Senate Convenes Informational Hearing on Threats to the Affordable Care Act

This week, the Senate Health Committee convened an informational hearing entitled “The Affordable Care Act in Jeopardy: What does it mean for California?” bringing together several experts and consumers to discuss what would happen in California if the Affordable Care Act (ACA) is struck down by the US Supreme Court. The hearing featured several panels providing perspectives on the ACA including an overview, the law’s legal status and potential impacts on California if the law is repealed, a consumer panel, a health provider panel, and a panel representing consumer advocates and business representatives.

The first panel included health expert Deborah Reidy Kelch, former Executive Director of the Insure the Uninsured Project (ITUP) and legislative staffer and Melanie Fontes Rainer, representing California Attorney General Xavier Becerra. Ms. Kelch provided a broad overview of the ACA noting that the rate of uninsured Californians declined from 29 percent when the ACA first passed in 2013 to 11 percent by 2017. She also commented that according to the UC Berkeley Labor Center, California could stand to lose $27 billion in federal funding if the ACA is repealed or struck down. Ms. Fontes Rainer explained the pending lawsuit at the Supreme Court, California v. Texas. She outlined the three arguments California’s Solicitor General, Michael Mongan, will be arguing before the Supreme Court next month:

• No plaintiffs in the case have standing to file suit
• Despite congressional changes to the individual mandate tax penalty, what remains of the individual mandate is constitutional
• Even if the court decides the zero-dollar individual mandate tax penalty is unconstitutional, the penalty is severable from the rest of the ACA

Following the opening panel, the second group focused on how the ACA currently operates in California and what could happen if the ACA is struck down. Panelists included Peter Lee, Executive Director of Covered California, Jacey Cooper, Chief Deputy of Health Care Programs, Department of Health Care Services (DHCS) and Medicaid Director, and Ben Johnson, Principal Fiscal and Policy Analyst, Legislative Analyst’s Office (LAO). Mr. Lee commented that with Covered California’s open enrollment period about to commence, there are 1.5 million Californians renewing their enrollment in the health exchange next year – an all-time high. He also noted that California receives $7 billion in federal premium subsidies, which makes healthcare more affordable for many Californians. Ms. Cooper discussed how the Medicaid expansion has significantly helped millions of low-income Californians and is particularly invaluable during a pandemic. She noted that 3.8 million adults are now on Medi-Cal as part of the ACA’s expansion to low-income childless adults and with the ACA’s simplified eligibility rules, 5.2 million children are now covered by Medi-Cal. In addition, if the law is eliminated, California’s counties and safety net hospitals will be significantly impacted as well as mental health, substance use disorder, IHSS, family planning, and 340B programs among others. Ben Johnson from the LAO provided an overview of the fiscal impacts, including a loss of $25 billion annual fiscal loss to California with significant impacts on California’s $400 billion health care system with the most severe impacts on California’ healthcare safety net providers in addition to millions of healthcare consumers. Mr. Johnson also noted that disruptions to the coverage provided by Covered California, where 1.2 million receive $7 billion in premium support, would cause subscribers to bear a much more significant amount of their healthcare costs with many likely to drop their coverage. California would also lose federal funding from the ACA’s Prevention and Public Health fund that supports immunizations, epidemiological and lab capacity, chronic disease prevention programs, and tobacco prevention and cessation programs.

The third panel included three Californians who discussed their experiences with the healthcare system and serious health conditions for themselves or their children, and what the elimination of the ACA would mean for them and their families in the future. Representing California’s healthcare system, three panelists representing a public hospital, a rural health clinic, and a safety net system physician discussed what the loss of the ACA will mean to their health systems, patients and communities. The fifth and final panel, representing consumer healthcare advocates and business representatives, including the California Chamber of Commerce, talked about the difficulties in obtaining care prior to the ACA given preexisting conditions, the disproportionate impacts of the coronavirus on communities of color, and potential disruptions to employer-based coverage as well as all Californians regardless of where they receive their health insurance.

During committee member questions, Senator Rubio asked the state panelists, assuming the ACA is struck down, what would California have to do? Jacey Cooper responded that DHCS is holding some contingency planning discussions; however, she said it will depend on extensive discussions/decisions with and from the Centers for Medicare and Medicaid Services (CMS), but would also include difficult state budget discussions. She noted the federal government would have to provide for a transition period. Peter Lee commented contingency planning is like adding lifeboats to the Titanic, and he said Covered California is focused on enrollment for next year and assuring California consumers they will have coverage for the foreseeable future. Dr. Pan asked the LAO about the ongoing cuts by the federal government to the Public Health and Prevention Fund. Ben Johnson concurred that cuts have significantly reduced the reach of funding from the Prevention Fund, but he also noted the loss of current Prevention Fund allocations would impact epidemiology and lab capacity as well as other prevention programs statewide. Dr. Pan closed with impassioned comments about how the ACA has provided freedom from fear for many Californians and the freedom to make different career choices, and will the Supreme Court take away that freedom.

The agenda from the hearing is available here. A background paper is available here. A video recording of the hearing is available here.