And, they warn, the economic burden will steer many medical students to lucrative specialties in more affluent, urban areas rather than lower-paying primary care jobs in underserved and rural communities, where doctors are in shortest supply.

“The growing financial barriers may deter some individuals from pursuing a career in medicine, particularly those from low-income backgrounds,” said Deena McRae, a psychiatrist and associate vice president for academic health sciences at University of California Health.

The new federal loan limits, which are enshrined in the GOP legislation signed by Trump on July 4, cap the amount professional degree students can borrow at $50,000 a year, up to a maximum of $200,000 — well below the average cost of a four-year medical school education.

For students who graduated this year with an MD degree from a four-year medical school in the United States, the median cost of attendance was $318,825, according to Kristen Earle, director of student financial services at the Association of American Medical Colleges. And for those who entered a U.S. medical school in the 2024-25 academic year, the median first-year cost was $83,700.

Health care experts and politicians on both sides of the aisle agree that medical schools must find ways to lower their costs, but critics of the loan caps say limiting federal lending isn’t the answer. Congressional Republicans, who voted for the caps, say they are intended to stem a sharp rise in federal student lending over the past two decades that has driven the cost of attendance higher.

“Uncapped loan limits gave no incentives for schools to reduce any of their costs, recognizing that taxpayers, students, or students’ families would eventually foot the bill,” said Sara Robertson, a spokesperson for the GOP-controlled House Committee on Education and Workforce. “Our reforms and loan limits will put downward pressure on costs to provide better outcomes and lower debt for all students.”

The budget law brings back caps for graduate and professional education that Congress eliminated in 2006. Since then, students have been able to get federal loans that cover the total cost of their degree programs. Reimposing the caps, along with other changes to federal student loans, is expected to save the federal government $349 billion over 10 years, according to the Congressional Budget Office.

Whether the new federal loan policy will push down tuition costs remains to be seen.

Robertson pointed to a 2023 study by the National Bureau of Economic Research showing that the more generous federal lending policy since 2006 has led to “significantly higher program prices” in graduate education. The study also found that the additional federal support failed to increase enrollment in graduate programs, including for underrepresented students.

However, data provided by the Association of American Medical Colleges shows that cost-of-living increases, not tuition, drove up the expense of studying medicine in recent years.

Students already in medical school who have taken out federal loans before the new rules take effect on July 1 will be exempted from the cap. But students whose loans are capped under the new law will need to make up the difference, in many cases by taking out private sector loans, which typically have less flexible repayment terms and require a strong credit rating — a heavy lift for students from low-income communities.

Robertson cited a 2017 analysis showing that nearly 60% of graduate students could have obtained a private loan at a lower interest rate than any available federal loan. Federal loans, however, come with advantages that private loans don’t. For instance, federal loans can include monthly repayments calibrated to income, and they offer two debt forgiveness paths, including the Public Service Loan Forgiveness program, which erases the balance for those who work in a government or nonprofit organization and make their monthly payments for 10 years.

Critics and proponents agree on at least one thing: Now is the time for medical schools to think creatively about lowering costs for students. This might include reduced tuition, more chances for debt forgiveness, and accelerated programs that allow students to graduate in three years rather than four, reducing costs by 25% and getting them more quickly into paid jobs.

“I hope that coming out of this, medical schools and others find a way to seize the moment and help us figure out how to reduce the total cost of medical school,” said Martha Santana-Chin, CEO of L.A. Care. “Maybe this is an opportunity for us to rethink how the system is working.”

Roughly a fifth of medical schools offering an MD degree have accelerated programs, including the University of California-Davis, according to the Consortium of Accelerated Medical Pathway Programs.

A data analysis of eight medical schools led by the NYU Grossman School of Medicine, whose core MD curriculum is three years, shows that students in three-year programs derive a lifetime financial gain totaling over $240,000 due to the cost savings of less time in medical school, interest not paid on the corresponding amount not borrowed, and faster progression to a salaried position.

In addition to lowering costs, accelerated medical programs seek to address health care workforce shortages by training physicians more quickly. And with the new loan caps about to make it more difficult for many students to finance their medical education, these programs suddenly have a new timeliness.

Students who spend three years in medical school instead of four have lower debt and get to a higher salary sooner, said Caroline Roberts, a family physician and director of rural education at the University of North Carolina’s School of Medicine. UNC offers a three-year track for students who want to be primary care doctors and work in rural areas of the state, where doctor shortages are a major problem.

Zoe Priddy, who is in her second year of UNC’s three-year program, said that if the federal loan limits had been in place at the time she was making plans to attend medical school, she would have needed a job that paid better than the research lab where she worked after completing her undergraduate degree.

“I would have had to change my trajectory if I still wanted to pursue medicine, and I don’t know if it would have been possible for me,” Priddy said. However, the lower debt associated with the three-year track “eased my decision” to go into pediatrics, a lower-paying specialty, she said.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

Analistas del sector salud advierten que la cantidad de personas sin seguro médico en el país aumentará significativamente si los legisladores federales no renuevan los subsidios creados durante la pandemia de covid, que el Congreso aprobó en 2021 como complemento a los subsidios de ACA.

Es un tema que tiene apoyo popular. Según una encuesta de KFF, más de tres cuartas partes de los adultos, incluyendo el 59% de los republicanos, quieren que el Congreso extienda los subsidios mejorados para personas de ingresos bajos y moderados.

Estos subsidios adicionales han reducido las primas mensuales, han ayudado a millones de estadounidenses a pagar los seguros de salud de ACA y han disminuido la tasa nacional de personas sin seguro.

La semana del 6 de octubre, el presidente Donald Trump insinuó que podría haber un acuerdo sobre salud. Y la legisladora Marjorie Taylor Greene, republicana de Georgia, alineada desde hace tiempo con el movimiento “Make America Great Again” (MAGA), pareció respaldar una extensión de los subsidios, al publicar en redes sociales que estaba “absolutamente indignada de que las primas de los seguros médicos se DUPLIQUEN si los subsidios expiran este año”.

Sin embargo, los líderes republicanos quieren reabrir el gobierno primero, mientras que los demócratas buscan que el acuerdo esté incluido en el proyecto de ley para terminar con el cierre.

Si los subsidios adicionales no se extienden más allá de este año, se espera que el costo que pagan estos consumidores por sus planes médicos de ACA suba más del doble en promedio.

Eso representaría un fuerte aumento en el costo de vida para más de 24 millones de personas inscritas en los mercados de seguros, incluyendo un 90% de los casi 2 millones que tienen seguro a través de Covered California, el mayor mercado de seguros médicos administrado por un estado. Analistas advierten que la pérdida de estos subsidios mejorados provocaría que millones de personas cancelen su cobertura a nivel nacional, incluyendo a cientos de miles en California.

El cierre del gobierno federal se debe principalmente a un desacuerdo entre los legisladores demócratas, que quieren extender los subsidios, y los republicanos, que se oponen al costo y, en muchos casos, a la propia ley de salud.

Una estimación calcula que la extensión tendría un costo de $350.000 millones en 10 años. Los demócratas esperan que su postura les ayude a recuperar la Cámara de Representantes en las elecciones intermedias del próximo año, como ocurrió en 2018 tras el fallido intento republicano de derogar ACA.

La temporada de inscripción para los planes de salud de ACA de 2026 comienza el 1 de noviembre en la mayoría de los estados, incluido California, y los inscritos aún no saben si sus primas aumentarán de forma exorbitante el próximo año.

“Las personas necesitan poder comparar planes de salud”, dijo Jessica Altman, directora ejecutiva de Covered California. “Estamos en un momento decisivo”.

En julio, Covered California envió notificaciones a sus consumidores detallando la parte adicional de su subsidio federal que está por expirar. La intención era advertirles cuánto podrían aumentar sus costos si decidían mantener el mismo plan el próximo año.

En el caso de personas de ingresos medios, desaparecería el subsidio completo de $200 al mes. Otro inscrito perdería un tercio de los $600 mensuales que recibía en ayuda, según ejemplos de notificaciones proporcionadas por Covered California.

