How will the Patient Protection and Affordable Care Act impact California counties?

The answer largely depends on how federal healthcare reform is implemented and what social services individual counties administer.  

Medicaid Questions

One of the centerpieces of reform is the establishment in 2014 of state insurance exchanges.

These one-stop shops could either simplify the insurance process or add a level of bureaucracy that makes healthcare more confusing and expensive to administer, warned Micah Weinberg, a senior research fellow at the New America Foundation.

In theory, they could take over from counties the eligibility enrollment process for Medi-Cal/Medicaid. “If, however, the state function is simply layered over the top of the existing system then that is the worst case as it will be more costly and more complicated,” Weinberg said.

While the role of counties in signing people up for an expanded Medicaid is still unknown, the law specifically reads that counties will not be required to contribute a greater percentage of the non-federal share of Medicaid than they contributed in 2009.

States will have to make up any difference, according to Paul V. Beddoe, associate legislative director for Health Policy at the National Association of Counties, which lobbied to have the language included in the bill.

Where counties will lose federal funds is on Medicaid Disproportionate Share Hospital Payments. Based on the assumption that more patients will have insurance, $14.1 billion (down from a proposed $50 billion) will be cut in 2013.

Funding for community health centers, however will be increased by $11 billion over five years through funding for Collaborative Care Networks. Beddoe called this section of the bill an opportunity for counties that may want to explore opening or expanding primary healthcare services in underserved communities.

Beddoe also praised the availability of billions in competitive Community Transformation Grants, including $500 million that will be available to state and local government agencies (including health departments) in 2010. A total of $15 billion will be granted over 10 years with 20 percent reserved for “frontier areas.”

“This is the first time the federal government is doing a major, sustained investment in public health. We are encouraged by that,” Beddoe said.

Healthy Competition

Whether counties that run existing hospitals will end up as winners or losers is still uncertain.

Dr. Susan Ehrlich, CEO of San Mateo Medical Center, knows that her operation will have to be the provider of choice for a new population of insured patients who will be able to choose where they go. Public hospitals will have to compete with private practices for both patient and insurer choice. The newly-insured will only be able to go to their insurer’s list of approved providers.

“We have to offer a better value at a lower cost,” Ehrlich said.

To even the playing field, the law requires administrators of private, non-profit hospitals to show that they, too, provide charity care to justify nonprofit status.

When all the chips are counted, different counties could find themselves in very different places in 2014. Counties like San Mateo and Orange could feel a sense of relief if large segments of their indigent population can suddenly start paying for their care. However, Lucien Wulsin, executive director of Insure the Uninsured, warns that hospitals that lose the newly-insured and are left with the uninsurable and reduced Medicaid Disproportionate Share funds could suffer. “The worst of all possible worlds could occur in Los Angeles if the only people who choose to use their services are illegal immigrants who are not covered under the new law,” Wulsin said.  

Ehrlich is optimistic, however. “What is critically important for my community is that in 2014, 65,000 more people will have insurance. That is a major improvement,” Ehrlich said. “Research shows that the uninsured delay care and have worse outcomes so more insurance is good for everyone.”

When people are healthier then they aren’t as reliant on the safety net that counties will continue to be required to provide. “We just have to keep going during this transition,” Ehrlich said.

The probability of reduced state funding each year for the foreseeable future could make competing in the new marketplace a difficult exercise, Weinberg warned. “It remains to be seen if they can be entrepreneurial about getting federal funds while they are losing state funds.”

JT Long can be reached at