I am now back from our adventures at the National Association of Insurance Commissioners (NAIC) meeting in Orlando, FL.
I have enjoyed being one of the advocates designated by the NAIC in 2010 to serve as Consumer Representatives. Our role is to advise the organization from a consumer perspective as they go about drafting policies and model legislation for states to implement health care reform. State regulators, consumer representatives, and the (many) industry representatives have deliberated on conference calls beginning in April 2010 to draft, fine tune, and sometimes revisit policy provisions on key aspects of the health care law. It is customary for 1600+ industry representatives to attend these three-times-a-year NAIC meetings in person and they clearly out-numbered our forces of a dozen or so Consumer Representatives representing the American people.
The marquee issue before the NAIC was their decision regarding the "medical loss ratio." This arcane term refers, in very technical language, to the requirement that insurance companies have to spend a minimum figure on actual, real-life health care. These percentages depend on the size of the plan but must be at least 80 or 85%. (You may think this is an outrageously low percentage threshold, but some insurance companies admit that they only are spending 50 or 70% of the money they take in on health care. They have allocated larger percentages to CEO salaries, marketing, profit, and other administrative costs. Some insurers say they are currently meeting the 80/85% floor, but are counting a lot of things as "delivery of health care" which no one else in their right mind would think could be construed as health care.) Consumer reps have a sort of traditional definition of "delivery of health care" which includes doctor's visits, hospital care, laboratory tests, and the like.
So, with the stakes being so high, and "our team" being vastly outnumbered, the outcome on the NAIC policy on medical loss ratio was uncertain. Consumer reps had slogged through dozens of NAIC phone calls over the last six months where this was debated, battling the insurance industry, and providing support to the state departments of insurance staff who voted for an even-handed interpretation of how the medical loss ratio would be calculated. It is not perfect, but we were given many opportunities to speak up on conference calls (where there were as many as 600 participants) and argue for sensible interpretations of the law into model language for implementation.
But the real test was whether the vote of the NAIC commissioners as a whole on the last day would approve this carefully crafted mosaic of regulatory language and actuarial principles drafted by their staff. The insurance industry had mounted a full-court press to urge amendment to significantly weaken the proposal.
The NAIC Consumer Representatives sat in the front row in the huge hotel ballroom in Orlando as the vote was to take place. There was no further opportunity for us to speak before those assembled to influence the vote. We had spoken to almost every commissioner personally throughout the week, some more than once, urging them to vote for the staff policy that we had had a hand in writing. We had shared our written comments, and our rebuttals to industry comments (which often seemed transparently self-serving.) We also argued that the commissioners should not vote against what their staff had drafted over a long and tedious process because of undue industry pressure. We had talked to the press to help them frame the right questions and put this battle in context. We checked in periodically with NAIC leadership and staff to take a temperature on the upcoming vote. No one was willing to predict the outcome. All bets were off.
The medical loss ratio issue was up on the agenda and several commissioners spoke about how home state constituencies would be disadvantaged, how complex this law was to implement, and other reasons why this policy should be tilted more toward the industry, against consumers' interests. Then other insurance commissioners spoke in favor of this policy as drafted, complimenting the NAIC on their open and transparent process, saying that the compromises woven into the fabric of the document would unravel if even one more provision were altered. All the commissioners who spoke in favor of the draft policy spoke eloquently about the reasonable language representing both industry and consumer positions.
Then Director Mike McRaith of the Illinois Department of Insurance took the floor. He reiterated several arguments in favor of the NAIC document as written and punctuated it with this final exhortation, urging commissioners not to let political considerations influence their vote: "There is no empirical evidence not to vote for this language." He then called for an end to debate and move directly to the vote. That was challenged by some commissioners who wanted to introduce other amendments or include redrafted language, but the policy was approved as written.
Who would have thought one of the first battles of health care reform at the NAIC would have resulted in such a victory for consumers? And maybe even more amazing was how dramatic that moment was. When I thanked Director McRaith for his eloquent speech and his parliamentary strategy, I told him we all thought he was "The Closer," referring the role of the pitching ace who takes over during the last inning or two of a high-stakes baseball game to preserve the slim lead of his team. We were all exhilarated with the vote, but I heard a couple people who observed the unfolding of this drama say as they walked out of the hall after the vote: "This is just as exciting the World Series!"--and probably a lot more consequential.
posted by Elizabeth C Abbott | Permalink | 10:00 AM
Five more days...
Friday, October 29, 2010
Sunday, October 31st, was the expiration of the current Medicaid waiver--the agreement between the state and federal governments about how to run and fund Medi-Cal, which provides coverage for over 7 million Californians and is a primary source of funding for our hospitals and entire health care system.
The Schwarzenegger Administration and the Obama Administration are negotiating a new Medicaid waiver as we speak. We hear they are oh-so-close to a deal, but they need a little more time--so the state of California has asked, and the federal government has granted, a five-day extension, until Friday, November 5th, 2010. Both the state folks at the California Health and Human Services Agency, and the federal folks at the Centers for Medicare and Medicaid Services (CMS), express confidence that a final deal will be in place before then, next week.
We are all awaiting the details, on both the broad outlines--the federal investment in our health care system, the opportunity to expand coverage early as a "bridge to health reform"--and the specific, such as the terms and conditions that details the needed consumer protections for those with pre-existing conditions. Stay tuned...
Nearly 50 Top Health Experts Sharply Critique Fiorina's Plan
Nearly 50 of the most prominent health policy experts and academics in California and around the country released a statement sharply critiquing the recently-proposed health proposals of U.S. Senate candidate Carly Fiorina, indicating her solutions to "repeal and replace" the new federal health law would have significant negative consequences with little benefit. Noam Levey of the Los Angeles Times has more.
"Carly Fiorina’s most recent statements suggest that she endorses the standard Republican 'solution' to the health care problems of the U.S.: extending the enormous tax subsidies already available for employer-provided health insurance," wrote the health policy experts in a statement. "This policy would promote the unraveling of employer sponsored insurance, leaving millions at the mercy of the discriminatory non-group market."
"As a result, Fiorina’s plan will simply result in a loss of federal and state tax revenues with little improvement to the functioning of insurance markets in the U.S., little reduction in the number of uninsured, and displacement of many who are happy with their existing insurance arrangements," concluded the experts.
The statement was quickly written and signed-onto by the experts in response to remarks made by California candidate Carly Fiorina just last week at a conference of underwriters in California, in which she, for the first time in this campaign at this late date, described some specifics on what she would do on health care policy beyond repealing the federal health law. According to the October 21 San Jose Mercury News, Fiorina criticized the Affordable Care Act as "flawed in that it puts 16 million uninsured people into Medicaid…. she did not say how those individuals should get health coverage. Instead, she advocated a system in which employees would 'own' their health insurance and insurers would compete for clients. Employees would receive the same tax breaks for health insurance costs as employers and would be able to take their insurance with them if they change or lose jobs."
The prominent national and California health experts and academics listed wanted to be clear about what such a "repeal and replace" proposal would mean for California families and patients. The list of 49 experts includes academic and analysts of a range of disciplines, ideological positions, and expertise in state and national health policy discussions, such as E. Richard Brown at the UCLA Center for Health Policy Research, MIT economist Jonathan Gruber, and Henry Aaron of the Brookings Institute. Health Access California does not endorse candidates, but assisted in distributing the statement as part of its ongoing effort educating people about health reform and different policy proposals.
This statement--by the who's who of health policy experts--helps provide new accountability to the health policy debate in political campaigns this fall. Candidates like Fiorina who have taken a "repeal and replace" position on the new federal health law have generally not been called to account on what they would "replace" the federal health law with--not to mention what the impact of those proposals would be, and whether they would even work. Here is the statement in its entirety:
The Fiorina “Plan” Will do Little to Reform Health Care in the U.S.