Los subsidios adicionales han brindado asistencia financiera a muchos compradores de planes medicos, con ingresos medios, que no calificaban para los subsidios originales, y han incrementado la ayuda para muchas otras personas.

El líder de la mayoría en el Senado, John Thune, dijo a finales de septiembre que no descartaba una extensión de los subsidios, pero que “tendría que venir acompañada de algunas reformas”.

Estas podrían incluir cambios para reducir la cantidad de personas que califican para la ayuda adicional, según sus ingresos, y reducir o eliminar los planes sin primas, que se volvieron ampliamente disponibles con la llegada de estos subsidios.

Si se terminan los subsidios mejorados, Covered California estima que quienes los reciben verán aumentar sus primas en un 97% de promedio. Pero los aumentos no serán iguales para todos. Según la edad, los ingresos y la ubicación, algunas personas verán aumentos menores, mientras que otras podrían ver que sus costos de bolsillo se triplican, explicó Altman.

Las personas que viven en zonas rurales, especialmente en los condados del norte, del este y en la región de Monterey Coast, enfrentarán aumentos de costos desproporcionadamente altos, según proyecciones de Covered California. Los inscritos con ingresos superiores a $62.600 perderán toda la ayuda financiera, lo que dejará a algunas personas de entre 55 y 64 años con facturas de primas que podrían representar hasta el 30% de sus ingresos.

Sin los subsidios mejorados, “veremos a más personas endeudadas por gastos médicos, más personas sin seguro o con seguro insuficiente”, dijo Cary Sanders, directora de políticas de la organización sin fines de lucro California Pan-Ethnic Health Network. “Y esa es la forma más rápida en que una familia puede perder su seguridad económica”.

Covered California estima que unas 400.000 personas abandonarían el mercado de seguros y probablemente se quedarían sin cobertura. Y eso, advierten profesionales y activistas de la salud, solo aumentará la presión —en forma de salas de emergencia y clínicas comunitarias más saturadas— sobre un sistema de salud ya estresado.

Sin embargo, el impacto proporcional en California será menor que en algunos estados liderados por republicanos como Florida, Texas y Georgia. Como esos estados no ampliaron el programa Medicaid de ACA, millones de residentes recurrieron a los planes del mercado de Obamacare, especialmente después de que los subsidios mejorados hicieron que la cobertura fuera mucho más accesible.

Entre 2020 y 2025, la inscripción en el mercado de ACA aumentó casi 2.5 veces en Florida, alcanzando los 4,7 millones —más del doble que en California. En Texas, se triplicó a casi 4 millones. En Georgia también se triplicó, alcanzando los 1,5 millones.

California cuenta con aproximadamente $190 millones para 2026 en fondos estatales para ayudar a compensar la pérdida de los subsidios adicionales. Pero ese dinero se usa para ayudar a rebajar los deducibles, copagos y otros gastos de bolsillo de los inscritos. Y es una cantidad pequeña en comparación con los $2.500 millones anuales que los inscritos de Covered California reciben hoy día gracias a los subsidios que están por expirar.

“Mucha gente se va a sorprender con lo que viene”, señaló Rachel Linn Gish, vocera de la organización sin fines de lucro Health Access California. “Van a tener que tomar decisiones muy difíciles como: ‘¿Recorto el gasto en comida, en la renta, o me quedo sin seguro?’”.

Muy pronto, Covered California y otros mercados de ACA tendrán que enviar cartas formales de inscripción abierta, notificando a los inscritos exactamente qué esperar para la cobertura de 2026.

Covered California normalmente envía estas cartas el 1 de octubre, pero las ha retrasado hasta alrededor del 15 de octubre con la esperanza de que Washington aclare la situación. Por ahora, la agencia tiene dos versiones listas: una con la extensión de los subsidios y otra sin ellos.

Altman dijo que esperaba una acción del Congreso antes de enviar la versión con los grandes aumentos en las primas. Pero puede que no tenga otra opción.

“Ese es el escenario que tenemos, es decir, lo que ocurrirá si nada cambia”, dijo Altman. “Y también es el peor escenario posible, desafortunadamente”.

Le preocupa que, si Covered California informa a los inscritos de un probable y enorme aumento en sus primas, eso ahuyentará a muchas personas, aunque más adelante el Congreso decida extender los subsidios.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

Health care analysts say the nation’s uninsured population will rise significantly if federal lawmakers do not agree to renew covid-era tax credits, which Congress authorized in 2021 to supplement ACA subsidies.

They’re popular too. According to a KFF poll, more than three-quarters of adults, including 59% of Republicans, say they want Congress to extend the enhanced tax credits for people with low and moderate incomes. KFF is a health information nonprofit that includes KFF Health News, the publisher of California Healthline.

The additional credits have lowered premiums, helped millions of Americans afford the cost of ACA insurance, and lowered the nation’s uninsured rate.

Last week, President Donald Trump suggested a health care deal might be in the works. And Republican U.S. Rep. Marjorie Taylor Greene of Georgia, long aligned with the “Make America Great Again” movement, appeared to endorse an extension of the tax credits, saying in a social media post that she was “absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year.”

However, Republican leaders want to reopen the government first, while Democrats want a deal in a bill that ends the shutdown.

If the supplemental subsidies are not extended beyond this year, the amount subsidized consumers pay for their ACA health plans is expected to more than double on average. That would be a painful cost-of-living increase for most of the country’s more than 24 million marketplace enrollees, including almost 90% of the nearly 2 million people in Covered California, the largest state-run health insurance marketplace. Analysts say the loss of enhanced credits would lead millions to drop their coverage nationally, including hundreds of thousands in California.

The federal government shutdown stems primarily from a disagreement between Democratic lawmakers, who want to extend the tax credits, and Republicans opposed to the cost and, in many cases, to the landmark health care law itself. One estimate puts the price tag at $350 billion over 10 years. The Democrats hope their stance can help them win back the House in next year’s midterm elections, as they did in 2018 following a failed GOP effort to repeal the ACA.

Open enrollment season for 2026 ACA health plans starts Nov. 1 in most states, including California, and enrollees still have no clue whether their premiums will rise exorbitantly next year.

“People need to be able to shop for health plans,” says Jessica Altman, executive director of Covered California. “We are at a pivotal moment.”

In July, Covered California sent notices to enrollees breaking out the enhanced portion of their federal subsidy that is set to expire. The idea was to give them a warning of how much their costs might rise if they chose to keep the same health plan next year.

In one case, a common scenario for middle-income enrollees, the entire subsidy of $200 a month would go away. Another enrollee stood to lose one-third of a total $600 per month in aid, according to sample notices provided by Covered California.

The additional tax credits have provided financial assistance to many middle-income health plan shoppers who didn’t qualify for the original subsidies and increased the amount of aid for many others.

Senate Majority Leader John Thune in late September left the door open to extending the otherwise-expiring tax credits but said “it would have to come with some reforms.”

Those might include changes that would reduce the number of enrollees eligible for the extra financial aid, based on income, and reduce or eliminate zero-premium plans, which have become widely available with the advent of the additional tax credits.

If the enhanced subsidies end, Covered California projects its enrollees receiving enhanced subsidies will see their premium costs rise an average of 97%. But the increases will not be borne equally. Depending on age, income, and location, some people will see smaller jumps while others could see their out-of-pocket costs triple, Altman says.

Rural residents, especially in the northern and eastern counties, and along the Monterey Coast, will see disproportionately large cost increases, according to projections from Covered California. Enrollees with incomes over $62,600 will lose financial aid altogether, leaving some who are ages 55-64 with premium bills as high as 30% of their income.

Without the enhanced subsidies, “we’re going to see more people experiencing medical debt, more people being either uninsured or underinsured,” says Cary Sanders, senior policy director at the nonprofit California Pan-Ethnic Health Network. “And that is the quickest way for families to lose their economic security.”

Covered California estimates about 400,000 people would leave the exchange and likely go without insurance. And that, health care professionals and advocates warn, will only heap stress — in the form of more crowded emergency rooms and community clinics — on an already stressed health care system.

