The Unkindest Cut: Slashing Medicaid Threatens the Medically Vulnerable

For Maria Paredez, the slashing of Medicaid funding is no political football, or some abstract argument emanating from Republicans in Congress about the size of government. It hits her where she lives: a small house in a small town in Tulare County, where she struggles to get from one month to the next.

Paredez is not a victim, though — she’s an employee. She has for the past three years cared for her grandmother, who’s now 88, through a program exclusive to California called In Home Supportive Services (IHSS). The IHSS pays people to take care of Medi-Cal eligible Californians who are elderly, blind or disabled, allowing those folks to hire their caregivers, 70% of whom are relatives. They can thus remain in their homes or with family rather than being funneled into costly care centers or nursing facilities, for which the state would have to pay.
 

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The work is difficult and the compensation is minimal. Paredez, who told me she is in her 40s, makes $17.10 an hour, a wage set by Tulare County officials. Despite, she said, being with her grandmother day and night after the elderly woman suffered a stroke and began requiring constant care, Paredez is paid for only 116 hours per month — a little less than $2,000, before taxes. She took a part-time second job to make ends meet.

“Our family wants to care for Grandma, and I was the best person to do it,” Paredez said. “But it’s been hard to make it all work. It’s not easy.”

It could get harder. If the GOP follows through on its resolution to cut Medicaid spending by $880 billion over the next decade, California’s budget for Medi-Cal (the state’s version of Medicaid) could take a heavy hit. For In Home Supportive Services, which uses federal dollars to fund more than 50% of its program, the result might be a reduction in services — and in hours for people like Paredez.

And should Paredez, who has the auto-immune disease lupus, become ill herself, it would be a double whammy. “I also use Medi-Cal for my own health needs,” she said. “If they cut Medi-Cal services, I don’t know what I’ll do.”

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Paredez is not alone. According to research by the University of California, Berkeley, Labor Center, more than half of all state home health care workers rely on Medi-Cal for their own health coverage.

That is perhaps not surprising, considering what they earn. Using the Massachusetts Institute of Technology’s Living Wage Calculator as a guide, the Labor Center found that none of California’s 58 counties pay home health care workers enough to afford basic living expenses. The hourly wage ranges from the state minimum of $16.50 in Siskiyou County to $22 in San Francisco County, and it’s negotiated on a county-by-county basis.

A bill by Assemblymember Matt Haney (D-San Francisco), currently making its way through the California Legislature, would enable IHSS workers to bargain on a statewide basis and seek uniform wages and health care benefits based upon the state itself becoming the employer of record. The bill is co-sponsored by two unions that represent IHSS workers, United Domestic Workers and the Service Employees International Union. (Disclosure: UDW and SEIU are both financial supporters of Capital & Main).

The Berkeley Labor Center estimates that, depending upon the timing and mechanisms for slashing the program, California could lose between $10 billion and $20 billion per year in federal Medi-Cal funds. Laurel Lucia, the center’s Health Care Program director, said the next several weeks should bring some clarity about how Republicans plan to carry out the massive cuts. Lucia said the center estimates job losses of between 109,000 and 217,000 in the state.

“If federal Medicaid spending is cut,” Lucia said, “it would affect health care providers and health care jobs.” Less funding means less service, fewer providers getting paid, and/or those providers’ rates for service being slashed.

The loss is multiplied for businesses that support Medi-Cal, which serves roughly 15 million Californians, about a third of the state’s population. An overall shrinking of Medi-Cal, for example, would hit food and laundry services and other contractors that work with hospitals and care facilities. Health care workers, Lucia said, could also find themselves with less to spend at local restaurants and retail stores.

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There’s still plenty unknown about what Congress will do. It is also not clear how Gov. Gavin Newsom and his staff will try to account for potential Medicaid cuts in their revision of the proposed 2025-26 state budget, which is due within the next week.

Lucia said the state can’t just absorb the range of federal cuts that the Labor Center is predicting. Even the lower end of its $10 billion to $20 billion projection is nearly what the state budgets over a full year for the Department of Corrections and Rehabilitation ($13.9 billion).

The numbers are huge. Their effect, though, is local. In Yreka, in Siskiyou County, 30-year-old Alice Demers is caring for her partner, who has a rare skin condition that requires constant care, and who, she said, has been in declining health for years.

Demers is paid $16.50 an hour under IHSS, but the program has authorized only 80 hours a month for her partner’s care. She drives about 30 minutes to care for another client a couple of days a week, but Demers said she and her partner were still forced to move into Section 8 low-income housing several months ago.

In past times of budget stress, the state has cut hours for IHSS workers across the board. Such cuts now would mean less income for Demers, but she has another concern: A Medi-Cal patient herself, she’s been putting off needed surgery to repair a nerve issue that causes shattering pain in her face. She relies on the program for the medications that help with the pain so that she can put in her hours as a caregiver.

“All of my partner’s health care comes from Medi-Cal, and mine — and in a way our income does too,” she said. “We could really get screwed over here.”

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