Millions of Californians likely would lose coverage under GOP Obamacare replacement, experts say

Millions of Californians probably would lose health coverage under the Obamacare replacement bill released by House Republicans this week, experts say.

The long-awaited GOP alternative removes the requirement that all Americans sign up for health insurance or pay a penalty, alters the amount of financial assistance offered for plans sold on the marketplaces and bans federal funding for Planned Parenthood. But what probably would affect the greatest number of Californians and raise the toughest questions for the state are proposed cuts to Medicaid, which covers more than a third of California’s residents.

“The pressure will be on the state Legislature to decide whether to let a lot of poor people suffer,” said Lowell Brown, a Los Angeles attorney who specializes in advising healthcare providers. “This plan passes the buck from the feds to the state.”

The Affordable Care Act offered states money to allow more people into their Medicaid programs, which are jointly funded by federal and state governments. California, one of 31 states that took the deal, currently receives more than $15 billion annually in federal dollars to fund the expansion, according to the state Legislative Analyst’s Office.

Anyone in California whose income is low enough — $16,395 or less for a single person or $22,108 for a couple — can sign up. The program, known as Medi-Cal in California, is free for participants.

The GOP bill, called the American Health Care Act, would begin phasing out federal money for the expansion starting in 2020.

Though states still could let people join, California probably would not be able to afford the expansion and would be forced to scrap it, according to experts. Approximately 3.7 million Californians have coverage through the expansion, state figures show.

Dustin Corcoran, chief executive of the California Medical Assn., said that too often political debate has focused on the exchanges and overlooked the Medicaid expansion’s positive effect on the poor.

“Even if they push it out to 2020, you’re still creating a pretty massive cliff for a state like California and other states that expanded coverage for very vulnerable individuals,” he said. “The ability of hospitals and physicians to provide services in areas like the Central Valley are dependent on Medicaid remaining as it is.… This is a scary jumping off point for the healthcare debate.”

The Affordable Care Act has had a major effect in California, with millions gaining insurance, many for the first time; the state’s uninsured rate reached a record low of 7.1% last year, according to data released last month.

“We have the most to lose because we gained the most under the Affordable Care Act,” said Anthony Wright, head of advocacy group Health Access California, in a call with reporters Tuesday.

The House bill suggests restructuring funding for the entire Medicaid program, which would imperil coverage not just for the newly insured but for millions who have been part of the program for decades.

Under the current funding model for Medicaid created by President Johnson in 1965, the federal government reimburses states for their programs’ expenses regardless of how big they are. But Medicaid has been criticized as unsustainable and inefficient, with an annual price tag of more than $500 billion and growing.

The GOP alternative plan instead would give states a fixed amount of money each year, which supporters say would create an incentive for using the money more efficiently.

But the annual federal contribution is unlikely to keep pace with increases in healthcare costs, so states would end up shouldering more and more expenses over time, said Ken Jacobs, chairman of the UC Berkeley Labor Center.

California could try to keep people in the program by reevaluating the benefits offered or how much doctors treating Medi-Cal patients are paid, but the state already has some of the lowest per-participant spending rates in the country, Jacobs said. “There’s not a lot to cut.”

The funding gap probably would be too big to overcome other than by dropping people from the program, experts have said.

House Republicans have not yet released an analysis of how their plan would affect insurance coverage nationwide.

On Tuesday, Gov. Jerry Brown said it was too soon to weigh in on the bill’s merits or drawbacks.

“I think there’s a lot of details that have yet to be analyzed — the cost and who’s covered and whose coverage is being taken away. There’s a lot more questions than there are facts at this point,” said Brown, speaking to reporters after an unrelated event in Modesto.

With Obamacare in jeopardy, some California politicians and healthcare advocates have been promoting the idea of a state-run “single-payer” system that operates like Medicare. But the costs for many of these ideas are very high.

Some popular features of Obamacare would be preserved under the House bill, including requiring that insurers offer coverage to people with preexisting conditions, banning lifetime spending caps and allowing young adults to stay on their parents’ plans until they are 26.

But it would do away with the mandate that all Americans have insurance or pay a penalty, and that all employers provide insurance to full-time workers. It also would ban Medicaid funding for Planned Parenthood and any other medical institutions that provide abortion services.

Planned Parenthood of California estimated the bill would lead to a $182-million loss of federal Medicaid funds. But President Kathy Kneer said the group would focus on blocking the defunding effort before it becomes law rather than leaning on Brown and state legislators to backfill the potential loss.

“I give this less than a 50-50 chance of making it to the president’s desk,” said Kneer, noting the pushback from conservative House Republicans as well as liberals. "We still are going to fight as hard as we can.”

The House bill also would change the way that tax credits are calculated for the 1.2 million people who use subsidies to buy health plans through the marketplace known as Covered California.

Subsidies under the Affordable Care Act are calculated based on how much money people make and the price of health plans. The GOP alternative would link subsidies primarily to consumers’ age.

“Costs will go up dramatically for older and poorer Californians and those living in high-cost areas, while there will be some savings for younger and especially more affluent Californians,” Jacobs said.

According to experts, getting rid of the individual mandate probably would mean that young, healthy people would stop buying plans and insurers would be stuck covering only people with high medical expenses. That would lead to increased premiums and out-of-pocket costs for those who continue to purchase insurance.

Because of the Affordable Care Act, Giannina Campos was able to stay on her mother’s private health insurance. Her 26th birthday was 10 days before President Trump was inaugurated.

Campos — a student teacher who lives in Pico-Union and doesn’t currently get insurance through work — just switched to Medi-Cal. Now she is worried about the future of her coverage.

“If I'm going to lose Obamacare and they're going to defund Planned Parenthood possibly, what's going to happen to me?” she said. “It’s stressful.”

soumya.karlamangla@latimes.com

Twitter: @skarlamangla

john.myers@latimes.com

Twitter: @johnmyers

melanie.mason@latimes.com

Twitter: @melmason

Karlamangla reported from Los Angeles and Myers and Mason from Sacramento. Times staff writer Jazmine Ulloa in Sacramento contributed to this report.

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UPDATES:

6:25 p.m.: This story was updated with additional coverage details and comments from healthcare experts.

8 a.m.: This post was updated with information about a possible “single-payer” health plan for California.

This post was originally published at 6:15 a.m.

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