But the proportional impact in California will be smaller than in some Republican-led states such as Florida, Texas, and Georgia. Since those states did not embrace the ACA’s Medicaid expansion, millions of residents thronged to Obamacare marketplace plans, particularly after the enhanced tax credits made coverage eminently more affordable.

From 2020 to 2025, ACA marketplace enrollment grew nearly 2.5 times in Florida to 4.7 million — more than double California’s marketplace enrollment. In Texas, it more than tripled to just under 4 million. Georgia’s tripled, too, to 1.5 million.

California has about $190 million for 2026 in state funds to help offset the loss of the enhanced premium subsidies. But that money is currently used to help offset enrollee deductibles, coinsurance payments, and other out-of-pocket expenses. And it’s a drop in the bucket compared with the $2.5 billion annually in financial aid Covered California enrollees currently receive from the expiring tax credits.

“A lot of people are going to be shocked at what they’re facing,” says Rachel Linn Gish, a spokesperson for the nonprofit advocacy group Health Access California. “They’re going to have to make super hard choices of, ‘Do I cut back on my groceries, or my rent, or do I go uninsured?’”

Very soon, Covered California and other ACA marketplaces will have to send out formal open enrollment letters, notifying enrollees precisely what to expect for 2026 coverage.

Covered California typically sends those letters out Oct. 1 but has delayed them to around Oct. 15 in the hope that Washington will provide clarity. For now, Covered California has two versions of the letter on ice, one with tax credit extensions and one without.

Altman says she is hoping for congressional action before sending the one with whopping premium increases. But she may have no choice.

“That’s the default here, as in the thing that will happen if nothing changes,” Altman says. “It is also the worst-case scenario, unfortunately.”

She fears that if Covered California informs enrollees that their rates will likely rise sharply, it will scare many away, even if Congress later agrees to extend the credits.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

Owlett is one of four residents in the inaugural class of a three-year family medicine residency program run by the local nonprofit Healthy Rural California. She is the kind of doctor the organization seeks to draw to the far north of California, a region with severe physician shortages.

That’s because Owlett knows in her gut what a lack of health care means, having seen family members drive hours to see a specialist or simply forgo care in her hometown of Wellsboro, a hamlet in Pennsylvania. She did rural training at medical school in Colorado. And because her husband attended Chico State, the couple has a strong social network here, making them likely to remain.

“With the growing family medicine residency program here, it’s a great opportunity to bring more doctors into the area, and I’d love to be a part of that,” Owlett said.

Owlett exemplifies what leaders in rural Northern California want more of: doctors trained locally who stay to work in the area. They have ambitious plans to attract more Owletts and expand the medical workforce, but recent state and federal spending cuts will pull dollars out of an already frayed health system, exacerbating the shortage of care and making their efforts more challenging.

“We need help up here, and cutting funding is not going to help us,” said Debra Lupeika, associate dean for rural and community-based education at the University of California-Davis School of Medicine and a family physician at the tribal Rolling Hills Clinic in Red Bluff, about 40 miles northwest of Chico. “We are in dire straits. We need doctors.”

California’s far northern region is a collection of sparsely populated counties stretching from just north of Sacramento all the way up to Oregon and from the Pacific coast to the Nevada border. The shortages are so pervasive that support for one of the costliest solutions — a proposed $200 million health care training campus — transcends partisanship.

“It’s about what are the priorities, right? And health care certainly is a priority — should be a priority,” said California Assembly Republican Leader James Gallagher, who represents Chico and the surrounding area. “I think it’s been pretty bipartisan, this kind of stuff.”

Republicans in Congress, including the nine GOP lawmakers in California’s delegation, voted in July to cut nearly a trillion dollars from Medicaid. Area Rep. Doug LaMalfa said the bill ensures “those eligible for benefits continue to receive them.” Meanwhile, the Democratic-controlled California legislature has scaled back its health care coverage for immigrants who lack legal status.

California’s health care shortage is driven by the struggles of rural hospitals; an aging physician workforce; the inherent appeal to up-and-coming doctors of more urban areas; and the financial pressures of doing business in a region with a high proportion of low-paying government insurance, especially Medi-Cal, the state’s version of the Medicaid program, for people with low incomes and disabilities.

Almost everyone who lives up here is affected by the shortages, ranging from people with complex medical needs to those with simple, straightforward ones.

When Lupeika’s 24-year-old daughter, Ashley, injured her shoulder this summer, she couldn’t get an MRI for nearly a month, despite her severe pain.

Ginger Alonso, an assistant professor of political science and public administration at Chico State, said she drives 70 miles to Redding for OB-GYN care.

The long waits or distances people must travel often lead them to delay or forgo care. As a result, they show up at emergency rooms, urgent care, or community clinics with illnesses that are more severe than they would have been had they received medical attention sooner.

“We see sicker patients, bottom line,” said Tanya Layne, a primary care physician in Chico who recently closed her private practice for financial reasons and works at an urgent care clinic in town, owned by Enloe Health, which also runs the sole hospital in town.

Patients walk through the door with undiagnosed cancers, uncontrolled asthma, raging diabetes, and severely high blood pressure, Layne said.

In many northern counties, specialists in acutely short supply include neurologists, gastroenterologists, rheumatologists, endocrinologists, OB-GYNs, oncologists, and urologists.

“We have whole areas with no specialists at all, or where specialists are so overworked that the waits are really long, and people are forgoing care,” said Doug Matthews, a Chico-based colorectal surgeon and regional medical director of Partnership HealthPlan, which provides Medi-Cal coverage in 24 northern counties.

The health care shortage in the region grew more acute after the catastrophic 2018 Camp Fire devastated the town of Paradise, 15 miles east of Chico, shuttering the local hospital and sending dozens of doctors out of the region.

In response, local leaders created Healthy Rural California, which launched a four-year residency in psychiatry last year followed by the family medicine program this year. The group also runs a program to expose high school students to potential careers in health care, and it is behind early plans for the $200 million “interprofessional” health care campus that would train future doctors, nurses, physician assistants, and others.

The startup cost would likely need to come from California’s state legislature, but lawmakers are limited by severe budget pressures. Nevertheless, James Schlund, a radiologist and board member of the organization, is discussing it with officials from UC Davis and Touro University.

“We are building the coalition,” Schlund said, “to go to the legislature with an empty bucket and ask them to fill it with money at the hardest of possible times.”

Meanwhile, medical and political leaders in Chico and Redding, the two largest cities in California’s far north, are each exploring building a medical school, possibly in collaboration and under the auspices of UC Davis, which considers rural medicine integral to its mission.

A medical school, paired with more residency slots, would keep graduating students in the area long enough for them to establish roots, buy homes, and start families, boosting the supply of local physicians, said Paul Dhanuka, a gastroenterologist and member of the Redding City Council.

But some say the region’s small population makes it a challenge to train more residents.

“The number of residents you can accommodate is limited by the ability to get the right kinds of patients with the right kind of cases that give the residents the training they need,” said Duane Bland, a physician who runs the family practice residency program at Mercy Medical Center in Redding.

Dhanuka said that in sparsely populated areas, a low number of childbirths limits how many residents can be trained in family medicine. But that is not the case with other specialties such as surgery, psychiatry, cardiology, and gastroenterology. And, he said, across the whole northern region, “there are multiple hospitals as well as clinics which absolutely are looking for more residency participation.”

Residency programs are largely funded with federal dollars through Medicare, and that funding is not at imminent risk — though the number of residency slots paid for by Washington has not significantly increased in about 30 years.

However, some graduate medical education is state-funded, and in California many of those slots rely on revenue generated from a tax on Medi-Cal health plans, which California voters earmarked for that and other purposes last fall by passing Proposition 35. That revenue is projected to plummet by billions of dollars under changes in the budget law and a similar rule proposed by the Centers for Medicare & Medicaid Services.

“We could lose that Prop. 35 funding,” said Mark Servis, vice dean for medical education at the UC Davis School of Medicine. “And we have been planning on it for over a year as a way to build out graduate medical education.”

It’s already begun: Glenn Medical Center in Willows, about 30 miles from Chico, announced last month it would shut down its ER and hospital services in October after losing its federal designation as a “critical access” hospital, which afforded it higher payments and more regulatory flexibility.

