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What Will Happen to California if Supreme Court Nullifies Health Law?

Posted: Mar 28, 2012

Photo courtesy of the National Partnership for Women and Families from their Supreme Court demonstration Tuesday on the health care reform law.

Editor’s note: The U.S. Supreme Court is hearing debate today on two key provisions of health care reform. But what will happen in California, a leader in the law’s implementation, if the court voids them? NAM health editor Viji Sundaram interviewed Richard Figueroa, The California Endowment’s director of health and human services.

NAM: What happens if the Supreme Court strikes down the requirement that individuals have insurance?

Figueroa: We are optimistic that it will uphold the individual-mandate provision as an appropriate authority of Congress.

California had analyzed and debated and considered doing an individual mandate on a statewide basis a couple of years prior to the signing of Affordable Care Act (ACA). So even if the Supreme Court strikes down the provision, California could once again have that discussion, particularly because federal subsidies would still be in place. You could have a scenario where individual states could decide whether they want to do it on a state level.

NAM: What about the Health Benefits Exchange (an online marketplace where people can buy affordable insurance). Some health care advocates seem to think that no matter what happens at the U.S. Supreme Court, California will still continue that program. Is that possible, given that California is so broke?

Figueroa: Because federal subsidies are the glue of the Exchange, California can move ahead. It will encourage more people to buy coverage to ensure a healthy risk pool [of enough enrollees to keep costs down for everyone]. Without a healthy risk pool, insurance companies can question whether the system will work.

NAM: Another provision of the ACA the U.S. Supreme Court is reviewing is the constitutionality of expanding Medicaid – called Medi-Cal in California. To fund the expansion, the federal government will cover 100 percent of a state’s cost of the expansion starting in 2014, and gradually decrease to 90 percent in 2020 and in subsequent years. If states don't comply with the expansion, they won't be eligible for any federal Medicaid funding to cover very low-income people. Are you concerned that the expansion could be overturned?

Figueroa: Medi-Cal is the real workhorse of our medical delivery system. With the state proposing to cut the Medi-Cal budget, it will be hard to think how it could be sustained if California were to expand it on its own, given that an additional 2 million people would become eligible for it.

But we stand behind the law and remain optimistic that it will not be overturned, and California can go full steam ahead to fully implement it.

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