Health Access CA Discussion Paper: Options and Opportunities for California under Section 1332 of the ACA

Covered California is collaborating with the California Department of Health Care Services to explore options for California under Section 1332 of the Affordable Care Act (see Covered CA’s slide deck from last month’s informational webinar). Under Section 1332, states may seek a waiver from the federal government to pursue innovative approaches to achieve the primary goals of the ACA. The proposal should cover at least the same number of people with the same level of benefits, affordability, and consumer protections and cannot increase the federal deficit. Depending on local priorities for reform, states can seek to waive ACA provisions related to:

  • The Exchange marketplace and subsidies for coverage
  • Some insurance market rules but not all
  • The individual mandate
  • The employer responsibility requirement

California has taken important steps to not just implement but improve upon the ACA and a 1332 waiver is a new tool to take additional steps. Health Access is pleased to release a new discussion paper exploring the following broad areas of reform where a 1332 waiver could facilitate potentially worthwhile changes for California:

  • Inclusivity: Allowing undocumented Californians to buy unsubsidized plans through Covered CA.
  • Streamlined enrollment and reduced churn and disruption for consumers by aligning coverage and other rules between programs, especially Covered California and Medi-Cal.
  • Improved affordability: from premiums to cost-sharing to better benefits.
  • Broader system transformations such as a revamped employer mandate requirement or single-payer health care are theoretically possible through a 1332 waiver but face the same political and practical obstacles that previously existed.

Click here to read the paper. Since this is a discussion paper, we welcome your comments and questions. Please email to share your thoughts.


Covered CA and DHCS are hosting a panel discussion (also featuring Health Access’ Anthony Wright) on Section 1332 waiver options for California on February 23, 2016 8:30 AM to 12:30 PM at Covered CA: 1601 Exposition Blvd. Sacramento, CA 95815.

Click here for details (and to register for the webinar).

Centene/Health Net Executives Answer to Regulators, Consumer Advocates and the Public

Consumer advocates are still skeptical about the proposed merger between Centene and Health Net after a six-hour long hearing about the transaction, where insurance company executives provided vague explanations of how consumers would benefit for the merger, but were unwilling to make any specific commitments to protect consumers. On Friday, January 22, California Department of Insurance (CDI) heard over six hours of testimony from insurance executives, consumer advocates and the public during an official hearing held at the Capitol. This hearing took place a month after a public meeting held by the Department of Managed Health Care (DMHC) on December 7, 2015.

During the hearing, California Department of Insurance Commissioner Dave Jones, department officials, and the public heard from Centene and Health Net executives, expert witnesses, consumer advocates and the public on the potential impact of Centene’s takeover of Health Net on California’s health insurance market, as well as Health Net’s track record in California, Centene’s commitment to California consumers and maintaining its presence in California’s health insurance market.

The hearing began with Commissioner Jones giving a procedural overview and review of the agenda, followed by testimony by Centene and Health Net executives. Their testimony closely followed statements made in earlier public meetings, focusing on the supposed benefits and cost savings of integration, consolidation and increased market share, but with little contractual or enforceable assurances made to ensure consumers will benefit from this merger.

Centene and Health Net Executives Questioned by CDI

John Finston, General Counsel for the California Department of Insurance, cross-examined the insurance executives with a series of questions drawn heavily from comments and issues raised by consumer advocates, such as Health Net’s poor quality ratings, Centene’s commitment to staying and operating in California and the possible effects the merger would have on California-based staffing. Finston also asked a lot of questions about on Centene’s experience in Kentucky, where the insurer abruptly pulled out of the state’s Medicaid program in the middle of its three-year contract.

Throughout the cross-examination, Finston continually asked Centene for assurances and commitments regarding its operations in California, improving its consumer quality ratings and maintaining adequate provider directories. Centene would not commit to any specific assurances or actions to improve the consumer experience, but would only agree to ongoing conversations with the department to address those issues. These vague assurances were repeated by Centene throughout the hearing, with no specific or enforceable guarantees provided.

