In ironic twist, S.F. is worried Obamacare could hurt its most vulnerable residents

Reporting from San Francisco —  Nearly 10 years ago, this county by the bay known for its progressive political leaps became one of the first in the nation to offer residents universal access to healthcare.

Now the federal Affordable Care Act has been rolled out nationwide with the same goal in mind. But in an ironic twist, officials in this city are worried the new law could adversely affect some of the most vulnerable San Franciscans.

The local health program known as Healthy San Francisco, which has served as many as 60,000 patients annually since its creation in 2007, is almost free.

Obamacare plans, however, are not. They come with government subsidies that bring down costs, but premiums, co-pays and deductibles can still add up to hundreds or thousands of dollars a year. That’s more than many people can afford, health advocates say.

“It’s definitely not a fix-all yet,” said Elizabeth Sekera, a director of a long-established clinic in downtown that treats patients in Healthy San Francisco.

County officials here are weighing ways to help residents pay for insurance plans offered through Covered California, the state’s health insurance exchange that was created through Obamacare. Some argue the plans won’t be truly affordable, and the promise of healthcare reform won’t be fulfilled, without the extra assistance.

The debate reflects one of the many challenges local leaders face as they seek to adapt to the sweeping changes prompted by the Affordable Care Act. With millions of Americans newly insured under the law, state and county governments have had to downsize or reorient public healthcare programs that previously served many of those patients.

In the process, they’ve also faced potentially costly and politically sensitive issues, such as extending coverage to people in the country illegally and deciding when to limit taxpayer expenditures on those who remain without insurance for various reasons.

Sekera works at Lyon-Martin Health Services, tucked away in a now-trendy corner of Market Street, with its brick sidewalks and overhead cables. Marked by a plain sign above the entrance, the clinic has operated here for more than 30 years, serving some of San Francisco’s poorest residents.

Before the rollout of the Affordable Care Act last year, many of the clinic’s patients had no medical insurance and their visits were partly covered by the county’s program. With more than 70% of its patients lacking traditional health insurance, the clinic almost went broke in 2011 because it wasn’t generating enough revenue, Sekera said.

But Obamacare’s massive health insurance expansion has been a boon to this and other community clinics across the state, with insurance plans paying for treatments that used to be provided free of charge or at very low cost to patients. Now 70% of the clinic’s patients have insurance.

“It is a game changer,” Sekera said.

But it hasn’t felt like a financial blessing for all her patients. Many tell Sekera they can’t afford the additional costs that have come with Obamacare coverage while managing the high cost of living in San Francisco.

Some are living paycheck to paycheck, facing some of the highest rents in the country, and can’t afford health insurance premiums, co-pays and deductibles, she said.

Judy Zhang, 28, was part of Healthy San Francisco for years. When she had gallbladder surgery several years ago, she didn’t pay a penny, she recalled.

“I’m really grateful for that,” she said.

Now she pays a $20 premium each month for a Covered California plan. It’s reasonable, she says, but Healthy San Francisco was “cheaper, and you didn’t have to do cost-sharing.”

If she has to use her insurance now for a significant health problem, she could owe hundreds in deductibles or co-pays.

Because such costs can be daunting for some low-income residents, county officials have allowed about 1,800 people eligible for Obamacare plans to remain in Healthy San Francisco. Colleen Chawla, director of policy and planning for the San Francisco Department of Public Health, said an additional 14,200 in the program are in the country illegally, and are barred from signing up for insurance under the Affordable Care Act.

County Supervisor David Campos said the county should help pay for Obamacare plans because federal assistance alone isn’t always enough.

The subsidies are the same nationwide whether a patient lives in low-cost communities or extremely high-rent regions like the Bay Area, he noted. A recent Kaiser Family Foundation survey found that cost was the biggest reason Californians didn’t sign up for health insurance, with 44% of those who were uninsured citing that as the deterrent.

The current subsidies don’t “reflect the reality of what healthcare really costs in these cities,” Campos said. “To fulfill the objectives of maximizing coverage, we have to go the added step of providing an additional subsidy. It’s the right thing to do.”

How San Francisco officials decide to proceed could become a model for many local governments. Almost two years after the launch of Obamacare, some experts say the focus is shifting from signing up as many people as possible to making sure the new insurance offerings work properly and remain affordable.

Officials here are considering a range of options, including reimbursing some or all of the cost of premiums and deductibles and seeking special deals with insurance companies to get needy patients lower rates on plans.

About $10 million is available for county officials to distribute among roughly 4,000 residents eligible for Covered California, Chawla said. The amount of individual subsidies offered by the county for out-of-pocket healthcare costs would probably vary based on need, she said.

The Board of Supervisors is expected to vote on the proposals later this summer, when they also are likely to decide whether those eligible for Obamacare can continue to remain in Healthy San Francisco.

Some other counties that offered health programs similar to Healthy San Francisco didn’t allow patients eligible for Covered California plans to stay in their programs.

Former San Francisco County Supervisor Tom Ammiano, who wrote his county’s universal healthcare bill, said officials shouldn’t push people out of the county program too quickly.

“The tenets of Obamacare are to be admired, but there are these gaps,” he said.

Sandra Hernandez, president and chief executive of the California HealthCare Foundation and one of the original architects of Healthy San Francisco, said the program has been “wildly successful” both in providing healthcare and moving thousands of people into Obamacare. She said that county officials should consider affordability, but it also is imperative that those eligible for subsidized plans sign up.

For the state’s revamped health are system to work properly and be adjusted to fully address residual problems, she said, all eligible patients must enroll in insurance coverage. She argues that insurance plans generally are better than Healthy San Francisco because their coverage follows patients when they move or travel outside the county.

“It’s great that people don’t want to leave the [county] program,” she said, “except that program isn’t health insurance.”

Soumya Karlamangla’s reporting on the remaining uninsured was undertaken as a California Health Journalism Fellow at USC‘s Annenberg School for Communication and Journalism.

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