What Supreme Court's Health Care Ruling Means for Calif.

7 million uninsured Californians will get coverage -- but at what cost?

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    NEWSLETTERS

    Bloomberg via Getty Images
    A sign in favor of the Affordable Care Act is held up outside the Supreme Court building after the court's ruling in Washington, D.C., U.S., on Thursday, June 28, 2012. The U.S. Supreme Court upheld the core of President Barack Obama's health-care overhaul, giving him an election-year triumph and preserving most of a law that would expand insurance to millions of people and transform an industry that makes up 18 percent of the nation's economy.

    For the majority of California's nearly 7 million uninsured residents, the recent, landmark U.S. Supreme Court ruling on health care reform means they will have access to health care coverage in the next few years.

    About 1.5 million of the uninsured will be covered by MediCal, California's version of the federal Medicaid program for low-income and disabled people. In 2014, the state will expand MediCal to include adults who make up to 133 percent of the federal poverty level.

    “We are now in the full go mode here. This ruling makes it possible to complete the work that we’ve started and be ready in January 2014,” said Diana Dooley, secretary of California Health and Human Services Agency, 

    Not every state is likely to expand its Medicaid program. While the Supreme Court on Thursday upheld the constitutionality of most of the federal health care reform act, it sided with the 26 states that challenged the law on one key point.

    The court found that the federal government could not threaten to withhold funding for Medicaid in order to force states to expand the program to include millions of uninsured adults. 

    California never joined the legal challenge to the Affordable Health Care Act, a challenge led mostly by Republican state attorneys general. And shortly after the court issued its ruling Thursday morning, the Brown administration reiterated its commitment to expanding MediCal. 

    The federal government will foot the entire bill for that expansion starting in 2014. The state could receive as much as $9 billion a year from the federal government to expand the program. But by the end of the decade, states will be required to pay up to 10 percent of the cost.

    “We, in California, have been given the green light and validation of the work we’ve been doing,” said Assemblyman Bill Monning, chairman of the Assembly Committee on Health, who said he was “thrilled” with Thursday’s ruling.

    The state has been aggressively implementing the Affordable Care Act in the run-up to 2014, when the new law goes into full effect. The state has already made coverage available to some 400,000 low-income adults and 11,000 people with pre-existing conditions who had previously been unable to obtain insurance.

    A key provision in the law requires insurers to offer coverage regardless of such conditions. “Californians who have been denied coverage or who have had their coverage taken away from them can rest assured that this will never happen to them again,” said state Sen. Ed Hernandez, chairman of the Senate Health Committee.

    The law's so-called "individual mandate" requires most Americans to obtain coverage by 2014. California is racing to set up the California Health Benefit Exchange, an online marketplace where small businesses and individuals who do not get health insurance through their employer can shop for coverage to get better rates. Residents will be able to enroll starting in October 2013 with coverage beginning Jan. 1, 2014.

    “Our goal is to make purchasing insurance through the exchange as easy as buying a book on Amazon,” said Kim Belshé, senior policy advisor at the Public Policy Institute of California, who sits on the board of the exchange. Between 1.8 million and 2 million Californians are expected to purchase insurance through the exchange.

    People who make between 133 percent and 400 percent of the federal poverty level will be eligible for tax credits to purchase that health insurance. (To estimate how much you would have to pay for insurance and how much tax credit you would receive, check out this Health Reform Subsidy Calculator.)

    The tax credits are the carrot, but there's also a stick – a penalty, which will be phased in gradually, for most of those who refuse to purchase insurance. By 2016, the penalty grows to $695 per person, but no more than $2,085 per family.

    About 4 million uninsured Californians will likely be covered thanks federal health care reform after 2014, according to Marian Mulkey, director of the Health Reform and Public Programs Initiative at the California HealthCare Foundation.

    More than 200,000 uninsured people in Santa Clara County alone are expected to be covered under the law, according to Renee Santiago, deputy county executive of Santa Clara County, who oversees the county’s health and hospital system.

    Health centers serving low-income patients are expanding capacity in anticipation of more demand for their services, as more people gain access to coverage.

    Just this month, the Gardner Downtown Health Center opened in downtown San Jose. Gardner Family Health Network, which now operates six clinics, sees about 42,000 patients a year, 18,000 of whom are presently uninsured.

    “The work has just begun,” said Reymundo Espinoza, chief executive of Gardner Family Health Network.

    Californians are more likely to be uninsured than residents of many other states because they are less likely to receive insurance through employers, according to Anthony Wright, executive director of Health Access California, a consumer advocacy group. “No state in the nation had more at stake in this decision than California,” he said.

    But some in the state see the Supreme Court ruling as a different type of opportunity. Ron Nering, chairman emeritus of the California Republican Party tweeted: "Don't get mad. Get even. Donate to the CALIFORNIA Republican Party today. http://bit.ly/MDgFUb #fullrepeal #obamacare."

    This story was produced by the Bay Citizen, a part of the nonprofit Center for Investigative Reporting.