Supreme Court Ripples in California
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Supreme Court Ripples in California

The Supreme Court decision on Thursday upholding the legality of federal subsidies in health benefit exchanges in 34 states did not directly pertain to California. This state was one of 16 that established its own exchange, Covered California.

But a ruling against the subsidies would have had a tremendous effect on California’s health care reform effort, experts say. Advocates throughout the state cheered the decision.

“It is a huge victory,” said Wendy Lazarus, co-president of The Children’s Partnership, a national children’s health advocacy group based in Santa Monica. “It’s a victory to be able to say the law applies and we’re doing the right thing,” she said. “We need to celebrate that and shout it from the rooftops.”

According to Nadareh Pourat, director of research at the UCLA Center for Health Policy Research, the ruling gives a vote of confidence to the Affordable Care Act effort, and that applies to everyone throughout the country working on it, including those in California.

“We were all waiting to see what would happen, knowing that if [the decision went the other way] someone would have to figure out how to handle it,” Pourat said. “For the people working on it, this ruling provides security and confidence that whatever changes are being made, they’re on the right path and nothing’s going to undermine it.”

Lazarus said leaders in Congress, in anticipation of a Supreme Court ruling against subsidies, were discussing eliminating the individual mandate and other basic elements of the ACA, and that could’ve had a disastrous effect on California’s reform effort.

“The ripple effect, the disruption caused, that would have almost surely reached California,” Lazarus said. “That could’ve toppled the progress we’re making in California.”

She said premiums here could have been affected by higher costs in other states, due to a lack of federal subsidies, and because so many insurers in California are national companies, those costs likely would’ve resulted in higher premiums here.

Robert Ross, CEO of The California Endowment and a former Covered California board member, said he hoped the latest court decision might short-circuit fighting over the ACA.

“The growth in health care costs has slowed,” Ross said, “hospital emergency rooms are treating fewer uninsured patients, the days of being denied coverage due to a pre-existing condition are over and critical preventive services are now offered for free.”

Between the court ruling and the state budget agreement, health care advocates may have a renewed sense of purpose, Pourat said.

“People now can continue to focus on the issues, the incremental work of implementation,” Pourat said. “You can continue with the work you need to do. The law stands as it is.”

Lazarus said people working on health reform can now concentrate on the remaining issues of implementation: establishing a viable small business exchange; reaching the hardest-to-reach populations in the state; ensuring premiums remain affordable; and ensuring network adequacy, particularly among Medi-Cal beneficiaries.

The state budget agreement reached last week included full-scope Medi-Cal coverage for undocumented children — adding the last group of children in the state who were ineligible for those state health care services.

“From a policy point of view for kids’ coverage, that is just tremendous,” Lazarus said. “Every child in California will get health care coverage if they’re eligible for Medi-Cal.”

She said it paves the way for the next big step in California:

“After all of that is implemented, we have a glide path to be the largest state in the country to cover everybody,” Lazarus said. “These are exciting times.

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Capitol Desk