The Sacramento Bee: Who could lose health insurance in California under GOP Obamacare repeal plan?

May 4, 2017

Many of the 5 million Californians who receive health coverage through the Affordable Care Act risk losing insurance under a GOP health care bill passed by the House of Representatives Thursday. 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, authored by U.S. Rep. Fred Upton, R-Mich., 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 allow insurers to deny 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 relied on federal subsidies to enroll in Medi-Cal, while about 1.6 million bought private plans through the Covered California exchange. Many of those people, particularly low-income families and patients with pre-existing conditions, could be priced out of insurance if the bill becomes law, said the California Medical Association, which represents physicians.

California Association of Health Plans President and CEO Charles Bacchi said in a statement, “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.”

State Sen. Ed Hernandez, D-West Covina, 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 non-existent,” 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, the American Health Care Act. In a statement, U.S. Rep. Darrell Issa, R-Vista, called the Affordable Care Act “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 care through the federal health plan.

Under the bill, the state would still have some leeway to retain coverage for a broad swath of Californians by keeping discretion to define essential health benefits that it would cover.

Some in the state fretted Thursday 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.

States could 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 Deborah Kelch, executive director of the California nonprofit group Insure the Uninsured Project. “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 insurers 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 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, but all of its health plans suffered substantial financial losses, the report said.

Kelch said she’s not sure how California will move forward should a Trumpcare world let insurers deny sick patients once more.

“We’ll have choices to make,” she said. There are so many things that are changing in this bill. … There’s a big shift that we’ll have to take in at the state level.”

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