Calif. state officials breathe easier after health ruling

3:09 PM, Jun 28, 2012   |    comments
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Gannett Washington Bureau

WASHINGTON - With the Supreme Court largely upholding President Barack Obama's health care law, California state officials Thursday no longer feared having their groundwork for it go for naught.

RELATED STORY: Supreme Court upholds 'Affordable Care Act'

Gov. Jerry Brown, a Democrat, called it a "dramatic" decision that "removes the last roadblock to fulfilling President Obama's historic plan to bring health care to millions of uninsured citizens."

"No state in the nation had more at stake in this decision," added Anthony Wright, executive director of Health Access California, a health care advocacy group in Sacramento.

The law takes full effect in 2014 and, in preparation, California was one of the first states to establish a health insurance exchange, a kind of clearinghouse through which insurance companies will compete to offer policies to individuals and small businesses.

In all, the state has passed close to a dozen bills over the last two years to prepare for its full implementation. The California Health Care Foundation recently reported stated officials were preparing to "rethink everything" if the Supreme Court struck down the law.

But now California will receive an estimated $14.5 billion in federal funds annually to increase coverage -- $5.5 billion to help low and middle-income residents purchase insurance in exchanges and $9 billion to insure newly eligible beneficiaries in Medi-Cal, the state's Medicaid program, Sen. Dianne Feinstein, D-San Francisco, announced in a statement.

Medicaid is the federal-state effort to provide health care to the poor.

"I realize that passage of health care reform was extremely controversial," Feinstein said. "But we cannot forget that insuring fellow Americans and driving down the exploding cost of health care spending in this country is a national emergency."
Of California's 38 million residents, between 6 million and 8 million lack coverage at any one time.

Because the law in 2014 vastly expands Medicaid and provides health insurance subsidies to others with low incomes, at least one-half to two-thirds of Californians who lack coverage will gain access, Wright said.

Millions more, he said, will benefit from the law's numerous consumer protections.

Some already in effect allow young adults to stay on their parents' insurance until age 26, give small businesses tax credits to help pay for employees' insurance, require insurers to pay a minimum portion of premiums on medical claims, and phase out gaps in Medicare prescription drug coverage.

The one part of the Supreme Court ruling that did not completely go Obama's way involved Medicaid. The court said the federal government could not mandate that states expand their programs to include those up to 133 percent of poverty. It struck down a provision that would have enabled Washington to withhold all Medicaid funds from states that failed to do so.

For those states wanting to expand coverage, the law calls for the federal government to finance 100 percent of the expansion during the first three years (2014-2016). The federal share would decrease slightly after that but remain at 90 percent for 2020 and beyond.

"We are going forward with our expansion efforts," said Tony Cava, spokesman for the California Department of Health Care Services.

The Medicaid expansion alone is expected to bring coverage to at least 2 million low-income Californians who now lack it.

For critics of the law, however, the Medicaid provision is just one of several aspects of the law the nation will be unable to afford.

Reactions from the California congressional delegation divided along party lines.

Rep. Devin Nunes, R-Tulare, highlighted the court's majority opinion, written by Chief Justice John Roberts, that referred to the requirement for individuals to purchase insurance -- if they don't get it through an employer or Medicaid -- as a "tax."

"While they were selling Obamacare to the American people, President Obama and congressional Democrats repeatedly and emphatically denied that the individual mandate is a tax," Nunes said.

"The Supreme Court has now revealed the cynical dishonesty of that claim. In fact, with Obamacare, the Obama administration has foisted one of the biggest tax hikes in history on the American people, and there's no disguising that fact anymore."

He added: "In Congress, my colleagues and I will continue working to defund and repeal Obamacare and replace it with affordable, practical reform plans that won't drown the country in new debt or expand the power of central planners in Washington."

But  Rep. Sam Farr,  D-Carmel, said "America's health is safe today" and that, "millions of American families can breathe easier knowing that access to quality, affordable health care is still the law of the land."

Earlier this month, Farr was one of the few in Washington predicting the law would be upheld.

"The Supreme Court's ruling is a victory for America's families, who deserve affordable health care," said Sen. Barbara Boxer, D-Rancho Mirage.

"The decision is great news for the millions of Californians who have already seen the benefits of this law -- including the six million who now have access to free preventive health services, 355,000 young adults who now have coverage on their parents' health plans and 320,000 seniors who have received help in paying for their prescription drugs."

She added she would continue to "fight Republican efforts to repeal these important health benefits."

Other consumer protections in the law yet to take effect include a ban on refusing coverage to people because of pre-existing medical conditions, the elimination of lifetime coverage limits, elimination of policy rescissions due to health reasons and the creation of a minimum package of health benefits.

Backers of the law said it would achieve two major goals of health care reform -- reduce the number of people without insurance and slow the rapid growth in costs. Opponents contend the mandate that people buy insurance beginning in 2014 is an unconstitutional power grab by the federal government. Other mandates in the law, they argued, interfere with the doctor patient relationship and would actually increase health care costs.

Gannett Washington Bureau

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