BREAKING: HHS Announces $200 Million Withholding of Medicaid Funds From California

On Monday, the U.S. Department of Health and Human Services (HHS) announced that $200 million in Medicaid funding will be withheld from California in the first quarter of 2021 over illegally mandating that all health care plans in the state must cover abortions.

The announcement by the HHS, made through their Office for Civil Rights (OCR), said that the California health care plan regulation, mandated by the California Department of Managed Health Care (DMHC), would lose an additional $200 million per quarter if they did not agree to align with federal regulations.

California’s mandate came into direct conflict over federal law earlier this year in January when the HHS first issued a notice of violation to the state, despite the law being on the books in California since 2014. The notice made clear that California was violating the Weldon Amendment, a law that makes it illegal for discrimination in health plans that did not include abortion procedures. The Amendment also notes that abortion coverage cannot be forced upon health care providers.

“We’re taking enforcement action against the state of California for imposing universal abortion coverage mandates on health insurance in the state,” said HHS Secretary Alex Azar on Wednesday. “We have informed California that this policy clearly violates federal conscience laws but the state refuses to fix the issue and comply. Accordingly, we plan to withhold $200 million in federal Medicaid funds from the state in the first quarter of 2021. And unless California amends its policies we will seek to withhold an additional $200 million every quarter until it complies.”

Many health policy experts in California have said that, with President-elect Biden set to be inaugurated next month, that the Medicaid fine may only be short-lived.

“They might only do this for the quarter, and once Biden is in, either drop it or reinstate the funds,” Washington-based healthcare lobbyist Sarah Torre explained. “Biden, despite being Catholic, has been clear on where he stands on abortion. Plus, look at who the next HHS Secretary will likely be: Xavier Becerra, the California AG who has defended the California healthcare abortion mandate before.

“So this whole thing might just be dropped or ignored, or they are going to try and change the Weldon Amendment. There are plenty of ways around this, so California, ultimately, may only have to wait a little more than a month before the funding is back best case scenario.

“Considering that they also just limited Vermont’s health care system a bit, also against abortions, this just seems like the outgoing administration doing what it can to et policy before going out. But with Biden and his team, we’ll see how long they last or how long they plan to pursue these.

“Let’s face it, $200 million a quarter is a lot.”

California health officials have yet to comment on the new quarterly violation withholding. Many officials are expected to wait on alterations until after the Biden Administration says where it stands on the issue with California.