potential federal and state further reductions could threaten the current level of coverage. Proposed cuts include ending the Medicaid expansion, implementing work requirements, and restricting provider taxes that significantly fund Medi-Cal. Historically, during economic downturns, California has had to cut benefits such as dental and eye care for adults and reduce provider reimbursements.

Given these challenges, the future of Medi-Cal remains uncertain, with policy decisions in Washington and Sacramento poised to shape the scope of health coverage for millions of Californians. Policymakers are faced with balancing fiscal constraints while maintaining access to vital health services.

Source: https://medicalxpress.com/news/2025-04-medi-cal-threat.html