California takes wait-and-see approach to Trump's proposed Medicaid cuts

While President Trump's proposed budget would mean a big hit to Medi-Cal, California is opting for a wait-and-see approach to let the political debate in Washington run its course.

The president's proposed budget released Tuesday would cut $616 billion from Medicaid and the Children's Health Insurance Program over 10 years. 

About one-third of Californians are on Medi-Cal, the state's version of Medicaid, the health insurance program for certain low-income Americans. 

Trump based his budget on the assumption that Congress will approve the health care bill passed by the House. But Senate Republicans have indicated that they will significantly change the legislation, so Gov. Brown's administration sees no need to act yet, according to H.D. Palmer, spokesman for the state Department of Finance.

"Until and unless there is an enacted change in law, our budget assumes that the current law that’s on the books right now carries the day," said Palmer, referring to the Affordable Care Act.

"We don’t want to have to dramatically reduce spending in other vital state programs based on what the Congress may or may not do," he said, adding that's why California hasn’t conducted a thorough analysis of how Trump's new budget might affect the state.

The state Department of Health Care Services estimated in March that the House Obamacare replacement bill would cost California an additional $24.3 billion by 2027. 

Such a large cost shift from the federal government to the states would mean that "states like California that have a large Medicaid population [would] feel it even worse," said Dr. Geoff Joyce, director of health policy at the Schaeffer Center for Health Policy and Economics.

Nearly 40 percent of L.A. County residents are on Medi-Cal.

If Congress were to pass something resembling Trump's budget, California would probably have to consider "some sort of reduction in benefits, or more likely a reduction in reimbursement to providers, hospitals and doctors," said John Baackes, CEO of LA Care. The health plan provides coverage for 2 million low-income county residents.