News

Local hospitals brace for Obamacare repeal

Changes in health care law could leave millions uninsured

The inauguration of President-elect Donald Trump is on Friday, Jan. 20 and congressional leaders are wasting no time delivering on one of his major campaign promises: the repeal of the Affordable Care Act. And while details are scant on what kind of replacement legislation will be offered, local county and hospital officials are voicing deep concerns that gutting parts of the landmark health care law could force millions of Americans to lose their health coverage.

Last week, the Senate voted 51-48 to start the process of creating a budget resolution that would defund and eliminate key parts of the Affordable Care Act, also known as Obamacare. Since then, Republican lawmakers have moved at breakneck speeds to dismantle the law, and are planning to report the repeal legislation to the Senate Budget Committee by Jan. 27.

Immediately after the November election, Santa Clara County officials got to work assessing just how much they stand to lose if congressional Republicans succeed. At a gloomy Nov. 9 Health and Hospital Committee meeting, Deputy County Executive Rene Santiago said Santa Clara County is likely going to have to bolster its relationship with the state on health care funding, and prepare for a Trump administration committed to cutting down on federal obligations. Based on previous Republican proposals, Medicaid could be doled out to states through a block grant or per-capita allotments, each of which have the ultimate goal of reducing federal spending. This, in turn, would mean less coverage for those currently eligible through Medi-Cal -- California's Medicaid program -- and less matching funds for California.

County staff are still rounding up a list of all the laws and funding streams that could be on the chopping block, as well as ways the county can intervene and preserve as many federal health care programs as possible.

"My sense is that we're going to have to do more with less," Santiago said.

Republicans plan to use a process called reconciliation, which only requires a simple majority in the Senate, in order to repeal parts of the law that have a budgetary component: premium support, taxes and Medicaid expansion, according to Burt Margolin, the county's health care consultant. Other parts of the law, including the provision that prevents insurance companies from denying coverage or charging more based on pre-existing conditions, cannot be put in a reconciliation bill.

Still, that leaves plenty of integral parts of the health care law open to demolition. The individual mandate, which requires most Americans to have some type of health insurance, is likely to be a primary target, along with the the expansion of Medicaid that has covered 3 million new enrollees in California who were previously ineligible, according to the Legislative Analyst's Office.

"We've never before encountered this kind of hostile environment," Margolin said. "There's never been an environment in Washington where the resources, the attitudes and philosophies have aligned to put this kind of threat forward to health care funding."

The exact details on the repeal, and eventual replacement, of the Affordable Care Act are still unknown, making it all the more challenging for county and hospital officials to plan ahead. William Faber, the chief medical officer for El Camino Hospital, said the hospital hasn't had a summit or high-level discussion on how to react because they don't know what's coming down the pipeline.

The big worry, he said, is that walking back the Medicaid expansion will mean the millions of new Medi-Cal enrollees risk losing their coverage. Hospitals across Santa Clara County, particularly Valley Medical Center, would then have to bear the brunt of serving more uninsured patients, who show up in the emergency room in need of care.

"Medicaid is not a great payer, but it's better than no pay at all," Faber said.

Making matters worse for hospitals, Republican lawmakers have shown no appetite for ending cuts to Medicare that were originally intended to offset the cost of the Affordable Care Act, meaning hospitals will likely have to withstand price cuts to Medicare while also losing the upside of expanded coverage. Previous repeal legislation proposed by Republicans, which was vetoed by President Barack Obama, left the rate reductions intact.

Faber said hospital officials are "very concerned" about future cuts to Medicare. Just over half of the patients El Camino Hospital serves are insured by Medicare, and the hospital already loses money on the whole when providing services to Medicare patients. But the impending cuts have less to do with the Republican-majority Congress and more to do with a bipartisan effort to bring down the cost of Medicare.

"Medicare is going to be under strict control regardless of who is in the White House," Faber said. "Medicare will become insolvent of we don't find ways to become more efficient."

Although county and hospital officials have some indication of what might get cut from the Affordable Care Act, Margolin said there's very little information available about what the replacement legislation might include. This is particularly worrying, he told Health and Hospital Committee members last month, because the county has to prepare for a new health care law within the next two to three years without knowing what's going to be in it.

"What they are essentially telling state legislatures and county supervisors to do is make their plans," he said. "How do you plan for a replacement that doesn't exist yet?"

County Supervisor Joe Simitian, who serves on the Health and Hospital Committee, said Santa Clara County might want to join state and nationwide coalitions in order to advocate for and preserve parts of the Affordable Care Act, rather than try to influence congressional lawmakers on its own.

"Neither the president or the Congress of the United States is waiting with bated breath to hear what the good people of Santa Clara County want in the way of health care," Simitian said. "We're going to have to make our case with others to have any hope or expectation of having any impact at all."

