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Future Uncertain for CA Healthcare Reform Under GOP

News  |  By Doug Desjardins  
   November 22, 2016

If the new administration were to water down segments of federal healthcare reform by revising Medicaid expansion and reducing or eliminating federal subsidies, it would have a major impact on California and its estimated 5.5 million newly insured residents.

Medi-Cal alone could lose $16 billion in federal funds, advocates say.

California healthcare policy experts say it is too early to tell what impact the policies of President-elect Donald Trump will have on the Affordable Care Act (ACA), but they agree the ACA is unlikely to remain intact.

Although Trump vowed to "repeal and replace" the ACA during his campaign, a wholesale repeal of the ACA is unlikely. Any legislation to do so would probably have to override a Democratic filibuster and would require 60 votes in a Senate that includes only 51 Republicans.

Therefore, policy experts expect the new administration to take a piecemeal approach to dismantling the Act by reducing federal funding for it.


Obamacare Repeal Likely, But Uncertainty Clouds Alternatives


If the new administration were to water down segments of federal healthcare reform by revising Medicaid expansion and reducing or eliminating federal subsidies, it would have a major impact on California and its estimated 5.5 million newly insured residents.

"California is currently receiving $20 billion in federal funds each year for Medicaid expansion and federal subsidies," said Micah Weinberg, president of the Bay Area Council Economic Institute.


"That includes about $15 billion to $16 billion for Medicaid expansion and $4 billion to $5 billion in subsidies."

Proposals made by Trump and House Speaker Paul Ryan would dismantle many elements of healthcare reform, according to a policy brief from advocacy group Health Access California. "Dramatic rollbacks in healthcare and coverage are at the top of the agenda of both President-elect Trump and Speaker Paul Ryan, who has reiterated long-standing plans to cut Medicaid and Medicare," the brief stated.

Many of those changes, as well as repeal of many elements of the ACA, could be passed through budget reconciliation, which only requires 51 votes in the Senate, a majority of the House, and the President's signature, the brief noted.

"Californians should be alarmed by repeal proposals that would, among other rollbacks, cut $16 billion from our Medi-Cal program in just two years, forcing elimination of coverage for more than 3 million Californians," said Anthony Wright, executive director of Health Access California.

Any plan to reduce funding for Medicaid expansion or federal subsidies could have a major impact on state residents who gained coverage under healthcare reform, potentially making that coverage unaffordable, Weinberg said.


Covered California's Future In Peril If Federal Subsidies Dry Up


"There are a range of proposals on the subsidy side, which include a tax credit or less generous subsidies," he said. "It's just a matter of how much of the $20 billion federal spigot will be turned off."


California doesn't have the financial capacity to backfill the proposed federal cuts to health insurance subsidies or the cuts proposed for public plans, according to California Insurance Commissioner Dave Jones.

"In California, the ACA has enabled us to provide health insurance to 5.5 million additional Californians through Medicaid expansion and another 1.4 million Californians have health insurance through our exchange, Covered California, of which 90% receive a reduced premium thanks to ACA subsidies," Jones said.

The percentage of California residents without insurance had dropped to 8.6% at the end of 2015, according to the U.S. Census Bureau. Census data estimates there were 3.3 million state residents without insurance at the end of 2015.

A report from the Urban Institute released this month cited a study from the Committee for a Responsible Federal Budget that estimates the number of uninsured residents would increase by 21 million, to a total of 50 million nationwide by 2018 if the ACA is repealed.

In California, the report estimates the number of uninsured would more than double to 7.5 million by 2018.

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