California lawmakers an expired law that would require the state to identify companies that employ 100 or more people and have employees enrolled in Medi-Cal, the state’s Medicaid program. Nevada has had a similar law in place since 2017, though a proposal for one in Oregon stalled when its legislative session ended in March.

The California bill author, Democratic state Sen. Lola Smallwood-Cuevas, said she is deeply troubled by what is going to happen when work requirements kick in. According to the state, out of more than on Medi-Cal will be subject to the rule.

“We think this is a bill that’s about fairness,” Smallwood-Cuevas said. “It’s a basic principle that taxpayers deserve transparency about which large employers are shifting their healthcare costs onto the public.”

Large employers that regularly top Nevada’s list, such as Walmart and Amazon, have said that the state included part-time and seasonal workers in their counts and that their full-time hourly employees to qualify for Medicaid.

Walmart spokesperson Katrina Proffitt said that the company offers affordable medical coverage to most employees, including eligible part-time workers, and that most of its plans include no-cost virtual care options.

“Healthcare affordability and access to quality care remain real barriers for many Americans, and Walmart continues to be committed to being part of the solution,” Proffitt said.

The push to name and shame companies reflects dueling narratives about the biggest abusers of the joint state-federal Medicaid program, which reached nearly in government spending in 2024. The Trump administration, led by Centers for Medicare & Medicaid Services Administrator Mehmet Oz, has called out blue states for not doing enough to fight insurer fraud and abuse. State Democratic leaders, meanwhile, are pushing back by calling attention to big employers that don’t offer affordable health benefits, which leaves taxpayers subsidizing healthcare costs for the low-wage workforce.

Some states have considered financial penalties. Democratic New Jersey Gov. Mikie Sherrill signed a bill in June that have at least 50 Medicaid-enrolled employees. Companies with 50 to 249 workers on Medicaid per person, and those with at least 500 will pay $725.

Bills that would have penalized companies with workers enrolled in Medicaid failed in this year.

In Sacramento, California, Democrats want to figure out a way to make large businesses pay for their employees’ health coverage. State lawmakers struck a deal with Democratic Gov. Gavin Newsom, who is contemplating a presidential bid as he wraps up his final year in the governor’s office, to explore tax options. Any tax hike would be up to the new governor.

States face of dollars under HR 1, the GOP tax-and-spending law known as the One Big Beautiful Bill Act, notably through that requires nondisabled Medicaid enrollees ages 19 to 64 in most states to prove they are working, volunteering, or going to school at least 80 hours a month to keep their coverage.

Yet federal work requirements are projected to increase the number of uninsured people nationwide by more than 5 million by 2034, according to the . Nebraska and Montana have begun enforcing the rule.

One health policy researcher said employer Medicaid reports highlight the lack of affordable healthcare options available to low-wage workers. More than half of adults enrolled in Medicaid who don’t have dependent children already meet the 80-hour-a-month requirement or face challenges that would likely qualify them for an exemption, .

“There’s a whole set of people who are working — they may not satisfy the work requirement provisions, they may not get the exemption that they’re qualified for, and they don’t have access to that employer-sponsored insurance either,” said Edwin Park, a research professor at the Center for Children and Families at Georgetown University.

Employers Push Back

While employer lists haven’t succeeded in bringing down Medicaid costs, supporters say measuring the burden can be the first step and help lawmakers make the case for further action.

In Nevada, Amazon has employed more Medicaid enrollees than any other company since 2020, according to the state’s report . For state fiscal year 2025, Walmart, the Clark County School District, the state government, and Tesla rounded out the top five.

Employers that the reports are misleading because they have included part-time and seasonal employees. The state’s includes only full-time employees, plus those who could not be confirmed as either full- or part-time employees.

That came to 4,914 Amazon employees and 3,503 Walmart workers in Nevada on Medicaid in 2025.

There are no penalties for companies on the list.

Amazon said it pays its workers more than double the $7.25-an-hour federal minimum wage and noted that Medicaid eligibility is based on household income and size rather than an individual’s wage. That means two employees who earn the same pay may have different eligibility depending on whether they have children or live with parents.

“Pointing fingers at Amazon over Medicaid is a red herring,” said spokesperson Alisa Carroll. “What really needs to happen is a significant and large increase in the federal minimum wage — that would be a big boost for American families.”

Nevada Medicaid spent nearly $950 million on healthcare for more than 133,000 full-time employees and more than 140,000 of their dependents. While the total amount spent dipped in fiscal year 2025, the average cost per member per year increased by nearly 17%.

Yvanna Cancela, a former Nevada lawmaker who sponsored the legislation on Medicaid work reports, said the annual reports force an important conversation “about whether or not this is the kind of economy we want and whether or not it is right or just that people who work full-time don’t make enough to have health insurance.”

A Fraying Safety Net

Health researchers say that uninsured people delay or skip and that their children may end up losing coverage, too.

One analysis found that more than were enrolled in Medicaid and the Children’s Health Insurance Program this April than in January 2025. California is among the states with the among children.

The loss in healthcare coverage among residents will be compounded by the loss of public food assistance benefits, Smallwood-Cuevas said. is pending in the legislature.

She compared Medi-Cal to a trampoline that has become a “very tattered kind of fishnet” overwhelmed by people falling into it. President Donald Trump’s spending-and-tax law pulls and rips at the safety net, she said.

When people lose food assistance and health benefits, they must choose between paying for medicine and paying for rent, Smallwood-Cuevas said.

“We’re going to see more people in their cars, more people on the street, and a lot more people in the emergency room,” she said. “That is dangerous for all of California.”

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The Republican blasted California during back-to-back political attacks in May, saying the heavily Democratic state is committing “outrageous fraud” and “stealing” by spending state and federal Medicaid money meant for basic medical treatment on unconventional services such as housing and nutrition assistance, gym memberships, and even tribal prayers and, he claimed, exorcisms.

“The California Medicaid program will pay for herbal medicines, meal deliveries. They’ll pay for housing,” Kennedy said. “I don’t know what housing has to do with healthcare.”

“California, they’re just setting all kind of records,” he added. “They’re wild people.”

Despite criticism from congressional Republicans and growing scrutiny from the Trump administration, Gov. Gavin Newsom, a Democrat considering a presidential run, said he’s proud of California’s spending on social services in Medi-Cal, the state’s Medicaid program. It’s a multibillion-dollar experiment to help medically frail patients meet their housing, food, and other social needs that Newsom says is not only legal but also a more cost-effective and evidence-backed approach to providing healthcare for Californians with complex health conditions. He counters that investing in services outside clinical settings can help people avoid emergency rooms and hospital admissions, improve their long-term health, and ultimately save taxpayers money.

“It’s about whole-person care,” Newsom said, adding that he hopes President Donald Trump’s administration sees California’s leadership and agrees with the “reforms we’re advancing as national best practices.”

Now one of the governor’s marquee health initiatives is at the center of an intensifying partisan battle with Republicans in Washington, D.C., who have moved to rein in billions in healthcare spending on low-income and disabled people across red and blue states. It’s a philosophical divide: Conservatives say social services are a financial strain on Medicaid and shouldn’t be considered healthcare, while liberals argue that investing in prevention ultimately saves money. While experiments proliferated across the country under President Joe Biden, the Trump administration federal policy encouraging state Medicaid programs to address health-related social needs.

The Medicaid fight is putting patients in limbo.

Lucy Rodriguez teaches Mexican folk dancing in the town of Hollister, in California’s Central Coast region. She said her life turned around this year once an intensive case manager with Titanium Healthcare, which contracts with health insurers to provide services, began helping her manage her chronic diseases and stay on top of her medical appointments and prescriptions, even picking up free food boxes for her. The 73-year-old is on Medicare and Medi-Cal, which offers more extensive benefits. The low-income health program has helped pay her utility bills, and she was recently approved for home-delivered meals.

