Kaiser Health News

One GOP Plan Says Calif. And Other States That Like Their Obamacare Can Keep It

January 24, 2017

By Chad Terhune and Pauline Bartolone

States could keep their federally funded insurance exchange with consumer protections intact under a proposal unveiled Monday by two Republican U.S. Senators.

Sens. Bill Cassidy, R-La., and Susan Collins, R-Maine, said their proposed legislation would allow states that embraced the Affordable Care Act to keep operating under many of the current federal rules.

Another option is for states to pursue a less regulated alternative to Obamacare under the Patient Freedom Act. Or they could reject federal dollars completely in favor of a new state solution for health coverage.

“We give states the option,” Cassidy said at press conference Monday. “California and New York — you love Obamacare, you can keep it.”

Some health law supporters say the Cassidy-Collins proposal, one of several in the GOP-controlled Congress, could represent a lifeline for states such as California that have invested heavily in expanding coverage under the Affordable Care Act.

But many Democrats at the state and national level criticized the plan as potentially harmful to millions of Americans who rely on the health law because it does not promise sufficient funding and consumer protections.

“It provides a somewhat illusory option to stay in the ACA without the guarantee of federal assistance necessary to allow states to maintain the level of coverage they are currently providing,” California Insurance Commissioner Dave Jones, an elected Democrat, said in an interview.

The Golden State fully implemented the health law by expanding Medicaid coverage to millions of low-income people and creating its own insurance exchange, which ultimately covered 1.3 million enrollees. Supporters have held California up as proof that the health law can work as intended — and as a counterpoint to Republican contentions that Obamacare is collapsing nationally.

Cassidy said his legislation promotes the Republican doctrine of states’ rights while avoiding the one-size-fits-all approach from Washington.

Collins echoed that sentiment, saying she favors letting states that had success with the health law maintain the status quo. She described it as “reimplementation of the ACA” in those states.

“If a state chooses to remain covered by the ACA, exchange policies will continue to be eligible for cost-sharing subsidies and advance premium tax credits,” Collins said in a speech on the Senate floor Monday. “The insurance market will still be subject to ACA requirements, and the individual mandate and employer mandate will also remain in place in that state.”

Cassidy and Collins acknowledged that details of their bill haven’t been worked out, nor is it clear how it will mesh with other proposals. Competing plans in Congress don’t envision these state options, and it’s unclear what approach President Donald Trump and his nascent administration will take in crafting a replacement plan.

Still, some industry experts and analysts say the Cassidy-Collins proposal is intriguing.

“The advantage to a state like California is we could protect what we have accomplished already,” said Howard Kahn, former chief executive of L.A. Care Health Plan, an insurer on the Covered California exchange. The large managed care plan serves patients in Medi-Cal, the state’s Medicaid program.

“Cassidy’s proposal could work for California better than other alternatives in the short term. The question is whether they maintain federal funding for the longer term,” Kahn said. “My feeling is you do have to engage with the rational Republicans who are trying to find something that doesn’t tear it all apart.”

Some key state lawmakers are more skeptical. “I’ll be surprised if it really happens,” said state Sen. Ed Hernandez, D-West Covina, chairman of the Senate Health Committee. “This is just one of many proposals.”

State Sen. Richard Pan, D-Sacramento, a pediatrician and former Assembly Health Committee chairman, said he was relieved to hear of a Republican proposal that backs federal subsidies, but was concerned about potential loss of funding at current levels. “It looks good on the surface” Pan said, but it’s important “to look at the details.”

Pan also said, however, that the bill could further the fragmentation of the health care system if some states keep Obamacare while others do not.

Covered California officials may weigh in on this Republican proposal and others at a board meeting Thursday. Executive Director Peter Lee didn’t respond to a request for comment Monday. After the November election, Lee emphasized that Covered California can show policymakers in Washington how to build a competitive insurance market.

California went beyond what other exchanges did. It chose to actively negotiate rates with insurers and didn’t allow every company to sell in its marketplace. It also simplified consumer shopping by requiring insurers to have standard copays and deductibles for each level of coverage.

Those moves pushed health insurers to compete more directly on price, and annual rate increases were a modest 4 percent in the first two years. Covered California’s rates are rising 13.2 percent, on average, this year. Still, that’s better than the 22 percent average rate hike in exchanges nationwide.

Walter Zelman, chairman of the public health department at California State University, Los Angeles, said it will be interesting to see whether state leaders try to negotiate with Republicans in Washington over funding levels.

“It’s not that Republicans don’t want people to have health insurance. They just don’t want to pay for it,” Zelman said. “It would be good for California to keep what it has and it would be much less disruption.”

Federal funding is a key issue for states. In a summary of the bill posted by Collins, it said states choosing to retain Obamacare or pick the Republican alternative could receive “funding equal to 95% of federal premium tax credits and cost-sharing subsidies, as well as the federal match for Medicaid expansion.”

Dylan Roby, an assistant professor at the University of Maryland School of Public Health, said “California would still have to absorb a 5 percent cut, at least, in the premium tax credits and cost-sharing subsidies.”

Republicans will need 60 votes in the U.S. Senate to pass a full replacement for the Affordable Care Act. At his press briefing Monday, Cassidy said his compromise approach is designed to win over some Democrats and reach that 60-vote majority.

In her speech on the Senate floor, Collins said children could still stay on their parents’ health plans until they are 26. There would be no discrimination against preexisting conditions and no caps on annual or lifetime coverage, she said.

Other key features of the legislation include a provision allowing states to automatically enroll eligible people in health plans unless they opt out. The plan also promotes health savings accounts and price transparency requiring hospitals and other providers to disclose costs so consumers can shop around for the best price.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

February 21, 2017

SACRAMENTO – Dr. Richard Pan, a former UC Davis faculty member and Director of the UC Davis Pediatric Residency Program, made the following statement regarding the selection of Gary May, Ph.D. as UC Davis Chancellor:

Senate Bill 267 to foster public trust in our political system by providing cost-effective oversight

February 9, 2017

SACRAMENTO – Dr. Richard Pan, a pediatrician and Senator representing the Sacramento region, announced today that he and Assemblymember Kevin McCarty have introduced a measure to allow the City of Sacramento to contract with the Fair Political Practices Commission (FPPC) to investigate and enforce the City’s campaign finance ordinance. 

SB 947 will focus staff time on moving families into the workforce and cut transportation expenses

September 29, 2016

SACRAMENTO – Senate Bill 947 to reduce red tape in the application process for the California Work Opportunity and Responsibility to Kids (CalWORKs) program was signed by the Governor today. 

Since 2009, applicants for the CalFresh program, which offers food to families in need, have had the opportunity to be interviewed over the telephone.  Conversely, applicants for the CalWORKs program must be interviewed in-person, even in counties that would rather conduct interviews over the phone to improve efficiencies and better utilize limited staff time.