A $50 billion rural health care fund in the budget law will offset a little more than a third of the money that rural areas are expected to lose because of the Medicaid cuts, according to research from KFF. And it’s not clear how, or to which states, that money will be distributed.

Civic and medical industry leaders in Chico and Redding say the message needs to get out that a robust health care system will serve the interests of everyone, across political lines.

“Health care is such a human need, because we all hurt the same, regardless of race, color,” Dhanuka said. “We can address this. And we don’t need to take sides on this.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

And presto: You’ve got people dropping coverage; rising costs; and a smaller, sicker group of enrollees, which translates to higher premiums.

The Trump administration and congressional Republicans have just checked that achievement off their list.

They have done it with the sprawling tax and spending law President Donald Trump signed on July 4 and a related set of new regulations released by the Centers for Medicare & Medicaid Services that will govern how the ACA marketplaces are run.

Among the many provisions, there’s this: Large numbers of lawfully present immigrants currently enrolled in Obamacare health plans will lose their subsidies and be forced to pay full fare or drop their coverage.

Wait. What?

I understand that proponents of the new policies think the government spends too much on taxpayer subsidies, especially those who believe the ACA marketplaces are rife with fraud. It makes sense that they would support toughening enrollment and eligibility procedures and even slashing subsidies. But taking coverage away from people who live here legally is not health care policy. It’s an echo of the federal immigration raids in Los Angeles and elsewhere.

“It’s creating a very hostile environment for them, especially after having to leave their countries because of some very traumatic experiences,” says Arturo Vargas Bustamante, a professor of health policy and management at UCLA’s Fielding School of Public Health. “For those who believe health care is a human right, this is like excluding that population from something that should be a given.”

In Covered California, 112,600 immigrants, or nearly 6% of total enrollees, stand to lose their federal tax subsidies when the policy takes effect in 2027, according to data provided by the exchange. In the Massachusetts and Maryland marketplaces, the figure is closer to 14%, according to their directors, Audrey Morse Gasteier and Michele Eberle, respectively.

It’s not clear exactly how much financial aid those immigrants currently receive in ACA marketplaces. But in Covered California, for example, the average for all subsidized enrollees is $561 per month, which covers 80% of the $698 average monthly premium per person. And immigrants, who tend to have lower-than-average incomes, are likely to get more of a subsidy.

The immigrants who will lose their subsidies include victims of human trafficking and domestic violence, as well as refugees with asylum or with some temporary protected status. And “Dreamers” will no longer be eligible for ACA marketplace health plans because they will not be considered lawfully present. Immigrants who are not in the country legally cannot get coverage through Covered California or most other ACA marketplaces.

The nearly 540,000 Dreamers in the United States arrived in the U.S. as kids without immigration papers and were granted temporary legal status by President Barack Obama in 2012. Of those, an estimated 11,000 have ACA health plans and would lose them, including 2,300 in Covered California.

Supporters of the policy changes enshrined in the CMS rule and budget law think it’s high time to rein in what they say are abuses in the system that started under the Biden administration with expanded tax credits and overly flexible enrollment policies.

“It’s about making Obamacare lawful and implementing it as drafted rather than what Biden turned it into, which was a fraud and a waste-infused program,” says Brian Blase, president of Arlington, Virginia-based Paragon Health Institute, which produces policy papers with a free-market bent and influenced the Republican-driven policies.

But Blase doesn’t have much to say about the termination of Obamacare subsidies for lawfully present immigrants. He says Paragon has not focused much on that subject.

Jessica Altman, executive director of Covered California, expects most immigrants who lose subsidies will discontinue their enrollment. “If you look at where those populations fall on the income scale, the vast majority are not going to be able to afford the full cost of the premium to stay covered,” she says.

Apart from the human hardship cited by Bustamante, the exodus of immigrants could compromise the financial stability of coverage for the rest of Covered California’s 1.9 million enrollees. That’s because immigrants tend to be younger than the average enrollee and use fewer medical resources, thus helping offset the costs of older and sicker people who are more expensive to cover.

Covered California data shows that immigrant enrollees targeted by the new federal policies pose significantly lower medical risk than U.S. citizens. And a significantly higher percentage of immigrants in the exchange are ages 26 to 44, while 55- to 64-year-olds make up a smaller percentage.

Still, it would be manageable if immigrants were the only younger people to leave the exchange. But that is unlikely to be the case. More red tape and higher out-of-pocket costs — especially if enhanced tax credits disappear — could lead a lot of young people to think twice about health insurance.

The covid-era enhanced tax credits, which have more than doubled ACA marketplace enrollment since their advent in 2021, are set to expire at the end of December without congressional action. And, so far, Republicans in Congress do not seem inclined to renew them. Ending them would reverse much of that enrollment gain by jacking up the amount consumers would have to spend on premiums out of their own pockets by an average of 66% at Covered California and more than 75% nationally.

And an analysis by the Congressional Budget Office shows that a consequent exodus of younger, healthier people from the marketplaces would lead to even greater costs over time.

Enhanced tax credits aside, consumers face additional hurdles: The annual enrollment period for Covered California and other marketplaces will be shorter than it is now. Special enrollment periods for people with the lowest incomes will be effectively eliminated. So will automatic renewals, which have greatly simplified the process for a majority of enrollees at Covered California and some other marketplaces. Enrollees will no longer be able to start subsidized coverage, as they can now, before all their information is fully verified.

“Who are the people who are going to decide to go through hours and hours of onerous paperwork?” says Morse Gasteier. “They’re people who have chronic conditions. They have health care issues they need to manage. The folks we would expect not to wade through all that red tape would be the younger, healthier folks.”

California and 20 other states this month challenged some of that red tape in a federal lawsuit to stop provisions of the CMS rule that erect “unreasonable barriers to coverage.” California Attorney General Rob Bonta said he and his fellow attorneys general hoped for a court ruling before the rule takes effect on Aug. 25.

“The Trump administration claims that their final rule will prevent fraud,” Bonta said. “It’s obvious what this is really about. It’s yet another political move to punish vulnerable communities by removing access to vital care and gutting the Affordable Care Act.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

El proyecto de ley, aprobado por el Senado el martes 1 de julio, revertiría muchos de los avances en cobertura médica de las administraciones Biden y Obama, cuyas políticas facilitaron el acceso a la atención médica a millones de personas y redujeron la tasa de personas sin seguro en el país a mínimos históricos.

El plan del Senado para recortar drásticamente la financiación de Medicaid y los mercados de ACA podría hacer que unas 12 millones de personas más no tuvieran seguro para 2034, según estima la CBO.

Esto, a su vez, perjudicaría las finanzas de hospitales, residencias de adultos mayores y centros de salud comunitarios —que tendrían que absorber una mayor parte del costo del tratamiento de las personas sin cobertura— y podría obligarlos a reducir servicios y personal, hasta a cerrar instalaciones.

La legislación está en el escritorio de Trump a la espera de su firma, aunque primero el Senado y la Cámara de Representantes deben aprobar la misma versión. La Cámara de Representantes aprobó su propia versión en mayo y se espera que considere la versión del Senado hoy (2 de julio), según Tom Emmer, líder de la mayoría en la Cámara.

A continuación, se presentan cinco maneras en que los planes del Partido Republicano podrían afectar el acceso a la atención médica.

¿Necesita Medicaid? Entonces consigue un trabajo

Los recortes más profundos al gasto en atención médica provienen de la propuesta de un requisito de trabajo para Medicaid, que cortaría la cobertura a millones de afiliados que no cumplen con estos nuevos estándares.

En 40 estados y Washington, D.C., que han ampliado Medicaid bajo ACA, algunos beneficiarios de Medicaid tendrían que presentar regularmente documentación que demuestre que trabajan, hacen voluntariado o asisten a la escuela al menos 80 horas al mes, o que califican para una exención, como por ejemplos el cuidado de un niño pequeño.

El requisito del proyecto de ley no se aplicaría a las personas en los 10 estados, mayoritariamente republicanos, que no han ampliado Medicaid.

