SAN FRANCISCO (KPIX 5) — President-elect Donald Trump has vowed to repeal the Affordable Care Act and Republican members of Congress, say it will be a top priority.
If congress pulls federal funding, what happens next year to the 1.4 million Californian’s with Covered California?
The president said more than 100,000 people nationwide signed up for Obamacare plans Wednesday. A sign — according to his team – that it’s what the people want.
But here in the Golden State, many are wondering if Covered California can survive without federal funding, and what happens to the plans they’re enrolling in right now.
Covered California open enrollment is in full swing.
Covered California executive director Peter V. Lee seems unphased by the threat of its pending demise.
“There is a lot of unknowns,” he said. “But 2017 the law is on the books, people can rest assure their covered throughout the year.”
He says coverage and subsidies are protected through at least 2017 and that the rates will not change.
Rates that increased more than 13 percent this year… Providing fuel to the critics of the affordable care act.
On Wednesday, Senate Majority Leader Mitch McConnell doubled down on the President-elect’s plan to gut Obamacare, stating it will be a top priority.
“Every single Republican thought Obamacare was a mistake,” McConnell said.
And California could stand to lose more federal funding than any other state, billions annually according to a recent study.
Insurance commissioner Dave Jones points out that repealing the Affordable Care Act could also lead to denial of coverage for pre-existing conditions, among other benefits to those without Affordable Care Act plans.
But at the core of Obamacare is federal funding, so how does that impact the future of the state’s exchange?
“Covered California doesn’t receive a penny from feds, rather money comes to individuals that help them pay insurance,” Lee said.
He explains Covered California operates like a business. It has money in the bank and significant reserves.
But like any business, Covered California needs customers to sustain it.
And the reason customers come is for the federal tax credit which makes policies purchased through Covered California essentially cheaper than buying them directly from the insurer.
“The tax credits are vital to make health care affordable,” Lee explained.
Tax credits that may soon be repealed. And without them, there may be little incentive for customers to use Covered California.
Lee declined to speculate on possible alternatives to federal subsides such as a ballot measure to fund health care through taxes or fees, or even a single-payer health system
It important to note, Republicans plan to repeal and replace. Insurers say they’re committed to continuous coverage during the transition, but it’s unclear what the future holds for the exchange.