Raise the debt ceiling or cut social programs? Lawmakers have struggled with this choice repeatedly, even though Congress has raised the debt limit 78 times since 1960. With debate ongoing this year, lawmakers on both sides of the aisle are vowing to spare Medicare and Social Security. However, some have their eyes set on cutting Medicaid funding. That would be an ill-advised and costly mistake for everyone, not just for the vulnerable populations who are beneficiaries of the government-funded program.
Medicaid – called Medi-Cal in California – is already severely underfunded, which has created widespread provider shortages. Despite numerous efforts to entice doctors to serve in the health care safety net, recruitment has been a painfully arduous process. As a result, emergency rooms become de facto primary care providers. Worse yet, low reimbursement rates perpetuate the institutional racism of a two-tiered health care system, since people of color make up the majority of those covered by Medicaid.
How low are Medicaid rates? Medicaid only pays about 60 percent of what providers receive to treat Medicare members and even less (about 33 percent) for what they would be paid to treat a commercially insured patient.
During the COVID-19 Public Health Emergency, the process of verifying Medicaid eligibility, known as redetermination, stopped. The number of beneficiaries jumped by more than 20 million between February 2020 and December 2022. With the end of the Public Health Emergency, redeterminations resumed on April 1 and an estimated 14 million people could lose coverage, many of whom might still be eligible for Medicaid. Many could be disenrolled just because state agencies do not have a current address for them on file after three years that saw so much turmoil.
This is happening at the same time that some lawmakers are pushing for Medicaid cuts by proposing new work requirements for beneficiaries. They are threatening not to raise the debt ceiling without the cuts. This plan was just passed in the House of Representatives. The Congressional Budget Office estimates that proposed work requirements could cut the program’s spending by $135 billion over 10 years. But that savings translates to millions of people losing coverage over that time. All of this threatens a system that is already in crisis due to low Medicaid reimbursement rates.
I am the CEO of L.A. Care Health Plan, the largest publicly operated health plan in the country, serving more than 2.8 million Medicaid beneficiaries in Los Angeles County. I have seen how these beneficiaries struggle to make ends meet. The last thing they need is to lose critical health care coverage.
Last year, California launched a multi-year, multi-billion dollar overhaul of the state’s Medicaid system, which included a host of new benefits for members. And, in 2024, Medicaid plans in California will be required to expand coverage to adults 26 to 49, regardless of immigration status. We applaud these efforts to expand access to health care services. This includes a proposal by the Biden Administration to provide coverage for young adults across the country who are enrolled in the Deferred Action for Childhood Arrivals (DACA) program. But so far, Medicaid funding levels are not keeping up with the new responsibilities.
In 2022, to help ensure that California Medicaid members continue to have access to the high-quality health care that they deserve, L.A. Care convened what’s now called the “California Safety Net Coalition.” This multi-stakeholder group of advocates is working to champion increased, sustainable funding for Medicaid providers in the state, rather than Band-Aid fixes that only temporarily plug holes.
The goal of the California coalition is to address the root cause of this crisis and end the finger pointing that so often keeps us from reaching that goal. Lawmakers need to take the time to understand the impact funding cuts would have on the overall health care system and the impact they would have on the most vulnerable populations in this country. If they did that, they would know that it’s time to increase funding, not cut it.
John Baackes is the Chief Executive Officer of L.A. Care Health Plan, the nation’s largest publicly operated health plan serving almost 2.9 million members in Los Angeles County, of whom almost 2.7 million are Medi-Cal beneficiaries.