Investigadores de salud afirman que la política tendría poco impacto en el empleo. Según KFF, la mayoría de los beneficiarios de Medicaid en edad laboral que no reciben prestaciones por discapacidad ya trabajan o buscan trabajo, o no pueden hacerlo porque tienen una discapacidad, asisten a la escuela o cuidan a un familiar.

Los experimentos estatales con requisitos de trabajo se han visto plagados de problemas administrativos, como la pérdida de cobertura de los beneficiarios elegibles por problemas con el papeleo, y más gasto.

El requisito de trabajo de Georgia, que se implementó oficialmente en julio de 2023, ha costado más de $90 millones, de los cuales solo 26 millones se han destinado a prestaciones de salud, según el  Georgia Budget & Policy Institute, una organización de investigación no partidista.

“Los costos ocultos son astronómicos”, afirmó Chima Ndumele, profesor de la Escuela de Salud Pública de Yale.

Menos dinero significa menos atención en las comunidades rurales

Las medidas de ajuste que se aplicarían a los estados podrían traducirse en una disminución de los servicios de salud, profesionales médicos e incluso hospitales, especialmente en las comunidades rurales.

El plan del Partido Republicano reduciría una práctica conocida como impuestos a los proveedores, que casi todos los estados han utilizado durante décadas para aumentar los pagos de Medicaid a hospitales, residencias de adultos mayores y otros proveedores, así como a empresas privadas de atención médica administrada.

Los estados suelen utilizar el dinero federal generado a través de los impuestos para pagar a las instituciones más de lo que Medicaid pagaría de otra manera. (Medicaid generalmente paga las tarifas más bajas por la atención médica, en comparación con Medicare, el programa para personas mayores de 65 años y algunas personas con discapacidad, y los seguros privados).

Los hospitales y residencias de adultos mayores afirman que utilizan estos fondos adicionales de Medicaid para ampliar o añadir nuevos servicios y mejorar la atención para todos los pacientes.

Los hospitales rurales suelen operar con márgenes de ganancia reducidos y dependen de los pagos de impuestos de Medicaid para sostenerlos. Investigadores del Cecil G. Sheps Center for Health Services Research que examinaron el proyecto de ley de la Cámara concluyeron que este obligaría a más de 300 hospitales rurales, muchos de ellos en Kentucky, Louisiana, California y Oklahoma, a reducir sus servicios o cerrar.

Los senadores republicanos agregaron un fondo de $50 mil millones a su versión del proyecto de ley para amortiguar el impacto en los hospitales rurales.

Más dificultad para obtener, y mantener, la cobertura de ACA

Para quienes tienen cobertura del mercado de seguros de salud de ACA, el plan republicano dificultaría la inscripción y el conservar los planes.

Los asegurados del mercado de seguros estarían obligados a actualizar sus ingresos, estatus migratorio y otra información cada año, en lugar de reinscribirse automáticamente, algo que más de 10 millones de personas hicieron este año.

También tendrían menos tiempo para inscribirse; el proyecto de ley acorta el período anual de inscripción abierta en aproximadamente un mes.

Las personas que soliciten cobertura fuera de ese período —por ejemplo, porque pierden su trabajo u otro seguro, o necesitan agregar a un recién nacido o cónyuge a una póliza existente— tendrían que esperar a que se procesen todos sus documentos antes de recibir subsidios del gobierno para ayudar a pagar sus primas mensuales. Actualmente, reciben hasta 90 días de ayuda con las primas durante el proceso de solicitud, que puede tardar semanas.

Los legisladores republicanos y algunos centros de estudios de políticas conservadoras, incluido el Paragon Health Institute, afirman que los cambios son necesarios para reducir las inscripciones fraudulentas, mientras que los opositores afirman que son el último intento de desmantelar el Obamacare.

La legislación tampoco contempla una extensión de los subsidios mejorados implementados durante la pandemia de covid-19. Si el Congreso no actúa, estos subsidios expirarán a finales de año, lo que resultará en un aumento promedio del 75% en las primas el próximo año, según KFF.

¿Tienes Medicaid? Se pagará más por las consultas médicas

Muchos beneficiarios de Medicaid podrían tener que pagar más de su bolsillo por las citas.

El proyecto de ley exigiría a los estados que han ampliado Medicaid cobrar a los beneficiarios hasta $35 por algunos servicios si sus ingresos se encuentran entre el nivel federal de pobreza (este año, $15.650 por persona) y el 138% de esa cantidad ($21.597).

Los beneficiarios de Medicaid generalmente no pagan nada cuando buscan servicios médicos, ya que estudios han demostrado que cobrar incluso copagos pequeños lleva a las personas de bajos ingresos a renunciar a atención necesaria. En los últimos años, algunos estados han agregado cargos inferiores a $10 por algunos servicios.

Esta política no se aplicaría a las personas que buscan atención primaria, atención de salud mental o tratamiento de adicciones.

Recortes para inmigrantes con residencia legal

El plan republicano podría provocar que al menos cientos de miles de inmigrantes con residencia legal —incluyendo solicitantes de asilo, víctimas de tráfico humano y refugiados— pierdan su cobertura del mercado de seguros al eliminar los subsidios que hacen que las primas sean asequibles. La restricción no se aplicaría a los titulares de tarjetas de residencia permanente (Green Card o tarjeta verde).

Dado que los inmigrantes que perderían subsidios bajo este plan tienden a ser más jóvenes que la población general, su salida dejaría una población de afiliados de mayor edad, con mayor riesgo de enfermedad y costos más elevados, lo que incrementaría aún más las primas del mercado, según directores de los mercados de seguros de salud en California, Maryland y Massachusetts, y analistas de salud.

Quitar el acceso a la atención médica a los inmigrantes que viven legalmente en el país “causará un daño irreparable a las personas que hemos prometido proteger e impondrá costos innecesarios a los sistemas locales que ya están sobrecargados”, declaró John Slocum, director ejecutivo del Refugee Council USA, un grupo de defensa, en un comunicado.

Tanto la versión de la Cámara de Representantes como la del Senado del proyecto de ley reflejan el enfoque restrictivo de la administración Trump hacia la inmigración.

Sin embargo, debido a que contravenía las normas del Senado, la legislación no incluirá una propuesta que habría reducido los pagos federales de Medicaid a estados como California, que utilizan sus propios fondos para cubrir a inmigrantes sin papeles.

La corresponsal principal de KFF Health News en Washington, Julie Rovner, contribuyó con este artículo.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

The bill, passed in both the House and the Senate without a single Democratic vote, is expected to reverse many of the health coverage gains of the Biden and Obama administrations. Their policies made it easier for millions of people to access health care and reduced the U.S. uninsured rate to record lows, though Republicans say the trade-off was far higher costs borne by taxpayers and increased fraud.

Under the legislation Trump’s expected to sign on Friday, Independence Day, reductions in federal support for Medicaid and Affordable Care Act marketplaces will cause nearly 12 million more people to be without insurance by 2034, the Congressional Budget Office estimates. That in turn is expected to undermine the finances of hospitals, nursing homes, and community health centers — which will have to absorb more of the cost of treating uninsured people. Some may reduce services and employees or close altogether.

Here are five ways the GOP’s plans may affect health care access.

Need Medicaid? Then Get a Job

The deepest cuts to health care spending come from a proposed Medicaid work requirement, which is expected to end coverage for millions of enrollees who do not meet new employment or reporting standards.

In 40 states and Washington, D.C., all of which have expanded Medicaid under the Affordable Care Act, some Medicaid enrollees will have to regularly file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month, or that they qualify for an exemption, such as caring for a young child. The new requirement will start as early as January 2027.

The bill’s requirement doesn’t apply to people in the 10 largely GOP-led states that have not expanded Medicaid to nondisabled adults.

Health researchers say the policy will have little impact on employment. Most working-age Medicaid enrollees who don’t receive disability benefits already work or are looking for work, or are unable to do so because they have a disability, attend school, or care for a family member, according to KFF, a health information nonprofit that includes KFF Health News.

State experiments with work requirements have been plagued with administrative issues, such as eligible enrollees’ losing coverage over paperwork problems, and budget overruns. Georgia’s work requirement, which officially launched in July 2023, has cost more than $90 million, with only $26 million of that spent on health benefits, according to the Georgia Budget & Policy Institute, a nonpartisan research organization.

