A plan outlined last week by Republican leaders in the U.S. House of Representatives to repeal the Affordable Care Act could cost San Luis Obispo County at least $6 million in the next fiscal year, a county analyst said this week.
If the federal Affordable Care Act is repealed in its entirety, the county would have to once again absorb the costs of providing health care to several thousand indigent residents who currently receive health insurance through the act’s expanded Medicaid program — called Medi-Cal in California.
“If the federal government were to rollback the expansion of Medicaid, the county — under welfare and institutions code — would still have some responsibility for providing medical care to indigent residents,” county analyst Emily Jackson told the county Board of Supervisors during a 2017-18 budget update Tuesday.
She added: “At a minimum, we would be looking at about a $6 million General Fund impact to the county budget. That is something we would have to figure out how to absorb.”
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Before the Affordable Care Act, commonly referred to as “Obamacare,” was signed into law, Medi-Cal generally was limited to children in low-income families, and the County Medical Services Program provided state-mandated medical services to 3,400 qualifying low-income adults.
Under the 2014 Medicaid expansion, most of those indigent adults were moved off the county program and into Medi-Cal. The county still provides services to about 50 people.
The $6 million cost to provide for indigent residents is “if we go back to the system that was in place before (the Affordable Care Act was signed into law),” County Administrative Officer Dan Buckshi said.
With no concrete moves yet in Washington, D.C., it’s unknown when — or if — the Affordable Care Act might be repealed, whether the state would continue the expanded Medi-Cal program and pay for it, or whether those costs would be passed on to counties, Buckshi said.
In San Luis Obispo County, about 62,000 people receive Medi-Cal benefits, including 17,585 people who qualify under expanded Medi-Cal, according to the state Department of Health Care Services.
If the Affordable Care Act were completely repealed, those residents would lose that coverage.
About 62,000Number of people who receive Medi-Cal benefits in San Luis Obispo County
In addition, the Affordable Care Act has supported “considerable expansions” of behavioral health programs, such as therapy services and drug and alcohol services for low-income populations. Those services “would likely discontinue,” Buckshi said.
Another 12,710 San Luis Obispo County residents bought health insurance in 2016 through Covered California, the state insurance exchange set up through the Affordable Care Act. Ninety percent received a federal subsidy to help pay for the cost of their premiums. Repeal of the Affordable Care Act throws all of that into question as well.
A budget forecast last fall anticipated the county’s General Fund would have about $492.3 million in revenues and $486.2 million in expenditures in the 2017-18 fiscal year, leaving about $6 million in discretionary revenue. A formal budget proposal for the next fiscal year will be introduced in May.
Jackson said the administrative office doesn’t always include federal considerations in its budget impacts.
Gov. Jerry Brown’s 2017-18 state budget proposal in January emphasized prudence and caution when moving into the budget planning process because of uncertainty of policy changes with the federal administration. The state budget proposal, however, does not include any “what if” scenarios for the Affordable Care Act.
“At this point, of course, it’s not clear what the new federal administration is going to try and push here,” Jackson said. “But we know that if there were a repeal or replacement of any portion of that law, we would have a significant impact.”
On Feb. 16, House Speaker Paul Ryan, R-Wis., presented a new policy brief for the plan to repeal and replace the Affordable Care Act. The plan is not detailed policy, but it does promise to “put Medicaid on a budget” and to provide funding for state programs, “whether it be high risk pools, cutting out-of-pocket costs like premiums and deductibles, or promoting access to health care services.”
Ryan’s plan also calls for enhancing and expanding Health Savings Accounts and providing Americans access to “a portable, monthly tax credit that they can use to buy a health insurance plan.”
House members are expected to debate the plan’s details after they return to session Monday.
Jackson told supervisors that county staff will continue to “pay close attention to what’s going on at the federal level.”
The county will likely have to make significant adjustments to the budget, depending on the timing of repeal policy, Buckshi said.