Finston also delved into the issue of executive compensation and bonuses due to the merger, which revealed that Health Net’s top executives will receive about $70 million in severance and stock options and sales. Both Finston and Commissioner Jones pressed Centene’s executives on their willingness to disclose the costs of the merger and ensure no costs are passed along to consumers or reflected in rate increases. Centene again expressed their willingness to discuss this with agency officials but refused to any binding agreement.

Commissioner Jones then raised key questions to Centene’s expert witnesses regarding the potential impact on consumer access and the health insurance market if Health Net exited the individual market and no longer offered insurance products in certain regions in Southern California, where Health Net has the largest market share. Centene’s expert witnesses continued to focus on the likelihood of that not happening, rather than the impact if it did. Commissioner Jones finally asked for enforceable or binding language in their documents—rather than just statements—committing them to staying in the commercial marketplace. Centene responded they did not have any binding language but, again, were willing to have conversations with the department about it.

After Commissioner Jones and General Counsel Finston finished their line of questioning, Richard Scheffler and Brent Fulton, two UC Berkeley professors, gave testimony about how insurer consolidation can affect health care market competition and how the Health Net-Centene merger can impact market concentration in different regions of California. Their review of the research demonstrates that health insurance mergers and consolidation is not beneficial for consumers and has led to higher prices for customers and higher profits for the insurers. Further, due to Health Net’s concentration of market share in certain regions in Southern California, an increase in market share could result in a narrowing of provider networks in those regions, thus reducing consumers’ access to care.

Afterwards, consumer advocates including Health Access California, Consumers Union, and Consumer Watchdog asked Centene’s executives a series of questions to regarding Centene’s commitments to get better as it gets bigger, if the merger is approved.

Consumers Advocates Weigh In

Tam Ma represented Health Access California and began her line of questioning focusing on why Centene is merging with Health Net and not just entering the market as a new entrant and providing additional plan options for consumers. She also asked how Centene planned to gain efficiencies and pass any savings along to consumers. Centene executives claim that by merging with Health Net, consumers will have access to more affordable health insurance options and they will able to offer these products into the future and remain competitive. Tam continued to press Centene, asking if consumers can expect to see savings through reduced premiums and cost sharing due to these savings. Centene again maintained the savings would be used to continue affordable plan options for its customers, but that other factors, such as health care costs, may continue to cause premiums to increase.  Health Access also focused on Centene’s commitment to maintaining accurate provider directories to comply with California law. Centene responded they are using their resources to find technological solutions maintaining its directories, participating in a pilot program with other insurers.

Representatives from Consumer Watchdog and Consumers Union also questioned Centene’s executives, continuing to ensure the consumer remained a focus of the hearing. Consumer Watchdog focused its line of questioning on Centene’s inadequate provider networks, patients who had subsequently received large out-of-network bills and sued Centene. She also asked about Centene’s commitment to continuing to offer plans in Southern California and its history of unreasonable rate increases. Centene only responded it would continue to have conversations with the department regarding these issues. Consumers Union asked for assurances from Centene to improve Health Net’s low quality ratings; which Centene replied it would commit the resources to do so.

After questions from the public and testimony from expert witnesses, consumer representatives from Health Access California, Consumers Watchdog and Consumers Union provided their testimony, which focused on many of the same issues discussed during the cross examination.

Representing Health Access California, Tam Ma shared our main concern for this and other mergers, which is whether California consumers, and our health system as a whole, will be better off. Tam focused on the lack of evidence that mergers result in higher quality or lower prices for consumers. She also continued to draw attention to Health Net’s poor track record as it relates to consumer protections and low patient satisfaction and quality scores. Further, Centene should be required to have a California-based medical director, legal counsel and regulatory compliance staff who are knowledgeable about California-specific consumer protections and other requirements the state places on all health insurers. Tam also urged Centene to promise to not proceed with rate increases that state regulators deem to be unreasonable.

Health Access and other consumer groups stated they were opposed to the merger unless it includes strong, enforceable conditions that ensure consumers are protected and benefit from these two companies getting bigger.

The Insurance Commissioner is keeping the record open and the public is welcome to submit comments regarding the merger by 5:00 PM on January 29, 2016. Comments should be sent to:

Health Access will continue to monitor and scrutinize the Centene/Health Net merger (and other mergers pending before state regulators) to ensure consumers benefit from the claims of greater efficiencies and cost savings.

