Dr. Carmin Powell talks about threats to health care at a March 28 town hall meeting at Cabrillo College. (Tyler Maldonado — Santa Cruz Local)

APTOS >> Federal lawmakers have proposed $880 billion in cuts to Medicaid over the next decade, which could leave many of Santa Cruz County’s 85,000 Medi-Cal recipients without health insurance, health care leaders said at a town hall meeting at Cabrillo College on Friday.

The proposed cuts aim to reduce Medicaid funding by about 10% in the next decade. The U.S. House of Representatives budget resolution awaits Senate approval and a signature from the president. Medicaid is the primary funding source for the state’s medical program Medi-Cal. 

U.S. Rep. Jimmy Panetta, D-Santa Cruz, hosted Friday’s event and said such cuts would be “very, very destructive for the families here on the Central Coast.” The event aimed to inform residents about the proposal and watch for Congress member’s votes. “They need to be held accountable,” Panetta said. 

About 1 in 3 Santa Cruz County residents is enrolled in Medi-Cal, which is intended for people with lower incomes or other qualifications.

Medi-Cal coverage helps pay for about half of all baby deliveries in California, and about half of all children seen in the state receive care through Medi-Cal, said panel participant Dr. Donaldo Hernandez, a former president of the California Medical Society. 

According to a recent Santa Cruz County Human Services report, Santa Cruz County residents on Medi-Cal are:

• 52% in South County, 
• 38% in North County.
• 10% in Mid County. 

In Santa Cruz County, about 8,000 immigrants without authorization to be in the U.S. receive health care benefits through Medi-Cal.

“This policy change would significantly affect our ability to care for our patients who are the most vulnerable in our community,” said Santa Cruz Community Health CEO Anita Aguirre, at Friday’s event.

Aguirre said 70% of its clients were on Medi-Cal and 10% were uninsured. About 60% of their adult patients would lose their coverage and would shift their uninsured patient portion from 10% to 40%, she said. Aguirre added that trimmed Medicaid funding would translate to fewer optional benefits such as dental, chiropractic, and acupuncture.

U.S. Rep. Jimmy Panetta, D-Santa Cruz, discusses proposed federal cuts to health care at a March 28 town hall meeting at Cabrillo College. (Tyler Maldonado — Santa Cruz Local) 

Medi-Cal in Santa Cruz County

Stanford Medicine pediatric endocrinologist Dr. Ananta Adala said it was important to rewrite the narrative that Medicaid benefits only go to low income patients. She said she often works with middle-class families whose diabetic children require expensive treatment and technology.

“For our middle-class families, all of this ends up costing well over half of their income, and that’s where Medicaid comes in,” she said. 

Hernandez, a Santa Cruz County-based hospital physician with Sutter Health, said Medi-Cal is “crazy important in terms of the overall health of people.” If the cuts are approved, Hernandez said he expected more people with chronic conditions to seek care at emergency departments because they have no other access to physicians.

“At times at Dominican Hospital, you see those numbers line up of people that have chronic conditions that could have been better served in the community now getting those treated in the emergency department,” Hernandez said.

Dr. Carmin Powell of Watsonville Community Hospital said the immigrant community “really needs a lot of advocacy from this district” as they would be among the hardest hit. She and others also expressed broader concerns about the administration’s immigration policies, some of which threatened immigrant “physicians, surgeons, scientists, researchers, all of those different fields.”

Powell asked, “How can we mobilize to make sure we’re protecting those who are very scared when it comes to threats of immigration and ICE that’s currently happening?”

At a town hall meeting Friday at Cabrillo College, U.S. Rep Jimmy Panetta and a panel of physicians and health care leaders describe reduced health care services in Santa Cruz County with proposed Medicaid cuts. (Tyler Maldonado — Santa Cruz Local)

Proposed budget reductions

House Republicans adopted a budget resolution in February that aimed to reduce spending by $2 trillion over the next 10 years and cut taxes by $4.5 trillion over that same period. 

It was written “to pursue policies that embrace the free market and promote economic growth policies that reduce federal spending, expand energy production, lower taxes that discourage work, savings, and investment, deregulate” the economy and diminish barriers to entering the job market, according to the resolution.

At Friday’s town hall event, Panetta framed the cuts in the budget proposal as “a package in which they are planning to cut essential services like Medicaid to pay for cuts for billionaires.”

Normally, bills can pass the senate with a simple majority vote, but require 60 votes to overcome a filibuster, in which a minority delays or obstructs legislation by extending debate on it indefinitely. Through a reconciliation process, which allows for expedited consideration of legislation, the House of Representatives directs subcommittees to draft proposals in line with its recommendations. The process started in February.

While the resolution adopted in February does not propose cuts to Medicaid directly, budget allocations over the 10 year period overseen by the Committee not including Medicare or Medicaid only add up to a total $381 billion according to the Congressional Budget Office. This means it would be impossible to cut the proposed $880 billion without cutting into one of the two programs, something the White House has promised not to do. 

The budget resolution itself includes cuts to most areas of federal spending and increases spending on the military, homeland security and the judiciary. 

House Republicans may believe that savings can be found in stopping overpayments, of which the White House said there were $140 billion or more in 2024 on its website. The page linked to however only lists around $85 billion in improper payments, which the Government Accountability Office confirmed in a March report. The report shows that improper payments, the majority of which are overpayments, decreased by 30% between 2023 and 2024, largely due to the winding down of COVID-19 era relief programs.

Improper payments are not themselves evidence of waste, fraud, or abuse, according to the Center for Medicare and Medicaid Services.

Panetta said that while he acknowledged there were instances of waste, fraud and abuse that needed reform. the U.S. “cannot allow Elon Musk to take a wood chipper or to it.” Or else “government and its systems will seize up, and you will not get the services that you deserve.” Musk leads the Department of Government Efficiency, an advisory body to the president focused on reducing spending.

Read more

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• Laid off NOAA employee was improving agency’s efficiency – March 14, 2025
• Federal funding freeze threatens UCSC research, Santa Cruz biotech industry – March 7, 2025

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