Our state’s substantial progress in expanding health care coverage to millions of low- and middle-income Californians is now in jeopardy as President-elect Trump and Republican leaders in Congress prepare to make good on their promise to repeal the Affordable Care Act (ACA), also known as Obamacare.
Under the framework of the ACA, which President Obama signed into law in 2010, state policymakers vastly improved California’s system of health care coverage. Low-income parents and childless adults who previously were excluded from Medi-Cal (the state’s Medicaid program) became eligible for coverage, with the federal government initially paying the full cost of this expansion and committing to pay no less than 90 percent of the cost starting in 2020. In addition, the state launched a health insurance marketplace called Covered California, which allows residents who earn too much to qualify for Medi-Cal but lack access to affordable job-based insurance to shop for federally subsidized coverage. State policymakers also simplified Medi-Cal’s eligibility and enrollment rules and made other changes needed to carry out federal health care reform in California.
Because of California’s robust implementation of the ACA:
- The share of Californians without health care coverage has dropped by more than half since 2010. California’s uninsured rate declined from nearly 19 percent in 2010 to 8.6 percent in 2015, according to the most recent figures from the US Census Bureau’s American Community Survey (ACS). (The number of Californians who lacked coverage dropped from 6.8 million to 3.3 million over this five-year period.) This expansion of health care coverage has benefited a diverse range of Californians, as we reported in a new fact sheet released today. However, these gains would largely be erased if Trump and his allies in Congress succeed in repealing the ACA — or at least rolling back significant parts of it.
- More than $20 billion in ACA-related funding flows from the federal government to California each year. This federal funding estimate is based on a Budget Center review of the most recent publicly available data. It includes more than $15 billion for Medi-Cal, most of which supports the expansion of coverage to low-income parents and childless adults. This federal funding estimate also includes around $5 billion in federal premium and cost-sharing subsidies for consumers who buy health insurance through Covered California. These federal dollars flow to doctors, clinics, and other health care providers in communities throughout the state, boosting local economies and supporting vital health care services for millions of Californians. Much, if not all, of this federal funding would disappear if the ACA goes away, creating an enormous funding gap in California’s health care system.
Fully repealing the ACA wouldn’t be easy. For one thing, Republicans hold only 51 seats in the U.S. Senate — far short of the 60 votes needed to end a Democratic filibuster. This reduces the likelihood that a bill to entirely roll back federal health care reform would make it to the President’s desk. Another problem for Republicans: Disagreements have emerged over whether some parts of the ACA should remain in effect. For example, Trump now suggests that he’d be open to keeping the provision that prevents insurance companies from denying coverage due to a pre-existing condition. Some Republicans are also concerned that terminating affordable health care coverage for more than 20 million people — this includes several million Californians — would create a backlash that reverberates into the 2018 midterm elections.
Yet, despite these potential stumbling blocks, efforts to roll back or at least significantly damage Obamacare are likely to move forward soon after Trump moves into the Oval Office in January. Even without a filibuster-proof supermajority in the Senate, Republicans have various options for attacking the ACA. For example, they could avoid a Democratic filibuster by invoking a budget procedure that allows certain bills to be passed with just 51 votes in the Senate. Republicans could use this rule to cut federal funding for the Medicaid expansion and phase out the federal subsidies that reduce the cost of coverage purchased through state’s health insurance marketplaces, such as Covered California.
Republicans could do even more damage by placing an annual cap on federal Medicaid spending. This line of attack could involve creating a fixed Medicaid block grant for each state. Annual caps on federal spending “would lead to large and growing cuts in state Medicaid programs … potentially placing millions of low-income Americans at risk of losing part or all of their health coverage,” according to our colleagues at the Center on Budget and Policy Priorities.
What would replace the ACA if large parts of it are wiped off the books? No one knows. Trump has provided few details on what a replacement plan might look like. Moreover, despite passing more than 50 bills to repeal the ACA in recent years, Republicans in Congress have never developed a fully vetted alternative plan. Without such a plan, analysts can’t assess how many people would lose coverage and how much of the cost of providing affordable health care coverage would be shifted from the federal government to California and other states.
Any effort to repeal the ACA, in whole or in part, will meet vigorous resistance. Health care advocates in California and around the nation are already mobilizing to save the ACA or, failing that, to limit the damage that Trump and congressional Republicans can do. These advocates may find allies among the doctors, hospitals, and other health care providers who would be directly affected by an attack on Obamacare. Governor Brown and state lawmakers, who are deeply committed to ensuring the success of federal health care reform in California, will also play a key role in defending the ACA. If the worst does come to pass and the ACA is repealed or substantially weakened, state policymakers will face difficult choices about how to mitigate the damage and preserve a health care lifeline for millions of Californians.