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Tam Ma, Health Access Policy Counsel, testifying at CDI hearing, 1-22-2016

Covered CA Unveils Next Stage of Delivery System Reform: Highlights from January 21, 2016 Board Meeting

Thursday’s Covered CA Board meeting featured an overview of certification parameters for Qualified Health Plans (QHPs) to be offered in 2017, proposed changes in benefit design, and new data-driven initiatives to improve quality and equity over time.

As Governor Brown said proudly in his State of the State address earlier that day, California has “wholeheartedly embraced the Affordable Care Act… enrolling 13.5 million Californians in Medi-Cal and another 1.5 million in Covered California.” As an active purchaser exchange focused on standardized benefits, Covered CA has driven much of the state’s progress to date on health reform. “In many respects Covered CA has “dared to do what others dream of,” said Covered CA Board Chair Diana Dooley, quoting Gov. Brown.

Consumer advocates have worked with Covered California to build on that success to tackle the “quadruple aim” (better health outcomes for individuals, healthier populations, lower costs, and improved health equity). Much of that input is reflected in the proposals presented in Thursday’s meeting.

Recommended Certification Standards for 2017 QHPs

To go further on its mission to improve health care quality, lower costs, and reduce health disparities, says Director Peter Lee, Covered CA must leverage its active purchasing authority to shape the delivery system itself. As proposed, the 2017 certification standards encourage the plans to use payment and other incentives to move providers toward more integrated approaches to care, whether through accountable care arrangements, use of telehealth, or whatever makes sense in the given community—whatever it takes to ensure access to a patient-centered medical home. Payment methodologies should include incentives to provide care at the right time and place and to minimize harmful or wasteful care, utilizing proven tools like Choosing Wisely to educate patients on how to make more informed decisions about their care.

To offer products in 2017, QHPs will need a coherent strategy for continuous quality improvement, in alignment with new federal requirements, (QIS) that focus as well on the unique economic, demographic, and regional variations that exist within the enrollee population. Data collection is key to this new direction—“you cannot can’t change what you can’t measure”—so 2017 will have plans establishing benchmarks around all of the data points so they can track progress on the plan’s QIS. Earlier discussions entertained Value-based Insurance Benefit Designs (VBID), but this focus has been smartly delayed until sufficient data is available on utilization.

Benefit designs (more details below) can be adjusted from year to the next, as needed, to achieve QIS aims, but they should focus on prevention and access to primary care and cost sharing to complement access to care. On this point caution is in order, say several consumer advocates, lest people living with chronic conditions face discrimination by virtue of their need to use more specialty care. For these patients the plans must provide incentives to efficiently coordinate care.

Benefit Design 2.0

The proposed 2017 benefit designs build on Covered California’s strong foundation of standardizing benefit designs to prioritize primary care while staying sensitive to those with chronic conditions; placing limits on cost sharing; and providing transparency for consumers so they can make informed choices. Any adjustments to these levers are necessarily constrained by the overarching requirement to stay within or close to the actuarial value (AV, which represents the percentage of health care costs covered by the insurer) limits by metal tier.  We are left, therefore, with fairly modest adjustments, including:

  • Promote access to care by reducing copays for primary and mental health care and rehab.
  • Promote access to urgent care when needed—for example, workers who cannot visit the doctor during the daytime need affordable copays for urgent care.
  • Improve consumers’ understanding of benefits and cost sharing obligations.
  • Meet new regulatory requirements, as per Health Access-sponsored AB 339, by applying the drug cap after the deductible, and so on.

To meet the AV test, benefit designs will have increased cost sharing in silver/bronze deductibles; a higher MOOP (maximum out-of-pocket) limit in gold and silver plans; higher copays for x-rays and diagnostics; and increased ER facility copays. The only VBID-like change, which we welcome, is the new $0 copay for diabetes self management.


Consumers come out just ahead in these proposed changes and in another requirement on the QHPs to apply best efforts to enroll all subsidy-eligible populations in subsidized products.

See Health Access and key partners’ letter weighing in on these changes—and clarifying rationale for going further. As an active participant in Plan Management Advisory Committee where these proposals were developed, Health Access remains grateful for the opportunity to weigh in (almost) every step of the way.