County Executive Jeffrey Smith told committee members that he wasn't too concerned about the future, and that he predicts lawmakers in Washington are going to quickly realize the political realities of dismantling the Affordable Care Act -- and by extension removing billions of dollars of federal funding from the economy. Republicans may talk about how the United States spends too much money on health care, he said, but they neglect to point out that the money is going to insurance companies, pharmaceutical companies and major health care providers.

"It's an enormous removal of profit for one sector of the economy on the brink of another recession," Smith said. "I don't think an administration focused on business and stimulation of the economy is going to be all that anxious to destroy the economy."

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Comments

26 people like this
Posted by 5 Coats
a resident of Barron Park
on Jan 18, 2017 at 11:54 am

If Affordable Care Act is indeed repealed, everyone that loses their coverage should mail their medical bills to Mr. Trump at the White House for him to personally pay out of his billion $ holdings.


1 person likes this
Posted by timetrip
a resident of Mountain View
on Jan 21, 2017 at 10:59 am

I pay ~ $225 per month for BC/BS insurance. Last year I checked on what the "affordable care" cost would be. It was ~ $650 per month. Very affordable.


6 people like this
Posted by Sharon
a resident of Midtown
on Jan 21, 2017 at 5:50 pm

A sanctuary state, like California, will finally have to pay the cost of its liberal guilt. All the illegal aliens come with a huge cost. Time pay up. The Trump administration is going to put it right back on California's back. Just cinch it up and pay the costs via local and state taxes. That would be honest accounting.


8 people like this
Posted by Todd
a resident of Another Palo Alto neighborhood
on Jan 21, 2017 at 6:25 pm

@Sharon

Consdering that overall California sends anywhere from $10-$100 billion anually to the federal government that we never get back (i.e. subsidizing other states) I'm not sure I understand the sentiment.


5 people like this
Posted by @Todd
a resident of Mountain View
on Jan 21, 2017 at 6:36 pm

You have to understand that there are people out there who are immune to actual, verifiable facts. They are much more comfortable spewing hate on discussion boards like these, which is a true shame.


2 people like this
Posted by Sharon
a resident of Midtown
on Jan 22, 2017 at 1:24 pm

A proper accounting among states would include the investment in California by the federal government, to include research and military development. California has more than its share of that type of investment. This is different from direct aid programs, but it is essential to the prosperity of this state. California has done very well on the federal government bank account.

Now we shall see how well it does if federal welfare aid is pared down. California is about to learn a hard lesson, I think. It will need to begin to pay the full cost of sanctuary status for illegal aliens via the Medicaid account, and the follow up with withdrawal of federal funds from sanctuary cities (because they fail to support federal laws).

Liberal guilt is about to be tested, big time.


Like this comment
Posted by @Sharon
a resident of Mountain View
on Jan 22, 2017 at 1:27 pm

[Post removed.]


7 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 22, 2017 at 5:32 pm

"A proper accounting among states would include the investment in California by the federal government, to include research and military development. California has more than its share of that type of investment."

California receives many fewer dollars from Washington than it sends to Washington. What it sends to WDC is a generous return on those investments. The situation in Deep Red states like Mississippi, Alabama, etc., is the exact reverse, despite heavy investments by, among others, NASA and DoD. They would be like Bangladesh if Washington didn't prop them up with welfare cash.


1 person likes this
Posted by Seriously?
a resident of Fairmeadow
on Jan 22, 2017 at 6:15 pm

These references are for per capita benefits.

California receives more than 50 billion dollars from the federal government for Medicaid alone. The whole of national spending is probably less than 500 billion.

The point of the previous poster is that by encouraging and protecting unofficial immigration, there are more people receiving Medicaid in California. So the federal government pays more. And California depends on that.

The fact that the federal government doesn't pay as much per person to California as it does to many other states doesn't change that fact. California has invited more people and receives extra money for them. (And as the state with largest population should expect economies of scale even without these additional people. Per capita analysis ignores this).


1 person likes this
Posted by Sharon
a resident of Midtown
on Jan 22, 2017 at 6:38 pm

"California receives many fewer dollars from Washington than it sends to Washington. What it sends to WDC is a generous return on those investments."

Does California pay for its particular coastal protection by the Coast Guard? The U.S. Navy? The Border Patrol? The basic research from NIH and DoD that underlies its biotech and high tech successes (e.g. the Internet)? Basically, California is soft and spoiled, in terms of its dependence on the federal government.

It is a new day arising, as CA now has to face up to its own costs for its liberal guilt. It is we who will have to pay for our own welfare system mess. How much higher will our taxes need to go? What golden and enduring programs will we need to give up to pay the piper? State parks? Educational programs (or increased tuitions)? Increase consumer taxes, perhaps? Many possibilities are in play.