Carly Fiorina’s most recent statements suggest that she endorses the standard Republican “solution” to the health care problems of the U.S.: extending the enormous tax subsidies already available for employer‐provided health insurance. The U.S. already spends $250 billion per year subsidizing employers to offer insurance. This has resulted in a system where most Americans have coverage with which they are fairly satisfied – but where Americans left out of the employer‐provided system comprise the majority of the uninsured. These individuals are subject to an overpriced and discriminatory “non‐group” market, where insurance is expensive and unreliable, where insurance can be cancelled or over‐priced when children or adults become sick or injured, or where insurers can exclude coverage for past illnesses.
The recently enacted health care reform, the Patient Protection and Affordable Care Act (PPACA) addresses these problems by:
* Prohibiting insurers from charging people more for coverage based on their pre‐existing health conditions. * Prohibiting insurers from excluding pre‐existing conditions from coverage. * Subsidizing the cost of insurance so that it is more affordable for moderate‐income and lower‐income families. * Reforming insurance markets through competitive exchanges which lower prices and improve consumer choice.
The result is a reformed system which will provide new insurance coverage to 32 million Americans, while offering an even larger number of people improved protection against the risk of medical bankruptcy.
While Fiorina has provided little detail, her statements suggest that she endorses the standard Republican approach of simply extending the existing tax subsidy to the purchase of non‐group insurance as well as employer-provided insurance. This approach fails to address the problems noted above because:
* Most workers who are offered health insurance by their employers are already enrolled. So offering new tax breaks to them will do little to increase coverage. * About half of the uninsured have low incomes and therefore don’t pay enough income taxes to benefit from a tax deduction for health insurance. * There is nothing in this plan to address the discriminatory and high priced coverage options now facing those without an employer offer. * This policy would promote the unraveling of employer sponsored insurance, leaving millions at the mercy of the discriminatory non‐group market.
As a result, Fiorina’s plan will simply result in a loss of federal and state tax revenues with little improvement to the functioning of insurance markets in the U.S., little reduction in the number of uninsured, and displacement of many who are happy with their existing insurance arrangements.
PPACA reforms insurance markets and truly provides the type of choice that Fiorina advocates: choice on a level playing field where insurance is efficiently provided, fairly‐priced, and available with subsidies which make coverage genuinely affordable. Repealing PPACA and replacing it with this alternative would mean 32 million fewer insured Americans and the continuation of a broken and discriminatory health insurance market.
Signed:
* Jonathan Gruber, Professor of Economics, Massachusetts Institute of Technology * Judith Feder, Professor of Public Policy, Georgetown Public Policy Institute * Ken Jacobs, UC Berkeley Center for Labor Research and Education * Harold Pollack, Helen Ross Professor of Social Service Administration and Faculty Chair, Center for Health Administration Studies, University of Chicago * J. Bradford DeLong, Professor of Economics, University of California at Berkeley * Theda R. Skocpol, Victor S. Thomas Professor of Government and Sociology, Harvard University * Linda Bergthold, Ph.D., Independent Consultant and Researcher * Colleen Grogan, Professor, School of Social Service Administration, University of Chicago * Mark A. Peterson, Professor of Public Policy and Political Science, UCLA School of Public Affairs * Sara Rosenbaum, Hirsh Professor and Chair, Department of Health Policy, George Washington University * E. Richard Brown, Professor, UCLA School of Public Health, Director, UCLA Center for Health Policy Research * Gerald F. Kominski, Professor, UCLA School of Public Health * Barbara Starfield, M.D. Professor of Health Policy, Johns Hopkins Bloomberg School of Public Health * Joseph Andresen, MD., Editor, Santa Clara County Medical Society Bulletin * Helen Ann Halpin, Professor, University of California, Berkeley School of Public Health * Dean Baker, Co‐Director, Center for Economic and Policy Research * David Cutler, Otto Eckstein Professor of Applied Economics, Harvard University * Austin Frakt, Assistant Professor, Boston University School of Public Health * Arindrajit Dube, Department of Economics, University of Massachusetts‐Amherst * Dylan H. Roby, Assistant Professor of Health Services, UCLA School of Public Health * Janet Coffman, Assistant Adjunct Professor, University of California San Francisco * Clarissa K. Wittenberg, Health Care Consultant * Theodore Marmor, Professor Emeritus, Yale School of Management * Rick Mayes, Associate Professor of Public Policy, University of Richmond * G. Caleb Alexander, Assistant Professor, University of Chicago * Alan B. Cohen, Professor, Executive Director Boston University Health Policy Institute * Jonathan Oberlander, Professor of Social Medicine and Health Policy & Management, UNC‐Chapel Hill * Enku Kebede‐Francis,Assistant Professor, Tufts University Medical School * Brian R. Flay, Professor, Public Health, Oregon State University * Robert F. Coulam, Professor, Director of the Center for Health Policy Research, Simmons College School of Management * Joseph Restuccia, Professor of Health Care and Operations Management, Boston University School of Management * Randall P. Ellis, Professor, Boston University, President, American Society of Health Economists * Ted Joyce, Professor of Economics, Baruch College and Graduate Center, City University of New York * Ronald Bayer, Professor and Co‐Chair, Center for the History & Ethics of Public Health, Mailman School of Public Health * Stephen M. Davidson, Professor, Boston University School of Management * Donald H. Taylor, Jr., Associate Professor of Public Policy, Duke University * Michael Shwartz, Professor of Health Care and Operations Management, School of Management, Boston University * Michael L. Millenson, The Mervin Shalowitz, MD Visiting Scholar, Kellogg School of Management, Northwestern University * Michael Reich, Professor of Economics, Director, Institute for Research on Labor and Employment, UC Berkeley * Ed Yelin, Professor of Medicine, University of California San Francisco * Sam Bozzette, Professor of Medicine and of International Relations, University of California San Diego * William Terry, MD, Center for Interdisciplinary, Cardiovascular Sciences, Brigham and Women's Hospital * Steve Shortell, Dean and Professor, UC Berkeley School of Public Health * Peter D. Jacobson, Professor, Director, Center for Law, Ethics, and Health, University of Michigan School of Public Health * Harry P. Selker Professor of Medicine, Director of the Clinical Research Program, Tufts University School of Medicine * Meredith Rosenthal, Associate Professor of Health Economics and Policy, Harvard School of Public Health * Diane S. Lauderdale, Professor, Epidemiology Department of Health Studies, University of Chicago * Arleen Leibowitz, Professor of Public Policy, UCLA School of Public Affairs * Henry J. Aaron, Bruce and Virginia MacLaury Senior Fellow, The Brookings Institution
(Titles and institutions are listed for informational purposes only.)
This election cycle, a national spotlight has been placed on the political actions of the U.S. Chamber of Commerce, particularly as they run political ads and other issues campaigns without disclosing the source of the funding for those activities. In this election cycle, the Chamber of Commerce has been spending millions of dollars in ads attacking Democratic candidates—without revealing where that money is coming from.
Questions have been raised about whether some of these dollars are from foreign corporations with which the Chamber has relationships--and if those dollars are thus going to support policies that benefit those foreign corporations, on issues from outsourcing to tax breaks.
Even putting aside the question of foreign sources of funding, there’s a more profound question in this controversy: who does the Chamber of Commerce really represent?
This question has come up repeatedly in the past few weeks about the California Chamber of Commerce.
The Chamber has been a main proponent and funder of Proposition 26, which would make it much harder to get corporations to pay mitigation fees for the environmental or health harm they cause. In this role, they serve as a fund for tobacco, oil, insurance, and other corporations to funnel their money into, in order to support this special interest measure.
On a similar issue, two bills were on the Governor’s desk last month to set up a new health insurance exchange. Beyond implementing the new federal health law, the bills created a new purchasing pool for many California families and small businesses to negotiate with the health insurers for the best price and value.