“This has been a godsend,” said Rodriguez, who has diabetes, high blood pressure, and kidney disease. “I was getting so stressed out and depressed. It’s really hard when you’re on a fixed income. Groceries are so expensive, and with summer, electricity gets even more expensive. But this is really improving my life.”

She worries the Trump administration will cut benefits to low-income older people.

Last year, the Centers for Medicare & Medicaid Services warned states that federal funding for social services would be determined on a . CMS spokesperson Christopher Krepich said the agency is not ending current agreements, known as waivers, that grant states temporary permission to provide social services, which are paid for with state and federal dollars. But future applications, for new services or to extend existing initiatives, could be at risk if they veer too far from traditional healthcare.

“Moving forward, CMS will work with states on innovative waivers that address core healthcare needs, as consistent with evidence-based approaches tied to clinical diagnoses and services, to the goal of ultimately improving health outcomes in the Medicaid population,” Krepich said in a statement.

In a further escalation, the Justice Department put out a allowing states to institutionalize people with disabilities and severe mental illness instead of providing community-based care. Republicans have also targeted states, mostly blue ones, for what they say is a failure to go after waste, fraud, and abuse in Medicaid. In May, CMS Administrator Mehmet Oz stood alongside JD Vance as the vice president announced the deferral of in Medicaid money to California over suspicions of fraud.

California Attorney General Rob Bonta said Republicans are simply trying to score political points while ignoring the healthcare needs of poor people. “The federal government wants to politicize fraud,” Bonta said, “and use it, unfortunately, as a bludgeon and a cajole to beat up on blue states.”

Social Healthcare

Health policy researchers say roughly are linked to socioeconomic, environmental, and behavioral factors, such as housing instability, homelessness, food insecurity, and exposure to violence, whereas 20% is associated with medical care delivered in hospitals and clinics. That evidence to tackle social services.

At least 24 states use their own money while drawing federal Medicaid funds for . Colorado, Massachusetts, New York, North Carolina, Oregon, and Pennsylvania are among those that provide housing and nutrition assistance.

As the Trump administration pulls back on social services, states are rethinking how to fund benefits that have improved preventive care for low-income people. Some have launched new benefits under what’s known as a state plan amendment, a mechanism states use to modify their Medicaid programs that doesn’t need federal waiver approval. and , for example, use this to add recuperative care for homeless patients after hospitalization. These short-term care facilities offer people the opportunity to recover, bridging the gap between hospital discharge and independent living.

This approach “has the advantage of establishing a permanent, statewide benefit that does not require ongoing federal renewals, offering greater stability and predictability,” said Lynn Sutfin, a spokesperson for the Michigan Department of Health and Human Services.

Other states, meanwhile, rely on federal waivers, which require renewal to provide social services. Arizona officials said the state intends to submit a request by the end of September to continue to provide housing and other services to homeless patients, or those at risk of homelessness, with a serious mental illness and a chronic health condition or recent incarceration.

“When members have access to stable housing and supportive services, they are more likely to engage in ongoing care and less likely to experience avoidable emergency department visits and inpatient admissions,” said Roberta Harrison, interim director of the Arizona Health Care Cost Containment System.

California, which has been the most aggressive state in adopting social services, has taken a two-pronged approach to keep its vast offerings funded past this year. The state is using its authority to make most of its existing social services and benefits permanent in Medi-Cal managed-care coverage. That regulatory maneuver bypasses federal waiver approval — a move that could attract further Republican scrutiny.

But not everything the state offers can be funded without permission from the federal government. As some services are made permanent, the Newsom administration is seeking new waivers to continue other social services, while also adding more.

It’s an ambitious approach that would expand California’s social healthcare experiment. Newsom said he’s worried that the federal government will decline the . “How could you not be with this administration?” he said. “I’m always concerned.”

New Front in Healthcare

California offers most of its health-related social services under within Medi-Cal, which has a proposed budget of . Although there are more than 14 million residents on Medi-Cal, the state has been selective about who gets help from in its program, called California Advancing and Innovating Medi-Cal, or . Patients with complex needs can also receive help navigating their health and social needs from specialized social workers under a benefit known as .

Since 2022, California has been offering social services, spending nearly $12 billion in joint state and federal money, long-term Medi-Cal spending by keeping enrollees out of costly institutions including emergency rooms, jails, nursing homes, and mental health crisis centers.

CalAIM had provided social services to more than patients as of September 2025, the most recent state data available. And nearly low-income Californians have received intensive . Some patients receive both services.

Among the services California is making permanent: Homeless patients can get help finding an apartment, with Medi-Cal paying rental and six months of rent. Patients with chronic conditions such as diabetes and heart disease are eligible for home-delivered meals. Asthmatic patients can get mold removed from their homes to control flare-ups. Low-income seniors with disabilities can get a wheelchair ramp installed free of charge. And inmates leaving jail or prison can be connected immediately with primary care, mental health, and substance use treatment.

The social services — especially housing, food assistance, and home modifications — are success in stabilizing the health of the most complex patients, while achieving savings for Medi-Cal through reductions in emergency room visits and hospitalizations and less reliance on institutional care such as nursing homes, the state Department of Health Care Services.

In the Central Valley, for instance, Health Plan of San Joaquin CEO Lizeth Granados said CalAIM has helped place homeless patients who were routinely hospitalized into housing. And patients with uncontrolled diabetes saw their blood sugar drop after receiving nutrition counseling and home-delivered meals.

Overall, Granados said, the health plan has seen major improvements in chronic disease management and reductions in hospital stays, dropping to 44 inpatient hospitalizations per 1,000 members since it launched in 2022, down from 61 per 1,000 before CalAIM.

In Orange County, officials with CalOptima Health credited CalAIM housing services for contributing to a nearly . “We’ve been able to expand our street medicine programs, too,” said Yunkyung Kim, the insurer’s chief operating officer.

Around the state, Medi-Cal health insurers said they’re optimistic that CalAIM will continue to save money and improve patient health. Yet, the fate of some services will be decided by the Trump administration.

California has asked CMS to continue enrolling jail and prison inmates in Medi-Cal 90 days before their release to maintain consistent treatment for substance use, mental disorders, or physical conditions, a .

The state has also proposed a new job assistance benefit that counties could opt into to help patients find and retain work in response to upcoming federal work requirements imposed by congressional Republicans’ One Big Beautiful Bill Act, signed by Trump last summer.

And the state wants to continue its array of traditional healers and natural helpers for Californians with tribal affiliations, including music therapy, dancing, drumming, and referrals to sweat lodges for mental health treatment and substance use recovery. While it covers spiritual services, such as ceremonies, rituals, and herbal remedies, state officials said Medi-Cal does not cover exorcisms.

Already, the Trump administration’s positioning has forced the state to eliminate room-and-board benefits, which is threatening local efforts to provide recovery beds.

The state is cutting short-term post-hospitalization housing, which was meant to prevent hospitals from or those at risk of homelessness onto the streets. The CalAIM service providing up to six months of temporary housing and ongoing care is ending at the close of this year. And the state is cutting recuperative care benefits, no longer paying for beds for patients to recover from illness or injury, instead offering only wraparound services.

In San Francisco, these beds have been crucial in reducing overdose deaths, helping transition homeless people off the streets and into housing, and reducing hospital bed usage, said Neal Sheran, a medical director with the city’s Department of Public Health. The city’s health plan operates a sobering center, and recuperative care facilities where patients can recover from hospitalizations.

“We’re concerned,” Sheran said. “Funding for the overnight piece of these programs is really crucial to their success.”

Cuts on the Horizon

Even without federal threats, state budget pressures have strained CalAIM financing. Newsom has proposed for social services by $68.3 million this fiscal year. The cut will deepen next year and remain at $150.2 million per year beginning in 2028.

Providers worry that Medi-Cal patients will lose access. And services, such as home-delivered meals and housing assistance, will be further restricted.

“It’s moving us back to the old days where our healthcare system is more expensive and reactive, instead of investing in prevention,” said Anwar Zoueihid, a vice president and the chief strategy officer at the Los Angeles-based Partners in Care Foundation, a CalAIM provider. “It’s contradictory to Make America Healthy Again.”

