Bad news for Medi-Cal beneficiaries in California: Here’s how Trump’s proposed changes could affect them

Around 30 percent of Californians receive healthcare through Medi-Cal, the state’s Medicaid program.

Medicaid is a federal program, administered by the states, that provides healthcare to low-income individuals and families. In 2022, California expanded the types of services offered through Medi-Cal, establishing CalAIM, which also included the distribution of meals and housing assistance.

CalAIM’s mission and origins in the Biden administration

The initiative aims to examine healthcare more holistically, recognizing that one’s economic situation has a direct impact on their health. CalAIM was made possible thanks to a waiver granted by the Biden administration, which, as CalMatters explained, allowed California and other states to “experiment with their Medicaid programs to try to save money and improve health outcomes.”

State lawmakers supporting the program argue that addressing substance abuse issues and reducing housing and food insecurity can reduce healthcare costs in the short and long run. In a brief describing the enhanced support that would be available to Medi-Cal members, officials explained that “members typically have several complex health conditions involving physical, behavioral, and social needs.”

“More than half of Medi-Cal spending is attributed to the 5 percent of members with the highest-cost needs,” reported the Department of Health and Human Services.

The future of CalAIM and other experimental programs

CalAIM is authorized under a federal waiver that allows states to experiment with their Medicaid programs to identify innovative ways to support and improve the health and well-being of economically vulnerable residents. These experiments also seek to test how enhanced support can lead to less reliance on social welfare programs in the long run, understanding that such an outcome will not be possible for all Medicaid recipients.

In his confirmation hearing to become the administrator of the Centers for Medicare and Medicaid Services, Mehmet Oz voiced his opposition to programs like CalAIM.

“This one really bothers me. There are states that are using Medicaid — Medicaid dollars for people who are vulnerable — for services that are not medical,” said the former television doctor.

As a result of Republican efforts to cut federal spending, states have been informed that these exceptions will end. CalAIM will continue to receive funding through 2026, but the state has been informed that it should not rely on federal funds after that point.

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