Anthem Blue Cross and some other insurers opposed this and other provisions, and actively sought Governor Schwarzenegger’s veto. But they got the California Chamber of Commerce to be the main public voice of opposition—including commissioning a study against the bills, and running full-page ads in several California newspapers. It would be strange for the Chamber to take the lead on such a specific health insurance issue--so many suspect that the Chamber was acting on behalf of Anthem Blue Cross, a member and contributor to the Chamber. The Chamber was likely used as the mechanism for Anthem and other insurers to fund an opposition effort, without exposing the clearly self-interested motive.
In serving as a receptacle for corporate cash from industries with specific interests, the Chamber seems to going against the actual interests of the rest of their membership--as it did with health reform in general (see my post in The New Republic earlier this year).
In fact, the Exchange bills--the ones that the Chamber opposed--are a big boon to small business: the exchange will be the way that thousands of small businesses in California will be able to access significant federal tax credits to help afford health coverage. The ability to negotiate for the best price—which the insurers oppose—would help individual entrepreneurs and small businesses get the benefit of bulk purchasing that only large employers and purchasers like CALPERS have now. Other business groups supported the exchange bills.
But it seems the Chamber chose their members in the insurance industry over the many members who have to pay the insurers’ high prices.
Why is this the case? Perhaps it's their structure: the Chamber’s health policy committees are often dominated by insurers and other sectors of the health industry—even though in many policy debates the health sector has a very different interest than the employer community as a whole, which is mainly interested in bringing down health costs.
That’s why it’s discouraging to see the Chamber also act as a funder of ads to influence the race for the crucial post of Insurance Commissioner. The Chamber is collecting millions of dollars in insurer and insurance-related money, and then running millions of dollars in ads in support of Assemblyman Mike Villines, the Republican candidate, and against Assemblyman Dave Jones, the Democratic candidate.
The Chambers’ members in the employer community—who pay everything from worker’s comp fees to health insurance rates—probably have a strong interest in supporting an aggressive watchdog on insurance rates. So it seems antithetical to the interest of many employers to attack the candidate who has a track record of providing aggressive oversight over the insurers, Assemblyman Dave Jones. Jones has been the lead sponsor of bills to regulate health insurance rates, weed out "junk" insurance that leaves people with significant medical debt, and to end gender discrimination in health rates.
It makes sense why insurers would fund opposition to the leading legislator on rate regulation--but why would employers? The Chamber seems to be following only the interests of the insurers on their board, rather than those “special interests” who have a stake in lower insurance rates and better service: the rest of us.
This political season, we should take another look at political advertisements from the Chamber of Commerce, JOBSPAC, and related entities--and be clear who is actually funding the ads, and what their interest is. And members of the Chamber should take a second look to see if their interest is being served by the Chamber's positions, on legislation, propositions or candidates for statewide office.
That said, there are measures that Health Access California recommends a YES vote on, for a fairer budget that protects health and other key programs. Here are ads supporting a YES vote on Propositions 21, 24, and 25:
This is much-needed relief for people denied for pre-existing conditions by private insurers. It's not just a better option, it is for many Californians the only option for getting coverage at any price.
Because of federal health reform, Californians who are abandoned by the current broken individual health insurance market will be able to get the coverage they need. This is also an important bridge to broader reforms in 2014 where insurer won't be able to deny or charge more for pre-existing conditions at all.
The short-term challenge now is to make sure that people who have been denied for coverage know about this new option, so Californians and our state's health system takes advantage of the $731 million federal dollars that are available. The state needs an aggressive outreach campaign so Californians know their rights and options.
The longer-term challenge is to transition to a market where insurers compete on cost and quality and wellness, rather than on which insurer is more deft at denying patients who actually need care.
The worst measure on the California ballot this fall may be Proposition 26, which would protects polluters and other corporations that cause health or environmental harm. It makes it much harder to charge corporations the fees to mitigate the harm they cause, making it a two-thirds vote of the legislature. If Proposition 26 passes, we pay when they don't--meaning that without such fees on corporations, Californians will see higher taxes or services cut back as a result.
Most newspapers are coming out against Proposition 26. Here's a recent radio ad from the No on 26 campaign:
Earlier today, the National Association of Insurance Commissioners voted to recommend a key package of consumer protections as part of the implementation of federal health reform--and to reject amendments by the insurance industry to significantly weaken these "medical loss ratio" regulations.
We are proud that Elizabeth Abbott, director of administrative advocacy for Health Access California, was one of the 28 designated consumer representatives at the NAIC who prevailed against the full-court press of literally hundreds of insurance company lobbyists who attended the meeting in Orlando, FL this week. Yes, the NAIC meeting this quarter, which travels around the country, was for this session just three miles from DisneyWorld.
Despite the clunky name, these "medical loss ratio" rules are crucial because they help ensure that our premium dollars are going to patient care, rather than to administration and profit. The requirement that at least 80% or 85% go to patient care then brings up questions about how to calculate the definitions and formulas, and that's what this package is important.
Although we did not get everything we wanted, the NAIC consumer advocates think the medical loss ratio rule that the NAIC adopted is fair, workable, and faithful to the law. They spent months and literally hundreds of hours on conference calls and meetings negotiating a careful compromise, and then at the last moment the insurance industry pulls out all the stops to weaken these consumer protections. They sought a loopholes the size of the country--for example, they sought so-called "national aggregation" to have these regulations applied nationwide, rather than state-by-state.
We appreciate that the insurance commissioners from California and elsewhere rebuffed the industry's attemps at undermining reform, and we hope they continue to put consumers front and center in the adoption of all the new consumer protections in the new federal health law.
Of major note was the progress of the new federally-funded "high-risk" pool, the Pre-existing Condition Insurance Program (PCIP). The program has started to distribute and accept applications, but it hasn't started providing coverage--yet. They had expected to start earlier this month, and there will be an announcement soon.
Even with minimal outreach--and before the program has actually started, there have been 5,900 hits on the PCIP website. In all, 6,300 applications were sent out, and of those, 12% were returned.
They called 1,000 people who got applications but have yet to return them, and found: * 55% said they planned on returning their applications, but were waiting on final eligibility status decisions from their insurance companies; * 22% had not been uninsured for 6 months (a requirement of being eligible for PCIP) * 12% were waiting for their first months premiums; * 5% did not plan on retuning their applications because PCIP was too expensive or they did not meet the requirements; * And the remaining 6% turned out to be brokers just interested in obtaining information.
Also, 514 applications have been processed as of 10/1/10. About 8% of the applications have been referred to MRMIP, the existing state-based high-risk pool (perhaps because it does not require that people are uninsured for six months.)
When the program starts, it was reported that it will take 2 business days to complete all applications once PCIP is up and running, though no date was given when this will be. There have been a few complaints, as the deposit with the applications have been taken and cashed by the state upon receipt (as per state regulations) even though the constituents have not seen any enrollment to date.
MRMIB reported on future outreach efforts in the forms of a Facebook page, Twitter account, newsletters and fliers online. There will also be a $50 reimbursement for successful application completion.
The state's existing high-risk pool, the Major Risk Medical Insurance Program (MRMIP), also got a status report. As of 10/1/10, there are 7,145 enrollees in the MRMIP program, and there was a wait list of 41. There was a disenrollment survey taken in which they found January 2010 had the highest rate of disenrollment with 82. Anthem Blue Cross had the highest rate of subscriber premiums for the year at more than 11%, Kaiser Permanente had the lowest at 7%. The class average was 10.7%
Two organizational announcements. One was that this was the first meeting with new MRMIB board member Sam Garrison, who works in his day job at the L.A. Chamber of Commerce.
Finally, of special note was the announcement that Lesley Cummings is leaving her post as Executive Director of MRMIB, and the board has started recruitment for a new ED. She stated her thanks to the board and to the MRMIB staff, and her pride in the growth of Healthy Families and start-up of PCIP as part of federal health reform. There will be a subcommittee for recruitment and hiring led by MRMIB board members Richard Figueroa and Cliff Allenby. The handouts included a position description and announcement for distribution.
This includes, SB 853 the health trailer bill, and AB 1612 the human services trailer bill, alongside many others.