Covered CA Quality and Delivery System Reform

Efforts to raise the bar on the Triple Aim (or really quadruple aim—including equity) through delivery system reforms are off to a promising start, thanks to the efforts of Covered CA Chief Medical Officer Dr. Lance Lang and the Plan Management and Quality Committee.  Starting with the 2017 and the QHP certification process, QHPs, providers, and patients will have incentives and tools like shared decision making to deliver and seek health care in the right time and place. Plans and providers will track, trend, and reduce health disparities based on race/ethnicity, geography, gender, gender identity and sexual orientation, and other demographic factors.  Plans will increase self-reported identity data to 85% by 2019—and proxy measures based on a combination of zip codes and surnames will be used to make up that difference. Disparities reduction strategies will focus at first on diabetes, hypertension, asthma, and depression—conditions which have significant disparities but that are also amenable to change.

By aligning these quality initiatives and QIS strategies to improve outcomes, prevent hospital readmissions, improve patient safety, and promote population health and wellness with large purchasers in the state like Medi-Cal and CalPERS, and applying certain requirements to the QHP’s entire book of business, Covered CA’s next stage of delivery system reform can have statewide and market-wide impact.

It will be up to the QHPs to build provider networks that are aligned with these admittedly ambitious goals.  Any variations in quality of care will need to be addressed either by dropping certain providers or explaining why they are being retained. The point is for each QHP to have their own coherent plan for meeting triple or quadruple aim objectives, working from benchmarks initially and from there collecting all of the data needed to track improvements over time. NCQA (or URAC or AAAHC) accreditation will be required of all QHPs—that will open up access to robust tools and learning communities to support triple aim goals.

Population health incentives for the QHPs start out fairly modest and conventional by comparison to the above. Plans will identify high-risk enrollees and promote utilization of preventive care, tobacco cessation, and obesity management. Patients, for their part, will have transparency tools to choose quality providers and share in decision making about their care. This last feature builds on research showing that the more consumers know about their options, especially at the end of life, the less likely they are to choose medically unnecessary and expensive procedures.

If we like where all of this is headed, or if we see any tweaking, we need to act fast. Comments are due February 11.

Other Updates

  • Lee reported that open enrollment 2016 has gotten 290,137 Californians newly enrolled by January 18. The deadline to enroll in January 31—and this year there will be no extension. New dental coverage has 142,552 already enrolled.
  • Tribal glitch: Covered CA is planning to fix a glitch in eligibility facing Indian families with mixed tribal status. As noted by the California Rural Indian Health Board, eligibility is messy for Indians living in mixed tribal status households, where some members have tribal affiliation and others do not. Eligibility policy and processes need to be updated to handle these situations.
  • Section 1332 State Innovation Waivers. Next week will be the official start of the state’s Section 1332 State Innovation waiver process, starting with a public forum on January 26 3:00-4:00 PM (register here) dedicated to guiding proposal development. Section 1332 of the ACA allows a state to pursue a different path to achieving the ACA’s goals with respect to access, affordability and patient protections. Based on Federal guidance for Section 1332 waivers, released last month, California’s options to use Section 1332 to cover the remaining uninsured are limited by the constraints of budget neutrality and other factors. Still, several consumer advocates like Betzabel Estudillo of California Immigrant Policy Center, made the case to leverage the Sec. 1332 opportunity and be the first state to “open the exchange to all.” Whether undocumented Californians can get subsidies or not, having a single point of entry for the entire family, said a representative of the Greenlining Institute, will help boost enrollment in hard to reach immigrant families and improve the risk mix, indirectly lowering costs. To meet the January 2017 deadline when Section 1332 waivers can first go into effect, enabling legislation would need to be passed in this session, noted Beth Capell for Health Access CA.

As for next steps, take a look at Covered CA’s revised 2016 calendar and prepare for next week’s forum on the Section 1332 waiver opportunity (register here).


Photos: Advocates Respond to Gov. Brown’s Budget, Demand “It’s Time” to Invest in Vital Services

On Friday, January 7, the California Health and Human Services Network (HHS Network), a coalition of anti-poverty advocates, held rallies across the state to demonstrate support for an equitable 2015-2016 California budget that proactively fights poverty through investments in health and human services.

