California fought for Obamacare and won. What’s at stake?

The Affordable Care Act was signed into law in March 2010 and was fully implemented in 2014. The law did several things, among them: 

• Prohibited insurance companies from denying coverage to people with preexisting conditions 
• Required that insurers cover young adults on their parents’ plans up to age 26
• Eliminated annual and lifetime limits on coverage  

The law also allowed states to choose whether to expand their Medicaid programs for low-income people, meaning more could qualify.  And notably, the act created state-based marketplaces, such as Covered California, where people shop and enroll in health insurance. Through these marketplaces people can access federal subsidies that help keep their premium costs down. In California, enrollees may also qualify for state-based aid. 

Eliminating the Affordable Care Act without any replacement from Congress would cause more than 5 million people in California to lose their subsidized insurance or their Medicaid coverage (Medi-Cal in this state) through the program’s expansion, which some state officials have called a disaster during a pandemic. 

California’s rate of people without insurance dropped from 17.2% in 2013 to 7.7% in 2019. By comparison, Texas, which wants to eliminate the law, continues to have the nation’s highest percentage of uninsured residents. Its uninsured rate dropped from 22.1% in 2013 to 18.4% in 2019. 

California v. Texas, brought by 18 Republican attorneys general and backed by the Trump administration, questioned the validity of the act’s individual mandate, which required most citizens and legal residents to have health insurance or pay a penalty. The mandate was intended to get young, healthy people to sign up and offset the cost of sicker people.

Critics contend that requiring coverage is unfair, and that a tax penalty is a burden to families. The mandate was the most unpopular part of the law, according to polls. 

In its 2017 tax bill, Congress eliminated the tax penalty associated with not having insurance (California later implemented its own penalty.) The Republican attorneys general argue that with no fine, the federal mandate is invalid— and therefore, so is the entire law.  

Today’s ruling came seven months after the Senate confirmed a new U.S. Supreme Court  justice. Democratic lawmakers unsuccessfully pushed back on replacing the late Justice Ruth Bader Ginsburg with now Justice Amy Coney Barrett, arguing that a more conservative court would likely lean against the law. Coney Barrett, however, joined the majority in voting to uphold the health law. In their opinion, the majority wrote that the plaintiff’s argument did not have legal standing.

As medical experts continue to learn about the lingering health effects of COVID-19, policy experts are raising another concern — that insurers could classify coronavirus as a preexisting condition. 

That means that if Obamacare’s protections for people with preexisting conditions had gone away, hundreds of thousands of Californians who have tested positive for the virus could potentially find themselves with pricier coverage — or none at all. (There are no preexisting condition limits for people on Medicare, which primarily covers people 65 and over.)

Researchers at the Commonwealth Fund estimate that nationally, about 3.9 million adults under age 59 have had COVID-19 and had no prior condition. COVID-19 has been linked to damage of the lungs, heart and other organs. The uncertainty of how vast these effects could be is enough for insurers to want to label coronavirus as a preexisting condition, the Commonwealth researchers say.

In California, Latinos experienced a bigger drop in the rate of uninsured than any other racial or ethnic group following the health law’s implementation. Still, Latinos continue to have the state’s largest uninsured rate  — partly because Latinos make up most of the state’s undocumented community, who are not allowed coverage under the law. (Children and young adults up to age 26 can access the state’s Medi-Cal program, regardless of immigration status.)

Latinos also have been disproportionately affected by the coronavirus pandemic. According to data from the Department of Public Health, Latinos make up 60% of the state’s coronavirus cases and almost half of related deaths, even though they are less than 40% of the state’s population. 

To complete the trifecta, Latinos, along with Blacks, also are more likely to be affected by COVID-induced layoffs. 

“The ACA covered millions of people and reduced the racial and ethnic disparities in health coverage in California,” researchers at the UC Berkeley Labor Center and UCLA Center for Health Policy Research wrote in a recent publication. “(T)o take away these coverage options especially during a global pandemic and recession would exacerbate racial and ethnic inequality in California.”

Losing the Affordable Care Act without a replacement would have also meant losing federal funding: California gets an estimated $25 billion in federal dollars from the health law, according to the Legislative Analyst’s Office.

The state would need to make “very serious and perhaps difficult decisions” of how to respond to such a funding loss,  said Ben Johnson of the Legislative Analyst’s Office.

Republican Sen. Melissa Melendez of Lake Elsinore, vice chair of the state’s Senate health committee, told CalMatters in November she was concerned the state would try to make up for losses in finances by increasing taxes on businesses and individuals.

“At some point, the Democrats need to face the reality that California taxpayers and the federal government may not be there to pay the credit card bill coming due,” she said.

The Affordable Care Act helped create thousands of jobs. As more people gained coverage and sought care, the demand for health workers rose. 

The UC Berkeley Labor Center projects that overturning the law could cost the state some 269,000 jobs — primarily in the health care industry. That includes jobs at hospitals, clinics, doctors’ offices, labs and insurance companies. Others affected could include suppliers to the health care sector, such as food operations, janitorial services and accounting firms. 

Dr. Efrain Talamantes has seen the Affordable Care Act play out in his office and community. Based in East Los Angeles, he’s an internist and chief operating officer for AltaMed, one of the largest health centers in the country. Talamantes said because of the health law and the funding that comes with it, AltaMed has been able to build new clinics and bring more providers where needed. Many more of the health center’s patients are also now insured, largely because of  the center’s own enrollment efforts.

A growing organization, AltaMed has been able to provide coronavirus testing to more than 65,000 people in Southern California since March, Talamantes said in early October.  “My concern is that turning our backs on the ACA will dismantle the infrastructure that is helping us fight this pandemic,” he said. 

Pulling the health law now could also stunt the health progress Talamantes expects from his patients with chronic conditions — being insured prompts them to seek regular care and stay on top of their medications, he said. “Things like diabetes and hypertension, it takes about 15 years to start seeing favorable outcomes, and we’re not there yet,” he said.

California has taken steps to strengthen and expand coverage even beyond what the federal law requires. For many Democratic lawmakers, this is a source of pride and another example of how California leads the nation. But there is a limit to the state’s power and resources. 

“If the Supreme Court were to invalidate the Affordable Care Act, and Congress did not act to step in and put something in place to fix it, California cannot solve the gaping shortage of finances,” Peter Lee, director of Covered California, said in November.

His agency spent about $140 million in advertising a new enrollment period. Recently, Covered California announced that it will keep the sign up window open for the remainder of the year. 

California is also looking to expand coverage in general. While the governor and the legislature are in the middle of negotiating a final budget, both have proposed opening the state’s Medi-Cal program to thousands more people through expansions and eliminating some eligibility restrictions.  

Experts expect President Joe Biden to expand on what’s already in place. 

As part of Biden’s American Rescue Plan, the federal government enhanced the financial aid available to people who buy health insurance off the marketplaces — $3 billion in new subsidies for Californians.  Covered California estimates about 2.5 million people in the state could benefit from the expanded aid, including about 810,000 uninsured people. The new financial help is good for two years.