More noteworthy is the signing of two bills to implement the pending Medi-Cal waiver, which is currently being negotiated between the state and federal governments. The bills are: * SB 208 by Senate President pro Tem Darrell Steinberg (D-Sacramento) * AB 342 by Assembly Speaker John Pérez (D-Los Angeles)
At stake in these bills and negotiations is significant federal funding for California, for both our budget and for the state's health care safety-net, especially public hospitals. It includes a significant expansion of coverage--an early ramp-up of federal health reform--from current county dollars funded by new federal dollars. The negotiations will also determine the key consumer protections for seniors and people with disabilities in Medi-Cal, as many get shifted to managed care plans.
We are likely to find out the results of those negotiations soon, as the current waiver (and extension) runs out on October 31.
I'm writing this from Orlando, FL. Unfortunately I'm not at Disney World. I'm at the fall meeting of the National Association of Insurance Commissioners (NAIC) in Florida. Here's why:
I am one of about a dozen consumer representatives appointed to represent consumers as the NAIC works on the rules to implement health care reform. Within the next 24 hours the insurance commissioners here from each state will vote on a key consumer provision with the crazy name of the 'Medical Loss Ratio' or MLR. This provision in essence requires insurance companies to spend at least 80 or 85 percent of the premiums they collect on actual health care for their consumers.
The NAIC has had an open and consultative process with states, industry, and consumer advocates over the last 5 months to develop the policy. They have crafted such a compromise policy and the commissioners will be voting to approve the policy in the next day in Orlando.
Now at the literally last minute, the industry has mounted a concerted lobbying campaign to substantially weaken this policy to make it more favorable to the insurance companies. The industry has raised issues that have already been decided months ago for reconsideration this week. They have asserted that these restrictions are unfair to the industry and insurance companies should not have to spend 80 or 85 percent of their premium dollars on real health care (even though this is in the new law.) The insurance companies want the freedom to spend their premium dollars on executives' salaries, marketing, brokers' commissions, advertising, and profit--not consumers' health care.
Consumer representatives have mounted a counter offensive to get the insurance commissioners to vote on the side with consumers. We won't know for a day or so what the outcome will be, but the stakes are high.
posted by Elizabeth C Abbott | Permalink | 4:20 PM
Register to VOTE TODAY on key ballot measures with big budget impacts...
Monday, October 18, 2010
HEALTH ACCESS UPDATE Monday, October 18, 2010
DEADLINE TO REGISTER TO VOTE TODAY; KEY BALLOT MEASURES COULD FORCE NEW CUTS TO BUDGET
BUDGET WRAP-UP: WORST HEALTH & HUMAN SERVICE CUTS REJECTED; BUT STEEP CUTS IN LINE-ITEM VETOES; BUDGET LEAVES OUR HEALTH SYSTEM MORE VULNERABLE TO FUTURE CUTS
Main Budget Rejects Elimination of Programs, and Limits on Drugs and Doctors Visits; Yet Budget Sets Health System Up For More Cuts Through Tax Breaks and Spending Cap
Voters to Have Final Say: Ballot Measures Would Have Major Impact On Budget Propositions 22 and 26 Would Blow Billion-Dollar Hole in Budget, and Force New Cuts Propositions 21 and 24 Would Prevent Cuts; Proposition 25 Would Help Get On-Time Budgets
Read Our Health Access Blog for More Updates; Also Follow Us on Facebook! Read Real-Time Updates on Legislation on Twitter @HealthAccess! If You Appreciate These Updates, Join/Renew Your Health Access Membership!
Today, Monday, October 18th, is the final day for Californians to register to vote for this November's election (go to the Secretary of State's website for more information). At stake in California is not just key races for Governor, Senator, and other statewide and legislative district contests, but several ballot measures that will have a direct impact on the state budget, and thus the health system on which we all rely.
After 100 days past the official deadline, capped by a marathon session going through the night, the California Legislature finally passed a state budget earlier this month, followed quickly by the Governor's signature and steep line-item vetoes. A full wrap-up of the budget is below.
But California voters will have the final say this November and, depending on their votes on key propositions related to the budget (see the Health Access California voter guide), will either prevent or force additional cuts to health, education, and other vital services.
* Two propositions (Prop 22 & 26) would force billions of dollars more in cuts, in the current budget as well as in the future. * Two propositions (Prop 21 & 24) would prevent additional cuts to health, education, and other vital services. * One measure ensures corporations pay a fair share (Prop 24), while another helps corporations avoid paying for the health and environmental harm they cause (Prop 26). * One measure helps us get an on-time budget (Prop 25), while others make the budget gridlock worse (Prop 22 & 26)
Additional cuts should be seen in the context of the major budget gaps of the past few years. This year's budget attempted to close a $19.3 billion gap, after having to close a $24.3 billion budget gap in 2008 and a gap of $60 billion in 2009. The Governor's budget office report it's "an extraordinary three‑year period in the state’s fiscal history totaling budget solutions of $103.6 billion."
THE NEW 2010-11 STATE BUDGET: Despite cost of living increases, the new 2010 Budget Act passed by the Legislature earlier this month holds General Fund spending essentially flat compared to the prior year — $86.6 billion in 2010‑11, compared to $86.3 billion in 2009‑10.
The budget does not raise new revenues to bridge the $19.3 billion budget gap, instead using by a combination of expenditure reductions, anticipated (and in some cases unrealistic expectations of) federal funds, and other solutions.
While the new Budget contains hundreds of millions of dollars of cuts to health care, it appropriately rejects the worst proposals made by Governor Schwarzenegger earlier in the year to eliminate and eviscerate key programs. Among those proposals were to limit prescriptions and doctor visits to Californians with Medi-Cal coverage, to eliminate Adult Day Health Care, CalWORKS, and other programs, and other draconian ideas.
Health cuts that were adoped by the legislature included the following (all figures focused on general fund dollars):
* $187.1 million by, as part of the new Medicaid waiver, enrolling seniors and with disabilities in mandatory managed care.
* $84.5 million for freezing hospital inpatient rates at current levels.
* $26.4 million (including associated support costs) by strengthening efforts to identify, prevent, and detect fraud in high‑priority areas, such as pharmacy, physician services, transportation, and durable medical equipment.
* $13.6 million by reducing radiology rates to 80 percent of the corresponding Medicare rate.
* $3.1 million by eliminating certain over‑the‑counter drug benefits (acetaminophen products) for adult beneficiaries.
* $1 million by no longer paying Medicare Part B premiums for beneficiaries whose income exceeds the Medi‑Cal threshold.
The Governor's office suggests that the impacts of these cuts will be mitigated. The shift of seniors and people with disabilities to Medi-Cal managed care plans is part of a much broader Medicaid waiver, which has included discussion of consumer protections to ensure continuty of care and appropriate access. (Whether those consumer protections are fully in place depends on the final waiver agreement between the state and federal government.) The freeze on hospital rates is paired with the recently enacted hospital fee, which would draw down federal funds to provide for significant supplemental payments to these hospitals above regular rates. And the radiology rates were seen as higher than average, in some instances, the Medi‑Cal rate is as high as 120 percent of the Medicare rate--and so the reductions are hoped to not impact access to care.
Yet on top of these cuts, the Governor unilaterally used his line-item veto authority to make additional cuts to health and human services, and in the process harmed California families, our health system, and our state's economic recovery.
The package of line-item vetoes included nearly $100 million in health care cuts, as well as major "blue pencil" reductions of $366 million in CalWORKS and $256 million in child care. With the line-item vetoes, the health care cuts include:
* $52.1 million to the Office of AIDS local assistance programs--a nearly 50% reduction from what the Legislature budgeted;
* $43.9 million cut to county administration for health services.
* $10 million for various clinic grants (a 90-100% reduction), especially in primary and rural health areas. While the Governor's office cites money going to clinics from federal health reform and other sources, those funds don't help all impacted clinics, and are needed for transition to reform and augmenting services, rather than simply maintaining capacity.
