California Could Lose Out More Than Other States If Affordable Care Act Overturned

Five days after the November election, the Supreme Court is set to rule on a case that could overturn the Affordable Care Act. In California, which whole-heartedly embraced the landmark health statute, advocates say the end of the act could mean millions of low-income people lose their insurance or face higher costs for care.

Established by President Barack Obama’s administration in 2010, the ACA — sometimes referred to as Obamacare — significantly expanded eligibility for Medicaid, the government-subsidized health program that was formerly only available to pregnant women, children, disabled people and elderly people. 

The law also made it illegal for health insurance companies to deny people insurance or charge them more for coverage due to a pre-existing condition. It also allowed states to create their own federally supported health insurance exchanges for low and middle-income residents hoping to buy on the individual market. 

What Could Happen To Californians

California expanded Medicaid eligibility under the ACA more than any other state, and would risk the most people losing coverage if the law was overturned.

The number of uninsured people in the state decreased from 6.5 million people in 2012 to 3.5 million people in 2017 as health advocates urged middle and low-income people to sign up for Medi-Cal and Covered California, the marketplace created under Obamacare. 

“California not just implemented but improved upon the law,” said Anthony Wright, executive director of consumer advocacy group Health Access. “Just as we took advantage to gain the most under the Affordable Care Act, we in California have the most to lose from the Affordable Care Act being struck down.”

How easily people can afford insurance on the marketplace depends heavily on how much the federal government chips in to help people pay their premiums. About 1.2 million people statewide were receiving that federal help in June 2019, according to Covered California. If the statute is overturned, California stands to lose $27 billion in federal assistance that currently goes toward subsidizing premiums and supporting expanded Medi-Cal eligibility.

Experts say if the state can’t backfill that assistance, they might have to adjust Medi-Cal eligibility. That means people who’ve been eligible for Medi-Cal since the ACA took effect could lose their insurance because the state wouldn't be able to pay for their coverage. It also means people who've been affording Covered California with federal help would see much higher premiums and may opt to ditch their plans.

California still has a requirement that people carry health insurance, so anyone who became uninsured in a post-ACA world would likely still have to pay the state a fine. 

The Legal Challenge

At issue in the Supreme Court case is the federal requirement that people carry health insurance, also known as an individual mandate. In 2017 the Trump administration eliminated the financial penalty for not carrying insurance, while keeping the requirement language in place. A group of Republican attorneys general is now arguing that since the fine has been zeroed out, the whole statute is invalid.

California Attorney General Xavier Becerra attempted to refute that argument at a press conference Thursday.

“Even if you zero out the money in the individual mandate, why should 133 million people lose their protections against discrimination based on pre-existing conditions?” he said. ‘Why should seniors no longer have better coverage for prescription drugs and better access to preventive care? Why should young people under the age of 26 who are on their parents' insurance lose that insurance?”

Experts say the Supreme Court is more likely to overturn the ACA if nominee Amy Coney Barrett is confirmed, both due to the fact that a tie would be less likely and based on her previous record with health care. 

“There are indications from her past writings and statements that make people concerned that she would support overturning the ACA,” said Laurel Lucia, health care program director with the UC Berkeley Labor Center.

How California Might Respond

Lucia says the state would likely make efforts to backfill losses in that scenario, but it will be especially difficult during the pandemic. 

“If the ACA is overturned, policymakers would be facing a lot of hard decisions about how to respond,” she said. “Over $28 billion in federal funding would be very difficult for the state to replace.”

The ACA roughly halved the number of African American and Asian Americans in California who are uninsured, according to the California Pan Ethnic Health Network. Latinx Californians also gained coverage under the policy, though the reduction was less dramatic because undocumented adults age 26 and over are still ineligible for Medi-Cal.

Representatives from LGBTQ groups also spoke at the Thursday preference about the protections for gender transition care that would disappear in a post-ACA world, and Planned Parenthood staff laid out how access to contraception and other forms of reproductive care could be limited if the Supreme Court strikes down the law.