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Santa Barbara County Faces Uncertain Future with Affordable Care Act Health Care Changes

The one thing that’s certain about the potential Affordable Care Act repeal-and-replace process is that it’s unpredictable, but could have major impacts on the Santa Barbara County health-care system and patients.

Since the health-care law known as Obamacare took effect in 2014, the county saw an increase in the number of people with health insurance coverage and experienced a jump in demand for doctor visits.

The number of patient visits rose dramatically at the county Public Health Department’s eight clinics, the largest provider of Medi-Cal health services.

In 2013, county clinics treated about 30,000 patients per year, about 12,000 of whom were on Medi-Cal.

That number went up to 35,000 in 2016, with the number on Medi-Cal skyrocketing to 23,000, said Dr. Charity Dean, the county’s health officer. There were 109,000 clinic visits last year, she added. 

County clinics only accept patients who are uninsured or are on Medi-Cal (California’s version of Medicaid) or Medicare. Dean said about 70 percent of clinic patients are on Medi-Cal.

The county estimates about 11,000 of its patients have coverage because of the ACA, she added.

With a Republican-controlled Congress and a Republican president who campaigned specifically to repeal and replace Obamacare, the attempt to do so is inevitable.

The repeal process has already started. Both the Senate and the House of Representatives approved a budget resolution in mid-January that will allow future repeal legislation to go through the budget reconciliation process, which doesn’t allow filibusters of the sort that minority Democrats are certain to attempt.

It’s unclear if Republicans will pursue a repeal before a replacement plan is ready, or try to pass legislation simultaneously.

At the moment, Republicans seem to have no consensus on how to do that or what a replacement plan would look like. Previous Republican proposals that could serve as blueprints include ones from House Speaker Paul Ryan, R-Wis., and Rep. Tom Price, R-Ga., whom President Donald Trump has nominated to serve as health and human services secretary.

Some of the key components of the Affordable Care Act are the individual mandate — which requires most citizens and legal residents to have health insurance and levies a tax penalty for those who don’t — and state health insurance exchanges (including Covered California) for individual and small business insurance plans.

The law provides tax credits for purchasing insurance and implemented new health insurance regulations, including extending dependent coverage to age 26 (so children can stay on their parents’ plans longer); prohibiting the exclusion of people with pre-existing conditions from being eligible to purchase plans; requiring 10 essential health benefits be covered by all individual and small group plans; mandating that no-cost preventive benefits be covered by insurance plans; and allowing companies to vary premiums based only on age, tobacco use and geographic location.

The provision expanding Medicaid eligibility has resulted in tens of thousands of Santa Barbara County residents getting health insurance. Eligible Californians can qualify based on income being below 133 percent of the federal poverty level, regardless of health or family status.

“As of December, Santa Barbara County had about 29,000 people eligible for Medi-Cal through the ACA Medicaid expansion,” CenCal Health CEO Bob Freeman said.

While the county had a total of 122,000 people enrolled at the end of last year, CenCal, the Medicaid administrator for Santa Barbara and San Luis Obispo counties, had 180,000 total enrollees in the same period.

“It’s hard to know what they’re going to do because they’re all saying repeal and replace, and we don’t know what the replacement is,” Freeman said of Trump and congressional Republicans.

“I would be concerned about all those people who were insured and are still sick, and keep going to the hospitals and community clinics but those places would not have any payers,” he added.

“The ACA has done a great job encouraging people who didn’t have insurance to go to the clinic instead of the ER when they’re sick. Now that they’ve learned how to do that, we’re going to pull the rug out from under them.”

If the mandate is dropped, Freeman noted, it will have a huge impact on the market because sick people would rush to get insurance and young, healthy people would likely stay away.

“There are not enough healthy people to offset the cost of the sick people,” he said.

Many of the ACA’s programs and policies would be eliminated under repeal proposals put forward by Ryan and Price in the past. Both plans propose repealing the individual and business insurance coverage mandates, eliminating insurance subsidies, eliminating the minimum benefits insurance companies are required to cover, and changing or eliminating the Medicaid expansion.

Price’s Empowering Patients First Act, HR 2300, was introduced in 2015 and proposed a complete repeal, including the mandates, subsidies, minimum benefits to be covered and the Medicaid expansion.

It would include tax credits for people to purchase insurance on the individual market, state high-risk pools with federal grant support for three years, and encourage the use of health-savings accounts.

Ryan’s A Better Way plan, a policy paper released last June, also proposed repealing the mandate and adding new health insurance regulations and coverage requirements. It would keep some of the most popular portions of the ACA — extending dependent coverage to age 26 and prohibiting pre-existing condition exclusions. It also would encourage the use of health savings accounts, create high-risk pools with federal grant support, and change how Medicaid is funded.

Ryan’s plan proposed raising the age of Medicare eligibility to 67.

The Congressional Budget Office has estimated the impact on insurance coverage and premium costs for Price’s Restoring Americans’ Healthcare Freedom Reconciliation Act, which then-President Barack Obama vetoed a year ago.

The measure proposed eliminating the insurance mandate, penalties and subsidies, while keeping market reforms intact (like the essential health benefits and selling to people with pre-existing conditions).

The CBO estimated that, if the bill were implemented, premium prices would double and 32 million more people would be uninsured by 2026.

In a report last month, the CBO concluded that there would be 18 million more uninsured people in the first new plan year following ACA repeal. After the elimination of the Medicaid expansion and subsidies for insurance on ACA marketplaces, that number would increase to a total of 32 million more uninsured people in 2026, according to the CBO.

Most of the reductions in insured people would come from repealing the penalties, the CBO determined. Some insurers would leave the individual insurance market, and approximately 10 percent of the population would live in areas with no participating insurer in the nongroup market.

Premiums in the individual policy market were estimated to increase by 20 percent to 25 percent, relative to projections under current law, in the first year and 50 percent in the year after eliminating the Medicaid expansion, the CBO concluded. Premiums would about double by 2026.

Noozhawk managing editor Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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