Updated May 22, 2025
***UPDATE*** In the dark hours of the morning of May 22, 2025, the House passed an updated budget reconciliation bill, which is even more damaging than the previous version of the bill, in terms of both funding cuts and people losing health coverage. For example, a late addition to the bill does more harm more quickly by imposing a work requirement on Medicaid recipients starting in 2026, rather than in 2029 as originally drafted. The administrative red tape created because of the new work requirement is certain to result in a loss of coverage for both adults and their children. As a consequence, kids will miss important doctor’s visits and preventive care, and families will struggle even more to pay for needed health care. A statement from the Newsom Administration estimated that up to 3.4 million Californians would lose Medicaid (Medi-Cal) and the bill would cost the California over $30 billion in lost federal funding annually; another 600,000 Californians would lose Covered California marketplace coverage under the bill. All of California’s Republican members of the House voted for the bill; all Democrats voted against it. The House-passed bill will be next be considered and amended by the Senate.
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Members of Congress said they wanted to cut “fraud, waste, & abuse” from the Medicaid health coverage program. Instead, what they’re poised to do is hurt kids, families, and the health care system in what is the largest effort in history to gut Medicaid to help fund tax cuts for the rich.
The nonpartisan Congressional Budget Office estimates the bill—which Congress is actively considering and may vote on as soon as the week of May 19th—would cut health care spending by at least $715 billion over 10 years. The human cost: At least 8.6 million people will lose Medicaid coverage.
Here are the biggest potential problems for California’s kids in the bill being debated in Congress:
- Shifting Medicaid costs to states: Rather than admit they’re eviscerating a program that covers nearly 80 million people nationwide including 5.5 million California kids, members of Congress are hiding behind cuts to states—which will inevitably be passed on to consumers because states can’t run a deficit like the federal government. One of these cuts would do away with a funding mechanism called a provider tax, which is used by all states except Alaska to help fund their share of Medicaid costs. Over two-thirds (68%) of California voters in last year’s election supported the Proposition 35 provider tax to fund Medi-Cal and ensure health care providers are paid a reasonable rate to care for Medi-Cal patients. Now, Congress and the Administration want to constrain this popular method for California and other states to robustly fund their health care systems, which will make it harder for kids to get care.
- Penalizing states that cover people who are undocumented: The bill also proposes to reduce federal funding for 14 states & DC (including California) that use the state’s own dollars to offer Medicaid coverage to undocumented people. For these states, the federal matching rate would drop from 90% to 80% for what’s called the “expansion population” (in California, that’s about 5 million adults including parents earning up to about $36,000 annually for a family of 3). It’s important to note that Congress CAN’T cut federal funding for undocumented immigrant Medicaid coverage, because it doesn’t provide any in the first place—states invest their own funds to cover undocumented kids and others because those states see the benefits of regular health care for all their residents. Lowering the federal matching rate would cut $27.5 billion in federal funds to California from 2028 to 2034. Facing these large funding cuts, California may be forced to scale back on Medi-Cal enrollment, benefits, or provider payments, as already proposed in the May Revise budget.
- Slashing key health care supports: When applicants are approved for Medicaid, their health care bills for the past 3 months are covered by the program, since many people don’t know they’re eligible until they have a big health care emergency and need significant care. This new bill would limit such retroactive coverage to 1 month instead of 3, penalizing eligible and busy families during their toughest times. Children are NOT exempt from this change.
- Burying Medicaid enrollees in paperwork: The bill also creates a complicated and administratively expensive penalty for adults who can’t prove sufficient levels of “community engagement” like working, going to school, or caregiving—which is what the majority of adult Medicaid enrollees already do. Although children under 19 and adults with dependent children are exempt from the current proposal, it’s estimated that approximately 106,000-151,000 kids will lose Medi-Cal coverage when they get caught in the crossfire. Adults in the expansion population will also have to re-enroll every six months (instead of annually), which is burdensome for both the state and enrollees. Parents and children often lose coverage due to administrative barriers like work requirements and frequent redeterminations—not because they aren’t eligible, but because the paperwork is unmanageable and confusing.
- Heaping more health care costs on family budgets. The bill requires states to impose cost sharing of up to $35 per service on adults in the expansion population. Medi-Cal currently does not have cost-sharing for most eligible individuals. This impacts kids because health care will eat up a greater share of family budgets, which will result in less money available for other basic household necessities and/or delays in care.
- Attacking trans youth and Planned Parenthood: The bill prohibits federal payments for gender-affirming care like hormone therapy, which is critical in addressing gender dysphoria, depression, and anxiety in transgender youth. It also prohibits federal payments to Planned Parenthood, a crucial provider of comprehensive health care, family planning, and sexual education among youth and medically underserved communities.
On top of these cruel Medicaid proposals, Congress is proposing $300 billion in cuts to the Supplemental Nutrition Assistance Program (food stamps, or CalFresh in our state), a key source of food assistance for kids. These devastating reductions will hurt the same kids and families as the Medicaid cuts, forcing them to choose between food on the table, asthma inhalers, and doctors’ visits.
Of the estimated 1.6 million Californians who would lose Medicaid, we don’t yet know how many would be kids, but we DO know this bill will reverse decades of progress for children and families. You can help by calling your Member of Congress TODAY at 866-426-2631 to tell them to OPPOSE Medicaid cuts, or visiting the Fight For Our Health coalition’s “take action” page at https://fightforourhealth.org/take-action.