“The hidden costs are astronomical,” said Chima Ndumele, a professor at the Yale School of Public Health.

Less Cash Means Less Care in Rural Communities

Belt-tightening that targets states could translate into fewer health services, medical professionals, and even hospitals, especially in rural communities.

The GOP’s plan curtails a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes, and other providers and to private managed-care companies.

States often use the federal money generated through the taxes to pay the institutions more than Medicaid would otherwise pay. Medicaid generally pays lower fees for care than Medicare, the program for people over 65 and some with disabilities, and private insurance. But thanks to provider taxes, some hospitals are paid more under Medicaid than Medicare, according to the Commonwealth Fund, a health research nonprofit.

Hospitals and nursing homes say they use these extra Medicaid dollars to expand or add new services and improve care for all patients.

Rural hospitals typically operate on thin profit margins and rely on payments from Medicaid taxes to sustain them. Researchers from the Cecil G. Sheps Center for Health Services Research who examined the original House version of the bill concluded it would push more than 300 rural hospitals — many of them in Kentucky, Louisiana, California, and Oklahoma — toward service reductions or closure.

Republicans in the Senate tacked a $50 billion fund onto the legislation to cushion the blow to rural hospitals. The money will be distributed starting in 2027 and continue for five years.

Harder To Get, and Keep, ACA Coverage

For those with Obamacare plans, the new legislation will make it harder to enroll and to retain their coverage.

ACA marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year. They’ll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.

People applying for coverage outside that period — for instance because they lose a job or other insurance or need to add a newborn or spouse to an existing policy — will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums. Today, they get up to 90 days of premium help during the application process, which can take weeks.

Republican lawmakers and some conservative policy think tanks, including the Paragon Health Institute, say the changes are needed to reduce fraudulent enrollments, while opponents say they represent Trump’s best effort to undo Obamacare.

The legislation also does not call for an extension of more generous premium subsidies put in place during the covid pandemic. If Congress doesn’t act, those enhanced subsidies will expire at year’s end, resulting in premiums rising by an average of 75% next year, according to KFF.

On Medicaid? Pay More To See Doctors

Many Medicaid enrollees can expect to pay more out-of-pocket for appointments.

Trump’s legislation requires states that have expanded Medicaid to charge enrollees up to $35 for some services if their incomes are between the federal poverty level (this year, $15,650 for an individual) and 138% of that amount ($21,597).

Medicaid enrollees often don’t pay anything when seeking medical services because studies have shown charging even small copayments prompts low-income people to forgo needed care. In recent years, some states have added charges under $10 for certain services.

The policy won’t apply to people seeking primary care, mental health care, or substance abuse treatment. The bill allows states to enact even higher cost sharing for enrollees who seek emergency room care for nonemergencies. But if Medicaid patients fail to pay, hospitals and other providers could be left to foot the bill.

Cuts for Lawfully Present Immigrants

The GOP plan could cause at least hundreds of thousands of immigrants who are lawfully present — including asylum-seekers, victims of trafficking, and refugees — to lose their ACA marketplace coverage by cutting off the subsidies that make premiums affordable. The restriction won’t apply to green-card holders.

Because the immigrants who will lose subsidies under the legislation tend to be younger than the overall U.S. population, their exit would leave an older, sicker, and costlier population of marketplace enrollees, further pushing up marketplace premiums, according to marketplace directors in California, Maryland, and Massachusetts and health analysts.

Taking health care access away from immigrants living in the country legally “will do irreparable harm to individuals we have promised to protect and impose unnecessary costs on local systems already under strain,” John Slocum, executive director of Refugee Council USA, an advocacy group, said in a statement.

The bill reflects the Trump administration’s restrictive approach to immigration. But because it ran afoul of Senate rules, the legislation doesn’t include a proposal that would have reduced federal Medicaid payments to states such as California that use their own money to cover immigrants without legal status.

KFF Health News chief Washington correspondent Julie Rovner contributed reporting.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

No state has more to lose than California, whose Medicaid program, called Medi-Cal, covers nearly 15 million residents with low incomes and disabilities. That’s twice as many as New York and three times as many as Texas.

A proposed rule by the Centers for Medicare & Medicaid Services, echoed in the Republican House reconciliation bill as well as a more drastic Senate bill, would significantly curtail the federal dollars many states draw in matching funds from what are known as provider taxes. Although it’s unclear how much states could lose, the revenue up for grabs is big. For instance, California has netted an estimated $8.8 billion this fiscal year from its tax on managed care plans and took in about $5.9 billion last year from hospitals.

California Democrats are already facing a $12 billion deficit, and they have drawn political fire for scaling back some key health care policies, including full Medi-Cal coverage for immigrants without permanent legal status. And a loss of provider tax revenue could add billions to the current deficit, forcing state lawmakers to make even more unpopular cuts to Medi-Cal benefits.

“If Republicans move this extreme MAGA proposal forward, millions will lose coverage, hospitals will close, and safety nets could collapse under the weight,” Gov. Gavin Newsom, a Democrat, said in a statement, referring to President Donald Trump’s “Make America Great Again” movement.

The proposals are also a threat to Proposition 35, a ballot initiative California voters approved last November to make permanent the tax on managed care organizations, or MCOs, and dedicate some of its proceeds to raise the pay of doctors and other providers who treat Medi-Cal patients.

All states except Alaska have at least one provider tax on managed care plans, hospitals, nursing homes, emergency ground transportation, or other types of health care businesses. The federal government spends billions of dollars a year matching these taxes, which generally lead to more money for providers, helping them balance lower Medicaid reimbursement rates while allowing states to protect against economic downturns and budget constraints.

New York, Massachusetts, and Michigan would also be among the states hit hard by Republicans’ drive to scale back provider taxes, which allow states to boost their share of Medicaid spending to receive increased federal Medicaid funds.

In a May 12 statement announcing its proposed rule, CMS described a “loophole” as “money laundering,” and said California had financed coverage for over 1.6 million “illegal immigrants” with the proceeds from its MCO tax. CMS said its proposal would save more than $30 billion over five years.

“This proposed rule stops the shell game and ensures federal Medicaid dollars go where they’re needed most — to pay for health care for vulnerable Americans who rely on this program, not to plug state budget holes or bankroll benefits for noncitizens,” Mehmet Oz, the CMS administrator, said in the statement.

Medicaid allows coverage for noncitizens who are legally present and have been in the country for at least five years. And California uses state money to pay for almost all of the Medi-Cal coverage for immigrants who are not in the country legally.

California, New York, Michigan, and Massachusetts together account for more than 95% of the “federal taxpayer losses” from the loophole in provider taxes, CMS said. But nearly every state would feel some impact, especially under the provisions in the reconciliation bill, which are more restrictive than the CMS proposal.

None of it is a done deal. The CMS proposal, published May 15, has not been adopted yet, while the House and Senate bills must be negotiated into one and passed by both chambers of Congress. But the restrictions being contemplated would be far-reaching.

A report by Michigan’s Department of Health and Human Services, ordered by Democratic Gov. Gretchen Whitmer, found that a reduction of revenue from the state’s hospital tax could “destabilize hospital finances, particularly in rural and safety-net facilities, and increase the risk of service cuts or closures.” Losing revenue from the state’s MCO tax “would likely require substantial cuts, tax increases, or reductions in coverage and access to care,” it said.

CMS declined to respond to questions about its proposed rule.

The Republicans’ House-passed reconciliation bill, though not the CMS proposal, also prohibits any new provider taxes or increases to existing ones. The Senate version, released June 16, would gradually reduce the allowable amount of many provider taxes.

The American Hospital Association, which represents nearly 5,000 hospitals and health systems nationwide, said the proposed moratorium on new or increased provider taxes could force states “to make significant cuts to Medicaid to balance their budgets, including reducing eligibility, eliminating or limiting benefits, and reducing already low payment rates for providers.”

Because provider taxes draw matching federal dollars, Washington has a say in how they are implemented. And the Republicans who run the federal government are looking to spend far fewer of those dollars.

