Protect Medi-Cal Funding Series Health Disparities Issue Brief # 6 in

Protect Medicaid Funding: Health Disparities

Protect Medi-Cal Funding Series

Health Disparities

Issue Brief # 6 in a 12-Part Series

Medi-Cal provides a long-term investment in the health of Californians. Medi-Cal

coverage and services are tailored to meet the unique needs of low-income individuals

and families, and costs less per beneficiary than employer-based insurance.

The

American Health Care Act (AHCA) passed by House Republicans would seriously

jeopardize the health and financial security of more than 13 million Californians—one

third of the state’s residents—who rely on Medi-Cal each year.

The AHCA cuts federal

Medicaid spending by $834 billion over ten years and imposes a cap on Medicaid

funding for states.

In addition, the recently released White House budget proposes to

further cut federal Medicaid spending by as much as $1.3 trillion over the next decade.

The loss of billions of dollars in federal Medicaid funding will invariably lead to cuts in

services and the loss of affordable coverage. This issue brief explains why Medi-Cal is

so critical for populations experiencing health disparities, and it explains how low-

income Californians would be harmed by Medicaid funding caps and cuts.

Why Medi-Cal is important for communities experiencing health disparities:

• Medi-Cal protects communities of color. Medi-Cal is an important source of

health care coverage for people of color, who represent at least 68 percent of its

enrolled population.

Almost half of Medi-Cal enrollees are Latina/o, 13 percent

are Asian/Pacific Islander, and 8 percent are African American.

Medi-Cal

coverage is also critical for individuals of color because they are more likely to

experience certain health conditions, such as diabetes, which require ongoing

screening and services.

• Medi-Cal is essential to delivering care in rural communities. Medi-Cal

funding is essential to delivering care in rural areas. Rural residents are more

likely to be enrolled in Medicaid than urban residents for a variety of reasons:

lower access to job-based coverage, greater prevalence of self-employed jobs,

lower incomes, and a greater share of the population with a disability. Working

adults in rural communities are also less likely to have access to employer-based

health insurance.

Medi-Cal fills this gap by providing health coverage, in

particular for rural communities. Approximately, 1,366,703 Medi-Cal enrollees

live in California’s rural counties.

It is also important to note that by providing

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Protect Medi-Cal Funding: Health Disparities 2

coverage for rural communities, Medi-Cal helps sustain a healthy workforce. For

instance, Medi-Cal is a critical source of income for rural hospitals.

• Medi-Cal protects people with disabilities. Although insurance markets

historically discriminated against people with disabilities, Medi-Cal provided

reliable coverage to this population without pre-existing condition exclusions or

other barriers. Medi-Cal also pioneered the development of home and community

based services that allow individuals with disabilities to receive care in their

homes and participate in community-based programs, instead of more expensive

institutional care. In fact, its In-Home Supportive Services program is the largest

in the country and covers more than 480,000 enrollees who are elderly or who

have a disability.

• Medi-Cal protects health and financial security. Medi-Cal provides increased

funding to help meet new community health threats as they arise, such as

obesity or the opioid epidemic, which are increasingly affecting ethnic minorities

and rural communities.

Medi-Cal is specifically structured to ensure that when

the economy falters and low-wage people of color and rural workers lose their

jobs, affordable health coverage is available to meet these needs.

How funding cuts would harm communities experiencing health disparities:

• Funding caps and other cuts would hurt communities experiencing health

disparities. Federal funding cuts result in reduced budgets for state Medicaid

programs. With substantially fewer resources, California would seek to cut back

Medi-Cal-covered services, and communities experiencing health disparities

would be among the most impacted. For example, Medi-Cal could attempt to

reduce coverage of expensive services relied on by individuals with disabilities,

since the current Republican House bill would increase state costs on in-home

supportive services by about $400 million in 2020 and will grow annually.

California could also be forced to make changes on the eligibility of certain

populations that include people of color and residents of rural communities. Caps

would not allow for the flexibility to meet demographic changes that are

happening in California, leaving the state with even larger cuts over the long run.

Moreover, the per capita structure does not take into account certain populations

like American Indians, meaning that California will have to make difficult

decisions about how it will be provide for those individuals who receive coverage

through Indian Health Services.

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Protect Medi-Cal Funding: Health Disparities 3

• Funding cuts would put state health security in jeopardy. Under a funding

cap, states get a predetermined federal payment for future years, meaning states

would not have enough money if health care needs increase. Such a rise in

needs is bound to happen since the number of Californians with complex health

conditions diabetes is likely to double by 2020.

Under a per capita cap,

California would not get support for these new costs, which disproportionately

impact people of color. California’s lower-income communities and communities

of color will see a reduction in their health security and an increase in debt and

medical bankruptcies.

• Funding cuts would undermine flexibility to address community health

priorities. Funding cuts would make it impossible for California to implement or

continue initiatives that address the social determinants of health or make

strategic investments in preventive care and community health that save long-

term costs. Funding caps and other cuts might also force California to reduce the

enhanced Medi-Cal rates paid to public and rural health clinics that care for

underserved communities, including individuals without insurance. Research

studies indicate that rural parts of California would face significant losses should

Medi-Cal experience any federal cuts.

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ENDNOTES

See TERESA COUGHLIN ET AL., KAISER COMM’N ON MEDICAID & THE UNINSURED, WHAT

DIFFERENCE DOES MEDICAID MAKE? 4, 7 (2013) (Nationally, employer-based coverage would

cost 28% more than covering the same individual with Medicaid),

http://kaiserfamilyfoundation.files.wordpress.com/2013/05/8440-what-difference-does-medicaid-

make2.pdf.