To save money, the state is tightening eligibility to limit services and . For instance, Medi-Cal patients with food insecurity would no longer be eligible for home-delivered healthy meals without a qualifying condition like diabetes. And a homeless patient would get capped at six months for help finding an apartment.

Some of the biggest providers of CalAIM say services should be continuously evaluated and curtailed if health plans were too permissive. In some cases, food and housing services were given to low-income patients who didn’t necessarily qualify as the highest-need.

“It’s important everybody takes a look with a very sober view at whether we’re truly benefiting people so we’re spending money in the right places,” said Charlie Robinson, the chief health equity officer at L.A. Care, one of the state’s largest Medi-Cal health insurers.

Dorothy Seleski, the Medi-Cal president for Health Net, said the health insurer isn’t deterred by state and federal cuts.

“Regardless of what happens at the federal level, we are committed,” she said. “This is a significant transformation of the healthcare system, and we are already seeing major reductions in avoidable emergency room trips, avoidable hospital admissions, and we’ve closed gaps in preventive care.”

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Now, Democrat Xavier Becerra and Republican Steve Hilton present a stark choice to voters in the race to be the next governor at a moment when public support for the state’s generous safety net is starting to fray.

Both frame the choice as an economic one.

Becerra, former secretary of Health and Human Services under President Joe Biden, has to exclude the poorest immigrants from routine care and push them into expensive emergency rooms . Hilton, a conservative commentator backed by President Donald Trump, has promised to eliminate their coverage and has echoed national Republicans who have to bolster their claims of fraud and abuse in the Medicaid program.

With voters nationwide worried about inflation and the rising cost of living, some Californians might feel less inclined to provide full healthcare coverage to those lacking legal status. What the state does next could have profound implications for its healthcare system and sprawling economy.

Over the past decade, California lawmakers used state dollars to expand Medi-Cal, offering all low-income residents comprehensive coverage regardless of immigration status. But enrollment surpassed initial projections, as did the cost. Medi-Cal coverage of immigrants without legal status costs the state roughly , according to California’s nonpartisan Legislative Analyst’s Office, more than double the initial estimates.

California lawmakers and Democratic Gov. Gavin Newsom, who , have approved major rollbacks of benefits for those residents. They said the state can’t afford ballooning healthcare costs amid massive federal cuts from the GOP tax-and-spending law known as the One Big Beautiful Bill Act; the California Health and Human Services Agency projected up to 3.4 million Medi-Cal enrollees and the state could lose more than $30 billion a year in federal funding under the law, causing major disruptions in the safety net health program.

Medi-Cal’s budget for the 2026-27 fiscal year is $217 billion, and the program serves more than 14 million Californians.

Meanwhile, many legal U.S. residents and citizens have seen their health premium payments skyrocket this year after Congress let enhanced federal Affordable Care Act subsidies expire at the end of December.

As the state grappled with a deficit last year, a majority of likely voters in California said — for the first time in nearly a decade — that they opposed providing health insurance to immigrants without legal status, by the Public Policy Institute of California.

“The state faces major challenges, and healthcare is one of the major expenditures,” said Mark Baldassare, PPIC survey director. “People have become more selective about how they want to see those limited healthcare dollars spent.”

Hilton, running on a platform of affordability and lowering taxes, has seized on the sentiment, casting health coverage for immigrants without legal status as and a to the state’s ability to help citizens.

“Stop taking money from California taxpayers who can barely afford their healthcare to give free healthcare to citizens of other countries who shouldn’t even be here,” Hilton said in a the morning of the June 2 primary.

In campaign stump speeches, to use the savings to for other Californians without detailing how. Hilton did not respond to requests from ºÚÁϳԹÏÍø News for comment.

“Their messaging is very, very simple: It’s an us vs. them,” said Roger Salazar, a Democratic political consultant who represents a coalition of healthcare advocates who argue providing coverage to people who can’t afford it strengthens the workforce and, as a result, the economy. “It’s just a question of convincing the average voter that it’s much better economically.”

A son of immigrants, Becerra for decades pushed to in Congress and has made a similar pitch in his campaign for governor. He did not respond to requests for comment.

“Immigrants, whether documented or not, work hard. They pay taxes, and sometimes they get injured on the job or their children get sick,” during a debate in May. “It would be foolish to tell a family that they don’t have access to the pediatrician or the family doc.”

Becerra, who could become California’s first elected Latino governor, when Newsom and legislative leaders decided to for adults without legal status, cut benefits, and impose monthly premiums.

“Stop treating coverage as a budget variable that expands in good years and contracts when revenue dips,” Becerra wrote in May in response to an Orange County Register . He has new, steady revenue to fund basic services, such as by upping taxes on corporations and the wealthiest Californians.

In 2023, California was home to about 2.3 million people without legal status, representing of the state’s labor force, according to the . And live in a family that includes at least one member without legal status, according to the California Department of Education. Healthcare economists say giving people access to preventive healthcare saves taxpayers money in the long run by and relieving pressure on an overburdened system.

That, Baldassare said, wasn’t a hard argument to make during the covid pandemic, when immigrants were and the link between individual well-being and public health .

But Medi-Cal costs to cover roughly 1.4 million immigrants , according to the latest estimates from the Department of Health Care Services. Because only some lawfully present immigrants are eligible for federal Medicaid benefits, states like California must do so exclusively with state funding.

California’s budget experts that maintaining full Medi-Cal coverage for immigrants without seeking additional revenue would destabilize the state’s long-term fiscal outlook.

In a legislative hearing last year, Republican Assembly member Carl DeMaio questioned whether California taxpayers would prioritize the expansions, saying he doubted “illegal immigrant healthcare in the general fund would be at the top of their list.”

After lawmakers approved the spending reductions, support for immigrant health coverage dropped, Baldassare said. Democratic lawmakers and Newsom  several Medi-Cal cuts until July 2027, leaving decisions for the next governor.

David Hayes-Bautista, who has spent his career studying the economic contributions of Latinos and immigrants, said Californians without legal status and tend to work in industries and occupations that . As a result, many resort to Medi-Cal, saddling the state with the healthcare costs instead of employers.

“California, as a state, has the world’s fourth-largest GDP, which is true thanks to Latinos,” said Hayes-Bautista, director of the Center for the Study of Latino Health and Culture at UCLA. Without contributions from Latinos, many without legal status, it drops to eighth place, about the size , he added.

Immigrant advocates hope to have a more vocal champion in Becerra, the favorite to become governor in a state where Democrats outnumber Republicans nearly 2-to-1.

“He will fight, he will push back, he will do all that he can,” said state Sen. María Elena Durazo, a former labor leader who has championed the immigrant healthcare expansions. “That’s the most we could expect.”

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The 152-bed hospital, which sits on a sprawling medical campus close to the predominantly Latino and Black neighborhood of Watts, is struggling for financial stability. Its patients are poorer and sicker than average, many of them are uninsured, and three-quarters of MLK’s patient care revenue comes from Medi-Cal, the state’s version of the Medicaid program, which pays low rates. For hospitals statewide, by comparison, less than one-third of patient revenue comes from Medi-Cal.

And MLK Community Healthcare, which comprises the hospital and two nearby clinics, is independent, so it cannot fall back on a larger chain to absorb some of the financial pressure.  

Similar problems plague hospitals around the country, in rural and urban areas. And their financial woes are about to get worse.

The Republican budget measure known as the One Big Beautiful Bill Act, signed into law by President Donald Trump last July, is expected to cut federal Medicaid spending by $911 billion over 10 years. And it could contribute to an increase of in the number of uninsured people, many of whom will go to already crowded emergency rooms to get care they can’t pay for.

The law does include a special fund to boost rural healthcare, totaling $50 billion over five years. But that’s far less than it is expected to cut from rural health spending over the next decade. And the rural health fund does little or nothing to help the numerous that also face serious financial troubles.

