Capitol Alert

‘Death spiral’ ahead under GOP Obamacare repeal, California’s insurance chief says

California Insurance Commissioner Dave Jones blasted House Republicans’ proposed bill to repeal the Affordable Care Act on Wednesday, saying it would deal a devastating blow to the state’s health insurance marketplace and potentially leave 5 million Californians without health coverage.

“Many people will just decide that they don’t need health insurance because they’re healthy, and there’s no longer a mandate that they have to have they’ll roll the dice much like they did before the Affordable Care Act and hope they don’t get sick,” Jones said at a news conference Wednesday, as divisions over the GOP health care proposal appeared to grow amid debate in the House Ways and Means Committee.

Jones, the state’s top health insurance regulator who is also running for California attorney general in 2018, cautioned that the GOP proposal would lead to a health care death spiral that would result in skyrocketing premiums and millions more uninsured.

“We’ll have a market skewed towards those who are sick. That is a recipe for disaster for the health insurance market,” he said. “That’s exactly where the Republican proposal is taking us. That will result in health insurers concluding they just can’t continue to sustain the losses and leaving the individual market and...result in further spiraling down.”

Jones also voiced strong support for a skeleton bill authored by state Sen. Ricardo Lara, D-Bell Gardens, that could seek a statewide single-payer health system.

“A single-payer approach would be more efficient, would cover more people and do so in a way that would overall reduce costs,” he said. “That’s the way we have to go.”

Jones is among a growing faction of California officials to condemn the GOP effort. House Minority Leader Nancy Pelosi called it a “make America sick again bill” that will “force tens of millions of families to pay more for worse coverage and push millions of Americans off of health coverage entirely.” Rep. Mike Thompson, D-St. Helena, a member of the House Ways and Means Committee, said on Twitter that the Republican plan will “gut our health care system.”

House Speaker Paul Ryan, who has led the Republican charge to dismantle Obamacare, has staunchly defended the proposal, dubbed the American Health Care Act.

“Obamacare is rapidly collapsing. Skyrocketing premiums, soaring deductibles, and dwindling choices are not what the people were promised seven years ago. It’s time to turn a page and rescue our health care system from this disastrous law,” he said in a statement. “The American Health Care Act is a plan to drive down costs, encourage competition, and give every American access to quality, affordable health insurance. It protects young adults, patients with pre-existing conditions, and provides a stable transition so that no one has the rug pulled out from under them.”

Rep. Devin Nunes, R-Tulare, also on the Ways and Means Committee, strongly defended the proposal.

“Since Obamacare is collapsing and is unsustainable, Rep. Nunes strongly supports the GOP replacement plan, which will allow for more competition cheaper prices, and more locally based care, while protecting those with pre-existing conditions and those who want insurance but can’t afford it,” said Jack Langer, a Nunes spokesman.

The proposal aims to strip key provisions of Obamacare that Republicans have long fought. It removes the individual mandate requiring people to have insurance and replaces it with financial incentives for people to retain continuous health insurance. It gradually eliminates funding for the expansion of Medi-Cal, which covers about 14 million Californians, and dramatically alters the way low- and moderate-income people pay for health insurance.

Under Obamacare, insurance subsidies are based on income level and where you live – the more expensive the region, the greater the subsidy. The House proposal would allocate refundable tax credits to people instead based on age. That would help higher-income earners, according to patient and consumer advocacy groups. Under the plan, some provisions of Obamacare would be preserved, including coverage for people with pre-existing conditions and allowing children to stay on their parents’ plans until age 26.

Jones said 3.7 million residents who benefited from the Medi-Cal expansion in California are at risk, in addition to 1.2 million who receive subsidies to purchase insurance through Covered California. Consumer advocates said poorer and older Californians stand to lose the most.

“Every bit of this proposal is designed to make it harder for people to get coverage, harder for people to keep coverage and it will mean people will pay more and get less,” said Beth Capell, health policy advocate for Health Access California, a health and consumer advocacy group. “It’s bad.”

Angela Hart: 916-326-5528, @ahartreports