Medicaid, or as it’s called in California, Medi-Cal, is the fastest growing entitlement in the country, with about 80 million Americans enrolled. And in this year of Trump/DOGE cuts to spending, it’s in trouble.

Republicans in Congress are considering proposals to slash hundreds of billions of dollars from federal Medicaid funding (about 10% of the total outlay, with $880 billion in cuts to Medicaid projected over the next decade) as they look to offset trillions in tax cuts proposed by President Trump. The specifics of the Medicaid cuts are still being hammered out. But any reductions to federal Medicaid spending would shift costs to states, which would likely be forced to end services or cut coverage for certain groups of people.

Medicaid is jointly funded by the federal government and states, meaning federal cuts would leave major budget gaps that would force reductions in services and enrollment, and also could trigger cuts to other state programs. California’s budget includes $161 billion for Medi-Cal, of which more than half is paid for with federal funds. And California is struggling to pay its Medi-Cal bills.

Based on proposals that Republicans in Congress are considering, California could lose $10 billion to $20 billion a year, according to the California Budget Policy Center.

The program that covers almost 15 million people in the state is costing more money than Gov. Gavin Newsom projected, and his administration is borrowing $3.4 billion from the state’s general fund to cover the unexpected cost increase, with no plan yet announced how the administration plans to restore the money. The primary reason is that California is spending $2.7 billion more than it planned on coverage expansions for 1.6 million immigrants who lack legal status and are enrolled in Medi-Cal. California is one of six states that offer coverage to immigrant adults regardless of whether they are in the country legally. Medi-Cal coverage also 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.

The potential cuts have great significance in Santa Cruz County, where nearly 90,000 people (about a third of county residents) are receiving health insurance through Medi-Cal. Medicaid funding losses will have major impacts on local health care, including hospitals and emergency departments. Cuts could leave many Medi-Cal recipients uninsured.

And cuts could be a financial catastrophe for Watsonville Community Hospital where about 80% of its patients are on Medi-Cal. The hospital’s financial statements show that a significant portion of its revenue comes from Medi-Cal, both through fee-for-service and managed care arrangements. In addition, about 8,000 immigrants in Santa Cruz County, without authorization to be in the U.S., receive health care benefits through Medi-Cal.

Federal support is critical. Santa Cruz County CAO Carlos Palacios said about one-third of California’s budget is composed of federal funding, with the majority spent on Medicaid. The picture is even more stark for the county, which relies on the state and federal government for about 47% — or $665 million — of its total annual budget.

Despite the divisiveness coming out of Washington, there are valid concerns over Medicaid. Some reform-minded Republicans have noted that the program, which was vastly expanded under former President Obama’s Affordable Care Act, allowed Medicaid to move beyond just the poor, pregnant and disabled, into a permanent entitlement that some say provides aid for millions of childless men in prime working age. If more healthy men get back into the workforce, and ultimately off Medicaid, they maintain, the program will be able to focus on the poor for whom it was originally intended.

But that’s the bottom line on why our legislators must fight back on attempts to cut Medicaid, and Medi-Cal. Medicaid is often suboptimum insurance that doctors often don’t accept because of its low reimbursement rates. It’s not a welfare entitlement but an essential component in allowing people to continue working, or getting back to work.