* $18 million for the Infectious Disease Branch’s Immunization Program.
* $7.6 million in local assistance funding for the AIDS Drug Assistance Program (ADAP).
* $5 million for the Maternal, Child, and Adolescent Health program.
* $1 million for the Prostate Cancer Treatment program (a nearly 25% reduction)
Legislative leaders have condemned the line-item vetoes, especially those eliminating "stage three" child care for low-income families, and vowed to revisit them in the new legislative session next year.
FUTURE RISK TO HEALTH PROGRAMS: Even with these significant cuts, the pain isn't over. The legacy of this budget could force cuts into the future, from special interest tax breaks that starve the system to a constitutional spending cap.
This budget lacks new revenues, and in fact provides additional special interest tax breaks, digging our budget hole deeper--which will force additional cuts in the future. Without more revenues coming in, this budget can not be seen as anything but a short term fix. Additional tax breaks granted in this budget will worsen the budget shortfalls in the very near future, causing additional pressure to cut health and other vital services.
Another area of concern is the placement of a 2012 ballot measure for a constitutional spending cap proposal that, if passed, will handcuff the state's ability to restore the health and other cuts in better economic times, or to make strategic investments in health and other key services. While voters rejected Governor Schwarzenegger's proposals for similar spending caps in 2005 and 2009, the impact of the measure's passage would be far-reaching into the future.
Voters have the opportunity to prevent additional cuts with Propositions 21 and 24, and reform the process that gave us this late and flawed budget with Proposition 25. Alternatively, voters could unwittingly make the budget worse, and force additional cuts to health and other vital services, if they allow Propositions 22 and 26 to pass.
* Propositions 22 and/or Proposition 26 would blow a billion-dollar hole in our current California budget, forcing either new cuts in health and other key services, or new taxes. Because they would go into effect retroactively for 2010, passage of either measure would undo major budget solutions already in place, leaving the Legislature scrambling to either raise taxes or cut core services even more.
Both measures would also impact budgets in the future. Proposition 22 would protect local government redevelopment agencies—at the expense of other state priorities like health care.
Proposition 26 makes it harder to impose fees on corporations to remedy the health or environmental harm they cause. If the state can’t impose those fees, those costs then have to be paid for by the general taxpayer, either by additional taxes or cuts in other areas like health care.
* California voters can vote against additional cuts, but also improve both the process and outcome of state budget. This November, Californians can vote for a fairer budget that prevents additional cuts by supporting Propositions 21 and 24.
Proposition 21 gives all California motorists free access to state parks, in return for a small vehicle license fee increase of $18. It raises enough money to better fund the parks, and to free up resources to prevent cuts to health, education, and other key services.
Proposition 24 maintains corporate taxes at the same level they are now, rather than allowing a billion-dollar special interest tax break to go into effect that would starve our health and education systems.
* Those corporate tax giveaways were the product of our flawed budget process in last year's budget. That budget process can be improved with the passage of Proposition 25, which allows for a budget to be passed by majority vote, and would withhold pay from legislators when the budget is late. Last year, a handful of legislatures demanded these corporate tax breaks--even while core services were being cut--as the price of their vote to pass a budget. This year, a handful of legislators were able to hold the budget hostage--and 100 days late--in order to get special tax giveaways, appointments, and special interest policy changes. Proposition 25 can stop the legislative hostage-taking by a few so we can finally pass a budget that serves all of California.
This November, California voters will make key budget decisions that will frame the work by a new Governor and legislature. But Californians can only participate in these crucial decisions if they are register to vote by today's deadline.
The continuing efforts to mislead about the federal health law are frustrating, and they are spotlighted in this humerous "Stop Spewman" video from our colleagues at Health Care for America Now, starring Jack Black and America Ferrera...
In anticipation of the gubernatorial debate tonight, here's some questions for the candidates for Governor that I hope are asked, either by the moderator Tom Brokaw, or by reporters in the days and weeks to come:
* How would candidates implement the new federal health law? How would they maximize federal dollars and benefits for California families and businesses? Would candidates seek repeal of the federal health law? Would they reject billions in Medicaid dollars for the state?
* How would candidates regulate and oversee health insurers? Would they support rate regulation? Would they seek repeal of the federal law's consumer protections? Would they allow out-of-state insurers to operate outside of California licensure and our consumer protections?
* How would candidates work to bring down the cost of health care? How would candidates improve quality? How would they encourage prevention, wellness, and public health?
The next Governor of California will have the significant challenge and opportunity to improve our health system, under the new federal health law. It will be up to the new Governor to maximize federal funds and other benefits coming to California, our families, and our businesses, and to be aggressive in the oversight over the insurers and the health industry.
The next Governor will deal with health care whether he or she talks about it in the campaign or not--it's an essential part of California's economy, our budget, and our lives. Health care is the second biggest part of the California budget--second only to education--so if we are cutting the budget, we are cutting education and health care.
Insurance regulation has been entirely an issue overseen at the state level, until this year. Health care is a primary responsibility of the states, and is an area where Governors can have their biggest impacts.
California has one of the worst health crises in the country, with one of the largest percentage of uninsured, of people not getting coverage through work, and of people being denied for pre-existing conditions. The federal health law will provide some direct relief, but to do so it will require a thoughtful implementation. Voters should know what the next Governor plans to do to in an area where he or she will have considerable authority.
Our colleagues at Young Invincibles want to make very clear about the consequences of efforts to repeal the new federal health law. They are spotlighting especially the impact to young people in their 20s, the group that has been the most likely to be uninsured, and thus the age groups most likely to benefit from the new federal health law, both in the near term and in 2014.
It's an important message. That it shows young folks "without coverage" helps get attention to that message.
Governor Schwarzenegger signed the budget this evening, and with it announced new line-item vetoes.
The Governor unilaterally used his line-item veto authority to make additional cuts to health and human services, and in the process harmed California families, our health system, and our state's economic recovery. These are the wrong cuts and the wrong time: an economic recession is exactly when we need funding for community clinics and public health programs, for the health of our communities and our economy.
The package of line-item vetoes included nearly $100 million in health care cuts, as well as major "blue pencil" reductions of $366 million in CalWORKS and $256 million in child care.
Among the health care cuts are the following reductions: * $52 million for the Office of AIDS local assistance programs (a nearly 50% reduction); * $22 million in countyadministration of health programs; * $10 million in clinic grants under the Primary and Rural Health program (an almost 90% cut); * $7.6 million for the AIDS Drug Assistance Program; * $5 million for the Maternal, Child, and Adolescent Health program; * $1 million for the Prostate Cancer Treatment program (a nearly 25% reduction)
Patients with AIDS to prostate cancer will face the negative consequences of Governor Schwarzenegger's budget decisions, as will many who depend upon community clinics and other public health programs.
Even with these significant cuts, the pain isn't over: The legacy of this budget could force cuts into the future, from special interest tax breaks that starve the system to a constitutional spending cap. This budget lacks new revenues, and in fact provides additional special interest tax breaks, digging our budget hole deeper. We are alarmed about the placement of a 2012 ballot measure for a constitutional spending cap proposal that will handcuff our ability to invest in health and other vital services. So the fight isn't over.
The good, the bad, and what's next on the budget...
Thursday, October 07, 2010
On the 100th day since its deadline, the California legislature has finally passed a budget. Thanks for those who followed throughout the night on our Twitter account at www.twitter.com/healthaccess
There's both good and bad news with the new budget.
While the new Budget contains hundreds of millions of dollars of cuts to health care, it appropriately rejects the worst proposals of Governor Schwarzenegger to eliminate and eviscerate key programs, limit prescriptions and doctor visits to Californians needing care, and other draconian ideas.