At the rallies, advocates responded to Gov. Brown’s budget and urged investments in childcare programs and the health care safety net, to restore in-home supportive services (IHSS) cuts, repeal the maximum family grant (MFG) rule, improve services for the developmentally disabled, augment SSI funding, increase the minimum wage, fund alternatives to incarceration, remove the discriminatory earned income tax credit (EITC) exclusion to tax-paying undocumented families and adequately fund programs for seniors.

Health Access California was proud to participate in these budget actions and highlight the need to restore critical funding to our state’s health care safety net.

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Prescription Costs Transparency Bill Fails in Assembly Health Committee, But Fight Continues

Earlier today the California Assembly Health Committee failed to pass AB 463 (Chiu), a bill introduced last session that would have required greater transparency around the pricing of high-cost medications. Bill author David Chiu pulled the bill because he did not have enough votes, like last year, to get it through committee.  But, as he stated, this issue is not going away and additional efforts are expected this year.

Specifically, AB 463 would have required each manufacturer of a prescription drug costing more than 10,000 per year or per course of treatment to file a report each year with OSHPD (Office of Statewide Health Planning and Development) on the factors underlying the final price of the given drug, including:

  • production costs (research and development, costs of clinical trials and other regulatory costs, materials, manufacturing, administration and other costs like patents;
  • marketing and advertising costs (direct-to-consumer and focused on prescribers)
  • History of AWP and other pricing standards used by major payers
  • Total profit
  • Amount of financial assistance provided through patient assistance programs
  • Total costs of drugs that failed to succeed through the approval process—added in 2016.

For consumer, labor, and other groups backing the measure, including Health Access California, the quest for a more rational approach to prescription drug pricing has only just begun. From new treatments costing $1,000 a pill to huge price spikes for decades-old medications, Californians, too, are asking hard questions about why drugs costs so much. In recent polling by Kaiser Family Foundation this issue actually comes out on top, along with other issues we are working on like surprise bills and adequate provider networks.


For CalPERS, the state’s largest buyer of prescription drugs and thus in best position to negotiate favorable pricing, specialty drug prices soared 32% just in the last year (for details see recent LA Times feature). With trends like this, the issues of pharmaceutical costs is clearly too big to just go away with one committee’s failure to act.

Health Access expects to see, and support, other policy efforts this year. Politicians ignore public anger over prescription drug costs at their peril.

President Obama Vetoes Obamacare Repeal

It’s not news that President Obama was going to veto the bill to repeal the Affordable Care Act, as he did today.

But it is worth noting that 240 House Representatives–including all Republican Members of Congress from California–voted to strip away the subsidies that help the 1.3 million Californians afford coverage that they purchased through Covered California; that they voted to phase out the Medi-Cal expansion that covers millions more; that they voted to undo other elements of “Obamacare” that would certainly make insurance rates skyrocket. (The measure also defunds Planned Parenthood.)

These members of Congress in California and nationwide did this against the direct interest of thousands of their constituents, and without any replacement plan. It’s a sobering reminder that the only thing from making that repeal a reality was the occupant of the White House.

Initial #CABudget Reaction: No New Cuts with MCO Tax–But Recession-Era Health Cuts Continue

Earlier today, Governor Jerry Brown released his proposed budget for the 2016-17 state budget, which continues California’s commitments on health care and health reform, but also continues the cuts made during the recession, and doesn’t make the needed investments needed to reduce barriers to coverage, increase access for Medi-Cal patients, or cover the remaining uninsured. Here’s some initial reactions:

* NO RESTORATIONS TO RECESSION-ERA CUTS IN THE HEALTH BUDGET: Even though we are many years from the recession and have a significant surplus, this budget proposal largely continues the recession-era cuts to health and human services. The surplus was created in part from $15 billion in HHS cuts; it’s high time to restore cuts to Medi-Cal benefits and rates and other public health programs. California should build on the progress we made under the Affordable Care Act, by removing barriers to coverage, ensuring those covered in Medi-Cal get access to benefits and providers, and extending care to the remaining uninsured.

