Telling the Supercommittee: The solution should not make more problems...
Thursday, September 29, 2011
Here's our testimony before the Assembly Budget Subcommittee on Health and Human Services, at today's hearing, chaired by Assemblywoman Holly Mitchell and attended by Assemblywoman Mariko Yamada on the "Potential Impacts of Federal Deficit Reduction on California’s Health and Human Services."
Health Access California, the statewide consumer advocacy coalition for quality, affordable health care for all Californians, is pleased to offer testimony on the impact of federal deficit reduction on California. We also serve on the leadership of the Health and Human Services Network, a broad coalition that has focused on budget solutions in recent years.
Analyzing the specific impacts of federal deficit reductions is difficult, since there are many proposals floating around. There’s the:
1) cuts already made, including the $1 trillion made as part of the negotiations earlier this year around raising the federal debt ceiling; 2) cuts that will be triggered (called sequestration) if the Joint Committee on Deficit Reduction fails to pass a proposal to further reduce the deficit by another $1.2 trillion; 3) cuts--and revenues--that the Joint Committee could agree to, which could include anything, including: a. the proposals by the House GOP in the Paul Ryan budget, such as to replace Medicare with a voucher program, or Medicaid with a block grant program; b. the proposals by President Obama in his deficit reduction proposal further detailed in September; c. other proposals that have come out of various bipartisan negotiations, including the public recommendations of the Bowles-Simpson Commission, and the private negotiations around a “grand bargain” deal between the President and Congressional leaders where other proposals were rumored to be “on the table.”
We can speculate on what may emerge, but we do think that California and our elected leaders have common interest in advocating around certain principles, and weighing in on key debates on behalf of the interest of the state and its residents.
SHORT TERM VS. LONG TERM: Let’s first put this conversation in context. Given our current economic situation, especially in California with a 12% unemployment rate, this is not the time to implement significant cuts that could further harm our economic recovery.
In fact, the need for health and human services is increased in this economic downturn, as both states and families continue to struggle with their benefits. With its continued economic problems, California should speak with one voice in urging additional assistance—especially on that help that recently expired in July, from COBRA subsidies to families, to enhanced Medicaid matching funds to states.
At the same time, we don’t disagree on the need to put in place a long-term plan to control and reduce the deficit and debt. As health advocates, we have a significant stake in ensuring that core programs like Medicaid and Medicare to be sustainable into the future. But part of the solution is to first get out of the historic economic crisis that we have experienced. And then there’s the real debate on how to do that.
PAST DECISIONS VS. FUTURE PRIORITIES: Many of the decisions made in the past decade have contributed to the deficit, including two packages of tax cuts and two wars, none of which were paid for by commensurate revenues or cuts. The same is true of a Medicare prescription drug benefit, which also did allow the federal government to negotiate with the drug companies for the best price, and not getting the lower prices and higher rebates obtained through Medicaid.
We support the Obama Administration’s deficit reductions proposals to revisit these decisions, from letting many of the tax cuts expire, to aligning Medicare drug payments with Medicaid.
PUBLIC PROGRAMS VS. THE HEALTH SYSTEM: Especially if you let many of the Bush-era tax cuts expire, then when you look at the long-term projections, the real issue isn’t education or social services or the government as a whole. The issue is health care costs, and the upward trend in underlying medical costs, and how that is reflected in health programs like Medicaid and Medicare. Making even drastic cuts to discretionary spending (and the federal government has already made $1 trillion in discretionary spending cuts), whether in human services, public health, or other areas, isn’t going to address the fundamental drivers of the long-term deficit.
But let me be clear: while the deficit is largely driven by Medicaid and Medicare costs into the future, this isn’t a Medicaid problem. This isn’t a Medicare problem. This is a health care problem. The issue is with rising costs in the health care system as a whole, not with the specific programs. In fact, Medicaid and Medicare do better—in some cases, far better, than the private market in controlling costs. These programs provide less expensive care, often to a more vulnerable, older, in some cases sicker population.
So the solution is not to attack or undermine Medicare or Medicaid—it is to find ways to control the base cost of health care.
SHIFTING VS. SAVING: Nor is the solution to simply shift the burden of the rising cost of health care from the federal government to the states, or to seniors, or to low-income families. Federal deficit reduction can’t be simply to “pass the buck” to others—especially to those who have less ability to deal with these costs.
