The $123 million question confronting Santa Barbara health-care administrators is whether President-elect Donald Trump is serious about repealing the Affordable Care Act (ACA) as he repeatedly pledged to do throughout his campaign. That’s how much extra Medi-Cal money is funneled in from the federal government to pay health-care costs for low-income Santa Barbara County residents annually because of expanded eligibility requirements written into the ACA.
For San Luis Obispo County, the number is $70 million. In both counties combined, the ACA has provided Medi-Cal coverage for an additional 45,000 people. And that doesn’t count the 29,000 people who signed up for private insurance via the Covered California exchange.
How Trump’s campaign rhetoric will translate into actual action remains the subject of intense speculation among health-care executives. Given that most insurance contracts entered into via the ACA won’t expire until 2018, the sky won’t be falling anytime soon. “Nobody really knows what the Trump people will do,” said Bob Freeman, CEO of CenCal Health, which administers Medi-Cal for Santa Barbara and San Luis Obispo counties. “But actions have consequences. If they want to make good on a campaign promise and cut a program that benefits 20 million people, we need to know how they plan to do this. But it will be a lot easier said than done.”
Kurt Ransohoff, CEO of Sansum Clinic, is taking a wait-and-see approach, his initial anxiety over Trump’s threat to abolish Obamacare tempered by Trump’s post-election remarks voicing support for two key provisions of the ACA: allowing children to remain on their parents’ insurance policies until age 26 and the ban on excluding individuals with pre-existing conditions from insurance coverage. According to one widely quoted campaign analyst, Trump supporters took their candidate “seriously but not literally,” while his opponents did just the opposite. Riffing on this, Ransohoff said, “Initially I took his pledge to get rid of Obamacare literally. The better thing to do is take it ‘seriously, but not literally.’”
To repeal the ACA outright will require 61 votes in the Senate; Trump and the Republicans don’t have that. But they do have the votes to cut funding or change the rules regarding eligibility, co-pays, and benefits. And those changes can make a huge difference for those seeking medical care. For example, under the ACA, Medi-Cal eligibility was expanded from those making 100 percent of the federal poverty level income — $11,800 for an individual or $24,300 for a family of four — to those making 138 percent — $16,394 per individual and $33,500 per family. If that were to be reversed, 45,000 Central Coast residents would find themselves without coverage. “That’s 45,000 lives,” stressed Ransohoff.
And if Medi-Cal stopped paying for treatment, he stated, then local health-care providers would have to absorb those costs. Those with insurance would have to pay more — in the form of higher premiums — to underwrite the burden of uncompensated treatment.
Dr. Charles Fenzi, CEO of Santa Barbara’s Neighborhood Health Clinics, said the number of CenCal enrollees seeking treatment in his six clinics has jumped by 2,000 since the ACA went into effect three years ago. The clinics’ number of self-insured patients — who typically pay 50 cents of every dollar owed — dropped from 30 percent to 19 percent. This jump and drop, in turn, has provided the once fiscally troubled clinics with greater financial security, enabling them to expand services to some of Santa Barbara’s poorest and most underserved communities. In the past four years, Fenzi said, the clinics have opened new offices, hired new doctors and physicians’ assistants, expanded hours, and added new programs for mental-health, substance-abuse, and preventative treatment.
As patients learn to seek treatment sooner, area emergency rooms should experience a gradual decline in demand from patients in crisis mode, Fenzi said. (The numbers reported by Cottage Health, however, are not so clear. Emergency room visits have continued to increase, while the charitable care provided by Cottage to uninsured or underinsured patients dropped from $17 million in 2012 to $4.2 million last year.) He expressed skepticism about proposals to replace the dollar-for-dollar payments offered by Medi-Cal now with lump-sum block grants made to individual states. Block grants are not tied to the cost of medical care, Fenzi said, and over time would constitute a cut in funding. Likewise, he doubted that people with preexisting conditions could get coverage without the financial underpinning provided by the individual mandates of the ACA. Fenzi said the state of New Mexico, where he worked as a health-care administrator before “retiring” to Santa Barbara four years ago, attempted to guarantee the former without the latter on numerous occasions, but the resulting policies, he said, proved to be prohibitively expensive.
Health-care access without affordability, said Freeman, is a perilous mirage. “Medical bills are the number one reason for personal bankruptcies,” he said. “I have no idea what Trump is going to do or how. We’re going to have to wait and see.”