Health reform already affecting most Californians

March 23, 2012

Unless the Supreme Court strikes it down, most of the Affordable Care Act is likely here to stay

By Daniel Weintraub
California Health Report

Today marks the second anniversary of President Obama’s signing of the federal health reform law. Supporters have been celebrating all week. On Monday, opponents of the law will go before the United States Supreme Court to ask that the law be struck down as unconstitutional.

But while its future may seem uncertain, the Affordable Care Act is already affecting the lives of millions of Californians — expanding access to insurance, and care, for people who had been falling through the cracks.

The most controversial piece of the law – its mandate requiring most Americans to obtain insurance coverage – does not take effect until Jan. 1, 2014. The mandate is at the heart of the legal challenge, and supporters say that the Act cannot survive without it.

That may be true. But the mandate, no matter how important, is just one part of the law, and most of the pieces that have taken effect so far are much more popular.

One is a requirement that insurance companies let families keep their adult children on their policies until age 26. Before the law was passed, adult children who were not in college were typically knocked off their parents’ family coverage, and many then went without insurance. It’s estimated that more than 350,000 young California adults are taking advantage of this provision to keep their coverage.

Another major change is a provision prohibiting insurance companies from denying coverage to children with pre-existing medical conditions. Once this rule took effect, some insurers doing business in California said they would simply stop selling kids’ coverage. But a new state law now requires them to sell those policies if they want to sell any insurance here. So families with sick kids now find it easier to get coverage for them.

Adults with pre-existing conditions can still be denied private coverage, until 2014. But in the meantime, California, using new federal money, has expanded a high-risk pool for people who have been shut out of the private insurance market. Nearly 9,000 people who were without coverage before have been accepted into that program.

Every Californian with private coverage is also benefiting from other parts of the law. One provision prohibits insurance companies from imposing lifetime limits on the costs that people can have covered. Another phases out the annual limits on costs that many insurers have included as part of their policies. Still another piece of the law requires insurance companies to provide preventive care without out-of-pocket costs.

And there is more. A major goal of the Act is the expansion of coverage for low-income Americans who have not received coverage through work, could not afford to buy it on their own but did not qualify for public programs designed for the very poor.

With new federal money, California counties are creating or expanding what are known as Low-Income Health Plans, similar to the Medi-Cal program, but for people with higher incomes or who do not have children. So far, more than 300,000 people in 47 counties have been enrolled in these programs. In 2014, they will become part of Medi-Cal, and the federal government will continue to pick up the cost of their care.

California has also begun implementing what could become the most important piece of the new health care system: the creation of a Health Benefit Exchange. This will be an online marketplace where businesses and individuals can shop for coverage. The plans will be standardized and grouped into levels of coverage – gold, silver, bronze – so that consumers can see clearly what benefits are available and how much each plan would cost, including deductibles and co-payments. Subsidies will be available for consumers with incomes up to four times the federal poverty level, or nearly $90,000 a year for a family of four.

The Exchange is expected to facilitate coverage for several million Californians who don’t have insurance now. Others will move to the Exchange if they lose employer-based coverage. Health insurance experts expect some employers to drop their coverage once the Exchange becomes a viable alternative for their workers, despite financial penalties for doing so. Eventually, the state-run marketplace could become the biggest seller of insurance in California.

All of this has been done without the mandate on individuals that will be the subject of next week’s Supreme Court hearings.

The court is expected to rule on the case in June, and unless the justices strike it down completely, the issue will probably be a big part of the presidential campaign later this year. Republicans have vowed to repeal the law if they get the chance, even though their likely nominee, Mitt Romney, signed a very similar plan when he was governor of Massachusetts.

But even if Romney or another Republican is elected president and the Republicans take control of the US Senate, it’s unlikely they will follow through with their threat to repeal the entire law.

Many pieces of the Act are popular even with Republican voters and the business community, and the parts expanding coverage for the poor are really more about the safety net than insurance.

So unless the Supreme Court invalidates the entire law, the Affordable Care Act, or most of it anyway, is probably here to stay.

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