Health & Fitness

Health advocates fear impacts to hospitals, safety-net despite changes to GOP repeal plan

Peter Lee, second left, the executive director of Covered California, poses with enrollees in the state-run health insurance exchange, in front of Los Angeles City Hall, Nov. 14, 2014.
Peter Lee, second left, the executive director of Covered California, poses with enrollees in the state-run health insurance exchange, in front of Los Angeles City Hall, Nov. 14, 2014. New York Times

Republican leaders made more changes to their proposed legislation to replace the Affordable Care Act, though the amendments didn’t impress advocates who want to preserve the gains of Obamacare in California.

House Speaker Paul Ryan called for more support in the bill to make insurance affordable for older adults. In addition, the changes would accelerate tax cuts for the wealthy and health care corporations, give states more flexibility in spending health care funds and allow them to tie work requirements to Medicaid benefits.

The House of Representatives is set for a vote Thursday on the “repeal and replace” legislation.

“All of the fundamental problems of the House bill are not addressed,” said Edwin Park, vice president of health policy for the Center on Budget and Policy Priorities.

The impact on the Medi-Cal program and safety-net system is of paramount concern in California, where 14 million children and adults rely on the health program, and in Stanislaus County, which has 45 percent of its population in the program.

Beside phasing out the Medicaid expansion, which added 3.5 million residents to the Medi-Cal rolls in California, the GOP would fundamentally change federal funding for state Medicaid programs, by giving a set amount per enrollee or providing block grants. California’s Medicaid program is called Medi-Cal.

Health advocates warn the state will have to cut back on services for parents and children, and safety-net hospitals will experience serious cuts in Medi-Cal funding.

“Since this bill would cut Medicaid, a major funding stream, by 25 percent, many California hospitals will see cuts of tens of millions of dollars, meaning reduced services and staffing for all who go there,” said Anthony Wright, executive director of Health Access, a leading defender of the ACA.

Citing estimates from the California Association for Public Hospitals, Wright said that San Joaquin General Hospital in French Camp would lose $50 million in annual Medi-Cal funding and the changes would mean $72 million in less funding for UC Davis Health, which accepts patients from all over the Central Valley.

Jan Emerson, spokeswoman for the California Hospital Association, said the cap on federal funding for Medi-Cal is projected to increase bad debt and charity care for hospitals in California by $3 billion. “Our concern is that the plan would really undo some significant advancement in getting coverage for people in California,” Emerson said.

Doctors Medical Center of Modesto issued a statement Tuesday, saying it favors preserving the ACA’s progress made in expanding insurance coverage, which has brought the uninsured rate to historic lows. The hospital said it would not comment further until details of the GOP plan are reviewed.

A staff member for Rep. Jeff Denham, R-Turlock, said the congressman will issue a statement on the replacement bill after Thursday’s vote.

In Stanislaus County more than 18,000 residents were insured through Covered California, the insurance marketplace created by the ACA, and about 65,000 were enrolled in Medi-Cal after eligibility was expanded in 2014.

The Republican plan would offer more for moderate-income families and consumers who lack employer-based coverage, by broadening tax credits to lower their premiums. In addition, it would promote other coverage options such as health savings accounts and do away with the individual mandate that currently requires people to have insurance or pay a penalty.

According to the Kaiser Family Foundation, the age-based tax credits under the American Health Care Act would be an annual $3,000 for a 40-year-old resident of Stanislaus County earning $30,000 a year, or $400 higher than tax credits through the ACA, which are based on income, age, family size and the region where people live.

A 40-year-old earning $40,000 a year would receive a $3,000 tax credit from the GOP plan, compared with $1,000 from the ACA. With the Republican plan, adults earning up to $75,000 a year would be eligible for $2,000 to $4,000 in tax credits, depending on their age; the credits would phase out between $75,000 and $115,000 in annual income.

A 40-year-old county resident with $100,000 in annual income could receive a $500 tax credit with the GOP bill. Under the plan, a family of four with $102,500 in annual income could see their premium drop from $1,350 to $517 a month, according to Covered California.

“No one wants to give it a chance,” said Leonard Silva, a Turlock resident who says the ACA needs to be replaced because of costs to taxpayers. “The Obama plan is going down hill. It is falling apart.”

The original Republican bill threatened to make coverage unaffordable for people in their early 60s who don’t yet qualify for the Medicare program for seniors age 65 and older.

The rates would triple from $209 to $668 a month for a 62-year-old woman in Northern California earning $30,000 a year, according to Covered California. And lower-earning families would be vulnerable to higher premiums partly based on the region’s steep costs of health care, with a family of four with $40,000 in annual income faced with a $345 monthly premium increase.

Low-income single adults age 27 to 40 are faced with about $115 increase in monthly premiums under the GOP plan.

Ryan said he would let the Senate write provisions giving more assistance for older adults. California can shield itself against some aspects of the GOP legislation, such as a rule allowing insurers to charge five times more to older adults who are more prone to health issues than younger adults, Wright said. A rule allowing insurers to charge three times more to older customers is written into state law, Wright noted.

In Stanislaus County, some people are concerned the limited funding for Medi-Cal under the GOP plan could result in the state cutting back on mental health services.

“People who have mental health benefits through Medi-Cal are almost in a better position as people who have private insurance, because they have access to a greater choice of psychiatrists,” said Jack Waldorf, chairman of the county Behavioral Health Board. “I think the ACA should stay in place. I see a lot of problems with the Ryan proposal.”

Jen Flory of Western Center on Law and Poverty said the ACA resulted in a streamlined application for getting people into the appropriate health program and made it easier to stay in programs. But that could be undone with the GOP bill.

It also would lower a Medi-Cal cap on home equity for people needing nursing home care, forcing people to sell their home and spend assets to get into a nursing home, Flory said.

Stanislaus County leaders are aware the county will have budget costs if it needs to restore an adult indigent health program with repeal of Obamacare.

Under a state enacted in 2013, state funding for county indigent health was routed back to Sacramento and about 9,000 adults in the county program were enrolled in Medi-Cal, thanks to the expanded eligibility in the ACA. In the previous year, the expenses in the county indigent health program ran $6 million over the normal funding for the program.

The county still has an obligation to provide an indigent program in the Welfare and Institutions Code and may have to restart the program if single adults are barred from enrolling in Medi-Cal under the GOP plan starting in 2020. “We are watching and trying to follow what the implications might be,” said Mary Ann Lee, director of the county’s Health Services Agency.

Ken Carlson: 209-578-2321, @KenCarlson16