HR-1: A Health Care Catastrophe

When HR-1, Trump’s Big Bad Budget Bill, first passed last summer, the California Medical Association warned of “catastrophic” consequences. They were right.

Residents of Glenn County now travel 40 minutes to the nearest emergency room, thanks to a 40% funding cut that forced the county’s only hospital to shut down. St. Johns Community Health in Los Angeles struggles to stay open, after seeing one-third of its operating revenue disappear. $50 million in cuts have forced the Los Angeles County Department of Public Health to close more than half its community clinics; besides vaccinations, the clinics provided screening and treatment of tuberculosis and HIV. In Alameda County, Wilma Chan Hospital narrowly averted a layoff of 400 workers while the County searches  for new funding sources to keep them on the job.

MediCal, California’s version of the federal Medicaid program, currently covers one in five working Californians and half the state’s children. A 25% cut in state and federal spending is expected to strip close to 3 million people of their coverage by 2028. People on Medicaid will lose access to reproductive health services.  

Nor has Medicare been spared. Refugees and asylum-seeking immigrants who were on  Medicare no longer qualify. Other non-citizens were already barred from the program. 

HR-1’s proponents claimed the only people harmed by Medicaid cuts will be those who should not have been getting benefits in the first place—what were once referred to as the “undeserving poor. ” The new law requires that any adult under 65 who is not caring for young children must provide proof of working at least 80 hours a month to qualify for Medicaid, so long as their employers met the federal minimum wage of $7.25 an hour.  

“Too onerous”

According to the Kaiser Family Foundation, most people on Medicaid already work, but may find it “too onerous to demonstrate compliance” with the work requirement. The UC Berkeley Labor Center estimates that this could account for more than half the Californians expected to lose their MediCal coverage.  Their hours may fluctuate; they may be laid off temporarily or change jobs; they may be self-employed, or work for an employer who is unable or unwilling to provide the necessary documentation. The same illness that required access to Medicaid could also disqualify you from getting it, if it keeps you off work for any length of time. 

Work requirements don’t come cheap; one of the ironies of HR-1 is that the cost of implementing them could offset any savings from  throwing people off the rolls. Georgia is a case in point. Medicaid is jointly funded by state and federal governments, and one of the best features of the Affordable Care Act to make federal Medicaid dollars available for states  that cover people who make  up to 138% of the federal poverty level. Georgia took the money, but added a work requirement. As a result,  Pro Publica reports that “most of the tax dollars used to launch and implement the program have gone toward paying administrative costs rather than covering health care.”  Worse, many Georgians who complied with the work requirement still found their coverage terminated. 

The targets of HR-1

HR-1 targets those who benefited from expanded access to Medicaid—including 5 million Californians—in other ways. They are now required to reestablish their eligibility every six months. Every doctor’s visit requires  a $35 co-payment. In California, providers who will take them on as patients will likely become harder to find, since the state will no longer augment notoriously stingy Medicaid payments. And no one on Medicaid can count on being reimbursed if they get medical treatment more than a  month before their eligibility is confirmed.

More than any other group, Californias’s immigrants will feel the impact of the cuts;  here, the state must assume its share of the responsibility. California was the first state in the nation to grant MediCal eligibility without regard to immigration status. This did not come easy or happen overnight; it was the product of a protracted, step-by-step struggle to extend state funds to cover those denied access by the feds—first immigrant children, then Dreamers, finally all state residents, whether “legal” or not. 

This victory for immigrant rights is now in peril.  California has responded to lost federal health care dollars by barring any new enrollment in MediCal for undocumented adults. Those already enrolled must pay a $30 monthly premium. Even one missed payment gets you dropped from the program, with no opportunity to reenroll. In fact, leaving the program for any reason, even temporary, means you can’t get back in. Those who remain enrolled must now pay out of pocket for dental care.

A weapon in the war on immigrants

How is it that that a state that boasts the world’s fourth largest economy could allow access to health care to be used as a weapon in Donald Trump’s war on immigrants, all in the name of “austerity budgeting”? Much of the blame lies with the health care system itself. A plethora of profit-driven private insurance plans, coupled with various public programs that try to patch up the system’s holes, make rampant administrative waste and glaring inequities inevitable, while driving health care costs through the roof. 

The state legislature is already on record in favor of a “unified financing” system that provides comprehensive benefits and equal access for all Californians, at a projected savings of $158 billion a year. AB 1900, the latest attempt to adopt a single payer health plan in California, fleshes out what the system should look like.  But it is strictly a policy bill; effective financing for a truly comprehensive, universal health care system in the state would require federal waivers that aren’t likely to happen as long as Trump is in the White House. 

That doesn’t mean the money isn’t already there. It’s just that so much it is in the hands of people who are exempt from equitable taxation. That’s the rationale for the Billionaire’s Tax, a one-time 5 percent state tax on assets over $1 billion. It would affect only about 200 people, but would bring in enough money to offset all the federal revenue cuts from  HR-1. 

A second measure, to extend Proposition 55, the Education and Health Care Act of 2026, would make permanent an existing state tax on incomes in the top 2 percent’s brackets, due to expire in 2030. It wouldn’t bring in any new revenue, but it should prevent further cuts to cash-strapped public schools and colleges, and sets aside money as well for children’s health.

Both measures are currently collecting signatures for the November ballot and are endorsed by California DSA. On March 15, East Bay DSA created a Tax the Rich Working Group to get them on the ballot and work for their passage.

Neither measure represents a long-term solution to the health care crisis. They’re more like applying a tourniquet to a cut artery—a stopgap measure, to buy time until you can get the patient to a doctor. But without it, the patient could die. We can’t let that happen.