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California has wholeheartedly embraced the Affordable Care Act — it advertises it, it invests in it, it protects it.

It even goes to court for it. 

That’s because the Golden State has a lot to lose if the the act, also known as Obamacare, is overturned.

Today, the high court will hear oral arguments in California v. Texas, a lawsuit that is challenging the health law’s constitutionality. California Attorney General Xavier Becerra is leading the defense of the act, with a decision expected next spring.

“The ACA has withstood numerous legal and political challenges,” Becerra said on Monday. “It’s been upheld by the Supreme Court as constitutional twice before. And we are optimistic that it will withstand this challenge as well.”

While not all states embraced the law, California implemented it fully— and built on it.

So how much exactly does the state stand to lose? And what is California’s plan if the law is terminated with no replacement? Here’s what you need to know.

What’s in it for California?

The Affordable Care Act was signed into law in March 2010 and was fully implemented in 2014. The law did several things, among them: 

  • Prohibited insurance companies from denying coverage to people with preexisting conditions 
  • Required that insurers cover young adults on their parents’ plans up to age 26
  • Eliminated annual and lifetime limits on coverage  

The law also allowed states to choose whether to expand their Medicaid programs for low-income people, meaning more could qualify.  And notably, the act created state-based marketplaces, such as Covered California, where people shop and enroll in health insurance. Through these marketplaces people can access federal subsidies that help keep their premium costs down. In California, enrollees may also qualify for state-based aid. 

Eliminating the Affordable Care Act without any replacement from Congress would cause more than 5 million people in California to lose their subsidized insurance or their Medicaid coverage (Medi-Cal in this state) through the program’s expansion, which some state officials have called a disaster during a pandemic. 

California’s rate of people without insurance dropped from 17.2% in 2013 to 7.7% in 2019. By comparison, Texas, which wants to eliminate the law, continues to have the nation’s highest percentage of uninsured residents. Its uninsured rate dropped from 22.1% in 2013 to 18.4% in 2019. 

Now before the Supreme Court

California v. Texas, brought by 18 Republican attorneys general and backed by the Trump administration, questions the validity of the act’s individual mandate, which requires most citizens and legal residents to have health insurance or pay a penalty. The mandate was intended to get young, healthy people to sign up and offset the cost of sicker people.

Critics have contended that requiring coverage is unfair, and that a tax penalty is a burden to families. The mandate has been the most unpopular part of the law, according to polls

In its 2017 tax bill, Congress eliminated the tax penalty associated with not having insurance (California later implemented its own penalty.) The Republican attorneys general argue that with no fine, the federal mandate is invalid— and therefore, so is the entire law.  

Today’s hearing comes two weeks after the Senate confirmed a new U.S. Supreme Court  justice — and just days after a contentious presidential election. Democratic lawmakers unsuccessfully pushed back on replacing the late Justice Ruth Bader Ginsburg with now Justice Amy Coney Barrett, arguing that a more conservative court would likely lean against the law.  

And a Joe Biden presidency won’t make a difference in the court case, said Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research. “But if the court keeps the law intact, one of Biden’s platforms was expanding the ACA, or what we call ACA 2.0, so he’d try to take it even further.” 

COVID-19 as a preexisting condition

As medical experts continue to learn about the lingering health effects of COVID-19, policy experts are raising another concern — that insurers could classify coronavirus as a preexisting condition. 

“We think of cancer, diabetes, heart disease — but pregnancy was also a preexisting condition,” Deborah Kelch, a health care consultant, said during a recent legislative hearing. “And of course, as we are looking at it, COVID eventually will be a preexisting condition.”

That means that if Obamacare’s protections for people with preexisting conditions were to go away, hundreds of thousands of Californians who have tested positive for the virus could potentially find themselves with pricier coverage — or none at all. (There are no preexisting condition limits for people on Medicare, which primarily covers people 65 and over.)

Researchers at the Commonwealth Fund estimate that nationally, about 3.9 million adults under age 59 have had COVID-19 and had no prior condition. COVID-19 has been linked to damage of the lungs, heart and other organs. The uncertainty of how vast these effects could be is enough for insurers to want to label coronavirus as a preexisting condition, the Commonwealth researchers say.