MLK, like many other hospitals, is scrambling to secure outside financing to avert serious disruptions of medical services when the brunt of the policies contained in the federal law begins to hit early next year. The hospital’s leadership team projects a revenue hole of $80 million to $100 million annually for the foreseeable future. It would be MLK’s largest budget gap since it opened in 2015.

“Even if we cut services that our community needs — maternity care, behavioral healthcare, diabetes management — it wouldn’t make a significant dent in the gap we’re facing,” said Elaine Batchlor, the CEO of MLK Community Healthcare. ”Many of those same people would still come to us through our emergency department, only they’d be in worse shape and might need more expensive care.”

Across the U.S., hospitals and patient advocates are looking to state lawmakers and local officials to help shore up shaky finances. In California, Assembly member Esmeralda Soria, a Democrat representing Fresno, is to expand a 2023 “distressed hospital loan fund” that allocated nearly $300 million in zero-interest loans to in the state, including $14 million to MLK. The state would pony up another $300 million under Soria’s bill.

At least two other states are weighing similar programs. A would create a $100 million “distressed hospital grant” program. And a funding bill for the Illinois Department of Healthcare and Family Services contains a provision to create for troubled hospitals.

Carmela Coyle, the CEO of the California Hospital Association, said the original $300 million disbursed by the state legislature helped but was not enough.

“This program is focused on those who are standing on the edge of that financial cliff, and it’s intended to give them a little space, brush them a little bit back from the edge,” Coyle said. “But we’ve got many more hospitals that are taking giant leaps toward the edge of that cliff every day.”

Despite the association’s influence, an expansion of the loan program is far from certain, given fiscal constraints that have already induced state leaders to roll back California’s ambitious healthcare agenda, with restrictions on coverage for immigrants and funding cuts for community clinics. Democratic Gov. Gavin Newsom recently warned lawmakers to expect more cuts in his revised May budget — and that’s before the main federal spending reductions kick in.

“This is a very difficult budget environment,” said Kristof Stremikis, director of market analysis and insight at the California Health Care Foundation, a nonprofit that advocates for healthcare improvement. “It is hard to come up with funding for new programs and even existing programs right now.”

Some lawmakers noted skeptically that the initial loans are now on their way to at which is allowed under existing law. Soria’s bill spells out a clearer path to loan forgiveness.

“Are these loans or are these grants? Because they seem to be turning, really, into grants,” Assembly member Pilar Schiavo, a Democrat in Santa Clarita, said during an April 21 hearing on the bill.

Ultimately, it might not be desirable to save struggling institutions by pouring dollars into them, because care is increasingly offered outside of hospitals, Stremikis said.

In the short term, though, the financial health of hospitals that received loans appears to have improved, according to a ºÚÁϳԹÏÍø News analysis of state data. The average operating margin of the 15 loan recipients for which comparable data is available shifted from a loss of 15.4% the year before the program to a gain of 2.3% after the money was disbursed.

It is unclear how much of the improvement can be attributed to the loans. Hospitals also secured other sources of funding, and they adopted efficiencies as a condition for the interest-free money.

MLK reduced the use of high-cost temporary labor by hiring more permanent staff, cut the average length of patient hospital stays to decrease staffing hours, streamlined billing, and negotiated more-favorable contracts with insurers, said Atul Nakhasi, a practicing physician who is also MLK’s vice president of government affairs and community relations. Batchlor said that the loan helped MLK get through a cash flow crunch and that a second loan, if it became available, would be used for the same purpose.

This summer, MLK expects to open a psychiatric assessment unit, where patients in mental distress can be stabilized in an environment replete with plush reclining chairs and “calming” rooms. Hospital executives hope the new unit will provide a significant new source of revenue, while taking pressure off the emergency department.

in Visalia, California, suspended some services, temporarily stopped contributing to employees’ retirement, and briefly froze wages in exchange for a loan of just under $21 million, said the organization’s CEO, Marc Mertz.

Madera Community Hospital got a $57 million loan — the largest disbursement from the state fund — to reopen after being shuttered for more than two years. The hospital reopened early last year, but it has not yet stabilized financially, said Matthew Beehler, the chief strategy officer at American Advanced Management, a privately held company that bought Madera out of bankruptcy.

“You can definitely say the hospital would not have been opened without the distressed hospital loan,” though the company has also invested more than $50 million, Beehler said. He said Madera would hope for another loan if the program were extended.

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It started building over the summer, fed by news of across Southern California, Trump administration plans to with Immigration and Customs Enforcement, and the passage of state and federal restrictions on immigrant Medicaid eligibility. Then in November, the federal government released a new that, if enacted, could block certain immigrants from obtaining permanent legal residency if they or family members have used public benefits, including Medicaid.

Many of González’ clients and their children, often U.S. citizens, still qualify for California’s Medicaid program, known as Medi-Cal, which provides health coverage to over 14 million residents with low incomes or disabilities. But increasingly, they don’t want to enroll or renew their coverage, she said.

“Many people don’t want to apply,” she said. “There are people who say they don’t even want to go outside and water their plants.”

An analysis by ºÚÁϳԹÏÍø News found that, from June to December, the latest month for which figures are available, almost 100,000 immigrants without legal status left Medi-Cal, representing about a quarter of all disenrollments in that time frame, even though this group makes up only about 11% of Medi-Cal enrollees.

It marks a reversal in a steady rise in enrollment among immigrants without legal status in California. Until July, sign-ups among this group had risen every month since the state opened Medi-Cal to all low-income residents regardless of immigration status in January 2024.

Tessa Outhyse, a spokesperson for the California Department of Health Care Services, which oversees Medi-Cal, said the enrollment declines can be mostly attributed to the fact that the government restarted eligibility checks that were suspended during the covid-19 pandemic. Indeed, overall Medi-Cal enrollment peaked in May 2023, and has since declined by about 1.6 million.

But two researchers, Leonardo Cuello at Georgetown University’s Center for Children and Families and Susan Babey at the UCLA Center for Health Policy Research, pointed out that California and most other states had fully resumed eligibility checks . In other words, that wouldn’t explain why enrollment has fallen precipitously in the last 12 months or so.

What has changed, Cuello said, is that the federal government passed the One Big Beautiful Bill Act, and executive orders added more changes that are propelling disenrollment.

Surveys Offer Clues

found immigrant adults nationally, especially parents, to be increasingly avoiding government programs that help pay for food, housing, or health care, to avoid drawing attention to their or a family member’s immigration status. That included lawfully present residents and naturalized citizens. Parental avoidance of these programs is particularly concerning, Cuello said, because about 1 in 4 children in the U.S. have an immigrant parent, even though most of those children were born in the U.S.

Cuello suspects that may help explain a nationwide enrollment drop of almost 3% in Medicaid and the Children’s Health Insurance Program during the first 10 months of last year, including a 5.6% drop in enrollment among California children, according to .

During the first Trump administration, the president broadened public charge criteria to allow consideration of Medicaid use and food and housing assistance. That led many citizen children and other household members to they were eligible for. Some the programs even after several courts blocked implementation and Democratic President Joe Biden rescinded the rule.

“It caused a high level of confusion,” said Louise McCarthy, president and CEO of the Community Clinic Association of Los Angeles County, which represents about 70 health centers in the Los Angeles area. “Community health center staff are still working to undo the effects of the first rule.”

Projected Savings

Currently, only people reliant on cash assistance programs or long-term, government-funded institutionalized care may be considered a public charge risk when applying for a visa to enter the country or to become a legal permanent resident. But under the Trump administration’s proposed rule, Medicaid and other noncash programs could be used to determine whether an immigrant is likely to become dependent on the government. Immigration officers would also have more discretion to label people a public charge.

The Department of Homeland Security’s proposal says the changes are needed because the existing rules hamper the agency’s ability to make decisions about an immigrant’s risk of becoming reliant on government resources. A public comment period for the proposal ended in December.

