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Calif. Runs With Health Law Without Waiting On Supreme Court

Posted: June 15, 2012

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The country's most populous state is already implementing the law, and it hasn't slowed down in recent weeks as the rest of the country waits to hear from the Supreme Court. Officials say the state isn't doing any contingency planning in the case the law is overturned.

California lawmakers have been introducing legislation that would replicate key pieces of the federal law, including bills defining benefits and guaranteeing coverage to people with pre-existing conditions.

California lawmakers have been introducing legislation that would replicate key pieces of the federal law, including bills defining benefits and guaranteeing coverage to people with pre-existing conditions.

Many states have done nothing to implement the health overhaul law, saying they'll wait to see how the Supreme Court rules.

Not California.

The country's most populous state got out in front first on implementing the law, and it hasn't slowed down in recent weeks as the rest of the country waits to hear from the high court.

"California has been moving ahead 100 percent assuming it will upheld," says Peter Lee, who left his Washington job as a health policy official in the Obama administration to lead California's Health Benefit Exchange. "We [aren't] doing anything in the way of contingency planning because it makes no sense to plan for what seems like an outer bounds of possibility, and rather, we've got a big job to do to get ready to cover what will be millions of Californians in 18 months."

Lee has a staff of 36 that is working feverishly to be ready — and he is optimistic about the exchange's future in California even if the court overturns the requirement that most people buy insurance. He argues that the tax subsidies to allow some people to buy insurance will be enough to entice customers to buy their insurance in the online marketplace his agency is setting up.

"The reason the exchange is going to have — we project — over 2 million people in it after a few years, [has] very little to do with the [individual] mandate," Lee says. "We're a place where people can get subsidies for care, and can make informed choices."

Without the requirement that everyone buy insurance, known as the individual mandate, Lee estimates that the exchange would lose a few hundred thousand people; it would still be a viable marketplace for California, however.

But Patrick Johnston, president and CEO of the California Association of Health Plans, says the federal law wouldn't work without the mandate.

"We need to have a group of people that is big enough and has enough people who for the most part are healthy to make sure that the insurance costs will be shared and not high," Johnston said. "States that decided to say 'Everybody gets insurance at the same price but you can buy it whenever you want,' found that prices just went way up and people dropped out."

Still, on the legislative side, California lawmakers have been introducing legislation that would replicate key pieces of the federal law, including bills defining standard health benefits and guaranteeing coverage to people with pre-existing conditions.

"I'm going to remain fully committed to figuring out how do we preserve and protect what was the vision of President Obama, to replicate that in California by any means necessary," says Assemblyman Bill Monning, chairman of the state assembly's health committee. "We will figure out how to do it."

Monning and his counterpart state Sen. Ed Hernandez, a Democrat, hesitate to say they'd propose a state health insurance mandate, without knowing the court decision. But Hernandez says he would author a bill that would "start the discussion" about compelling people into the market. Hernandez worries, though, that funding a new state marketplace without federal help would be difficult.

"The state just doesn't have any money," he said. "My biggest fear and concern is if we lose the federal subsidies, I just don't know how we can make it ... work."

Republican Assemblyman Dan Logue is a fierce opponent of the health law. He thinks the Democratic majority in California would succeed in passing a state mandate if the federal one goes down. But if a state mandate were proposed, he would take it to the voters.

"I think once they realize the dynamics and the cost and how it would put California at risk financially with the rest of the country, that it would go down in flames easily," Logue said.

Lee of the health exchange says he isn't losing any sleep over the thought of the mandate being thrown out . "I've seen community groups, I've seen hospitals, I've seen health plans, I've seen the business community, not throwing rocks at our effort but, rather, joining in to make this thing work," he says.

Despite Lee's optimism, a recent survey by the Public Policy Institute of California showed 63 percent of Californians were against the mandate.

This story is part of a project with the Capital Public Radio, NPR and Kaiser Health News.

Copyright 2014 Capital Public Radio. To see more, visit http://www.capradio.org.

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