Millions of Californians still at risk of losing coverage under new GOP health bill

By not altering its proposed cuts to Medicaid, the revised Senate health bill would still force millions of Californians to lose some or all of their insurance coverage, according to previous analyses of the original measure.

An analysis by the California Department of Health Care Services estimated that under the earlier version, 3.8 million low-income Californians would lose some or all of their Medi-Cal coverage as a result of a projected $114 billion cut in federal funding for the program over the next decade.

"This bill still decimates federal Medicaid funding for years to come," says Amy Adams, senior program officer for the California Health Care Foundation. "California, along with states across the county, would face excruciating decisions about who and what they could still afford to cover."

The consumer health advocacy group Health Access says more than a million more Californians could lose their private insurance policies under the Republican plan. 

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"It’s hard to really overstate the damage that this bill would do to California consumers, particularly for the older, less healthy, less wealthy consumers," says Betsy Imholtz, special projects director at Consumers Union.

About one in three Californians get their health insurance through Medi-Cal; about 9 percent got private policies through Covered California or elsewhere the individual market.

While the GOP bill makes the same massive cuts to Medicaid, it now has an additional $70 billion on top of the original version's $112 billion to help insurers pay for covering sicker patients.

"[That] sounds like a lot, but you’re spreading that over 10 years for the entire United States population who buy individual coverage," says David Duker, chief strategic officer with the insurance services firm Word & Brown Companies. "I don’t think that’s going to get us to where we need to be."

Anthony Wright, executive director of Health Access, puts it this way: "To the extent that this bill does make some new investments or added money, it’s a pittance compared to what is cut."

The new Republican bill would allow insurers to sell policies that don't include all of the benefits currently required by the Affordable Care Act, such as mental health or addiction treatment, so long as they offer one plan that does comply with the Obamacare benefit requirements.

The insurance industry has said that would destabilize the market. Duker agrees, arguing that it would lead in short order to "premiums skyrocketing," because sick people would be forced to buy the higher cost policies. It could also motivate people to make financial choices that might hurt the market further, he says.

"Can I stay on skimpier coverage for two or three years? And then when I’m diagnosed with a serious illness, the next year at open enrollment, jump into the richer benefits?" says Duker. "That will further accelerate the adverse selection. I don’t see that it’s sustainable to do it that way."

Still others worry that so-called "young invincibles" will under value what a health insurance plan will cover if they have an unexpected illness or injury.

"Then you’re heading right back to what we had previously, which was a whole lot of bankruptcies and debt being accumulated by health care consumers," says Hector De La Torre, executive director of the TransAmerica Center for Health Studies.