Press release Melinda Burns

Health Care Jitters: Life after Obamacare?

Daniel Gutiérrez, 59, didn’t want to sign up for health insurance under the Affordable Care Act. He flat-out didn’t like the idea of accepting a handout. For 25 years Gutiérrez had a full-time job as a dishwasher and food preparation worker at Peabody’s, a popular restaurant in Montecito. But when Peabody’s closed in 2012, he lost the job and the health benefits that came with it.

Gutiérrez paid the $95 penalty fee for failing to sign up for Obamacare during 2014, when the health care reform went into effect. He paid the $325 penalty for 2015, too. But he balked at paying the $695 penalty for 2016. Gutiérrez now works at a restaurant in Carpinteria three days per week. He gets minimum wage plus tips—and no benefits.

So, undeterred by the Republican campaign to repeal Obamacare, Gutiérrez made an appointment last January at the county Health Care Center on the aptly-named Camino del Remedio (Remedy Road). He found he was eligible for Medi-Cal under the new law, and he signed up. “Since 1982 when I started working, I have never tried to take government help,” Gutiérrez said. “I thought I should give others a chance who might need it more. But now my circumstances have changed, and I am asking for it.”

One in 10 county residents now has health insurance under the Affordable Care Act, state and county records show. The federal funding that came with it has breathed new life into at least 12 South Coast clinics serving low-income residents.

A repeal of the Affordable Care Act could jeopardize up to $140 million per year in federal funding that pays for the Medi-Cal expansion in Santa Barbara and San Luis Obispo counties, said Bob Freeman, who administers the program as the CEO of CenCal Health. Nearly one in three Santa Barbara County residents—and more than one in three statewide—are now enrolled in Medi-Cal, getting free or low-cost care. “Cutting back on the spending does not cut back on the need,” Freeman said. “It would be a setback for our mission.”

Santa Barbara County has seen a 68 percent increase in all Medi-Cal enrollment over pre-reform levels, wildly exceeding expectations, said Maria Gardner, a deputy director of the county Department of Social Services. “It’s just astronomical,” she said. “I haven’t gone through anything as significant as this in my 23-year career. It’s been a busy three years. We’ve made a big dent in the uninsured in our county.”

Kurt Ransohoff, CEO of Sansum Clinic, said the Affordable Care Act has been challenging for providers, especially because there is a shortage of primary care doctors to meet the new demand. Sansum has added seven and would hire more, he said, but they “are really hard to find.”

Covered California, the marketplace for private insurance under the law, has some very high deductibles, and that is hard for patients, Ransohoff said. But, he said, it would be devastating to return to the days when people went bankrupt to pay their medical bills and faced ruined lives. “You’d meet very sick patients in your career—they really stand out in your mind—who had just lost their job or maybe moved,” he said. “And you’d sit there and realize they couldn’t get health insurance. That was a horrible feeling.”

Santa Barbara County’s eight health clinics stand to lose as much as $4 million per year if the Affordable Care Act is repealed, said Doug Metz, a deputy director of county Public Health. Since the reform went into effect, he said, the clinics have added six primary care providers and eight support staff. During pre-reform years, the clinics regularly ran up annual deficits of up to $2 million, requiring cuts in staffing and services to make up the difference, Metz said.

At Santa Barbara and Goleta Valley Cottage hospitals, the cost of charity care for the uninsured dropped from $17 million in 2012 to $4 million last year, CEO Ron Werft said. The cost is shifted to patients with private and employer-paid insurance, he said. Emergency room visits have steadily increased, but that’s in part because it takes time to reorient people on how to use their new insurance, Werft said. Medi-Cal and Medicaid patients make up about 65 percent of the total at Cottage.

“We’re just starting to get this right, where people have doctors and get appointments and have a relationship with their personal physician,” Werft said. “It’s so important that we not repeal this act without knowing what’s replacing it. There are a lot of moving parts here.”

The sheer numbers of newly insured Californians underscore how hard it will be for Republicans to fashion a replacement bill, as President Donald Trump effectively conceded in the first week of February, saying it may take until sometime next year. Among the legislators now under pressure to come up with a plan, is Rep. Kevin McCarthy (R-Bakersfield) the majority leader in Congress and a longtime opponent of the Affordable Care Act. McCarthy represents a district in which more than 80,000 people are now insured under the law, according to Health Access, a Sacramento-based consumer advocacy coalition.

On Jan. 27, hundreds of protesters rallied at McCarthy’s district offices in Bakersfield in support of the Affordable Care Act. In a recent op-ed piece to the Sacramento Bee, McCarthy called the quality of insurance under the law “dismal.” He said Republicans planned to rescue Americans from the “imminent crash” of the insurance system by giving them “a refundable tax credit delivered every month.” With it, McCarthy wrote, Americans could “purchase the health care they choose, if they choose to do so.”

State Senator Hannah-Beth Jackson says the system works. “It’s the best that’s out there, short of a single-payer solution,” she said, referring to a national health care system in which a single public agency organizes the financing. “The bottom line is the Republicans have been screaming about Obamacare for some time. They want to get rid of the Affordable Care Act and now suddenly it’s on their watch, and they’ve got to own it.”

Could California fund the Medi-Cal expansion on its own? The state received $19 billion in federal funding for it during the 2016-2017 fiscal year. “I don’t think we could sustain it,” Jackson said. “We’re trying not to overcommit. We are basically waiting with some anxiousness, trying to be ready in case it happens.”