Many of the proposals being discussed in Washington right now do little to save costs. The House GOP proposal would radically restructure Medicare into a privatized voucher program—but by all accounts, the savings comes from the fact that the value of the voucher would not keep pace with the cost of medical care. This would represent a shift in the cost of care from the federal government to seniors, that could cost them thousands of dollars in the near term, and even more into the future. What’s worse, individual seniors are not in any position to bargain for better rates, or to implement the systemic changes needed to save costs in the health system.
The House GOP proposal would “block grant” Medicaid, which would be definition place a limit on the amount of reimbursement the state would receive to help operate our Medi-Cal program. The federal contribution would be capped, even in the event of a recession that increases enrollment, or a public health emergency that increases costs, and the state would shoulder that financial burden. This is in fact the wrong policy direction to go, since the state, with a balanced budget requirement, is actually ill-equipped to deal with the ebbs and flows of the economy, as this budget committee knows all too well. Shifting additional costs to the states would simply force the states to do the “dirty work” of cutting eligibility, benefits, and provider rates, with the resulting consequences on families, on our health providers and the health system on which we all rely.
So California should speak with one voice against any deficit proposals that simply shift the cost of care onto states, or seniors, or low-income families. This simply makes patients and taxpayers pay more in the end.
WHAT WE HAVE ALREADY DONE VS. WHAT WE NEED TO DO: This doesn’t means there aren’t savings to be had, by finding ways to control or reduce the cost of health care.
In this regard, it is important to recognize that the federal government has recently passed the most sweeping deficit reduction package in a generation. It’s called the Affordable Care Act, which included a range of provisions to reduce the rising cost of care. The Act was not only paid for with a combination of revenues and savings, but according to the CBO, it will provide over $210 billion dollars of budget savings over the first ten years, and over a trillion in budget savings over the next ten years.
Some of the money-saving measures were booked as providing savings, even if some supporters had questions about their effects, such as the tax on high-cost “Cadillac” health plans, or the creation of an independent Medicare board to consider the evidence on the effectiveness of certain treatments. But there are other provisions, such as investments in prevention, or the adoption of information technology and electronic health records, where the evidence is not clear but many believe there will be substantial savings. In many cases, the Affordable Care Act provides new tools and new platforms for getting savings, especially in a reformed health system where more people will be in the system (and thus we can better manage their costs), and where insurers have to change their business model away from avoiding risk and toward actually competing on price, quality, and service.
So there is much more to do to reduce health costs. But let’s recognize the progress in the Affordable Care Act. Let’s also recognize that in the negotiations arising from the need to raise the debt ceiling, there were over $1 trillion in cuts in discretionary spending as well, including in areas like public health.
CUTS VS. REVENUES: It’s time to balance these cuts with revenues, beginning with letting unpaid tax cuts expire, closing corporate tax loopholes, and asking for shared sacrifice from all sectors of society, including the most fortunate, and not just for those who find the need for core services like Medicaid and Medicare.
THE CUTS IN THE TRIGGER VS. ON THE TABLE: We appreciate that many members of the Supercommittee say that everything should be on the table. We are concerned that some are already foreclosing any notion of revenues to balance cuts, either those already made or those yet to come.
If the subcommittee fails, the triggered cuts would fall on defense and discretionary spending. California’s first choice should be to avoid this with a package of smarter cuts balanced with the needed revenues. That said, the triggered cuts do not include direct cuts to Medicaid, to Affordable Care Act premium subsidies in the Exchanges, or to Medicare beneficiaries. Some Medicare provider cuts would be enacted, and the discretionary cuts might have some indirect impacts on the Affordable Care Act—whether on resources for implementation, or on the specific subsidies to limit cost-sharing.
What we are much more concerned about are the cuts that the Supercommittee could adopt. We are pleased that the President is protecting the basic core of Medicare and Medicaid, although we are concerned about the impact of specific cuts that he has proposed in his package, whether the reduction in funds for prevention and public health, some cost increases to certain Medicare beneficiaries, or some of the Medicaid cuts that will fall on states.We were relieved that the savings sought from Medicaid was less than originally feared, given how sparsely funded it currently is. But the cuts that remain continue to be cause for concern. The President has put forward a proposal that would restrict the ability to get federal Medicaid match on provider fees, which have been used to plug key holes in the budget in recent years.
