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Finally, after weeks of speculation, the US Supreme Court has surprised all the pundit s by upholding the constitutionality of President Obama's health care reform. We look at the real implications for San Diego and California.

June 28, 2012 1:12 p.m.


Glenn Smith, Professor of Law, California Western School of Law

Gary Rotto, Director of Health Policy Council of Community Clinics San Diego,

Gregory Knoll, executive director Consumer Center for Health Education and Advocacy,

Kenny Goldberg KPBS Medical Reporter

Related Story: What The Supreme Court's Health Care Decision Means For San Diego


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: Today is Thursday, June 28th. I'm Alison St. John in for Maureen Cavanaugh. After weeks of speculation, the U.S. Supreme Court has surprised all the pundits by upholding the constitutionality of President Obama's healthcare reform. This ruling will affect all of our lives for years to come: We can only begin to untangle the significance today. We want to look particularly at the real implications for us here in San Diego and California. In studio we have Glen Smith, professor of law at cal western school of law. Thanks for coming in.

SMITH: You're welcome.

CAVANAUGH: And Gary Rotto, director of health policy here in San Diego.

ROTTO: Hello.

CAVANAUGH: And Greg Knoll.

KNOLL: Good morning.

CAVANAUGH: And Kenny Goldberg, our KPBS health reporter.

GOLDBERG: Hi, Alison.

CAVANAUGH: Glen, the U.S. Supreme Court did uphold the individual mandate, they said it was constitutional, but they used an unexpected argument. Can you explain to us how they justified it?

SMITH: Yes, everyone who has talked about this has talked about it under the congressional commerce power, and was Congress forcing people to enter a market, could they make us eat broccoli, etc, etc. It's very surprising that the Court in upholding this case, and upholding the law, upheld it under the theory that it really operate like a tax. If you don't buy health insurance, that's adequate under the way it's defined in federal law, you owe a tax, and that tax varies depending on various factors. So they said Congress' taxing power is substantially equivalent to it, and they were able to upheld it that way. It was an ultimate fallback argument. It shows if you are worried about your main argument, make sure you have an alternative because it succeeded in this case.

CAVANAUGH: Do you think it sets up a new ball game for the political battle ahead?

SMITH: I'm not sure how it will affect the politics. Those of us who aren't nerds crunching opinions and reading all the pages, the main takeaway will be that the law was upheld, it was found constitutional, and I think a surprising sideline is this will do a little damage to the perception of the Supreme Court as this ideologically divided constitution that always splits between conservatives and liberals. You have the chief justice of the U.S., a conservative, aligning with four other justices to do the right judicial restraint thing and leave this to the political process.

CAVANAUGH: Now, the second issue that was important was they said the federal government could not require states to add more patients to Medicaid. What does that mean for California?

SMITH: Well, that's why I say that the Court mostly upheld this law. What they said is basically that states cannot be told that the risk of not participating if they lose all Medicaid funding. So California like all the states will have to decide, is it in their interest to proceed? People aren't focussing on the fact that there are a lot of incentives, economic and others, for states to go ahead and agree to participate. But the point is, it's more voluntary than it might have been had the Court just uphold the provision as written.

CAVANAUGH: Kenny, other I want to throw it to you. Would California have chosen not to add more patients to the rolls if they'd been given that option? It seems like I hear that you spoke to the insurance commissioner, the California insurance commissioner a few minutes ago. What was his take?

GOLDBERG: Well, California's been extremely aggressive in going forward with the affordable care act, regardless of what the decision was going to be, and the Medi-Cal expansion has indeed already started. Counties in California including San Diego have already started to add people on the rolls. And what we're talking about with this decision being upheld now is that by 2014, we're going to have 2 million more Californians that can be added to the Medi-Cal rolls, and commissioner Dave Jones says that's a big deal for California.