In California, the insurers that pay the MCO tax are reimbursed for the portion levied on their Medi-Cal enrollment. That helps explain why the tax rate on Medi-Cal enrollment is sharply higher than on commercial enrollment. Over 99% of the tax money the insurers pay comes from their Medi-Cal business, which means most of the state’s insurers get back almost all the tax they pay.

That imbalance, which CMS describes as a loophole, is one of the main things Republicans are trying to change. If either the CMS rule or the corresponding provisions in the House reconciliation bill were enacted, states would be required to levy provider taxes equally on Medicaid and commercial business to draw federal dollars.

California would likely be unable to raise the commercial rates to the level of the Medi-Cal ones, because state law constrains the legislature’s ability to do so. The only way to comply with the rule would be to lower the tax rate on Medi-Cal enrollment, which would sharply reduce revenue.

CMS has warned California and other states for years, including under the Biden administration, that it was considering significant changes to MCO and other provider taxes. Those warnings were never realized. But the risk may be greater this time, some observers say, because the effort to shrink provider taxes is embedded in both Republican reconciliation bills and intertwined with a broader Republican strategy — and set of proposals — to cut Medicaid spending by $800 billion or more.

“All of these proposals move in the same direction: fewer people enrolled, less generous Medicaid programs over time,” said Edwin Park, a research professor at Georgetown University’s McCourt School of Public Policy.

California’s MCO tax is expected to net California $13.9 billion over the next two fiscal years, according to January estimates. The state’s hospital tax is expected to bring in an estimated $9 billion this year, up sharply from last year, according to the Department of Health Care Services, which runs Medi-Cal.

Losing a significant slice of that revenue on top of other Medicaid cuts in the House reconciliation bill “all adds up to be potentially a super serious impact on Medi-Cal and the California state budget overall,” said Kayla Kitson, a senior policy fellow at the California Budget & Policy Center.

And it’s not only California that will feel the pain.

“All states are going to be hurt by this,” Park said.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

California’s Affordable Care Act health insurance exchange covers nearly 2 million residents and 89% of them receive federal subsidies that reduce their premiums. Many middle-income households got subsidies for the first time after Congress expanded them in 2021, which helped generate a boom in enrollment in ACA exchanges nationwide.

From the original and enhanced subsidies, Covered California enrollees currently get $563 a month on average, lowering the average monthly out-of-pocket premium from $698 to $135, according to data from Covered California.

The 2021 subsidies are set to expire at the end of this year unless Congress renews them. If they lapse, enrollees would be on the hook to pay an average of $101 a month more for health insurance — not counting any premium hikes in 2026 and beyond. And those middle-income earners who did not qualify for subsidies before would lose all financial assistance — $384 a month, on average — which Soni fears could prompt them to drop out.

At the same time, vaccination rates for children 2 and under declined among 7 of the 10 Covered California health plans subject to its new quality-of-care requirements. Soni, a Los Angeles native who came to Covered California in May 2023, oversees that program, in which health plans must meet performance targets on blood pressure control, diabetes management, colorectal cancer screening, and childhood vaccinations — or pay a financial penalty.

Lack of access to such key aspects of care disproportionately affects underserved communities, making Covered California’s effort one of health equity as well. Soni, a Harvard-trained primary care doctor who sees patients one day a week at an urgent care clinic in Los Angeles County’s public safety net health system, is familiar with the challenges those communities face.

Covered California reported last November that its health plans improved on three of the four measures in the first year of the program. But childhood immunizations for those under 2 declined by 4%. The decline is in line with a national trend, which Soni attributed to postpandemic mistrust of vaccines and “more skepticism of the entire medical industry.”

Most parents have heard at least one untrue statement about measles or the vaccine for it, and many don’t know what to believe, according to an April KFF poll.

Health plans improved on the other three measures, but not enough to avoid penalties, which yielded $15 million. The exchange is using that money to fund another effort Soni manages, which helps 6,900 Covered California households buy groceries and contributes to over 250 savings accounts for children who get routine checkups and vaccines. Some of the penalty money will also be used to support primary care practices around California.

In addition to her bifurcated professional duties, Soni is the mother of two young children, ages 4 and 7. KFF Health News senior correspondent Bernard J. Wolfson spoke with Soni about the impact of possible federal cuts and the exchange’s initiative to improve care for its enrollees. This interview has been edited for length and clarity.

Q: Covered California has record enrollment of nearly 2 million, boosted by the expanded federal subsidies passed under the Biden administration, which end after this year. What if Congress does not renew them?

A: Our estimates are that it will approach 400,000 Californians who would drop coverage immediately. We hear every day from our folks that they’re really living on the margins. Until they got some of those subsidies, they could not afford coverage.

As a primary care doctor, I am the one to treat folks who show up with preventable cancers because they were too afraid to think about what their out-of-pocket costs would be. I don’t want to go back to those days.

Q: Congress is considering billions in cuts to Medicaid. How would that affect Covered California and the state’s population more broadly, given that more than 1 in 3 Californians are on Medi-Cal, the state’s version of Medicaid?

A: Those are our neighbors, our friends. Those are the people working in the restaurants we eat at. Earlier cancer screenings, better chronic disease control, lower maternal mortality, more substance use disorder treatment: We know that Medicaid saves lives. We know it helps people live longer and better. As a physician, I would be hard-pressed to argue for rolling back anything that saves lives. It would be very distressing to watch that come to California.

Q: Why did Covered California undertake the Quality Transformation Initiative?

A: We were incredibly successful at covering nearly 2 million, but frankly we didn’t see improvements in quality, and we continue to see gaps for certain populations in terms of outcomes. So, I think the question became much more imperative: Are we getting our money’s worth out of this coverage? Are we making sure people are living longer and better, and if not, how do we up the ante to make sure they are?

Q: There’s a penalty for not meeting the targets, but no bonuses for meeting them: You meet the goals or else, right?

A: We don’t say it like that, but that is true. And we didn’t make it complicated. It’s only four measures. It’s things that as a primary care doctor I know are important, that I take care of when I see people in my practice. We said get to the 66th percentile on these four measures, and there’s no dollars that you have to pay. If you don’t, then we collect those funds.

Q: And you use the penalty money to fund the grocery assistance and child savings accounts.

A: That’s exactly right. We had this opportunity to think about what would we use these dollars for and how we actually make a difference in people’s lives. So, we cold-called hundreds of people, we sent surveys out to thousands of folks, and what we heard overwhelmingly was how expensive it is to live in California; that folks are making trade-offs between food and transportation, between child care and food — just impossible decisions.

Q: You will put up to $1,000 a child into those savings accounts, right?

A: That’s right. It’s tied to doing those healthy behaviors, going to child well visits and getting recommended vaccines. We looked at the literature, and once you get to even just $500 in an account, the likelihood of a kid going to a two- or four-year school increases significantly. It’s actually because they’re hopeful about their future, and it changes their path of upward mobility, which we know changes their health outcome.

Q: Given the rise in vaccine skepticism, are you worried that the recent measles outbreak could grow?

A: I am very concerned about it. I was actually reading some posts from a physician colleague who trained decades earlier and was talking about all the diseases that my generation of physicians have never seen. We don’t actually know how to diagnose and take care of a number of infectious diseases because they mostly have been eradicated or outbreaks have been really contained. So, I feel worried. I’ve been brushing off my old textbooks.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).

Reddy can’t match the salaries offered by larger health systems — a difficulty compounded by a widespread shortage of primary care doctors.

The shortage is tied largely to the lower pay and relative lack of prestige associated with primary care, making recruitment difficult. “It certainly is challenging to expose medical students early in their careers to the joys of this kind of integrated health care,” Reddy said. “The relationships we build and the care we provide truly allow people to live longer with a better quality of life.”

Hoping to increase revenue so Acacia can afford to pay more, Reddy has signed the practice up for alternative payment methods with health plans that offer bonuses for meeting certain primary care goals tied to child vaccinations, blood pressure control, and screenings for breast cancer, colorectal cancer, and mental health. Such pay-for-performance arrangements are among the many efforts by industry players and state officials to confront the problems plaguing primary care.