The President’s proposal would also change the formula by which the federal government reimburses states for much of the cost of Medicaid, and there’s a real argument for making those formulas simpler and fairer. Depending on the formula, the damage to California could be different. But the issue is that this recalculation would also seek to save the federal government money—in the President’s September proposal it was around $15 billion over 10 years, and others wanted savings of much more—which means some combination of states will have to pick up the difference. California would not be in a position to make up the difference—I’m not sure many states would be—and as a result the state would have to make up the difference through cuts or tax increases. To give a sense of scale, just a $15 billion cut if done proportionately would force a bigger cut to Medi-Cal (around $180 million/year) than the cut California made in 2009 to eliminate dental and 9 other benefits (which was around $125 million). Our Governor Brown was very concerned about an earlier "blended rate" proposal because of the risk to the state's general fund, and it's something to watch closely.
THE PROBLEM VS. THE SOLUTION: California needs to watch this process very carefully. In particular, it should send a strong message that we want a deficit solution that doesn’t add to other problems. A solution should not increase unemployment or poverty at a time when we need an economic recovery; it shouldn’t shift costs to patients already struggling with high health bills; it shouldn’t stick states with additional costs at a time when states need help themselves. There are solutions, but some actually make the problem worse.
KEY HEALTH BILLS NOW ON GOVERNOR'S DESK Key Measures Passed CA Legislature; Governor Brown to Sign or Veto by October 9th
Bills on Governor's Desk Include: * AB1296 (Bonilla) on Streamlining Eligibility and Enrollment * AB922 (Monning), to Improve Consumer Assistance * SB222 (Evans/Alquist) & AB210 (Hernandez) to Require Maternity Coverage * SB51 (Alquist) to Implement the Medical Loss Ratio, Requiring Insurers to Devote 80-85% of Premium Dollars on Patient Care, Not Administration or Profit * SB408 (Hernandez) on Hospital Ownership Changes * SB202 (Hancock) on Ballot Measure Timing
Urge Governor Brown To Sign These Bills! Call 916-445-2841 Organization Letters on Each Bill to the Governor Needed: Fax: 916-558-3160
Already Signed by the Governor: * AB151(Monning), Guaranteed Issue for MediGap Plans * ABx1 21 & ABx1 30 (Blumenfield), to Extend "MCO Tax" to Fund Healthy Families
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Governor Jerry Brown is now considering which bills to sign, and which to veto, of the hundreds that were passed earlier this month by the California Legislature in their final week of the 2011 session. A handful of health consumer protection measures are on his desk. If signed by the Governor, many of these health bills will implement and improve some provisions of federal health care reform law and make other improvements to prepare California for a health system of the future.
Health bills now headed to the Governor include crucial consumer protections for Californians, from a requirement that maternity services are covered in all health plans, to a reorganization and expansion of consumer assistance for California patients, to the streamlining of eligibility and enrollment systems so that Californians get the coverage they want and need. Another key bill, implementing the new federal health law, would limit the amount of our health insurance premium dollar that goes to administration and profit, rather than patient care.
Health advocates are encouraging phone calls to the Governor's office to urge him to sign the bills. The Governor office is 916-445-2841. Organizations are encouraged to submit letters to Governor Brown in support of each bill. Governor Brown is reportedly personally reading through the bills, and through the bill file with letters of support. The Governor's fax number is 916-558-3160.
Below are bills supported by Health Access California on the Governor's desk.
Getting Californians Ready for Coverage: Two bills sought to reform and streamline the key system to help consumer get enrolled, and get assistance with questions and complaints.
* STREAMLINING ELIGIBILITY AND ENROLLMENT: AB1296 (Bonilla) requires the California Health and Human Services Agency to establish a standardized single application form and related renewal procedures for Medi-Cal, the Healthy Families Program, the Exchange, and county programs. This is a crucial piece of legislation that sets a framework so that millions of Californians gain meaningful and easy access to coverage as the Affordable Care Act is implemented.
* IMPROVING CONSUMER ASSISTANCE: AB922 (Monning) improves the Office of Patient Advocate to provide better assistance to California health care consumers by providing a central, enhanced center to handle questions and complaints, and for them to be triaged to thappropriate agencies, whether regulatory or administrative, state or federal, etc. The bill also transfers the Office of Patient Advocate, and the Department of Managed Health Care, to the Health and Human Services Agency.
