What Calif. Will Gain, And Lose, From Health Law

fromKQED

With the highest number of uninsured in the country, California stands to gain much from the health care overhaul. The changes will take some of the pressure off safety-net health care programs for the poor. And vast numbers of people will have access to primary care for the first time. Medicaid rates will go up, and more people will be purchasing private insurance. But it's not all good news. Some California legislators are concerned that the expansion could exacerbate the state's budget crisis.

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With the highest number of uninsured in the country, California will be greatly affected by the new health care overhaul. The state's Medicaid program for the poor and disabled, MediCal, will expand. Other low income Californians who are legal residents of the state will receive federal subsidies to help them purchase private insurance. But the health care law also prohibits states from making cuts to their own public insurance programs and that presents a problem for a state like California that has long been strapped for cash.

Sarah Varney of member station KQED reports.

SARAH VARNEY: To get a sense of just how many people in California are expected to become insured under the new law, it helps to pull out a map. Put your finger on Montana, now follow down to Idaho and over to Wyoming, North Dakota, South Dakota and Nebraska. That combined population is the number of Californians who will gain coverage in the coming years. The uninsured here have long relied on community clinics like this one in Oakland.

(Soundbite of crowd)

VARNEY: At Clinica de la Raza, almost half of the patients have no health coverage. Associate clinic director Doctor John Murphy says those patients rarely see specialists or get needed surgeries.

Dr. JOHN MURPHY (Clinica de la Raza): We really feel our hands are tied when we have a patient who's uninsured or dramatically underinsured, who has a chronic medical condition, for example.

VARNEY: Murphy says that will change when many of his patients, at least those who are in the country legally, qualify for the expanded Medicaid program or government assistance to buy private insurance.

Dr. MURPHY: I think it offers an opportunity for people to focus on something other than just what they need to do to survive. Fewer people are going to have to choose between food and medication.

VARNEY: Agriculture and tourism dominate California's economy. But those jobs pay little and typically don't come with health coverage. Anthony Wright is executive director of Health Access, a Sacramento-based consumer advocacy group.

Mr. ANTHONY WRIGHT (Executive Director, Health Access): California has one of the lowest rates of employers offering coverage to their workers. And so that means that many more individuals are left all alone at the mercy of the insurance companies in the individual market.

VARNEY: Under the new law, insurers selling policies on the individual market will face tough restrictions. They won't be able to deny people with preexisting conditions or charge sicker people or women more. And low income Californians who don't qualify for Medicaid could get government subsidies to help them buy health insurance.

The size of those subsidies, though, was a point of contention for California's congressional delegation. They argued the one-size-fits-all subsidy would be of limited help in high cost states like California. In the bill signed by President Obama, the subsidies would end at about $88,000 a year for a family of four.

Peter Harbage is a health care consultant who has worked for governor Arnold Schwarzenegger.

Mr. PETER HARBAGE (Health Care Consultant): The danger is that the subsidies that are supposed to make insurance affordable might phase out at an income level that in one part of the country is considered upper class, but in parts of California would leave you distinctly as lower middle class.

VARNEY: California lawmakers are also concerned the new health care law could exacerbate the state's fiscal crisis. Budget planners here had already proposed cutting back on some of the public insurance programs the state offers in partnership with the federal government. For example, Governor Schwarzenegger has proposed eliminating California's health insurance program for low income children.

But the new federal law forbids states from scaling back any of those programs. And that puts California lawmakers, who are trying to close a $15 billion budget deficit, in a tough spot.

Mike Shires is an associate professor of public policy at Pepperdine University.

Professor MIKE SHIRES (Public Policy, Pepperdine University): We can't touch those programs. And if some of our other spending categories like education are locked into place, we just have to make hard choices about how we're going to spend overall. If we don't raise revenues, then we're going to have to probably do across the board spending cuts in every category.

VARNEY: And while the economy seems to be improving in other parts of the country, California has been slower to recover. Unemployment is still running at more than 12 percent statewide and more than twice that in dozens of towns and communities. Some of those unemployed will soon be eligible for health coverage through a new temporary program for people with preexisting conditions, part of the new health care law.

Others, however, will enroll in California's Medicaid program, adding even more to the state's budget woes, and no doubt, it's collective fretting about the Golden State's future.

For NPR News, I'm Sarah Varney.

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