Many of the 5 million Californians who receive health coverage through the Affordable Care Act risk losing insurance under GOP legislation passed Thursday by the House of Representatives. State and health industry officials said they hoped the U.S. Senate would block the bill or revise it to better protect low-income communities and people with pre-existing conditions.
The new legislation repeals the 2010 Affordable Care Act and makes major changes to the federal health care system in place over the last seven years. If signed into law in its current form, the bill would shrink funding for Medicaid expansion populations after 2020, shift decisions about essential health benefits to states and give state officials the option to deny coverage to patients with pre-existing conditions, among other changes.
In California, where the uninsured rate dropped by half under the Affordable Care Act, about 3.6 million residents rely on federal subsidies to enroll in Medi-Cal, while about 1.6 million pay for private plans through the Covered California exchange.
Dr. Theodore Mazer, a San Diego ear, nose and throat specialist, said he expects many of his low- and moderate-income patients to be priced out of coverage if the new law passes. Mazer is president-elect of the California Medical Association, which represents physicians.
“At this point in time, were this to become law of the land, California – which already undercuts Medi-Cal severely – will basically implode,” Mazer said. “There’s no way that California can move forward with 1 in 3 people covered.”
California Association of Health Plans President and CEO Charles Bacchi also expressed concern about the bill’s impact on low-income Californians.
“There should be further debate over the market stabilization proposals and improvements to the Medicaid reforms to ensure that our state can afford to provide health care to the millions of Californians who depend on Medi-Cal and federal subsidies,” Bacchi said in a statement.
State Sen. Ed Hernandez, D-Azusa, chair of the Senate Health Committee, said the bill is a major step back from the progress California has made toward controlling health care costs. This year, however, insurance premiums under Covered California jumped by an average 13.2 percent after 4 percent increases the two previous years.
“You’re going to have less people insured, you’re going to have higher premiums, and the Medi-Cal program as we know it in California will be nonexistent,” Hernandez said. “You’re going to now go back to the days of individuals going into bankruptcy because their health insurance doesn’t cover anything. It’s going to be barbaric.”
All 14 Republican House members in California voted for the bill. In a statement, U.S. Rep. Darrell Issa, R-Vista, called the Affordable Care Act, former President Barack Obama’s signature initiative, “a failure from the get-go.”
“Today’s vote gives a voice to the victims of Obamacare, the millions of Americans who are paying higher premiums, receiving less coverage and for whom the status quo offered no end in sight,” he said. “Now is the time to make it right.”
Perhaps more than any other state, California made the biggest push to enroll people in private insurance or Medicare plans under the Affordable Care Act. Californians make up about a quarter of the 20 million Americans who receive health insurance through the federal plan.
Under the bill, the state would still have some leeway to retain coverage for a broad swath of Californians by being able to define essential health benefits that the state would cover.
Some in California, however, fretted about the possible disappearance of protections that required insurance plans to ignore pre-existing conditions when accepting enrollees. Under the bill, states could apply for a federal waiver to not cover people with pre-existing conditions, and, if granted, plans could deny sick customers or charge them more for care if they’ve experienced a lapse in coverage of 63 days or more.
Joseph Antos, a health policy analyst at the conservative think tank the American Enterprise Institute, said California is unlikely to apply for the waiver.
“Every commentator I’ve heard has said it’s going to be terrible, your grandma isn’t going to be able to get cancer treatment,” Antos said. “Politically, it seems like a non-starter. … I think in California you’re pretty safe around that.”
But even in states that don’t apply for the waiver, the bill’s removal of the individual mandate, requiring everyone be insured, could sway healthy people to go back to being uninsured and create a sicker, less stable marketplace overall, said Deborah Kelch, executive director of the California nonprofit group Insure the Uninsured Project.
Some states might create high-risk pools specifically for sicker patients, with the federal government chipping in $8 billion nationwide over the next five years to fund them. Patient groups, however, fear the proposed federal funding is too slim.
More than 300,000 Californians would fall into those high-risk pools, according to health care consulting firm Avalere Health.
“It’s expensive stuff,” said Kelch. “The costs are exorbitant. You think of the organ transplant, late-stage liver disease, cancer treatment. Everything I’ve seen says (the funding) is not enough.”
California created similar high-risk pools in 1991 and saw premiums skyrocket while wait lists for high-risk plans grew so long that the state program started capping benefits and limiting enrollment, said Kelch, who recently wrote a report on the model.
Most enrollees in the state’s Major Risk Medical Insurance Program paid somewhere between 13 percent and 36 percent of their annual income toward health care, according to the report. In 2003, the Legislature restructured that program into the Guaranteed Issue Pilot Program, but all of its health plans suffered substantial financial losses, the report said.
The pending changes worry Rhett Simmons, a 57-year-old Sacramento resident and Covered California enrollee who underwent a below-the-knee amputation earlier this year due to diabetes. She’s self-employed and pays $875 each month for platinum-level coverage, she said.
“It’s just scary. I don’t know what’s going to happen,” Simmons said. “I do want a leg. I do want to be able to walk out my front door.”