* MCO TAX: While there aren’t any new investments in health, we are pleased with the momentum to revamp and renew the managed care organization tax swap, which enables California to draw down federal funds for our health system–with virtually no impact on health plan premiums. Maintaining this funding stream helps prevent a billion dollars in cuts to health care, on top of the cuts made in the recession that have yet to be restored. We hope legislators from both parties see the wisdom of bringing in these federal funds and maintaining this existing funding stream to prevent even more cuts. The MCO tax still needs to be resolved in the special session in January.

With our significant budget surplus, advocates will urge California to continue its progress under the ACA, to improve care for the projected 13.5 million Californians with Medi-Cal coverage, and to extend coverage to the remaining uninsured. 

The health policy debate will continue in budget hearings and on bills to cover California’s remaining uninsured regardless of immigration status (SB 10 by Sen. Lara), and to limit Medi-Cal estate recovery (SB 33 by Sen. Hernandez), which discourages patients from enrollment and potentially risking losing family home.

Key restorations and investments will be debated in the budget process this year, and may also involve voters this November, who will decide on revenues by extending upper-income taxes and raising the tobacco tax.

* IMMIGRANT HEALTH CARE: We should build on the commitment to care for all California children made in last year’s budget, and we will continue to push this year to ensure access to coverage for all Californians, regardless of immigration status. Immigrants are a vital part of our community and economy and should be fully included in our health system. SB10 (Lara) to extend access to health care to all Californians regardless of immigration status in pending in the Assembly.

* ESTATE RECOVERY: There are key health budget policy issues not addressed by this budget. It’s disappointing the budget does not remove the estate recovery provision that complicates enrollment and discourages patients for signing up for Medi-Cal coverage. The Governor has previously vetoed a bill to limit Medi-Cal estate recovery, arguing the policy change should be done in the budget instead. We will vigorously pursue this change, so some Californians don’t fear that their loved ones lose the family home as a result of signing up for coverage. SB33(Hernandez) to limit estate recovery is pending in the Assembly.

* REVENUES: The size of the surplus provides the opportunity to both put money away for a rainy day and to restore services for families for whom it is raining now. The budget debate will continue to November when voters will also have the opportunity to raise revenues. By extending Prop. 30 on high-income earners and increasing the tobacco tax, Californians can prevent cuts to vital services and make the investments needed in the health care system on which we all rely.

Health Access and other community advocates with the Health and Human Services Network (HHS Network) will respond tomorrow (Friday) in press conferences throughout the state, in San Francisco, Los Angeles, Bakersfield, and Riverside. 

Consumer Groups Question Aetna-Humana Proposed Merger at DMHC Public Meeting

On January 4, 2016, the Department of Managed Health Care (DMHC) held a public meeting on the proposed merger of Aetna and Humana. The public meeting was requested by consumer groups including Health Access, Consumers Union, and others to raise questions about the structure of the deal, its potential impact on California’s patients and health care systems, and ensure proper oversight as insurance companies merge and become larger.

The proposed Aetna-Humana merger is one of three pending insurer mergers being reviewed by DMHC. Earlier this year, the DMHC approved a merger between Blue Shield and Care1st, following Health Access’s and other consumer groups’ request for strong conditions to address potential negative impacts. Health Access is also monitoring the proposed Anthem Blue Cross-Cigna and Centene-Health Net mergers and will continue to fully engage state regulators, including the DMHC, to ensure strong consumer protections and a commitment to improving the health care delivery system.

Tam Ma, Health Access California’s Policy Counsel, provided comment on behalf of California consumers, raising questions about Aetna’s track record in California and if they should be allowed to have even greater market share. Specifically, she made the case that to ensure that this merger—and others— is in the public interest, insurers should not be allowed to get bigger unless they commit to getting better, sharing skepticism about whether bigger is actually better for consumers.

Lack of Consumer Protections a Concern

In her testimony, Tam Ma focused on Aetna’s track record in California’s commercial market and its lack of respect for California law as well as basic consumer protections.