DHS did not respond to a request about when it plans to make a final decision on the rule. The change would “align with long-standing policy that aliens in the United States should be self-reliant and government benefits should not incentivize immigration,” the proposal states.

The agency projected the change could save federal and state governments almost $9 billion annually from people disenrolling from or forgoing enrollment in public benefit programs.

A of the proposed rule estimated it could result in 1.3 to 4 million people disenrolling from Medicaid or CHIP, including as many as 1.8 million citizen children.

“It’s clearly being weaponized to create fear and anxiety,” said Benyamin Chao, supervising health and public benefits policy manager at the California Immigrant Policy Center. He called the proposal part of an “assault on lawfully present immigrants and U.S. citizens who are family members, and just the general community.”

Public charge fears are expected to decrease enrollment also in anti-hunger programs, such as the Supplemental Nutrition Assistance Program, known in California as CalFresh. Mark Lowry, who heads the Orange County Food Bank, said that that — along with disenrollment related to the One Big Beautiful Bill Act — could overwhelm food pantries, since federal nutrition programs account for the vast majority of food aid.

“There’s no way that the emergency food system has the capacity or resources to address those needs,” he said.

Health Care Needs

Fear of Medi-Cal enrollment doesn’t extend to all immigrants. Juana Zaragoza manages a program in Oxnard that helps mostly Indigenous Mexican farmworkers sign up for Medi-Cal. Overall enrollment and reenrollment has remained steady over the past few months, she said. Neither she nor the community members she serves know much about the public charge proposal, she added.

Often, any concerns they have are outweighed by an immediate need for health care.

“We encounter a lot of people who are balancing: what benefits me now and what benefits me later,” she said. “Some just want to cover their needs in the moment.”

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Oz, who heads the U.S. Centers for Medicare & Medicaid Services, there was approximately $3.5 billion of fraud in the hospice and home health care industry in Los Angeles County alone. “This administration under President [Donald] Trump is not going to tolerate taxpayer dollars being stolen because people aren’t paying attention anymore. We’re focused on this,” . He claimed the fraud was largely orchestrated by the “Russian, Armenian mafia” and said that most of the money spent on home and community-based services across California “might be fraudulent.”

However, CMS clarified that not all billing activities referenced by Oz were presumed to be improper. And a review of the most recent available data shows that there are hotbeds of health care fraud across the country and across practice areas, most of them allegedly perpetrated by health insurers and other domestic actors, and that California outperforms most other states in recovering fraud dollars.

As the temperature heats up in the conflict between the Trump administration and California, a handful of Republican state lawmakers have entered the fray, accusing Gov. Gavin Newsom in of allowing “rampant fraud.” Democratic state officials insist they aggressively combat fraud, and Newsom has filed a against Oz, calling language in the allegations “baseless and racially charged.”

“The Trump Administration is attempting to take the issue of fraud — a very real, and national issue — and weaponize it against Democratic states,” California Attorney General Rob Bonta said in an early February statement.

Oz said that he would halt “hundreds of millions of dollars” in payments to California if he didn’t get satisfactory answers from state officials. He and Vice President JD Vance announced in late February that they would delay about $260 million in Medicaid payments , another Democratic-led state, over fraud allegations there, and the state is now suing.

Oz has also launched social media campaigns alleging high-dollar public benefit fraud in Democratic-led Maine and New York. On March 17, he added a Republican-led state to his target list: Florida.

Georgetown University professor Andy Schneider, who served as a senior adviser primarily on Medicaid integrity issues during the Obama administration, said fraud has always been an issue across states, dating back decades. About $3.4 billion in Medicare and Medicaid fraud across the country was , according to the most recent report available. Insurers have paid the highest settlements in alleged health care fraud schemes.

“Bad actors trying to steal public health care funds have been around for a long time,” Schneider said.

How California Stacks Up

The federal government is responsible for Medicare, which primarily benefits older people, while Medicaid, which primarily serves people with lower incomes, is a joint federal-state program. Melissa Rumley, a spokesperson for the Department of Health and Human Services’ Office of Inspector General, said the office could not make state-by-state data on Medicare fraud available because the federal probes often cross jurisdictions.

States file annual reports on actions by Medicaid anti-fraud units that are jointly funded with the federal government and run by state attorneys general. They investigate fraud as well as abuse and neglect of Medicaid patients.

These reports provide a sense of the scale of Medicaid fraud across states. In fiscal 2024, states recovered , compared with $949 billion in total Medicaid spending, according to from the HHS Office of Inspector General. California recouped an outsize share, recovering more than 50% of all the criminal recoveries made by the anti-fraud units nationwide in fiscal 2024 even though the state made up only about 17% of enrollment.

California ranked fourth in the U.S. in 2024 in dollars recovered per Medicaid enrollee across civil and criminal investigations, behind the District of Columbia, Montana, and Delaware. It led all the most populous states, followed in order by Texas, Florida, and New York. (California and federal officials noted that state recovery data varies significantly year to year, often because of the length of investigations.)

Vulnerability of Hospice Care

One aspect of health care fraud that has been at the center of Oz’s attack on California is hospice fraud, which has plagued Republican and Democratic administrations.

The use of hospice, intended to provide care to patients expected to die within six months, increased by over 8% from fiscal 2020 to 2024, to about 1.84 million Medicare beneficiaries, significantly.

To combat fraud, the Biden administration in 2023 of hospices in California, Arizona, Nevada, and Texas. The Trump administration Ohio and Georgia.

CMS spokesperson Chris Krepich did not say specifically what criteria were used to choose which states to monitor, only that the decision was based on “activity typically indicative of hospice-related fraud.” As of June, the agency had revoked the Medicare enrollment of 122 hospices in the original four states, but Krepich said a breakdown by state was not available.

While Oz stated there was some $3.5 billion of fraud in the hospice and home health care industry in Los Angeles County alone, his agency clarified that the number is for overall Medicare billing related to hospice and home health services. Krepich said that “not all billing activity referenced in the remarks is presumed to be improper” and added that the agency could not identify the amount of fraudulent activity until an “evidence-based” investigation was completed.

That’s not to say there is no truth to allegations of hospice fraud.

A published in 2022 found “numerous indicators” of large-scale fraud in Los Angeles County, and a highlighted nearly 500 hospices within a 3-mile radius, including 89 companies registered to a single building in Van Nuys. that “hospice fraud has become an epidemic in California.” He noted that state officials have been aggressively combating it for years, including with .

In January, the state in Monterey County with hospice fraud. That follows hospice scam cases in and .

However, California public health officials are overdue in adopting that were supposed to be . The state’s Department of Public Health is currently revising the regulations, according to spokesperson Mark Smith.

In the interim, the state has revoked the licenses of more than 280 hospices over the past two years and is evaluating an additional 300 hospices, . California had licensed hospice agencies as of 2022, according to the state audit.

Civil Rights Complaint

Meanwhile, Newsom is pushing back on Oz. The governor filed his discrimination complaint with the at HHS, which oversees CMS. The office said it will first decide whether it has the authority to investigate, then, if so, will gather information through interviews and documents. However, the process seems designed to aid individuals who have lost a job to discrimination, or to correct a specific policy, and it is unclear whether there could be any real-world consequences.

The governor wants the agency to address “systematic bias from their leadership,” said Newsom spokesperson Marissa Saldivar.

Krepich said CMS “does not target communities, ethnic groups, or states” and bases its decisions on “confirmed investigative findings.” The allegations of organized fraud refer to “documented criminal cases,” Krepich said, providing a link to in which California residents were convicted of using the identities of foreign nationals to steal almost $16 million from Medicare.

It’s unclear what cases Oz was referring to when he spoke of the Russian and Armenian mafia.

Ciaran McEvoy, a spokesperson for the U.S. attorney’s office for the Central District of California, which includes Los Angeles County, said it doesn’t track whether hospice fraud defendants are alleged to be foreign nationals, but he pointed to the office’s online prosecution announcements. None alleged involvement by foreign influences or organized crime.

