Legislative Analyst’s Office Releases Report on California Impact of Affordable Care Act Repeal

In February 2017, the California Legislative Analyst’s Office (LAO) released a report on how the repeal of the Affordable Care Act (ACA) might impact California.

The report, titled, “The Uncertain Affordable Care Landscape: What It Means For California,” provides a thorough overview of how the ACA fundamentally altered the health care landscape in the state, and how potential changes to the health care law might change the provision of services.

The ACA had several significant impacts on California, including:

• California now has one in three residents now enrolled in the state’s Medi-Cal program, reflecting the state’s adoption of the ACA optional Medicaid expansion.

• California has seen a significant reduction in the number of uninsured residents—from 6 million in 2013 to 3 million in 2015.

• California has seen more than $20 billion in additional federal funding each year for health care coverage, through enhanced federal funding for the ACA optional expansion and federal subsidies for coverage purchased on the state’s Health Benefit Exchange—Covered California

The report highlights the significant federal uncertainty about the future of the ACA, including the Trump Administration has stated intent to repeal (or at least make major changes to) the ACA. The Administration has already begun taking procedural steps to repeal the ACA, however, there is substantial uncertainty as to whether and which components of the ACA might be repealed, when any repealed components of the ACA would become inoperative, and what policies could replace those in the ACA.

Congressional Republicans have initiated the first steps of the federal “budget reconciliation process” to facilitate the potential repeal of certain major components of the ACA. Some of the components potentially subject to repeal through use of this process include federal funding for the ACA optional expansion, federal funding for premium subsidies and cost-sharing reductions through Health Benefit Exchanges, enhanced federal funding for other health care programs and services in Medicaid, and the individual and employer mandate tax penalties.

Changes in the ACA components most at risk for repeal—absent replacement policies—would have significant consequences for California. These include the potential loss of substantial annual federal health care funding, the uncertain survival of Covered California, a potentially considerable increase in the number of uninsured Californians, and a possible disruption of the commercial health insurance market.

A link to the report can be found here: http://www.lao.ca.gov/reports/2017/3569/ACA-Landscape-021717.pdf