Trump’s administration denies California the chance of collecting one of their healthcare taxes, specifically on managed-care organizations in the state.

Although California will be unable to receive the tax money, it won’t immediately impact the budget, as their fiscal year, or year used for budgeting and financing hasn’t arrived as of yet.

Although the decision won’t affect California’s budget immediately, it will start showing itself on July 1, 2021, the start of California’s fiscal year. The state could potentially lose up to $2 billion annually from low-income benefits, as they could lose at a minimum of $1.2 billion, but could rise up to more than $1.9 billion afterward in the next fiscal year.

California also uses the money to pay their share of Medicare costs and would have saved the state the amount it will close in the following fiscal year. 

California’s Medicaid program, according to the Associated Press and the interview with John Baackes, the CEO of Los Angeles Care Health Plan, is the largest Medicaid program in the country, and with its budget of $100 billion or more, losing almost $2 billion won’t detriment the program as much as expected.

The money from the tax reject will be used for a high-speed rail project and California’s authority to set its own vehicle emission standards. The tax applies to managed care organizations that administer California’s Medicaid plans, the joint state and federal programs that provide health benefits for poor and disabled people.