California has played all its eggs in the same (liberal) political nest. Too late to overcome at this point. In the future, much better to have a balanced political state structure...then we would have some serious say in DC. It might take a decade or so to accomplish this, and it will be a painful process, but it would be worth it.


4 people like this
Posted by Todd
a resident of Another Palo Alto neighborhood
on Jan 22, 2017 at 7:41 pm

@Sharon

I'm not sure if the concept is going over your head or if you're being willfully ignorant...Nobody said that California pays directly for the Navy or other federal services, all states put in money but the amount California puts in pales in comparison to the amount the feds actually spend here (this includes health care, welfare etc.) If California was paying for these directly we'd have a hell of a lot of money left over which would otherwise have been spent balancing the budgets of those states not plagued with "liberal guilt"


4 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 22, 2017 at 8:46 pm

"Does California pay for its particular coastal protection by the Coast Guard?"

Lesse--last I looked Mississippi, Alabama, and a bunch of other states have a coastline. I expect they have Coast Guard protection too. The Coast Guard is federally funded.

California pays more than its fair share to Washington, while Mississippi, Alabama, and a bunch of other Deep Red states depend critically on net federal handouts. Without California and other liberal states like New York providing them cash, Deep Red America would be even deeper in doo doo.


Like this comment
Posted by john_alderman
a resident of Crescent Park
on Jan 22, 2017 at 9:58 pm

john_alderman is a registered user.

@Curmudgeon - you are conveniently shaping a story by leaving out facts. The most federally dependent states are Mississippi, Alabama, Louisiana, New Mexico, and Maine. That's two blue, three red. And while Mississippi is red today, it was blue for 90% of the last century - they had an unbroken streak of Democratic governance from 1872 to 1992, so maybe Democrats should get some credit for grabbing that federal money. Also note that Texas is one of the big losers along with California and New York. So the truth is that money tends to flow from big states to smaller states - perhaps because small states benefit from disproportionate representation in the Senate. Maybe we can find common ground in cutting the size of Federal government and leaving money and power in the states.


7 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 22, 2017 at 11:09 pm

"And while Mississippi is red today, it was blue for 90% of the last century - they had an unbroken streak of Democratic governance from 1872 to 1992, so maybe Democrats should get some credit for grabbing that federal money."

A common semantic dodge. Or maybe you didn't know that Red and Blue abruptly flipped after LBJ (a Democrat) put through civil rights legislation empowering African Anericans in the 1960s, and enraged Democrats from all regions found new kinship as Republicans under Nixon's cynical Southern Strategy. Mississippi was characteristically slow catching on.

The fact remains: our Blue states generate the economic surplus that supports our culturally and economically backward Deep Red states.


4 people like this
Posted by Stats
a resident of Menlo Park
on Jan 23, 2017 at 12:44 am

@Sharon,
Just consult Google and you'll see how fallacious your supposition is... California is very close to the bottom in term of dependency on Federal $$'s. We put in more in Federal taxes than citizens in the state (Fed employees, etc.) and the the state (Block grants, etc.) get out. Take a look at Wallethub's analysis and methodology if you want to understand.

Web Link

Show us some real numbers from a credible source if you want us to believe your made-up gobbletygook. If Trump shuts down inflows, California can shut down outflows in a way that will be much more painful...


1 person likes this
Posted by Sharon
a resident of Midtown
on Jan 23, 2017 at 10:19 am

@stats, Did you even read your own reference? Wallethub does not include indirect subsidies. For example, the NIH budget is crucial to California businesses, because it funds basic research which is heavily used by CA biotechs and big pharma (with very little spent directly on federal workers within CA). The basic research on the internet came out of the military, and then provided to private enterprises (of which many were in CA). As a thought experiment, simply eliminate NIH and DARPA...then watch CA wither on the vine.

It's hard to figure how CA liberals can be so blind. Even if you disagree with what I say, you will still need to pay for Medicaid costs that the federal government will no longer fund. It is better to accept this fact, instead of whining that it so unfair. Given that cinching up our belts is directly in front of us (per the initial article in this thread), where do we start cutting other state services?


2 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 23, 2017 at 3:55 pm

"..indirect subsidies. For example, the NIH budget is crucial to California businesses, because it funds basic research which is heavily used by CA biotechs and big pharma..."

And Deep Blue California returns those investments, with a surplus.

Now look at the long history of heavy direct NASA expenditures at the Stennis Space Center in Mississippi, plus bucu Navy cash flows to the nearby NAVOCEANO facility. Also take a gander at the NASA cash river to the Marshall Spaceflight Center in Huntsville, Alabama. Yet those doggedly Deep Red states cannot bootstrap themselves to generate even an even return on government investment.

Blue wins, Red loses. It's that simple.


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