A new Congressional budget proposal would cut federal payments to California by $3.5 billion for allowing illegal immigrants to enroll in the state’s taxpayer-funded health care program.
California largely does not get federal reimbursements for illegal immigrant health care, though it is reimbursed for emergency care under a federal law requiring hospitals receiving federal funding to treat anyone in need of emergency medical attention.
The budget proposal would cut the Federal Medical Assistance Percentage to states that “use their Medicaid infrastructure to provide health care coverage for illegal immigrants under Medicaid or another state-based program.” The cuts would not impact emergency care reimbursements.
California has spent $9.5 billion this year on illegal immigrant health care and is reportedly set to face a $10 billion budget deficit the coming fiscal year.
According to an analysis Monday morning from California Policy Center Visiting Fellow Marc Joffe, cutting the federal reimbursement share for the Affordable Care Act expansion from 90% to 80% would reduce California’s federal funding by $3.5 billion.
While the federal government does not reimburse the state for non-emergency care for illegal immigrants, other federal health care reimbursements enhance the state’s available resources for fully state-funded healthcare programs, such as coverage for illegal immigrants.
Joffe also noted the $3.5 billion cut equates to roughly the cost of coverage of five million beneficiaries at $7,000 per year.
In March, California Gov. Gavin Newsom requested a $6.4 billion emergency bailout for Medi-Cal. He said that while benefits for illegal immigrants had a “partial” impact, ending benefits for such individuals was not on his “docket” and that he believes in “universal healthcare.”
With an estimated 1.9 million illegal immigrants and $9.5 billion spent by Medi-Cal on their health care, the state is spending approximately $5,000 per illegal immigrant on health care this year.
Working illegal immigrants in California earn a median wage of $13 per hour — well below the state’s $18 per hour minimum wage — and thus pay up to $1,846 per year in state taxes, assuming all income is property reported and taxed, and all non-rent, post-tax funds are spent at businesses collecting sales tax.
That’s well short of the average of $5,000 spent on each illegal immigrant’s health care — not including other state programs — leaving the program highly reliant on other state revenue, including indirectly via federal funding, for support.
With the state facing yet another year of budget deficits necessitating more cuts, taxes or both, Republicans say that continuation of benefits for illegal immigrants is putting Medi-Cal at risk.
“Gavin Newsom says ending his policy of unlimited Medi-Cal for illegal immigrants is ‘not on my docket,’ even though it has already made the program insolvent,” said U.S. Rep. Kevin Kiley, R-California, earlier Monday. “This bears repeating: saving Medicaid in our state from bankruptcy is not on the Governor’s docket.”