NEW SPEAKER: The federal government pays in large measure for this. There's about $6 billion in the affordable care act due to this expansion. And the reason that's good news, not only for those individuals and families because it means they get health insurance, but for the rest of us that have health insurance, it means the costs of treating them don't get shifted to us.

CAVANAUGH: Now, do you think California had more at stake riding on this decision because of the number of uninsured?


GOLDBERG: Absolutely. But we also had a lot riding on it because the state has embraced the thing from the very beginning.

CAVANAUGH: And Gary, let's bring it to San Diego, you are the head of the community clinics. And according to a report from 2010, more than 27,000 San Diego County residents, 17% of them, lost their health insurance between 2009 and 2010. But that's just a fraction of the number of people who could actually benefit from this; is that right?

ROTTO: That's very true. The estimates that the UCLA center on health policy research have is that for San Diego County, it's about 515,000 people who are uninsured, and we know that because the affordable care act has been upheld, we'll have folks who have moved into who will be newly eligible for Medi-Cal. Some already work through the low-income program, and some of them will benefit from the exchange. And that was the other part about the individual mandate. Those funds that were being generated by folks that were opting out would help to subsidize others who were going into the exchange so if they couldn't afford it, they'll subsidize that insurance. So we're going to have about 2/3 covered, 370,000 coming to our clinics.

CAVANAUGH: And Greg, you were saying earlier that the stock of hospitals around the region has gone up on this

KNOLL: Yeah, I noticed this morning after the ruling, I went to look at particular stocks, and they had the hospital stocks because of the wider coverage now were going up because they anticipate a bigger book of business. The insurance company stocks were going down because this will affect their bottom line profit.

CAVANAUGH: Well, I wanted to ask you a bit more about that. This law also states that a person with a preexisting health condition cannot have their insurance canceled or denied. And that potentially could end up costing more. So how will that be absorbed, and will people's premiums go up?

KNOLL: I don't think so. Ultimately they will go down. But the reason is because the Supreme Court found a way to make the individual mandate constitutional. That's what wee said along. Everyone must be in the pool. All of the healthy folks have to be in the pool. In 2006, Mitt Romney referred to his mandate in Massachusetts has personal responsibility. I think that's a perfect description. It is part of why we want everybody in the pool, so the cost for everyone can come down. The great news today is that all of the tens of thousands of young adults can stay on their parents' policies, children have no preexisting condition limitations. It's -- as a lawyer, it's a good day for the rule of law. As a health advocate, it is a great day for health in America.

CAVANAUGH: Will this make your job as legal aide a lot easier in the sense people won't have to fight so hard to get access to healthcare?

KNOLL: Well, I still think that accessing healthcare in this country for a long time is going to be extremely complicated. That's why part of the affordable care act calls for consumer assistance programs. And as you may know, we've been funded by the State of California to be the consumer system in San Diego County, and they're going to need help accessing and getting through all the regulatory information, trying to determine whether they're in the exchange or not, small businesses trying to figure out how they can best cover their employees, how to access the tax credits. One of the great things about this act are the business tax credits that largely are going unrequested.

CAVANAUGH: That is obviously a big issue for employers, they're wondering what is this going to do to our premiums? Anyone?

KNOLL: I think eventually, they're going to come down. You're going to be in a competitive marketplace, there are some subsidies in the form of business tax credits. Unless people talk about the facts related to the act, and all of the great financial incentives, that's the real story of this act.


ROTTO: There's the innovation center, and they have had some funding for pilot projects, and one will be extended here to San Diego. San Diego organizing project is a part of it, along with San Ysidro health centers, and it builds on something called high utilizers, and it's off of a study done in Camden, New Jersey. Rutgers university is helping with this. And what it's going to do is take folks who are high utilizers in the emergency rooms, identify them, it's called hot spotting, who are these folks? And providing services to them closer to where they are so that you can intercept them and avoid them going to ERs. The emergency room is the high cost of care. It's the hospital care. And so many of them, what was found in Camden, was they were for upper respiratory diseases, colds, things that you can handle in a primary care setting. It's that type of thing that's being funded, those type of innovative things are being funded through the affordable care act that's getting our area ready for the full implementation.