The Governor’s initial proposal to cut $5.4 billion from basic health care and social services was not accepted. Instead, legislators found other ways to reconcile the $19 billion deficit, avoiding slashing services to California’s most vulnerable families, seniors, children, and people with disabilities. Medi-Cal, Healthy Families, Cal-WORKS, IHSS, and Adult Day Health Care escaped the worst of the budget axe--as did tens of thousands of both public and private sectors jobs that would have been lost under those proposals.
While we appreciate that the legislature prevented some of the worst cuts, this budget leaves health and other vital services at increased risk in the future.
We are concerned about future cuts, in both the short term and longer term, in three ways:
1) We are concerned about the threat of line-item vetoes and additional 'blue pencil' reductions for clinics and other services. We don't want a repeat of last year, when Governor Schwarzenegger made further cuts and even zeroed out some key public health programs and important social services.
The Governor has announced he will make $1 billion in line-item cuts this evening when signing the budget. He should forgo using his line-item authority to make additional cuts to health and human services, and harming California families, our health system, and our state's economic recovery. An economic recession is exactly the time when we need funding for community clinics and public health programs, for the health of our communities and our economy.
2) This budget lacks new revenues, and in fact provides additional special interest tax breaks, digging our budget hole deeper, which will force additional cuts in the future. Without more revenues coming in, this budget can not be seen as anything but a short term fix. And with additional tax breaks, we’re likely to be back discussing budget shortfalls in the very near future, destined to repeat the same fight to preserve vital services.
3) We are alarmed about the adoption of a 2012 ballot measure for a constitutional spending cap proposal that will handcuff our ability to invest in health and other vital services. Voters rejected Governor Schwarzenegger's spending caps in 2005 and 2009, and we hope they will again in 2012.
This November, voters have the opportunity to prevent additional cuts with Propositions 21 and 24, and reform the process that gave us this late and flawed budget with Proposition 25. Alternatively, voters could unwittingly make the budget worse, and force additional cuts to health and other vital services, if they allow Propositions 22 and 26 to pass.
Health Access will continue to advocate for both the revenues our health system needs, and the real reforms our budget process needs.
Both the Assembly and Senate are meeting today to consider the budget bills. We appreciate the preservation of basic health services such as Medi-Cal, Healthy Families, Adult Day Health Care, and other human services in the compromise. It could have been worse, but it's not over: we recognize that we are not yet safe from cuts. The Governor still has line item veto power to cut programs, and there are still no new revenues in the budget -- and in fact gives out more tax breaks, digging our hole deeper -- which puts health and human services at risk for more cuts in the very near future. We are concerned about the prospect of spending caps.
During the health reform debate earlier this year, there was a question about how the new federal law would impact the elections this fall. While many have tried to make claims one way or another, there's a general sense that the impact is small, and that the elections are about the economy, and the larger ideological differences between the parties and the candidates.
Health care really hasn't been a focus of the statewide races for Senator and Governor in California, even though the differences are stark between the Democrats, which support the law and the new oversight over insurers, and the Republicans who have endorsed efforts to repeal the law.
That said, there are candidates around the country who voted for health reform that are playing offense, drawing a contrast between their support--and their opponents' opposition to the law. We are starting to see a few of these in key contested races. Below are just a few examples:
Here's an ad from Senator Russ Feingold, of Wisconsin:
And here's an ad from Representative Earl Pomeroy in North Dakota:
Finally, another ad from Representative Steve Israel of Long Island, New York:
We'll see if any California races follow this lead.
Coming in 2014: Tax credits for 3.5 million Californians...
Tuesday, October 05, 2010
An estimated 3,473,000 Californians will be eligible for new tax cuts beginning in 2014 that will significantly reduce the cost of private health insurance for those individuals and families. The historic tax cut in the health reform law, which is estimated to reduce nationwide income taxes by more than $110 billion in 2014 alone, will be provided through tax credits through a new health insurance exchamge, to offset a portion of the cost of health insurance premiums. Californians’ savings will be approximately $13.8 billion in just that first year.
Those are among the key findings of a report for California released today by the health care consumer group, Families USA, which commissioned The Lewin Group to use its economic models to estimate how many individuals in the state would benefit from the new premium tax credits.
The report was released on a conference call earlier today with Health Access California, the statewide health care consumer advocacy coalition, and Congressman Henry Waxman, chairman of the U.S. House Energy and Commerce Committee, which has oversight responsibility over the federal health law. The report also highlights the importance of the new laws signed by Governor Schwarzenegger last week that creates a new health insurance exchange, which will administer these tax credits and subsidies.
· Approximately 2,928,200 people—the majority of those who will be eligible for the credits—will be in families with a worker who is employed full-time. · Another 343,300 people will be in families with a worker who is employed part-time.
The new tax credit targets middle-income families. (Those who are under or near the poverty level will get coverage through Medicaid instead). For families of four, the tax credits—provided on a sliding scale—are focused on families with annual incomes between $29,327 and $88,200.
· People with annual incomes at or above 200 percent of the federal poverty level—$44,100 for a family of four in 2010—will constitute nearly two-thirds (62 percent) of the people who will be eligible for a premium tax credit. · Because the size of the tax credit is determined on a sliding scale based on income, however, more than half the dollars from the tax cut (60 percent) will be targeted to families with incomes below 200 percent of the poverty level.
Families USA calls this "the largest middle-income tax cut in history."
There are about 1,741,200 uninsured Californians who will be eligible for the tax credits, and another 1,731,800 eligible people who are currently insured but are stillstruggling to afford coverage.
Between the new federal law and the new bills just signed by Governor Schwarzenegger, Californians who buy coverage as individuals will see radical improvements in their ability to get quality and affordable coverage. The new exchange will not just be where Californians can access these new credits and subsidies to better afford coverage, but it will give us the combined bulk purchasing power to bargain for a better price and value for their dollars. Many Californians will get hundreds, if not thousands of dollars of relief from high premiums through the new credits. Others will get the group discount that now only goes to large employers and CALPERS, but that now will be available to individuals and small businesses.
Last week our California Congressional Delegation on the House Energy and Commerce Committee spoke out about the child-only policy issue, asserting that they were not pleased with insurers' efforts to undermine their efforts to enact consumer protections through Federal Health Reform. In letters to Aetna and to Anthem Blue Cross, Representatives Henry Waxman, Anna Eshoo, Lois Capps, Jane Harman, and Doris Matsui expressed dismay that insurers were acting so irresponsibly and in bad faith considering the efforts HHS and Secretary Sebelius have made to negotiate with the industry to find a workable solution.
On September 23, the provision of Federal Health Reform requiring insurers to cover children with pre-existing conditions went into effect. Anthem Blue Cross, Aetna, Cigna, and Health Net responded by announcing they would rather not cover children than have to cover the small number of children who have pre-existing conditions. Their announcement stated that they would no longer offer child only policies (policies that cover only the child and no other family members). (Note that Kaiser and Blue Shield did NOT issue these statements and continue to offer child-only policies.)
While it is infuriating that the insurance industry seems intent on fighting reform every step of the way (including trying to prevent sick children from being covered), it is reassuring to see that our Congressional Representatives getting our backs as much of the implementation work moves to the State arena. Hopefully, that will help bring these insurers back into the market, as will AB2244(Feuer), the bill signed by Governor Schwarzenegger last week--which says that if they don't start offering child-only policies by January 1st, they will be barred from the individual market. We believe this issue will be resolved, but it's crazy-making that the insurers are putting up such a fight.
It was appropriate that in the gubernatorial debate in Fresno, where the uninsurance rate is among the highest in the nation, that the candidates were finally asked about health care issues. The differences were clear. Here's the transcript from the Fresno debate, on both the health care and budget crises:
Maria Elena Salinas: THANK YOU BOTH. AND THE FOLLOWING QUESTION IS ALMOST 30 PERCENT OF HISPANICS IN CALIFORNIA DO NOT HAVE HEALTH INSURANCE. AS GOVERNOR WHAT CAN YOU DO TO FACILITATE ACCESS TO HEALTHCARE FOR MILLIONS OF PEOPLE WHO ARE POTENTIAL BURDEN ON STATE SERVICES. WE'LL BEGIN WITH MR. BROWN.
