Facing a $55-million deficit during the Great Recession, Sacramento County officials made a choice: To save money, they would close their free health clinics to people who entered the country illegally.

Six years later, they want to reverse that decision.

“The real intent of the Affordable Care Act, political or not, is to see to it that we’re all covered,” said Sacramento County Supervisor Patrick Kennedy, who was elected last year after campaigning to restore clinic access for these immigrants.

“We know the right thing to do, and that’s offer a level of healthcare that’s available to every person in Sacramento County.”


California law has long required county governments to provide healthcare to their poorest residents, but most have not interpreted that to include those who’ve entered the country illegally. But now that almost all of the other people counties once paid the tab for have insurance under Obamacare, some officials think they can afford to reconsider.

Health advocates say it’s a smart financial move. People who entered the country illegally are barred from signing up for Obamacare, and without insurance, they can generally visit only emergency rooms or free clinics. Giving them access to care through other means can prevent the spread of disease and save money by offering less expensive primary care that can catch or stave off serious illnesses that are more expensive to treat, Kennedy said.

So Sacramento supervisors are set to vote this week to begin offering healthcare to residents who entered the country illegally. However, the plan they’ll probably adopt is a modest one: a $5-million investment that would provide limited care to less than a quarter of that population.

A similar proposal is moving through the Legislature. And though that bill, SB 4, was originally intended to cover more than 1 million Californians in the country illegally, it had been significantly whittled down by the time it passed the Senate this month, with provisions to cover only a few hundred thousand. Now it heads to the Assembly.


These decisions reflect public agencies’ continuing tight budgets, but they also speak to a central problem with the American healthcare system — one the Affordable Care Act aims to correct.

Even though programs and services may improve the general public health, officials are reluctant to spend money on them unless they deliver immediate benefits.

“Very few organizations have an economic incentive to invest in interventions that improve health in the long run,” said USC health economist Glenn Melnick. “That’s a real weakness of our healthcare system.”

Advocates argue that easy and early access to medical care will save money for the health system overall. Without coverage, people develop serious illnesses and end up in hospital emergency rooms, generating big bills, said Daniel Zingale of the California Endowment, which is leading a campaign to expand health coverage to all Californians. Those costs either increase hospital prices and then insurance premiums, or are subsidized by the federal government with taxpayer money, he said.


“We can pay for it in the emergency room setting, we can pay for it through [insurance] premium increases, or we can pay for it in a way that makes the most sense,” Zingale said.

But the way Zingale thinks would make the most sense — insurance-like coverage through a government — is a huge investment that many county officials are unwilling to make.

In Sacramento County, providing comprehensive coverage — primary, specialty and hospital care — to 15,000 of the county’s 50,000 undocumented residents would cost from $41.9 million to $52.3 million, according to county projections. Though officials didn’t calculate the cost for covering all 50,000, San Francisco County ran a program of similar size for $150 million annually.

“For me, this still comes back to the fact that we have a budget responsibility here,” Sacramento County Supervisor Susan Peters said at a recent hearing on the issue. “Whatever price tag it is, I want to know where the money is coming from.”


Supervisors acknowledge that funding these programs means less money for other city services, such as policing, that can serve a broader swath of the community. Providing health care to people who’ve entered the country illegally is also politically unpopular in many parts of California, with only 11 of the state’s 58 counties offering some form of healthcare to these immigrants.

It’s hard to make a financial argument as a medical provider or local government for programs that are simply good for people’s health “because the costs and benefits are not aligned,” said Steven Wallace, a professor of health policy at UCLA.

For instance, if a clinic for uninsured patients invests in a cancer screening that catches a tumor early, it does a huge service for the patient and saves money for the hospital that might have had to provide more expensive treatment when the disease grew worse. But the clinic has made no money off that investment.

One of the main goals of the Affordable Care Act is to fix many of these misaligned financial incentives, which have often been blamed for driving up the nation’s healthcare costs.


Doctors typically haven’t profited from a patient not needing medical care. Traditionally, providers have been paid on a fee-for-service basis regardless of whether a patient’s health improved. Now, many receive a lump sum to take care of a patient over a period of time, so they profit when they prevent them from getting sick, avoiding the need for more expensive care.

In a sign of the growing shift away from that fee-for-service model, federal officials announced in January that Medicare, the government’s biggest health insurance program, would handle half its payments based on quality of care by 2018.

But that won’t change anything at the county government level.

In Sacramento County, expanding health coverage to include some undocumented immigrants may reduce ER and free clinic visits but still “as a county ... you’re not saving money in the county’s general fund budget,” Wallace said.


And finances remain tight for Sacramento County.

County governments lost money when the Affordable Care Act was implemented, because the state took back millions in health funding to finance an expansion of Medi-Cal, the state’s health program for the poor, which now insures millions of low-income Californians who once received care through counties. In Sacramento, funding for their health program dropped from $42 million to $13 million, according to officials.

Hugo Marquez, who works in Sacramento, told supervisors at a recent meeting that he’d benefit from county medical care. He has a hernia and a misaligned spine for which he can’t afford treatment.

“The only thing I know is life here,” he said. “I work day to day, five days a week, eight hours, like the American dream.”


He’s worried, he said, that he won’t be able to support his wife and two kids if the injuries get worse.

Supervisor Phil Serna, the Sacramento County board chairman, said he thinks healthcare is essential. He acknowledges that the proposed investment is small but said he is happy the county is poised to take this first step.

“If we had unlimited revenue, we would try to provide unlimited services, but that’s just not the case,” Serna said.

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


soumya.karlamangla@latimes.com

Follow @skarlamangla for more California health news.