Latinos, COVID and health care

In California, Latinos experienced a bigger drop in the rate of uninsured than any other racial or ethnic group following the health law’s implementation. Still, Latinos continue to have the state’s largest uninsured rate  — partly because Latinos make up most of the state’s undocumented community, who are not allowed coverage under the law. (Children and young adults up to age 26 can access the state’s Medi-Cal program, regardless of immigration status.)

Latinos also have been disproportionately affected by the coronavirus pandemic. According to data from the Department of Public Health, Latinos make up 60% of the state’s coronavirus cases and almost half of related deaths, even though they are less than 40% of the state’s population. 

To complete the trifecta, Latinos, along with Blacks, also are more likely to be affected by COVID-induced layoffs

“The ACA covered millions of people and reduced the racial and ethnic disparities in health coverage in California,” researchers at the UC Berkeley Labor Center and UCLA Center for Health Policy Research wrote in a recent publication. “(T)o take away these coverage options especially during a global pandemic and recession would exacerbate racial and ethnic inequality in California.”

A major financial blow

Losing the Affordable Care Act also means losing federal funding — California gets an estimated $25 billion in federal dollars from the health law, according to the Legislative Analyst’s Office.

The state would need to make “very serious and perhaps difficult decisions” of how to respond to such a funding loss,  said Ben Johnson of the Legislative Analyst’s Office.

Republican Sen. Melissa Melendez of Lake Elsinore, vice chair of the state’s Senate health committee, told CalMatters in an email that she is concerned the state could try to make up for losses in finances by increasing taxes on businesses and individuals. If the law is struck down, the Supreme Court cannot be blamed for Democrats’ fiscal mismanagement or for the state’s prioritization of costly policy, she said.  

“At some point, the Democrats need to face the reality that California taxpayers and the federal government may not be there to pay the credit card bill coming due,” she said.

Jobs in peril

The Affordable Care Act helped create thousands of jobs. As more people gained coverage and sought care, the demand for health workers rose. 

The UC Berkeley Labor Center projects that overturning the law could cost the state some 269,000 jobs — primarily in the health care industry. That includes jobs at hospitals, clinics, doctors’ offices, labs and insurance companies. Others affected could include suppliers to the health care sector, such as food operations, janitorial services and accounting firms. 

How the health law plays out

Dr. Efrain Talamantes has seen the Affordable Care Act play out in his office and community. Based in East Los Angeles, he’s an internist and chief operating officer for AltaMed, one of the largest health centers in the country. Talamantes said because of the health law and the funding that comes with it, AltaMed has been able to build new clinics and bring more providers where needed. Many more of the health center’s patients are also now insured, largely because of  the center’s own enrollment efforts.

A growing organization, AltaMed has been able to provide coronavirus testing to more than 65,000 people in Southern California since March, Talamantes said in early October.  “My concern is that turning our backs on the ACA will dismantle the infrastructure that is helping us fight this pandemic,” he said. 

Pulling the health law now could also stunt the health progress Talamantes expects from his patients with chronic conditions — being insured prompts them to seek regular care and stay on top of their medications, he said. “Things like diabetes and hypertension, it takes about 15 years to start seeing favorable outcomes, and we’re not there yet,” he said.

Looking ahead

California has taken steps to strengthen and expand coverage even beyond what the federal law requires. For many Democratic lawmakers, this is a source of pride and another example of how California leads the nation. But there is a limit to the state’s power and resources. 

“If the Supreme Court were to invalidate the Affordable Care Act, and Congress did not act to step in and put something in place to fix it, California cannot solve the gaping shortage of finances,” Peter Lee, the director of Covered California, said during a recent live-streamed conversation with Sacramento Congresswoman Doris Matsui.

But Lee said he is confident the Supreme Court will make the right call. His agency is not spending time coming up with contingency plans. Instead, it’s spending $140 million in advertisement and partnerships for the new enrollment period that started Nov. 1.

Jaycee Cooper, the state’s Medi-Cal director, told legislators that if changes were made to the health law, there likely would have to be a transition period to give states time to plan. And that plan, she said, would ultimately depend on what parts of the law, if any, are pulled.

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Ana B. Ibarra

Ana is a Sacramento-based health reporter. She joined CalMatters in 2020 after four years at Kaiser Health News, where she covered California health care and policy. She started her reporting career at...