California ACA Supporters Blast Congressional Republicans’ Plan

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By Laura Mahoney

California health care advocates may not be surprised by the broad outlines of the House Republicans’ ACA repeal plan, but they expressed surprise and disappointment at some of its finer points.

Advocates and California Democratic lawmakers who support the Affordable Care Act said the plan released March 6 would leave millions of people without insurance and increase costs for those who could still access care. At the same time, they faulted the plan’s tax cuts for the wealthy.

Major elements of the plan, such as shifting from premium subsidies to refundable tax credits and placing a per capita cap on funding for Medicaid, were expected. The broad strokes of the plan would cost California tens of billions of dollars a year, endanger coverage for about 5 million Californians who are newly covered under the ACA and devastate the individual insurance market, to name a few of its impacts, they said.

“This isn’t repeal and replace, this is repeal and destroy,” Anthony Wright, executive director of Health Access, told reporters on a conference call. Wright’s group is a coalition of health care, consumer and labor groups that advocates for affordable health care.

In Congress, House Majority Leader Kevin McCarthy (R), who represents a rural area of California with nearly half of its population enrolled in Medicaid, defended the Republicans’ American Health Care Act, saying on Twitter March 8 that it “returns power to states with the biggest entitlement reform in a generation.”

“This is what the American people have asked for, this is what those across this country have wanted,” he said at a March 8 news conference. “We’ve been willing to listen and now we will lead.”

Tax Deduction

Wright and others pointed to a few provisions as socially regressive, calling them “mean-spirited.” Among them are:

  •  including a tax deduction to health insurance company executives who earn more than $500,000 a year while cutting subsidies for low-income people;
  •  prohibiting those who get a refundable tax credit for health insurance purchases from enrolling in plans that provide coverage for abortions;
  •  eliminating federal funding for all health care services at Planned Parenthood;
  •  requiring Medicaid enrollees to reapply every six months to confirm eligibility, rather than the current 12 months; and
  •  imposing a 30 percent penalty for one year on those who drop coverage for 63 days or more, rather than the current tax penalty imposed for lack of coverage that is pro-rated by the month.
“The viciousness of it was a bit of a surprise,” Beth Capell, policy advocate for Health Access, said.

Potential Higher Costs

Especially troubling is the tax break for health insurance executives, Wright said.

“There’s an ugly irony in cutting credits for moderate to low income people while expanding a deduction for health insurance executives that make more than $500,000,” Wright said. “It’s a signal of the priorities of the drafters.”

Democrats who control the California Legislature said they are still reviewing the plan but so far see higher costs with less insurance if the Republican plan passes.

“I would have been happy to work on a bipartisan effort to address the rising cost of insurance and limiting out-of-pocket expenses, but that isn’t what this plan is about,” Sen. Ed Hernandez (D), chair of the Senate Health Committee, said in a March 7 news release. “This plan is a tax cut for the rich at the expense of insurance coverage for hard working people.”

California Insurance Commissioner Dave Jones (D) also faulted the Republican plan, which he said would roll back gains California has made under the ACA.

“When it comes to making sure that the same number of Americans is insured, at the same level of affordability and with at least the same benefits, the GOP proposal fails on all counts,” Jones said in a news release.

5 Million Californians

California has embraced the ACA through its state run benefits exchange, Covered California, and a full expansion of Medicaid. About 1.3 million people have insurance through Covered California, and almost 4 million people are enrolled in Medicaid under the state’s expansion. The uninsured rate has dropped from 16 percent of residents to 7.1 percent since the ACA went into effect in 2014.

If California loses federal funds as expected under the Republican plan, the state can’t afford to keep the exchange or Medicaid expansion going on its own, the advocates said.

Potential Funding Loss

California could lose $15 billion in federal matching funds it now receives for the Medicaid expansion, according to state Medicaid officials. That total could rise because the per capita cap could shift even more of the cost of Medicaid onto the state as demand grows, the advocates said. California’s individual market is the largest in the country, both in its size and percentage of the total market, Wright said. Its scale means it is more sustainable than individual markets in other states, and it therefore is most vulnerable to the changes proposed in the Republican plan, Wright and advocates from other groups including Consumers Union and the California Pan Ethnic Health Network, said.

To contact the reporter on this story: Laura Mahoney in Sacramento, Calif., at LMahoney@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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