  • Routine Medical Survey: Through DMHC’s most recent Routine Medical Survey, Aetna was found to have three major deficiencies, of which one had still not been corrected three years later. DMHC found that Aetna makes it difficult for patients to submit grievances and fails to provide information about California’s HMO grievance process on its website. If Aetna has repeatedly failed to meet basic consumer protections such as posting consumer rights information on their website, we question whether Aetna should be allowed to get bigger.
  • Enforcement actions: Health Net has been the subject of numerous enforcement actions by DMHC, most of which stem from its poor handling of patient grievances, from which it has had 45 violations since 2011. Aetna has accumulated over $100,000 in fines in the last year alone and in 2014 was fined $200,000 for failing to process claims and provider disputes in a timely manner.
  • Unreasonable rate increases: Aetna has proceeded with rate increases for its small group business that the DMHC found to be unreasonable. As a result, small businesses paid more than they should have for health care. In fact, DMHC Director Shelley Roulliard cited the pattern of going ahead with unreasonable rate increases in the opening of the hearing. Given their track record on proceeding with unjustified rate increases, consumers should be doubtful that Aetna will pass along cost savings to consumers and other purchasers.
  • Quality ratings: Aetna has had lackluster quality ratings; in patient surveys, patients give Aetna poor ratings for not helping them access the care they need when they needed it. Further, Aetna’s clinical performance ratings range from poor to fair in for all eleven health conditions covered.

Health Access also posed two questions to the representatives from Aetna and Humana, who had an opportunity to respond to public comment. First, why is this merger necessary? Why can’t Humana expand in California without he partnership with Aetna? Second, what concrete commitments and investments can Aetna and Humana make today about how this merger would benefit patients and the state’s health system? The representatives from Aetna and Humana did not respond to these questions in their closing statements.

Several other organizations provided public comment regarding the proposed merger. A couple in favor of the merger cited the negligible number of consumers affected while also being able to learn from Humana’s experience in other markets. Consumers Union raised similar issues and questions as Health Access, including concerns about unreasonable rate increases, skepticism about passing savings along to consumers and concerns with low consumer satisfaction scores.

Given Aetna’s and Humana’s track records, Health Access and other consumer advocates are urging state regulators and policymakers to scrutinize this merger and other pending deals. If regulators approve the mergers, they must impose strong, enforceable conditions to ensure insurance companies improve and strengthen consumer protections if they want to increase their market share.

If you or your organization would like to submit comments about this merger or the larger questions at stake concerning mergers in general, you have until Monday, January 11, 5:00 PM to submit your comments to

Federal Officials Approve New “Medi-Cal 2020” Waiver Renewal

Earlier today the U.S. Centers for Medicaid and Medicare Services (CMS) officially approved California’s “Medi-Cal 2020” waiver renewal for the next five years, providing new resources and new flexibility to deliver better care for the millions of low-income Californians who rely on Medi-Cal for their health coverage. The new waiver also includes support for a “smarter safety net” and innovative care solutions for the uninsured. The announcement comes one day before the extended deadline for final renewal.

A waiver is a formal request by a state to the Secretary of Health and Human Services to waive specific Medicaid program requirements in order to test new ways to deliver care without spending more federal dollars than would otherwise be spent. Since the 1990s, California has made extensive use of waivers to further health reform goals or more recently, to implement reforms (including the Medicaid expansion) ahead of schedule and to extend their reach. Under the Medi-Cal 2020 waiver renewal, California will have $6.2 billion in new funds and likely more over the next five years, to pursue innovations in health delivery, dental care, safety-net services for the remaining uninsured, and ‘whole person care’ through integration with other human services.

Key provisions of Medi-Cal 2020 include:

  • The Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program will build on the success of the state’s Delivery System Reform Incentive Program (DSRIP), a first for the nation. Under PRIME, Designated Public Hospital (DPH) systems and District Municipal Public Hospitals will pursue innovations in critical areas like physical and behavioral health integration and outpatient primary and specialty care delivery. PRIME also moves the DPHs toward value-based payment methodologies over the course of the waiver.
  • The Global Payment Program (GPP) provides incentives mainly to the county-based health care systems to improve the way care is delivered to the remaining uninsured. The counties, too, will move toward value-based payment structures and incentives to deliver primary and preventive care, as opposed to hospital-based care, to the remaining uninsured. With the resources set aside in the GPP, more California counties can leverage local partnerships to provide comprehensive care to the remaining uninsured (see our map for details).
  • Under the Dental Transformation Initiative (DTI), qualified Medi-Cal dental providers will have incentive payments to provide preventive services and better continuity of care to Medi-Cal patients.
  • Whole Person Care pilot programs, funded with up to $1.5 billion over 5 years, would explore integrating health with other human services. Many of the highest risk patients, for example homeless people or people leaving incarceration, cannot benefit from care without additional supports like housing services or food assistance. It’s one thing to diagnose a homeless patient with diabetes—but that patient won’t get very far in the prescribed treatment without a roof over her head. Under the whole person care pilot provision, counties will engage other social services and supports to help their most vulnerable patients fully benefit from care.

The waiver renewal also re-authorizes the Medi-Cal managed care program, Community-Based Adult Services, the Coordinated Care Initiative, and Drug Medi-Cal.

Finally, the waiver renewal includes an independent assessment of access to care and network adequacy for those enrolled in Medi-Cal managed care plans. Health Access welcomes this assessment and believes it will complement current efforts to ensure timely access to care across the state.


The California Department of Health Care Services (DHCS) will convene a stakeholder webinar to review the requirements of Medi-Cal 2020 and answer questions.

When: January 25th 3 p.m. to 4:30 p.m.

Where: Details, including the waiver approval letter and Special Terms & Conditions are available on DHCS’s website.

Hearing on “Public Health Impacts of Tobacco Use in California: Problems and Solutions”

The Conference Committee on AB2X 1 (Bonta) and SB2X 2 (Ed Hernandez) held an Informational hearing to discuss the Public Health Impacts of Tobacco Use in California and Problems and Solutions on Thursday, December 17, 2015 in Oakland, California. There were close to 100 people in attendance, constituents and heads of community and state organizations, all in support of placing a tax on tobacco and the handful of other tobacco control measures that have been introduced in the Special Session. Members of the Committee included Co-Chairs, Assemblymember Rob Bonta, Senator Ed Hernandez, Assemblymember Susan Bonilla and Assemblymember Miguel Santiago. Assemblymember Tony Thurmond, who represents Oakland attended the hearing as well.

Jim Knox, Vice President for Government Relations for the California American Cancer Society, Cancer Action Network, Dr. Claudia Alvarez, with UCLA Medical Center and Dr. Donna White Carey, Chief Medical Officer of Roots Community Health Center all spoke about the public health effects of tobacco use in California. “Prevention is always better than treatment” as stated by Dr. Donna White Carey was perhaps one of the central themes heard throughout the hearing. This panel testified to the effects of tobacco on adults and youth and on unborn babies, leading to low birth rate, pre-term, and still births.

The negative impacts of e-cigarettes on the lives of youth, in particular was also stressed during the hearing. “The popularity of e-cigarettes threatens the lives of youth” said Dr. Carey. When youth engage in smoking by use of e-cigarettes, the impact the neurotoxins have on their brain is detrimental, even more so than the impact of neurotoxins on adult brain development.

Dr. Karen Smith, Director of the California Department of Public Health presented on the findings of DPH’s report on e-cigarettes released earlier this year. “E-cigarettes threaten to erode the 25 year progress we’ve (California) made on tobacco,” said Dr. Smith. We were successful in combating the “cool factor” of smoking among youth for many years and more youth were staying away from tobacco until 2013 when e-cigarettes were first on the uprise, explained Dr. Smith.

The LAO reported that a $2 per pack increase in California’s cigarette tax would likely lead to a 7 percent to 15 percent reduction in the number of cigarettes smoked by Californians, would likely reduce the share of California high school students who smoke by one to two percentage points, and would reduce smoking during pregnancy.

In addition to strong support for a tax on tobacco, there were various solutions suggested by community advocates, including increasing renewal licensing fees for the sale of tobacco and using the money to fund tobacco cessation and public awareness on the harm of tobacco use, requiring city and urban planners to restrict the number of stores that sale alcohol and tobacco and restricting the sale of flavor tobacco, like menthol which is prevalent in the African American community.