The state audit references by the U.S. Justice Department under President Barack Obama that an “Armenian-American organized crime enterprise” was behind a nationwide health care scam.

Federal officials at the time described an “international organized crime enterprise” based in Los Angeles and New York but with roots in Russia and Armenia. The scheme involved billing for unneeded medical treatments, not hospice fraud.

A revealed fraud schemes in which hospice operators recruited patients who were not actually terminally ill, then paid kickbacks to doctors who falsely certified these patients as dying so the hospices could bill Medicare. There was no mention of foreign involvement.

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For a second year, the Democrat has asked state lawmakers to roll back coverage for some immigrants in the face of federal Medicaid spending cuts and a roughly that if the artificial intelligence bubble bursts. Newsom has proposed that the state not step in when, starting in October, the federal government stops providing health coverage to an estimated 200,000 legal residents — comprising .

Progressive legislators and activists said the cost-saving measures are a departure from Newsom’s , while Republicans continue to skewer Newsom for using public funds to cover any noncitizens.

Newsom’s latest move would save an estimated $786 million this fiscal year and $1.1 billion annually in future years in a proposed budget of $349 billion, according to the Department of Finance.

State Sen. Caroline Menjivar, one of two Senate Democrats who voted against Newsom’s immigrant health cuts last year, said she worried the governor’s political ambition could be getting in the way of doing what’s best for Californians.

“You’re clouded by what Arkansas is going to think, or Tennessee is going to think, when what California thinks is something completely different,” said Menjivar, who said previous criticism got her from a key budget subcommittee. “That’s my perspective on what’s happening here.”

Meanwhile, Republican state Sen. Tony Strickland criticized Newsom for glossing over the state’s , which state officials say could balloon to $27 billion the following year. And he slammed Newsom for continuing to cover California residents in the U.S. without authorization. “He just wants to reinvent himself,” Strickland said.

It’s a political tightrope that will continue to grow thinner as federal support shrinks amid ever-rising health care expenses, said Guian McKee, a co-chair of the Health Care Policy Project at the University of Virginia’s Miller Center of Public Affairs.

“It’s not just threading one needle but threading three or four of them right in a row,” McKee said. Should Newsom run, McKee added, the priorities of Democratic primary voters — who largely mirror blue states like California — look very different from those in a far more divided general electorate.

Americans are deeply divided on whether the government should provide health coverage to immigrants without legal status. In a last year, a slim majority — 54% — were against a provision that would have penalized states that use their own funds to pay for immigrant health care, with wide variation by party. The provision was left out of the final version of the bill passed by Congress and signed by President Donald Trump.

Even in California, support for the idea has waned amid ongoing budget problems. In a by the Public Policy Institute of California, 41% of adults in the state said they supported providing health coverage to immigrants who lack legal status, a sharp drop from the 55% .

, Vice President JD Vance, , and congressional Republicans have repeatedly accused California and other Democratic states of using taxpayer funds on immigrant health care, a red-meat issue for their GOP base. Centers for Medicare & Medicaid Services Administrator Mehmet Oz has of “” to receive more federal funds, freeing up state coffers for its Medicaid program, known as Medi-Cal, which has enrolled roughly 1.6 million immigrants without legal status.

“If you are a taxpayer in Texas or Florida, your tax dollars could’ve been used to fund the care of illegal immigrants in California,” he said in October.

California state officials have denied the charges, noting that only state funds are used to pay for general health services for those without legal status because the law prohibits using federal funds. Instead, Newsom has made it a “” that California has opened up coverage to immigrants, which his administration has noted and helps them avoid costly emergency room care often covered at taxpayer expense.

“No administration has done more to expand full coverage under Medicaid than this administration for our diverse communities, documented and undocumented,” Newsom told reporters in January. “People have built careers out of criticizing my advocacy.”

Newsom warns the federal government’s “carnival of chaos” passed Trump’s One Big Beautiful Bill Act, which he said puts 1.8 million Californians at risk of losing their health coverage with the implementation of work requirements, other eligibility rules, and limits to federal funding to states.

Nationally, 10 million people could lose coverage by 2034, according to the Congressional Budget Office. higher numbers of uninsured patients — particularly those who are relatively healthy — could concentrate coverage among sicker patients, potentially increasing premium costs and hospital prices overall.

Immigrant advocates say it’s especially callous to leave residents who may have fled violence or survived trafficking or abuse without access to health care. Federal rules currently require state Medicaid programs to cover “qualified noncitizens” including asylees and refugees, according to Tanya Broder of the National Immigration Law Center. But the Republican tax-and-spending law ends the coverage, affecting legal immigrants nationwide.

With many state governors yet to release budget proposals, it’s unclear how they might handle the funding gaps, Broder said.

For instance, Colorado state officials estimate roughly 7,000 legal immigrants could lose coverage due to the law’s changes. And Washington state officials refugees, asylees, and other lawfully present immigrants will lose Medicaid.

Both states, like California, expanded full coverage to all income-eligible residents regardless of immigration status. Their elected officials are now in the awkward position of explaining why some legal immigrants may lose their health care coverage while those without legal status could keep theirs.

Last year, spiraling health care costs and state budget constraints prompted the Democratic governors of , potential presidential contenders JB Pritzker and Tim Walz, to pause or end coverage of immigrants without legal status.

California lawmakers last year voted to eliminate dental coverage and freeze new enrollment for immigrants without legal status and, starting next year, will charge monthly premiums to those who remain. Even so, the state is slated to spend $13.8 billion from its general fund on immigrants not covered by the federal government, according to Department of Finance spokesperson H.D. Palmer.

At a press conference in San Francisco in January, Newsom defended those moves, saying they were necessary for “fiscal prudence.” He sidestepped questions about coverage for asylees and refugees and downplayed the significance of his proposal, saying he could revise it when he gets a chance to update his budget in May.

Kiran Savage-Sangwan, executive director of the California Pan-Ethnic Health Network, pointed out that California passed a law in the 1990s requiring the state to cover when federal Medicaid dollars won’t. This includes green-card holders who haven’t yet met the five-year waiting period for enrolling in Medicaid.

Calling the governor’s proposal “arbitrary and cruel,” Savage-Sangwan criticized his choice to prioritize rainy day fund deposits over maintaining coverage and said blaming the federal government was misleading.

It’s also a major departure from what she had hoped California could achieve on Newsom’s first day in office seven years ago, when he declared his support for single-payer health care and proposed extending health insurance subsidies to middle-class Californians.

“I absolutely did have hope, and we celebrated advances that the governor led,” Savage-Sangwan said. “Which makes me all the more disappointed.”

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Martha Santana-Chin, the daughter of Mexican immigrants, grew up on Medi-Cal, California’s version of Medicaid, the government-run health care program for people with low incomes and disabilities. Today, she is CEO of L.A. Care, which runs by far the biggest Medi-Cal health plan, with more than 2.2 million enrollees, exceeding the Medicaid and Children’s Health Insurance Program enrollments in .

“If it weren’t for safety nets like the Medi-Cal program, I think, many people would be stuck in poverty without an ability to get out,” she said. “For me personally, not having to worry about health care allowed me to really focus on what I needed to focus on, which was my education.”

As she begins her second year steering L.A. Care, Santana-Chin is grappling with federal and state spending cuts that complicate her task of providing health care to the poor and medically vulnerable enrollees in Medicaid. The insurer also provides Affordable Care Act marketplace plans through Covered California.

Santana-Chin warns that the GOP’s One Big Beautiful Bill Act, enacted last year and also known as HR 1, could result in 650,000 enrollees falling off L.A. Care’s Medi-Cal rolls by the end of 2028. This will strain the plan’s finances as revenues decline. The insurer had revenues of $11.7 billion in the last fiscal year.

HR 1 is expected to cut more than $900 billion from Medicaid over the next 10 years — including in California, according to the Department of Health Care Services, which runs Medi-Cal.

