california health law
Dr. Richard Turner treats Diego Garcia Cruz at San Pablo’s Lifelong Medical Care Clinic, which cares for many Medi-Cal patients who rely on the Affordable Care Act for coverage

For much of the three years since the Affordable Care Act took hold in California, the Golden State has been largely insulated from the most drastic problems of the health care law that plague other states. It enjoys more robust competition among health insurers and has managed to keep premium hikes lower than in most states.

But now the Trump administration and congressional Republicans are chipping away at the health law. And so California, often heralded as a model state for the implementation of President Barack Obama’s signature health law, is bracing for what many call “Trumpcare” — a repeal or replacement that threatens to upend the historic progress the state is making in getting most of its residents insured.

State health care advocates worry they may not be able to shield California consumers from the changes Republicans are pushing for, which could put at risk coverage for millions of low-income Californians who rely on Medi-Cal, the state’s Medicaid program that expanded under the health law to cover nearly 4 million more people.

A plan outlined by House Republicans to replace the Affordable Care Act, made public Thursday, would cut federal funding to Medi-Cal expansion in half, or about $8 billion a year, health advocates estimate. And it would replace federal subsidies — which are currently based on income and used by Californians to buy plans on Covered California — with a tax credit based on age instead of income. The plan is not a formal bill, but signals that GOP leaders in Congress are serious about replacing Obamacare. House Speaker Paul Ryan indicated legislation will be introduced after Congress returns from a weeklong reces

Under Obamacare, California reduced its uninsured rate to a record low 7.1 percent in 2016, according to the Centers for Disease Control and Prevention. This was done through two programs: Covered California, the insurance exchange, and Medi-Cal expansion. In sheer numbers, the Medi-Cal expansion has been much more dramatic, adding 3.8 million Californians since the law took effect in January 2014. In comparison, 1.5 million people get insurance through Covered California.

Jarvis Johnson, a 54-year-old Oakland resident, lost his employer-sponsored health insurance several years ago after losing his job as a truck driver. Because of the health law’s expansion of Medicaid, Johnson was able to enroll in Medi-Cal, which allowed him to seek treatment for colon cancer. He worries that if the law is repealed, he could lose his insurance and not be able to afford his medical care or continue seeing his regular physicians.

“If they do away with affordable health care, people like myself, poor people, we may not be able to see a doctor in a timely fashion,” he said. “Right now, because of (the law), we don’t have to worry about being turned away because we don’t have insurance. It takes away that burden.”

A spokesman for the Department of Health Care Services, which administers Medi-Cal, said the state agency “cannot speculate as to any potential changes to the Medicaid program that may occur under a new administration.”

The GOP plan was made public a day after the Centers for Medicare and Medicaid Services released proposed regulations that could force consumers who buy plans through Covered California to pay more for health care.

The new proposals, which began under the Obama administration, seek to stabilize the insurance exchanges. Some of the changes may not apply to California because of state laws and Covered California’s independence from the federal exchange. For example, the federal proposal would cut annual open enrollment periods from 12 weeks to six weeks, but California law mandates the period to be 12 weeks. A provision that would give states authority to review whether health plans offer enough doctors and hospitals is somewhat moot in California, which has long regulated the standard at the state level.

But one important provision that could affect California is a technical change that would allow insurance companies to pay a smaller portion of health care costs — leaving consumers to pay higher out-of-pocket costs, said Timothy Jost, a professor at Washington & Lee University School of Law in Virginia who studies health policy.

“California will not be shielded from these changes, especially the ones that are the most troublesome, the ones that directly increase cost on consumers,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group that lobbied in favor of the Affordable Care Act. “That could mean another $500 to $1,000 on your deductible, or another $25 or $50 on a co-pay. That’s a tangible difference.”

Both Covered California and the California Department of Insurance are analyzing the federal proposals and declined to comment until their reviews are completed.

Covered California works better than insurance marketplaces in many other states because more insurers sell on the California exchange. But the uncertainty left by repeal efforts is making insurers nervous about staying on the state exchange.

At least two insurers on Covered California, Molina Healthcare and Anthem Blue Cross of California, recently expressed uncertainty about whether they will stay on the exchange after 2017. Eleven health insurers currently sell on Covered California; Anthem Blue Cross is the second largest, with 302,000 people enrolled in plans, and Molina is the fifth largest, with 83,000 people, according to the most recent data from Covered California.

“We believe there are simply too many unknowns in the marketplace program to commit to our participation beyond 2017,” Molina chief executive Dr. Mario Molina said in a call with investors Wednesday, hours after the new regulations were announced. “We will wait and see how the new administration and Congress will adjust the program and we plan to evaluate our participation on a state-by-state basis.”

The chief executive of Anthem Inc., the parent company of Anthem Blue Cross of California, made similar remarks in an earnings call earlier this month.

“California is not an island,” said Micah Weinberg, president of the Economic Institute at the Bay Area Council, who has researched Covered California extensively. “It’s extremely worrisome.”

State officials are making some moves to push back on Trump’s promise to undo the health law. Gov. Jerry Brown has pledged to work with other governors to protect health care coverage for Californians, and on Friday, state Sen. Ricardo Lara, D-Bell Gardens (Los Angeles County), introduced legislation to create a single-payer health system in California.

“This is our opportunity to put ourselves on the record and be proactive against a Trump administration that is hellbent on eliminating the Affordable Care Act,” Lara said.

The Centers for Medicare and Medicaid Services proposals were the first official action by a federal agency directed at the Affordable Care Act since Trump signed an executive order his first day in office pledging to ease the “regulatory burden” of enforcing the law.

They come on the heels of a quiet move by the IRS to ease enforcement of the tax penalty for not having health insurance. This is a subtle but important move that weakens the individual mandate, the requirement for people to buy health insurance or face a tax penalty. The individual mandate is one of the most crucial components of the law’s success because it forces healthy people to buy insurance and gives insurers incentive to sell on the exchanges.

“The concerns in California are more around what the future looks like,” Weinberg said. “There’s a tremendous amount of uncertainty created by this election. There were a lot of insurers waiting in the wings to return to the exchange. … Everything is up in the air right now.”

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