Proposed cuts to Medicaid would affect 2.9 million Angelenos

A new study says more than a quarter of the people who live in Los Angeles County rely on Medicaid, and that cuts to the program would have a significant impact on people and healthcare providers.

The study by the L.A.-based Economic Roundtable, a nonprofit research group, examined the effects of proposed cuts to Medicaid, which is known as Medi-Cal in California. The budget before Congress now would eliminate 12% of federal funding for the program .

“This loss of medical care will diminish the health of Medicaid patients, compromise public health and undercut the financial stability of hospitals and clinics,” the study states.

While 21% of Americans rely on Medicaid for healthcare, 29% of Angelenos rely on the service.

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Key takeaways from the study

Dan Fleming, one of the authors of the study, said researchers looked at over 3 million hospital visits in California — about a third of those in L.A. County.

“The biggest takeaway for me is that the largest function of Medicaid is to bring babies into the world,” Fleming said, adding that the federal program pays hospital costs for 41% of the babies born in U.S.

Medicaid provides care to 42% of people under the age of 15. The program provides health coverage for 36% of all U.S. residents with disabilities — 48% in L.A. County.

Many Medicaid recipients are unhoused. The program provides health care for 66% of unhoused residents nationwide, according to the study.

“Reduced access to Medicaid for homeless individuals would increase the number of individuals with severe psychoses living on the streets and be tragic for the already dispossessed population that does not have a place of their own to sleep,” the study states.

Cutting Medicaid would have negatively affect a wide range of healthcare providers.

It’s not just hospitals. Pharmacies, nursing homes and home healthcare services would all suffer, Fleming said.

Projected impacts of the cuts

Medicaid paid for $835 billion in U.S. health care costs in 2023, according to the study. A 12% reduction in federal Medicaid funding would result in $220 billion in annual economic shrinkage throughout the United States.

Healthcare costs for the general population would likely go up because healthcare providers would increase charges for other patients.

Los Angeles is the largest county in California and would be most affected by Medicaid cuts, numerically and financially. But rural counties would be hardest hit.

Fleming points to Mariposa County, northeast of Fresno, where 35%of the residents are on Medicaid.

Fleming said the county has one “struggling” rural hospital, which would likely be in danger of closing if Congress approves cuts to Medicaid.

“In terms of loss of access to healthcare, probably rural counties would be impacted most severely,” Fleming said.

Congress is debating proposals to implement work requirements for some Medicaid recipients. These proposals generally require able-bodied adults to document a certain number of work or work-related activities, like volunteering one or more times per month, to maintain their Medicaid coverage.

According to the study, 12% of adult Angelenos on Medicaid would fall in the category of people who would have to work or engage volunteer related activity to qualify for the program.