Jerry Brown: Well first of all I support President Obama's health plan. I'd like to know if Ms. Whitman does that, because that's the only game in town right now and while there's some problems, like for example it needs more cost control, it is a framework to bring in children and to bring in people who have no other way of getting their health insurance. So that's a very important part; working with the federal government to make that new national health plan work. That's the path forward.
Secondly, we have a Medi-Cal program that has its own issues. I think we've got to save money in that program so we can continue to cover those at the lowest incomes and then finally we have to when we work in the state government as we cut the budget we make sure that we don't cut the health programs in a way that will help so many families that are working in the public sector. And then finally we have these health exchanges that allow people to purchase health insurance.
And then at the end of the day of course it's about jobs and it's not just about jobs, it's about jobs with good wages and we've got to be fair about this. Because in the last 20 years the income has been moving up to the highest sectors, the top one or two percent and those in the middle and much worse those towards the bottom they don't have enough money even to do the basics which are healthcare. So I'm gonna be a champion for the working people of California and decent wages and good jobs.
Meg Whitman: Well healthcare is an enormous challenge in California and it's driving up the cost of small business. I think I've run into so many small business people who have had to, you know, cut back on their health insurance or it really kept them from hiring more workers because health insurance had gotten so expensive.
The problem is Obamacare is going to make it worse for small businesses not better. There is a requirement for very expensive healthcare insurance on the behalf of small business. It's going to create, every small business person I've talked to says, this is going to create a huge burden. So at a time when we need to make it easier for small businesses, we're going to make it harder.
The other issue is it could put another $3 billion unfunded liability on California, meaning we're going to owe $3 billion more when we already have a $20 billion budget deficit. So here's what I'd do, first is if you want to bring down the cost of things in our society, the way you do it is open up some competition. We should open up California to more insurance competition so there's more choices for people, more ability to buy plans. Second we should make sure that we eliminate the fraud in Medicare and Medi-Cal. Estimates are $3 billion to $5 billion of fraud in that system and that's because we don't use technology to do more with less. The computer system in the state of California belongs in a museum. I come from Silicon Valley and we can do a lot better and then we can use electronic medical records to make sure that we bring down the costs of healthcare for everyone which will allow us to cover more individuals and that's the ultimate goal. But I don't think Obamacare is the way to go because it's going to hurt small business.
Here's a few fact checks:
* When Attorney General Brown says that "Medi-Cal has its own issues," one of those is that it currently is 51st in the nation in per patient spending. So it's hard to see how you can find additional savings while keeping people covered, which he says he wants to do.
* When Meg Whitman says that the new federal health law will place a burden on small business, she's wrong. In fact, what she calls "Obamacare" actually offers significant subsidies to specified small business with fewer than 50 employees. To the extent there is a requirement on employers afer 2014, it is on larger employers, to either offer a very basic level of coverage, or otherwise pay a contribution to help finance your workers getting subsidies through the new exchanges. But small businesses have no requirement, now or in 2014.
* Meg Whitman suggests health reform will cost the state $3 billion. In fact, it will provide over $100 billion in benefits to California (through Medicaid) and Californians (through the new exchange) to help afford coverage over 10 years. The $3 billion number came from Governor Schwarzenegger about an earlier version of health reform (and one that even then was significantly inflated); it improved and after it passed, Governor Schwarzenegger has embraced it, since he sees the opportunity it provides. What costs might be expected of the state? All the credits and subsidies in the exchange will be federally funded. The Medicaid expansion will be 100% federally funded from 2014-2017, and then would scale down to a still remarkable 90% federal share in 2020 and beyond.
* So the question for a prospective Governor Whitman is, if there is the potential of a cost to the state in 2020--one that would yield a 9-to-1 match from the federal goverment to cover a couple million more Californians--would she turn down the tens of billion of dollars during your tenure and deny millions of Californians coverage as a result? That's the pending issues right now. Candidate Whitman has in the past suggested supporting lawsuits to repeal the new federal health law.
Would the new Governor implement reforms to maximize the benefits for California? Or will the new Governor seek to block efforts to implement and improve upon the law, and turn away the benefits of reform to Californians?
As we reported earlier, on Thursday, the Governor signed seven of the key bills implementing health reform.
On Friday, Health Access board members and staff were well represented at a signing ceremony in Los Angeles at the California Endowment. Ellen Wu from CPEHN, Joan Pirkle Smith from ADA, Mike Russo from CalPIRG were present, as was former Health Access Foundation policy committee chair and UCLA School of Public Health professor Rick Brown. Along with Beth Capell and Nancy Gomez of Health Access, we were there to watch Governor Schwarzenegger, Assembly Speaker John Perez, Senate Health Chair Elaine Alquist and others speak about the accomplishment.
Governor Schwarzenegger said: “Today quality, affordable health care is not a privilege, but a necessity for every one of us.”
He spoke about a double economic crisis---one facing families who suffer bankruptcy because of medical debt and a second facing emergency rooms with tens of millions of dollars of unpaid debt. And a more crisis eight million individuals are uninsured and children can’t get health care because of a pre-existing condition. The Governor also spoke about how the work we did in California became the model for the national bill. He said he had learned the heard way that what is perfect for one is disastrous for another, how what is perfect for insurers has consumers up in arms.
The Governor also announced a new website http://www.healthcare.ca.gov/ which is intended to serve as a resource for health reform in California. (He did not mention it but this was one of the primary uses to which California put its grant for consumer assistance along with updating the HMOHELP line and providing the Office of Patient Advocate better capacity for social media.)
Assembly Speaker John Perez thanked the Governor and President Obama (nice touch!) for making health reform a reality. California is a beacon of hope for the rest of the country, by creating a consumer-friendly marketplace providing quality, affordable coverage.
Senate Health Committee Chair Elaine Alquist spoke of what a momentous day this was for California, for its people and its small businesses. She, like Speaker Perez, thanked the Governor for his great courage. Then she turned to the Governor and said “today you are my action hero”. She also spoke about how her Greek immigrant father moved to California out of hope of a better life and how the exchange legislation would provide that hope, the hope that there would be real access to affordably priced health care.
Bruce Bodaken, the CEO of Blue Shield then said that the Governor and the Legislature had shown great courage and vision and demonstrated that California can lead again. In Blue Shield’s view, a strong exchange is long overdue and that they were committed to competing on price, product and service rather than health status. Small businesses and individuals will now have the same option as large businesses. The exchange will provide real options, real choices. The existing market is not the best value for those who need it the most.
There were several other speakers, including a small business owner from Small Business Majority as well as Fernando Torres-Gil and Cynthia Telles, both of the Endowment board.
It was all over in an hour—and then the Governor and the Speaker went back to Sacramento to Big Five to begin closing down the budget.
Here's a statement on the signing of health reform implementation, from key California Congressional leaders that were, along with Speaker Nancy Pelosi, most responsible for the passage of the new federal heath law.
Three California members of Congress, the chairs responsible for health policy in the U.S. House of Representatives, applauded California Gov. Arnold Schwarzenegger’s signature of legislation yesterday to create a new health insurance marketplace. California is the first state to begin implementation of a key element of historic health reform enacted in March.
The California Health Benefit Exchange will help individuals and employees of small businesses compare and purchase health insurance plans in a transparent marketplace at competitive prices.
“California is once again leading the way on health care with the creation of a strong health insurance exchange that leverages the purchasing power of millions of consumers,” said Rep. Pete Stark (D-CA), chair of the House Ways and Means Health Subcommittee. “This exchange will give everyone a set of clear, more affordable choices for health care, and provide a great example for other states that are creating their own exchanges.
“California families and small businesses are being crushed by health costs and dwindling benefits,” said U.S. Rep. George Miller (D-CA), chair of the House Education and Labor Committee. “The health exchange law signed by Gov. Schwarzenegger will ensure that insurance companies compete in an open and transparent marketplace, putting consumers in the driver’s seat, thereby driving down costs and making coverage more predictable.”
