Consumer Federation of California

If the healthcare reform law is thrown out by theU.S. Supreme Court ‘ as many fear could happen based on the comments of conservative justices ‘ more than 700,000 low-income Californians could lose a once-in-a-lifetime chance to obtain affordable health insurance.

At stake is what’s known as a Basic Health Plan. This is a system provided for by the reform law, fully funded by the federal government, that would extend coverage to people who may not be able to afford conventional insurance policies but don’t qualify for Medi-Cal.

State Sen. Ed Hernandez (D-West Covina), chairman of the Senate health committee, is the author of legislation that would create a Basic Health Plan in California beginning in 2014. It would provide coverage to about 720,000 people for as little as $30 a month.

But that’s only if the reform law remains intact, providing up to $3 billion in federal funds needed annually to make the program a reality.

"If the court throws out the entire law, that’s the nuclear option," Hernandez told me. "The Basic Health Plan would lose all funding. It’s what I’m afraid of most."

Critics of the healthcare reform law focus primarily on its requirement that most people buy insurance or face a modest tax penalty, which is the trade-off for a separate requirement that insurers provide coverage to everyone, regardless of medical condition.

These critics seldom acknowledge other aspects of the law aimed at helping insure some of the roughly 50 million people in this country who now lack coverage.

That’s an act of pure selfishness (even though we’d all benefit from having fewer people relying on emergency services for treatment). It’s also a display of heartlessness unbefitting a country that claims to define itself by love-thy-neighbor Judeo-Christian values.

I wrote this month about another program in jeopardy, the Pre-Existing Condition Insurance Plan, or PCIP, which relies on nearly $350 million in federal funds to provide a safety net for Californians who have been turned away by private-sector insurers because of a medical disorder.

The PCIP is intended to protect such people until so-called insurance exchanges are created by the reform law in a couple of years. But if the Supreme Court rules the entire law unconstitutional, the exchanges would almost surely collapse and funding for PCIP would vanish.

Hernandez’s Basic Health Plan faces the same prospect.

"The beauty of the plan is that it’s completely funded by the federal government," he said. "When we can help this many people get access to the affordable, quality healthcare they need without putting additional strain on California’s budget, we need to act."

Hernandez’s bill, SB 703, would target people earning $30,000 to $46,000 a year. Such people would probably find the policies offered by insurance exchanges too pricey, although it remains to be seen how much coverage under the system would cost.

At the same time, these people would be largely ineligible for Medi-Cal because their incomes are above the near-poverty levels required by the program.

"The Basic Health Plan is coverage for the working poor," Hernandez explained.

The drafters of the healthcare reform law anticipated a need for such coverage, he said, because many people fall between the cracks of the existing healthcare system. So funding for Basic Health Plans was included in the law for any state choosing to establish such a program.

"It is clear, even at this early stage, that the BHP option deserves serious consideration by states seeking to provide their low-income residents with affordable and continuous coverage while improving state fiscal circumstances in 2014 and beyond," the nonpartisan Urban Institute concluded in a recent report.

Hernandez’s bill creating a Basic Health Plan in California was approved by the state Senate last year. It’s now making its way through the Assembly.

The key question before the Supreme Court, meanwhile, is whether Congress has the authority to impose a tax penalty if people choose not to buy health insurance.

Although many constitutional scholars say this power is well-established under a number of judicial precedents, the court’s conservative justices made clear during three days of hearings that they think lawmakers may have overstepped.

Justice Antonin Scalia indicated that if the so-called mandate is ruled unconstitutional, the entire law would have to be scrapped. "My approach would be to say that if you take the heart out of this statute," he said, "the statute’s gone."

With it would go the requirement that insurers provide family coverage to young people up to age 26, which has extended insurance to about 2.5 million people. With it would go the requirement that insurers cover anyone who applies, no questions asked.

With it would go the Pre-Existing Condition Insurance Plan, which is currently the only affordable way many people can obtain coverage. With it would go the exchanges that would provide a marketplace for millions of people who lack insurance.

And with it would go the Basic Health Plans that, as Hernandez observed, may be the only recourse for the working poor ‘ people who are striving mightily to participate in the economic benefits of American society but all too frequently are left out in the cold.

The stakes are so very high.

Republican politicians can criticize the healthcare reform law all they want. But at least offer an alternative that accomplishes as much.