CAL. DEP’T HEALTH CARE SERVS., MEDI-CAL MONTHLY ENROLLMENT FAST FACTS 1 (2017)

(enrollment as of December, 2016 at 13.5 Million),

http://www.dhcs.ca.gov/dataandstats/statistics/Documents/Fast_Facts_December_2016.pdf

CONG. BUDGET OFFICE, COST ESTIMATE: H.R. 1628, THE AMERICAN HEALTH CARE ACT, AS

PASSED BY THE HOUSE OF REPRESENTATIVES ON MAY 4, 2017 (2017),

https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628aspassed.pdf.

EDWIN PARK, CTR. ON BUDGET AND POLICY PRIORITIES, TRUMP BUDGET CUTS MEDICAID EVEN

MORE THAN HOUSE BILL, SHOWING DANGER OF PER CAPITA CAP (May 23, 2017),

http://www.cbpp.org/blog/trump-budget-cuts-medicaid-even-more-than-house-health-bill-

showing-danger-of-per-capita-cap.

CAL. DEP’T HEALTH CARE SERVS., MEDI-CAL MONTHLY ENROLLMENT FAST FACTS (NOV. 2016),

http://www.dhcs.ca.gov/dataandstats/statistics/Documents/Fast_Facts_Nov_2016.pdf.

Id.

American Indians/Alaska natives (15.9%), Non-Hispanic blacks (13.2%), Hispanics (12.8%),

and Asian Americans (9%) make up the populations with the highest rates of diagnosed

diabetes, compared to 7.6% of non-Hispanic whites. CTRS. DISEASE CONTROL & PREV.,

NATIONAL DIABETES STATISTICS REPORT: ESTIMATES OF DIABETES AND ITS BURDEN IN THE UNITED

STATES (2014), https://www.cdc.gov/diabetes/pubs/statsreport14/national-diabetes-report-

web.pdf.

Kaiser Family Found., The Affordable Care Act And Insurance Coverage In Rural Areas

(2014), https://kaiserfamilyfoundation.files.wordpress.com/2014/05/8597-the-affordable-care-

act-and-insurance-coverage-in-rural-areas1.pdf; see also NAT’L POVERTY CENTER, NAT.

POVERTY CENTER WORKING PAPER SERIES: #11-16 - THE GEOGRAPHY OF EXCLUSION: RACE,

SEGREGATION AND CONCENTRATED POVERTY 6-7 (2011),

http://npc.umich.edu/publications/u/2011-16%20NPC%20Working%20Paper.pdf.

CAL. DEP’T HEALTH CARE SERVS., COUNTY CERTIFIED ELIGIBLES AS OF DECEMBER 2016,

available at http://www.dhcs.ca.gov/dataandstats/statistics/Pages/Medi-Cal-Certified-

EligiblesRecentTrends.aspx (last visited June 13, 2017).

CAL. DEP’T HEALTH CARE SERVS., RURAL HEALTH REPORT 2012, available at

http://www.dhcs.ca.gov/services/rural/Documents/CSRHAPresentationNov132012.pdf.

CAL. DEP’T HEALTH CARE SERVS., SUMMARY AND PRELIMINARY FISCAL ANALYSIS OF THE

MEDICAID PROVISIONS IN THE FEDERAL AMERICAN HEALTH CARE ACT (Mar. 21, 2017),

http://www.dhcs.ca.gov/Documents/3.21.17_AHCA_Fiscal_Analysis.pd.pdf .

See, e.g., Sara E. Schaefer et al., Assessing Child Obesity and Physical Activity in a Hard-to-

Reach Population in California’s Central Valley, 2012–2013, 12 PREV. CHON. DISEASE E117

(2015); Sarah Childress, How the Heroin Epidemic Differs in Communities of Color, FRONTLINE

(Feb. 23, 2016), http://www.pbs.org/wgbh/frontline/article/how-the-heroin-epidemic-differs-in-

communities-of-color/.

CAL. DEP’T HEALTH CARE SERVS., supra, note 11.

CALIFORNIA PAN-ETHNIC HEALTH NETWORK, THE REPUBLICAN ACA REPEAL PLAN WILL BE

DEVASTATING FOR CALIFORNIA (2017),

https://cpehn.org/sites/default/files/cpehn_fact_sheet_ahca_-_may_2017.pdf.

CAL. DEP’T HEALTH CARE SERVS., supra note 9.

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Protect Medi-Cal Funding: Health Disparities 5

See CONSUMER FIN. PROT. BUREAU, FINDINGS FROM THE CFPB’S SURVEY OF CONSUMER VIEWS

ON DEBT CONSUMER EXPERIENCES WITH DEBT COLLECTION (2017) (“Medical debt is the most

common type of past-due bill or payment for which consumers reported being contacted [by

debt collection agencies].”),

https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201701_cfpb_Debt-

Collection-Survey-Report.pdf; Christina Lamontagne, NerdWallet Health Finds that Medical

Bankruptcy Accounts for Majority of Personal Bankruptcies, NERDWALLET HEALTH BLOG (Mar.

26 2014), https://www.nerdwallet.com/blog/health/medical-bankruptcy/.

See LAUREL LUCIA ET AL. U.C. BERKELEY CENTER FOR LAB. RES. & EDUC., Medi-Cal Expansion

under AHCA: Severe Coverage and Funding Loss unless State Backfills Billions in Federal

Cuts, http://laborcenter.berkeley.edu/medi-cal-expansion-under-ahca.