KNOLL: I think all of the arguing and political wrangling, if you just put that aside and try to look at nonpartisan analysis like the CBO, the congressional budget office, who has already indicated that over the next ten years the affordable care act implementation alone is going to save trillions of dollars for the economy. About 18% of the GDP right now is for healthcare costs. It's got to stop.

CAVANAUGH: The critics argue that it's the end of freedom in this country, and it's going to bankrupt families. What do you think is important to follow now?

GOLDBERG: The one missing element in California, at least, and commissioner Jones was talking about that today, in California health insurance rates are not regulated. In other words, there's nothing to prevent health insurers under this act or any other act in California from raising rates at will. And there's a bill in the state legislature now, and a ballot measure that may be on the November ballot that would grant the state insurance commissioner the ability to reject rates he or she considers excessive. This kind of rate regulation happens in many other states, but not California. And California, the state insurance commissioner regulates home insurance, regulates auto insurance but for some reason health insurance is not regulated. So that's a big issue. He addressed that this morning, and he was the one pushing this measure when he was in the state assembly. He also has endorsed this ballot measure and we might find out tomorrow if it actually qualifies for the November ballot

CAVANAUGH: If the federal government is saying if you don't want to pay your insurance, you can always pay a penalty to the federal government, which is what the protestor called the tax, right? And if the insurance premiums go too high, it might actually become more attractive to pay the tax.

GOLDBERG: Well, are the tax is low. That's one of the problems with the bill the way it was structured. It's so low that many people might say, yeah, forget about it.

KNOLL: It's low to start, at about $95. But it's interesting. The tax goes up over four years, up to 2019, it goes up, and it can get a little stiff later. And the hope is, as Kenny rightly points out, the idea is you want to be able to compare and say, well, I think it's common sense to go ahead and get insurance so I'm not subject to the higher tax four years down the road.

CAVANAUGH: Well, Gary, I want to ask you whether there's any compulsion to insure children. They're already suffering at the moment. If families have the option to choose whether to get insurance or pay a tax, some of these children may remain uninsured.

ROTTO: Well, and part of it is handled through the healthy families program which is now in flux. That took folks that were not eligible for Medi-Cal, especially kids, up to 250% of the federal poverty level and allowed them to be able to pay in, pay an insurance premium. So hopefully that will -- that type of coverage will continue, and people will continue and tend to look after their kids first, and it's certainly something that we see a lot with the clinics. We see so many kids that come in for their immunizations, for annual change-ups, etc.

CAVANAUGH: Gary, who in San Diego are the big winners under this?

ROTTO: Well, as far as clinics as a network, we've been very successful in competing for federal grants. There was about $19 million in grants that came down for clinics in our network to be able to rehab facilities or build new facility, and even out in imperial county, another grant came down for a clinic in Brawley, they're going to be able to set up a new site. $2 million they're going to be receiving.

CAVANAUGH: So it should be much easier for people who don't have a lot of money to access healthcare?

ROTTO: Absolutely, we're going to be able to expand services and have greater availability.

CAVANAUGH: And Glen, in terms of the future, how do you see this shaping up legally? Is this the end of the legal battle?

SMITH: I think it is, generally. I was just going to say, I think the winners in San Diego from a legal standpoint are all the citizens who believe that these kind of policy questions should be worked out Democratically by elected officials and should be worked out by individual decision making. The Court got out of the way of the political process to let things be sorted out as they always are in America, by a majority democracy.

CAVANAUGH: Great. Okay. One last comment?

KNOLL: Sure, I think the people that benefit is everybody. I believe this makes us a healthier nation and will ultimately go to everybody's benefit. I think having everyone with access to health coverage is a fundamental right, and I think now it might become a reality.

CAVANAUGH: All right. Thank you, gentlemen very much.