When the Republican Congress passed its tax reform bill last year, it was only a matter of time before Santa Barbara’s Neighborhood Clinics felt the ripple effects. According to clinic CEO Dr. Charles Fenzi, that time is now, and the clinics have lost about 8 percent of annual operating revenue, roughly $1.1 million. Included in the tax reform package was language abolishing the penalty imposed for individuals who opted not to sign up under the Affordable Care Act. Without that penalty, Fenzi said, the clinics experienced an increase in the number of uninsured patients, from 19 percent to 31 percent, a spike that has prompted the clinics to bridge the gap through private fundraising. Some patients — especially those pursuing preventative care — have stopped showing up, Fenzi said.
Meanwhile, Texas is challenging the Affordable Care Act (ACA) with regard to its protections for patients with preexisting conditions. About 5.8 million Californians are estimated to have preexisting conditions. Without ACA protections, patients may see premium hikes or insurance carriers may simply not offer coverage. For people with chronic conditions, like diabetes, that’s of special concern, Fenzi said, as it qualifies as a preexisting condition. Of the Neighborhood Clinics’ 22,000 patients, about 1,000 have diabetes.
Representatives with Covered California, which administers the Affordable Care Act in the state, declined to speculate how much premiums will rise, stating the matter is currently the subject of intense negotiations. That announcement is expected in July. Given the high premiums and high deductibles of many plans — and Santa Barbara has only one provider — more people will be inclined not to sign up. And for Dr. Fenzi, that’s of serious concern.