Medical students frequently opt not to go into primary care, and that’s not good for patients. People with regular primary care providers are more likely to get preventive care that avoids serious illnesses and feel more empowered to advocate for themselves. They’re also less likely to encounter language barriers, resort to costly emergency room visits, or forgo care.

Six years after the influential California Future Health Workforce Commission made a series of recommendations to plug a projected shortage of 4,100 primary care providers in 2030, a number of public and private initiatives have proliferated around the state to address the problem. They include new residency slots, debt forgiveness, waived medical school tuition, new ways of paying doctors, expanded nurse practitioner roles, and a statewide target to increase primary care spending. Hundreds of millions of taxpayer dollars have been allocated for some of these efforts.

But numerous academic experts and medical professionals believe those moves, while well intended, have been scattershot and insufficient. “The pieces are there,” said Monica Soni, chief medical officer of Covered California, the state’s Affordable Care Act health insurance marketplace. “I am worried we started a little too late, and I think it’s a little too siloed.”

A study published in 2022 by the California Health Care Foundation found that substantial progress had been made on some of those goals, including recruitment of students from low-income households and communities of color. A separate analysis from the foundation showed that, from 2020 to 2023, California jumped about 10 spots in a ranking of states by primary care residents and fellows per capita.

However, the latest state data shows nearly 15 million Californians live in areas without enough primary care providers to meet patient needs.

State budget constraints and potential federal spending cuts, especially to Medicaid, could exacerbate shortages in areas already desperate for clinicians and dampen hopes of building a robust primary care system that state officials and virtually everyone in the industry agree would be a strong defense against serious — and costly — illnesses. Federal cuts could also hit medical training and hospital systems.

“Many of us are very scared about threats from both the Trump administration and Republicans in Congress,” said Kevin Grumbach, a family community medicine professor at the University of California-San Francisco.

Acute Primary Care Shortages

California’s lack of primary care providers, including doctors, nurse practitioners, and physician assistants, is most acute in rural parts of the state, particularly in the north and the Central Valley. Entire rural counties, including Del Norte, Madera, Tulare, and Yuba, are designated shortage areas, according to state data. Some densely populated urban areas, including parts of Los Angeles, also confront shortages.

Many Californians face months-long waits for appointments or have to travel long distances or go to emergency rooms for nonurgent medical needs, which means hours spent in crowded waiting rooms for unnecessarily expensive care.

In Chico, 90 miles north of Sacramento, the emergency room at the only hospital in town has seen a sharp increase in patients over the past decade, due in part to a lack of primary care providers in the area.

“People who don’t have a primary care provider — which is a lot, because there are not enough — end up in the ER when they need routine care,” said David Alonso, a local internal medicine doctor. “The ER then says, ‘OK, you should follow up with your primary care provider,’ and they’re like, ‘We don’t have one.’”

Yalda Jabbarpour, director of the Robert Graham Center for Policy Studies, a health policy think tank, said failure to invest robustly in primary care has robbed the public of its benefits.

The field has historically been underfunded, accounting for less than 5% of national health care spending in 2022, according to the Milbank Memorial Fund, a national nonprofit focused on population health and health equity.

The consequences are clear.

The U.S. spends significantly more per capita on health care than other industrialized nations, and yet Americans aren’t any healthier. Chronic conditions such as heart disease, diabetes, arthritis, and Alzheimer's, as well as mental illness, account for 90% of the $4.5 trillion spent on health care every year.

Medical students, often faced with staggering educational debt, are increasingly choosing higher-paid specialties over primary care. The average salary of a family medicine physician is slightly over $300,000, compared with more than $565,000 for a cardiologist and over $763,000 for a neurosurgeon, according to one study.

“If you are going to pay over $300,000 to go to medical school, you want to be a neurosurgeon; you don’t want to be a family practice doctor,” said William Barcellona, executive vice president of government affairs at America’s Physician Groups, a Los Angeles-based professional association representing 360 medical groups and independent practice associations nationwide.

Barcellona said the Golden State’s high housing costs also make recruiting difficult.

But it’s not only pay that tempers enthusiasm for primary care. It’s also burnout from so many unpaid hours spent recording details of medical visits in electronic health records; haggling with insurance companies for treatment authorization; answering phone calls and emails from patients; or searching far and wide — often in a health care desert — for specialists with the right expertise.

Debby Lee, the daughter of Hmong immigrants from Laos, experienced this kind of frustration firsthand.

Cultural and linguistic barriers faced by her family motivated her to pursue internal medicine. Lee worked part of her residency at a community clinic serving Hmong in the Sacramento area. She loved the patients, as well as her co-workers. But she was burdened by outdated technology that limited the number of patients she could see. “I just saw myself kind of burning out being in that setting,” Lee said.

When the clinic invited her to stay, she declined, taking a job with a bigger health system.

Solutions to the Shortage

Besides residencies, other efforts support primary care.

The Health Plan of San Mateo offers grants to help medical practices retain and add to primary care staff. In exchange, the practices — some single physicians serving patients in California’s Medicaid program, Medi-Cal — must show they have increased their patient load and retained newly hired providers for five years.

The idea is to provide capital so doctors can hire the staff they need to run their practices efficiently, increase salaries, offer bonuses, and even take sabbaticals. Such efforts are consistent with one of the main thrusts of the 2019 workforce report: to increase investment in primary care.

California recently joined several other states, including Connecticut, Oklahoma, and Rhode Island, in setting a target to increase primary care spending. So far, those policies have yielded mixed results.

Late last year, California’s Office of Health Care Affordability set a target to make primary care account for 15% of total health care spending by 2034, more than double the current proportion. It imposes no requirements, relying on the goodwill of health plans to work with medical providers.

Greater spending on primary care would mean better pay and more people working in the field, said Richard Kronick, a public health professor at UC-San Diego and a member of the OHCA board. “That’s a big change. Will it happen? I don’t think anyone can predict the future with any certainty.”

Stephen Shortell, a professor emeritus of health policy and management at UC-Berkeley, said “some of that increase might occur, but at some point, it might need to be made mandatory.”

In its report, the workforce commission also cited the importance of alternative forms of primary care payment that offer extra cash for quality care. The affordability office has set targets to encourage such payment methods. The aim is to transform the system from one in which every medical service has a price tag to one that treats people holistically, and in which adherence to medical standards brings more money to doctors and their office staff.

Such arrangements are common among HMOs, though less so in primary care practices. Where they do exist, different health plans and other payers generally design them differently, which means primary care practices manage multiple payment models, adding to their administrative burden.

Reddy’s family practice is participating in a one-year demonstration project launched in January intended to reduce that burden by having multiple insurers work together in one payment plan.

The project brings together three large insurers — Health Net, Aetna, and Blue Shield of California — and 10 independent practices across the state with the goal of improving care while boosting revenue for the medical groups. It is administered by two industry groups, the Integrated Healthcare Association and the California Quality Collaborative.

On top of customary payments, either for services rendered or monthly per-member allotments, the medical practices receive bonuses for meeting targets or improving their performance on core measures.

Participating practices also receive monthly per-patient payments for “population health management,” which means managing the collective health of their patients. And they can search a single platform to find all their patients covered by one of the three plans.

In addition to extra payments and fewer administrative hassles, the health plans pay for a “practice coach,” whose job is to help primary care groups meet their targets and provide more seamless care.

The idea is to add more insurers and medical groups over time, said Todd May, Health Net’s medical director for commercial health plans, who is among those driving the project. “In addition to better outcomes, we’d like to see a stronger, more robust, and more satisfied primary care workforce,” he said.

Reddy hopes she can increase Acacia’s revenue by 20%, using the extra money from this and other pay-for-performance arrangements. That, she said, would enable her to raise pay for her staff and hire clinicians.

For many years, her practice has limited the number of patients it has accepted. But after searching for the better part of five years, Reddy has hired a doctor on a half-time basis and another is coming on board in June.

“This is the most hopeful I have felt in decades,” Reddy said.

Phillip Reese contributed to this report.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

USE OUR CONTENT

This story can be republished for free (details).