California stands to lose $25 billion annually in federal funds if ACA is overturned

California stands to lose over $25 billion in annual federal funds if the Supreme Court overturns the Affordable Care At (ACA) in its entirety, according to a report released by the Legislative Analyst’s Office. Oral arguments in California v. Texas, which threatens the health law, are scheduled to begin next month.

 

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If the ACA is overturned without a replacement option passed by Congress, the state could lose $17.5 billion in Medi-Cal program funding, $7.7 billion in Covered California premium subsidies, and $46 million in prevention and public health funding.

 

Image: Legislative Analyst’s Office

 

Under the ACA, Medi-Cal enrollment grew from 7.9 million in 2012-13 to 13 million in 2019-2020.

“Over this same time period,” reads the report, “total annual funding for Medi-Cal has roughly doubled from $50 billion to $100 billion, with federal funds accounting for over 75 percent of the growth in total funding.”

If the ACA is eliminated, roughly 3.7 million individuals who became newly eligible through Medi-Cal expansion would lose coverage. This would result in a loss of at least $17 billion in federal funding.

The brief also notes that the ACA has helped reduce the number of uninsured Californians – including formerly incarcerated individuals. Between 2012 and 2016, the percent of individuals released from department of corrections institutions who enrolled in Medi-Cal increased from 25% to 61%.

The ACA has also increased health care access for individuals with mild to severe mental health conditions.

“For example, in 2019-20, 45 percent more adult Medi-Cal beneficiaries with severe mental health conditions received county services than in 2012-13. Over this same time period, funding for county mental health services increased by 46 percent from $5.4 billion to $7.9 billion,” reads the report.

Outside of the Medi-Cal program, about 1.2 million Californians receive federally subsidized coverage through Covered California, the state’s health benefit exchange. The federal subsidies equaled about $7.7 billion in 2019-20, and on average reduce the cost of premiums for eligible customers by at least 78% (from $841 per month to $184 per month).

Without the ACA, and the federal subsidies that come along with it, the LAO brief warns that premiums would become more expensive and policyholders might choose to drop their Covered California coverage and choose go without health insurance instead.

The Prevention and Public Health Fund established through the ACA is also at risk of elimination. The fund supports community prevention activities aimed at improving health, behavioral health screenings, public health infrastructure, and data collection.  Last year, California state government and local agencies received about $46 million of this funding.