Like other states facing big deficits, California has reduced its Medicaid spending through such steps as freezing new enrollments for immigrants without legal status and reintroducing an . And that’s before the state reckons with the spending cuts that likely will be required by the withdrawal of so many federal dollars under HR 1.

Santana-Chin oversaw Medi-Cal and Medicare operations for the for-profit insurer Health Net before taking the helm of L.A. Care in January 2025, nearly three years after state regulators over violations they said compromised the health and safety of its members. L.A. Care paid to the state and agreed to contribute $28 million to community health projects.

In a wide-ranging interview, Santana-Chin talked to ºÚÁϳԹÏÍø News senior correspondent Bernard J. Wolfson about the financial headwinds facing L.A. Care and why she believes health care shouldn’t be restricted based on a person’s immigration status. This interview has been edited for length and clarity.

Q: You grew up on Medicaid. How has that shaped your views now that you run one of the largest Medicaid plans in the country?

What really motivates me is knowing that many of the people that we’re serving are just like my family. They’ve struggled and have had to have their own children translate things that were very difficult to translate. I remember doing that for my own mother. You know, basic human dignity requires that you have access to health care.

Q: Has anything you’ve dealt with at Health Net or L.A. Care reminded you of your childhood experiences in Medi-Cal?

Back then they didn’t cover transportation, and we didn’t have a vehicle. Today, one of the issues we’ll hear from our members is the need to make sure we have trustworthy transportation that shows up on time, where the drivers treat them with respect. Had I had that, had my mother had that, life would have been much easier.

Q: What do you think the impact of HR 1 will be?

It’s going to devastate the delivery system. The state obviously isn’t going to be able to make up for the shortfalls in federal funding, and over the course of the next several years, funding is going to be less and less, and the people we cover are going to decrease significantly. We are expecting between now and the end of 2028 that we’re going to see 650,000 people drop off the rolls. That’s just L.A. Care.

Q: That’s over a quarter of your Medi-Cal enrollment.

Yes, it’s very, very significant. The reductions in payment and the rise in uncompensated care are really going to impact our delivery system. As the delivery system gets destabilized and hospitals and other health care providers are forced to close services or reduce the number of sites they have, it’s going to impact access. And it’s not only going to impact those that lose coverage.

Q: How will L.A. Care respond?

Obviously, we’re going to see a significant drop in revenue. We’re very focused on making sure that we are operating as efficiently as we can operate. And we are looking at creative ways to use technology to empower our people to do higher-level work. Mostly supporting our call center agents with smarter technology that helps them answer questions and resolve problems more quickly. Some of it is automating processes on the claims payment side.

Q: What do you have to say to congressional Republicans who passed HR 1?

We are at a point of inflection in the health care delivery system. And we have to recognize that some of the components of HR 1 will have long-term unintended consequences — maybe they were intended; I’ve got to believe that some of these things are not. There’s probably a need to reconsider some of the things that were passed.

Q: Such as?

Work requirements are an example of something that many people did believe was the right thing to do to be good stewards of the health care dollar. It is very complex and is going to cause people to lose coverage that actually do qualify. It’s unfortunate, and that would be something that I would urge folks to reconsider.

Q: What impact do you expect from California’s decision to freeze Medi-Cal enrollment for immigrants without legal status?

It doesn’t matter what immigration status you are. If you are a human being and you need health care, you’re going to try to access health care wherever you can. That’s going to put a strain on the delivery system if you’re uninsured.

Q: What has L.A. Care done to address the state’s concerns in 2022 that it delayed authorizing care and addressing patient grievances?

There has been quite a bit of investment in the L.A. Care infrastructure over the last several years — our IT platforms, our data. There’s also quite a bit of investment in adding new capacity, adding bandwidth to many of the teams, more folks to help support the work.

Q: How have federal immigration raids in L.A. affected L.A. Care members and the broader community?

It absolutely has had a chilling effect. Families are afraid to come in. They’re not taking their children to get vaccinated. I’ve had numerous providers in emergency departments say that they have experienced a drop in the volume of individuals coming in. One of our case managers was really distraught because there was an individual that decided to forgo serious lifesaving treatment because of fear.

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Scattered visits to free clinics notwithstanding, Guevara hadn’t had a full medical checkup in years. She required dental work. She wanted to start looking for a job. And she was overwhelmed by the maze of paperwork needed simply to get her off the street, much less to make any of the other things happen.

But Guevara had help. The Jamboree Housing Corp., an affordable-housing nonprofit that renovated the former Stanton, California, hotel Guevara now calls home, didn’t just move her in — it also provided her a fleet of wraparound services. Jamboree counselors helped Guevara navigate the health care system to see a doctor and a dentist, buy a few things for her apartment, and get training to become a caregiver.

“I was years on the street before I got the kind of help I needed so I could help myself,” said Guevara, 68.

Amid the Trump administration’s apparent opposition to using Medicaid funding for such social services, staffers at Jamboree and similar affordable housing providers in California have been worried about losing federal money, particularly as the experimental waivers that provide the primary funding for the program they rely on expire at the end of 2026. But as it turns out, the state had the foresight several years ago to designate certain nonhousing social services, such as mental health care, drug counseling, and job training, as a form of Medicaid spending that will continue to be reimbursed.

Catherine Howden, a spokesperson for the federal Centers for Medicare & Medicaid Services, confirmed that California’s use of the “in lieu of services” classification for these wraparound programs is allowed under federal regulations.

“It is starting to sound positive that we will, at the very least, be able to continue billing for these services after the waiver period,” said Natalie Reider, a senior vice president at Jamboree Housing.

During President Donald Trump’s first term, states were permitted to use Medicaid money for social support services not typically covered by health insurance. But the second Trump administration is reeling that policy back in, saying that the intervening Biden administration took the supportive services process too far. Howden said in a statement that the policy “distracted the Medicaid program from its core mission: providing excellent health outcomes for vulnerable Americans.”

Through CalAIM, a five-year experimental build-out of the Medicaid system, programs like Jamboree were able to leverage federal funding to offer the kinds of nonhousing social services that experts contend are essential to keeping people permanently housed.

However, these wraparound services are only one component of the CalAIM initiative, which is attempting to take Medicaid, known as Medi-Cal in California, in a more holistic direction across all areas of care. And when CalAIM launched, California officials gave the programs the Medicaid “in lieu of services” designation, known as ILOS, effectively putting them outside the waiver process and ensuring that even when CalAIM sunsets, money for those social initiatives will continue to flow.

“California has tried to future-proof many of the policy changes it has made in Medi-Cal by including them in mechanisms like ILOS that do not require federal waiver approval,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes ºÚÁϳԹÏÍø News. “That allows these policy changes to continue, even with a politically hostile federal administration.”

The designation allows these social services to be funded through Medicaid managed-care plans under existing federal laws because they are cost-effective substitutes for a Medicaid service or reduce the likelihood of patients needing other Medicaid-covered health care services, said Glenn Tsang, policy adviser for homelessness and housing at the state’s Department of Health Care Services. The state could not provide an estimate of the annual funding for these wraparound services because they are not distinguished from other payments made to Medicaid managed-care plans.

“We are full steam ahead with these services,” Tsang said, “and they are authorized.”

Although California was the first state to incorporate the designation for such housing and other health-related social support, Tsang said, several other states — including Arizona, Arkansas, Florida, New York, and North Carolina — are now using the mechanism in a similar fashion.

Early results suggest such support saves on health care spending. When Jamboree, in Northern California, in the Central Valley, and other permanent supportive housing providers employ a holistic approach that includes social services, they have reported higher rates of formerly homeless people remaining in housing, less frequent use of costly emergency health services, and more residents landing jobs that help them pay rent and stay housed.

At the nonprofit MidPen Housing, which serves 12 counties in and around the San Francisco Bay Area, roughly 40% of the units in the program’s pipeline are earmarked for “extremely low-income” people, a group that includes the homeless, said Danielle McCluskey, senior director of resident services.

