Study: Obamacare Repeal Would Cost California $58 Billion

California progressives and crony capitalists are panicking over a new study that predicts California will lose $58 billion in Medicaid funding over the next decade if the latest proposal to repeal Obamacare is passed.

The Center on Budget and Policy Priorities that “pursues federal and state policies designed both to reduce poverty and inequality financially,” forecast that under the latest Republican effort to repeal the Patient Protection and Affordable Care Act, sponsored by Senators Lindsey Graham (R-South Carolina) and Bill Cassidy (R-Louisiana), would reduce total federal spending through 2027 by $299.5 billion.

Under the current nationally-administered Medicaid system, the 50 U.S. states have enrolled 68.9 million individuals in Medicaid, or about 21 percent of all U.S. residents. The only limitation on enrollment is an individual’s or family’s income as a percent of the poverty rate. Obamacare drastically increased Medicaid enrollment by raising the percentage of income over the poverty rate necessary to qualify for the program.

California with a population of 39.25 million has gamed the Medicaid rules to sign up a stunning 13,465,532 enrollees, or about 34 percent of the state’s population, according to the Medicaid.gov website. Despite having just 12 percent of the nation’s population, California currently pockets 19.6 percent of all federal spending on Medicaid.

Under the Graham-Cassidy proposed Obamacare repeal, Medicaid spending would be “block-granted” to the 50 states based on a percentage of the population. As a result, California will lose $57.5 billion over the next decade, or about 19 percent federal spending cuts.

Although the loss of about $5.75  billion a year would be very painful to California progressives and their business fellow travelers, Breitbart News reported in June that the U.S. Senate’s original proposal would have immediately begun “block-granting” federal Medicaid spending to each state according to the population. If the original Republican proposed repeal had passed, California would have lost $27 billion a year, or about a third of the $82 billion the state received from Medicaid last year.

The major difference is that under the Graham-Cassidy repeal, there will be a three-year delay until 2020 before block-granting begins. Over the next seven years, Medicaid will transition in steps toward a straight block-grants arrangement in 2027.

But California’s Medicaid funding losses are by far the largest of any state, followed by New York losing $33.1 billion and Florida losing $17.1 billion. Although every state will lose some Medicaid funding, many states believe that the block-grants will give them the flexibility to design and administer Medicaid programs that better meet local needs.

California Assembly Speaker Anthony Rendon tried to pass SB-562 in an effort to take over the state’s $389.5 billion healthcare industry and convert it into a state-sponsored “single-payer” system. But the bill failed to pass, due to concerns about how to fund socializing one-fifth of California’s economy.