The case pits cash-strapped California against low-income patients who are demanding guaranteed medical care. At issue is if a state can cut the rate it pays doctors under Medicaid, which is administered in California as the Medi-Cal program.
Family practitioner Dr. Gilbert Simon says no. The reimbursement rates are already so low he can barely stay open. An up to 10-percent cut would be devastating.
"We have to cut back. We have 12 clinics here. We have to eliminate clinics that are in most difficulty and reduce our staffing," said Simon.
The state of California argues doctors and low-income patients don't have the right to sue because the statute that created Medicaid doesn't list them.
"It doesn't say anything about whether or not these people who are suing are allowed to come into court and sue," said Prof. Leslie Gielow Jacobs from the University of the Pacific's McGeorge School of Law.
The California Department of Health Care Services also notes the Medicaid law fails to dictate a minimum dollar amount that patients must receive in benefits. It only spells out that the funding needs to be "sufficient" -- a test the state believes it has met.
"We made targeted reductions that we believe will allow us to continue providing meaningful healthcare services to our most needy individuals," said Norman Williams from the California Healthcare Services Department.
But for the 7.5 million Medi-Cal patients like Patricia Ondo, cutting payments could mean more and more doctors refusing to see them, creating a wider gap between the quality of healthcare for those with private insurance and those on public assistance.
"That's not equal and you're supposed to be equal. The United States is about being equal to one another. It's not about whether you can afford to be equal to one another," said Ondo.
A ruling could take several months. The 10-percent cut has been on hold since 2008. At stake is over a $1 billion in savings to the state budget. The Obama administration is siding with California on this one.