“I commend Governor Schwarzenegger for signing this critically needed legislation, which will create an exchange that will fight hard on behalf of consumers to keep premiums affordable and to help people get the tax credits they need,” said Rep. Henry A. Waxman (D-CA), chair of the House Energy and Commerce Committee. “It is a strong marker for other states to follow as they prepare for major improvements in health insurance in 2014.”
The national health reform law allows states to set up and operate their own health insurance exchange beginning in 2014. The national law requires standardized format, definitions, enrollment applications, consumer satisfaction, and marketing requirements to allow easy comparison of the prices, benefits, and performance of health plans.
Individuals without coverage and small businesses will be able to shop for coverage in the new health insurance exchanges beginning in 2014. Individuals and families earning an income up to 400 percent of the poverty level will be eligible for premium tax credits to help make coverage affordable. The U.S. Department of Health and Human Services announced yesterday that 48 states will receive grants to help step up their own health insurance exchange (for more information on this announcement, click here: http://go.usa.gov/xuS).
ON DEADLINE DAY, GOVERNOR SIGNS FIRST-IN-THE-NATION BILLS TO SET UP NEW HEALTH INSURANCE EXCHANGES AND OTHER KEY HEALTH REFORM IMPLEMENTATION LEGISLATION
Patient Protection Bills Signed by the Governor Include: * AB1602(Perez) & SB900(Alquist), to Create a New Health Insurance Exchange
* AB2244(Feuer), to Limit Premiums for Children with Pre-existing Conditions * SB1163(Leno), to Provide 60 Day Notice and Transparency on Rate Hikes * AB2470(De La Torre) on Eliminating Rescissions * SB1088(Price), to Allow Young Adults Up to Age 26 To Stay on Parental Coverage * AB2345(De La Torre), to Eliminate Cost-Sharing for Preventative Care
The Governor Vetoed the Following Measures: * SB890(Alquist), to Categorize Benefits to Allow for Better Comparisons of Plans * AB1825(De La Torre), to Phase-In Maternity Coverage as a Basic Benefit
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In his last day of signing and vetoing bills, Governor Schwarzenegger made history by signing a full package of patient protections, including the first-in-the-nation bills to set up a new health insurance exchange--a central element of the new federal health reform law.
MAJOR SIGNINGS: A list of the measures related to implementing federal health reform is available on the front page of the Health Access website. The following key patient protections measures were signed into law:
* CREATING A NEW EXCHANGE WITH BARGAINING POWER: AB 1602, by Speaker Perez and SB 900, by Senate Health Committee Chair Alquist and Senate President Pro Tem Steinberg will, working together, establish a new health insurance Exchange, a core element of the new federal health reform law. In 2014, the new Exchange will be the new one-stop shop for getting health coverage for individuals and small businesses, both providing easy-to-compare choices, access to federally-funded subsidies to make coverage affordable, and the bulk purchasing power (similar to large employers or CalPERS) of millions of Californians to bargain for the best price and value.
Currently, without an exchange, individual consumers are at the mercy of the big insurers, without any purchasing power, in a complex and confusing marketplace. While opposed by Anthem Blue Cross and others, a new, independent exchange can dramatically improve the way Californians individuals and small businesses get coverage—making such decisions easier, more understandable, and more affordable.
The signing of the bill helps get California ready on day one to take advantage of billions of dollars in credits and subsidies to help families and small businesses afford coverage. Over 4 million Californians would be eligible to participate in the exchange in 2014 (and more later). AB1602 establishes the new, indepedent agency; SB900 set ups its governance, as a 5-member board to be appointed by the Governor and Legislature.
* ACCESS & AFFORDABILITY FOR CHILDREN WITH PRE-EXISTING CONDITIONS: AB 2244, by Assemblyman Feuer, implements the federal prohibition on denying coverage to children with pre-existing conditions, and limits the amount that insurers can charge to cover those children. While the federal health law takes a crucial first step this September, by prohibiting insurers from denying coverage to children with pre-existing conditions, this state bill takes another step in making reform real, by also limiting how much insurers can charge children with pre-existing conditions, within an open enrollment period.
Federal law will prohibit such premium differences in 2014, but this bill phases in this affordability help sooner, and provides a smoother glide path for California's market to transition. Proponents say the bill would save tens of millions in the state budget, giving families the opportunity to buy private insurance rather than having them fall onto public health coverage programs.
The measure also counters the attempts of some insurers from leaving the child-only insurance product. The bill says that if insurers are not selling child-specific plans by the effective date of the law, those insurers are barred from the lucrative individual insurance market for five years.
* REQUIRING 60-DAY NOTICE AND TRANSPARENCY ABOUT RATE HIKES: SB 1163, by Senator Leno, requires insurers to make information public about premium increases, available for review not just by the regulator but by the public on the insurers’ and regulators’ websites. The bill also requires insurers to give 60 days notice to consumers and to the public before raising premiums.
Currently, this information is not public, even the notice of a rate hike: insurers only need to give 30 days indication to subscribers, and there is no public notice requirement. This bill expands California regulators' authority, especially at the Department of Managed Health Care, to review rate information and better take advantage of the new federal funding available.
* ELIMINATING RESCISSIONS: AB2470, by Assemblyman De La Torre, helps implement health reform by seeking to eliminate rescissions, so patients don't have their coverage yanked away at the time when they most need it. This is an important protection in the interim until 2014, when insurers will be required to take patients without regard to pre-existing conditions.
* YOUNG ADULT COVERAGE: SB1088, by Senator Price, implements the federal health law that allows young adults up to age 26 to stay on their parents' group coverage.
* PREVENTATIVE CARE: AB 2345, by Assemblyman De La Torre, implements the federal health law by requiring insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations.
These measures are a major improvement in patient protections, and an aggressive implementation of the federal health reform law. A symbolic signing ceremony is scheduled for today, Friday, in Los Angeles.
GOVERNOR SCHWARZENEGGER VETOES SOME PATIENT PROTECTION MEASURES. While signing significant health reform bills, the Governor vetoed two patient protection measures yesterday, on mandating maternity coverage as a basic benefit, and on helping consumers compare plans and avoid "junk" insurance.
These vetoes added to the five bills the Governor vetoed the day before, on mental health parity, limiting rate hikes to once a year, public health insurance options, increase fines for rescission, and "never events" medical errors. Here's more information on the bills vetoed yesterday:
* MATERNITY COVERAGE: AB 1825, by Assemblyman De La Torre, would have phased in a requirement for all health insurance plans to cover maternity care. Plans would have been required to have maternity coverage, but until 2014 they can impose a one-year waiting period. See the veto message.
This measure would have helped provide equity for women trying to buy coverage, save the state money by preventing women from having to rely on public programs for maternity benefits, and crucially help provide the public health benefit of getting babies the prenatal and early care coverage needed to live healthy and productive lives.
* AVOIDING "JUNK" INSURANCE: SB 890 by Senator Alquist would have reformed the individual insurance market, by setting basic benefit levels and classifying health plans in tiers (Platinum, Gold, Silver, Bronze) to allow consumers better ability to make apples-to-apples comparisons based on actuarial value, so that consumers can have some idea of how much of their medical costs they may need to pay out-of-pocket with different health plans. See the veto message.
The bill would have helped the California implement and transition to federal health reform in other ways as well, by instituting the new federal requirements on medical loss ratios, to ensure that premiums dollars go to patient care rather than administration and profits; and by eliminating annual and lifetime caps on coverage that cause individuals with serious illnesses to incur significant medical debt.
Right now, consumers are flummoxed by the over 100 choices in the individual insurance market, and rightly concerned that some of those choices won't cover them when they need it. California lost an important opportunity to transition to a standardized and transparent marketplace.
with a background as a consumer advocate and community organizer on many issues, including health issues for the last ten years in California and New Jersey.