CalAIM reimbursements help fund the part of MidPen that focuses on supportive services across a wide range of experiences, from chronic homelessness to mental health issues to those leaving the foster care system. McCluskey described it as one leg of a three-legged stool, the others being real estate development and property management.

“If any of those legs are not getting what they need, if they’re not funded or not staffed or resourced, then that stool is kind of wobbly — off-kilter,” the director said.

A recent found that people who used at least one of the housing support services — including navigation into new housing, health care assistance, and a deposit to secure an apartment — saw a 13% reduction in emergency department visits and a 24% reduction in inpatient admissions in the six months that followed.

Documenting those outcomes is critical because the department needs to show federal officials that the services lessen the need for other, often costlier Medicaid-covered care — the essence of the classification.

Advocates for the inclusion of supportive services argue that the American system ultimately saves money on those investments. As California’s homeless population to more than 187,000 on a given night — nearly a quarter of the U.S. total — Jamboree has been allocating more of its resources to permanent supportive housing.

Founded in 1990 in Orange County, Jamboree builds various types of affordable housing using federal, state, and private funding. Reider said about a fifth of the organization’s portfolio is dedicated to permanent supportive housing.

“They’re not going back out to the streets. They’re not going to jail. They’re not going to the hospitals,” Reider said. “Keeping people housed is the No. 1 outcome, and it is the cost-saver, right? We’re using Medicaid dollars, but we’re saving the system money in the long run.”

Guevara, who wound up on the streets after a falling-out with family in 2015, spent years living out of her truck before a shelter worker connected her with Jamboree. There, she was paired with a specialist to help her figure out how to get and see a doctor, and to keep up with scheduling the battery of medical tests she needed after years spent living in temporary shelters.

“I also got a job developer, who helped me get this job with the county so I can pay my rent,” Guevara said of her position as a part-time in-home caregiver. “Now I take care of people kind of the same way people have been taking care of me.”

This <a target="_blank" href="/insurance/permanent-supportive-housing-california-medicaid-social-services-future-proofed/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Health officials are recommending diet and exercise as alternatives to heavily advertised weight loss drugs like Wegovy and Zepbound, advice experts say is unrealistic.

“Of course he tried eating well and everything, but now with the medications, it’s better — a 100% change,” said Wilmer Cardenas of Santa Clara, who said his husband lost about 100 pounds over about two years using GLP-1s covered by Medi-Cal, California’s version of Medicaid.

California joined several other states in restricting an option they say is no longer affordable as they confront soaring pharmaceutical costs and steep Medicaid cuts under the Trump administration, among . Despite negotiated price reductions announced in November that would make the drugs available at a “dramatically lower cost to taxpayers” and enable Medicaid to cover them, states are going ahead with the cuts, which providers say may undermine patients’ health.

“It will be quite negative for our patients” because data shows people typically regain weight after stopping the drugs, said , medical director of the University of California-San Francisco Weight Management Program.

While California, , , and stopped covering adult GLP-1 prescriptions for obesity on Jan. 1, they continue to cover the drugs for other health issues, such as Type 2 diabetes, cardiovascular disease, and chronic kidney disease.

, , and Wisconsin are planning or considering restrictions, according to KFF’s .

That reverses a trend that saw 16 states covering the medications for obesity as of Oct. 1. Interest in providing the coverage “appears to be waning,” the survey found, likely due to the drugs’ cost and other state budget pressures. North Carolina pulled back GLP-1 coverage in October, but reinstated it in December, bowing to court orders despite a lingering budget shortfall.

Catherine Ferguson, vice president of federal advocacy for the American Diabetes Association and its affiliated Obesity Association, said it’s not clear how states will adjust to the White House plan to lower the cost of several of the most popular GLP-1s through TrumpRx, an online portal for discounted prescription drugs. The price of Wegovy, for example, will be $350 per month for consumers, versus the current list price of nearly $1,350, and Medicare and Medicaid programs will pay $245, according to the plan.

“Many states are facing budgetary challenges, such as deficits, and are working to address the impacts of the changes to Medicaid and SNAP,” Ferguson wrote, referring to the Supplemental Nutrition Assistance Program. “As more details become available for the Administration’s agreements, we will see how state Medicaid responds.”

The Department of Health and Human Services referred questions to the White House, which did not respond to requests for comment on states’ termination of Medicaid coverage for the weight loss drugs.

California projected its costs to cover GLP-1s for weight loss would have more than quadrupled over four years to if it didn’t end Medi-Cal coverage for that use. Medi-Cal has covered weight loss drugs since 2006, but use of GLP-1s soared only in recent years. By 2024, more than 645,000 prescriptions were covered by Medi-Cal across all uses of the medications. The California Department of Health Care Services could not readily provide a breakdown of whether the drugs were for weight loss or other conditions.

When asked whether the state would reconsider its plans in light of the announced price cuts, Department of Finance spokesperson H.D. Palmer said it had no plans to do so. California’s cut is written into .

California officials would not say how much it could save under the TrumpRx plan, citing federal and state restrictions on disclosing rebate information.

Health providers don’t expect the Trump administration’s negotiated price cuts to make much difference to consumers, because pharmaceutical companies already offer some discounts.

“The out-of-pocket costs will still be very cost-prohibitive for most, especially individuals with Medicaid insurance,” Thiara said.

is among the other states that ended their coverage Jan. 1. Officials with the New Hampshire Department of Health and Human Services did not respond to requests for comment.

About 1 in 8 adults are now taking a GLP-1 drug for obesity, disease, or both, up 6 percentage points from May 2024, according to released in November. Over half of users said their GLP-1s were difficult to afford, and many who had stopped the treatment cited the cost.

Public and private payers have been trying to wean patients off to save costs. California health officials said Medi-Cal members and their health care providers “other treatment options that can support weight loss, such as diet changes, increased activity or exercise, and counseling.” That echoes advice from the New Hampshire Medicaid program.

California Department of Health Care Services spokesperson Tessa Outhyse said in an email that the official advice to try those other approaches now “is not meant to dismiss any past efforts, but to encourage Medi-Cal members to take a renewed, proactive, and medically supported approach with their healthcare provider that may appropriately include these additional options.”

But that may be unrealistic, said , founding director of the Center for Clinical Nutrition at Keck School of Medicine of the University of Southern California.

“We definitely want patients to do their part with the diet and exercise, but unfortunately, and from a practical standpoint, that itself frequently is not enough,” Hong said, adding that usually by the time patients see doctors they have already failed at achieving results through those means.

Hong understands why Medicaid programs, as well as private providers, want to cut back on covering the drugs, which can cost per patient per year. However, they can produce twice the weight loss as the medications typically used previously, he said.

A school of medical thought supports patients’ gradually ending their use, but Hong said obesity is generally considered a chronic condition that requires indefinite treatment.

“Once they reach their target weight, a lot of people will try to see whether or not they can wean off,” Hong said. “We do see a lot of patients — when they try to get off, unfortunately, then the weight comes back.”

Medi-Cal members under age 21 for purposes including weight loss, California officials said, citing a federal requirement.

Medi-Cal members are able to keep their GLP-1 coverage if they can demonstrate it is medically necessary for purposes other than weight loss, the department said. Members who are denied coverage can seek a hearing, the department said in to members.

Members will still be able to pay for the prescriptions and may be able to use various discounts to lower costs. Another option is new pills to treat obesity, which will be cheaper than their injectable counterparts. The a pill version of Wegovy on Dec. 22, which will likely run $149 per month for the lowest dosage, and similar weight loss pills are expected to be available in the first half of the year.

While Cardenas said his husband, Jeffer Jimenez, 37, uses GLP-1s primarily for weight loss, Jimenez’s prescription is for his diabetes, so the couple hoped to continue receiving coverage through Medi-Cal.

“He tried a thousand medications, pills, natural teas, exercise program, but it doesn’t work like the injections,” Cardenas said. “You need both.”

This <a target="_blank" href="/health-care-costs/california-medicaid-medi-cal-glp1-weight-loss-drugs-ends-coverage-cost/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">