Improving Consumer Protections and Insurer Oversight: Two more measures adopting consumer protections that are, or will be, required by the federal Affordable Care Act.
* GUARANTEEING MATERNITY COVERAGE: SB222 (Evans/Alquist) & AB210 (Hernandez) requires that health plans sold in the individual and small group markets, respectively, stop discriminating against women and provide as a basic benefit, maternity care and maternity-related care, starting in July 2012. This would get Californians needed care and prevent them from falling onto taxpayer-funded programs, but also would allow for a smoother phase-in to the federal requirement that maternity be included in an essential benefits package in 2014.
* REQUIRING PREMIUM DOLLARS TO BE SPENT ON HEALTH CARE: SB51 (Alquist) implements the Medical Loss Ration provision of the Affordable Care Act that requires insurers in the large group market to spend 85% of premium dollars on health care and insurers in the small group and individual markets to spend 80% of health care dollars on actually providing health care rather than for administration or profit.
Also Of Interest: Some bills of interest to health advocates included:
* ELECTIONS: SB202 (Hancock) would, as a policy going forward for ballot measures not yet scheduled, place initiatives on general election ballots in November, rather than primary elections where far fewer Californians vote. The measure also would delay a vote on a “spending cap/rainy day fund” previously placed on the June 2012 ballot by the Legislature. Under the bill, the vote on “spending cap” constitutional amendment, opposed by Health Access California and other health advocates since it would force cuts in key programs, would be pushed back for two years to 2014, given the ongoing budget issues including the need to pay down debt rather than divert dollars to a "rainy day fund."
* HOSPITAL TRANSFER OVERSIGHT: SB408 (Hernandez) requires a new license application to be filed when the holder of an existing license changes ownership. This closes a loophole in the law exploited by Prime Healthcare in acquiring hospitals without proper review.
Measures already signed into law by Governor Brown include:
* GUARANTEED ISSUE FOR SENIORS: AB151 (Monning) assures that those who previously covered by Medicare Advantage plans have guaranteed issue for Medi-Gap coverage.
* MEDI-CAL EXPANSION: AB1066 (Perez) implements the expansion of Medi-Cal as authorized by the Affordable Care Act and by the 1115 Medicaid Waiver.
* QUALITY ASSURANCE FEE: SB335 (Hernandez) imposes a quality assurance fee to be paid by hospitals, for a specified period which would be used to increase federal financial participation in order to make supplemental Medi-Cal payments to hospitals and pay for health care coverage for children.
* COVERAGE FOR KIDS: ABx1 21 and ABx1 30 (Blumenfield) are budget trailer bills that would maintain funding for children's coverage by extending a Managed Care Organization (MCO) tax, which in turn will help bring down federal dollars to fund Healthy Families. These bills also prohibit, for one year, the immediate shift of the Healthy Families population into Medi-Cal, a budget proposal by the Governor that raised some concerns, especially if implemented hastily.
Next Year: Not all health reform-related measures this year advanced to the Governor's Desk. Notably, high-profile rate regulation legislation, AB52 (Feuer), was held by the author because there was not enough support in the Senate at this time.
Other health reform implementation measures, sponsored by Health Access California--AB714 (Atkins) and AB792 (Bonilla) to easily enroll people into coverage starting in 2014, and AB1083 (Monning) to reform the small group market aligned with federal rules--were held as “two-year” bills will be considered next year, along with several other measures that will need to be passed next year, to be ready for 2014 implementation of the federal Affordable Care Act. On a parallel track and timeline, SB810(Leno), to create a single-payer universal health system, will also be considered next year as well. These bills will be part of a full agenda of health legislation next year.
For a broader list of legislation introduced this year impacting health care consumers, or a more specific list of this year's bills related to implementing the Affordable Care Act in California, visit the Health Access California website.
The Board of the California Health Benefits Exchange met again this afternoon.The meeting began on a high note with the Board and the audience warmly welcoming the Exchange’s new Executive Director, Peter Lee.Mr. Lee’s first remarks including expressing joy at returning home to California and his excitement to work to make California’s Exchange a model for the rest of the country.
The many materials for the meeting are on the Exchange's website. The most robust discussion at the meeting centered around a staff presentation about Exchange Design Options.The proposed program design goals were modified to reflect comments from stakeholders presented at the workgroup meeting.Thes "Program Design Goals" are:
“No Wrong Door” service system that provides consistent consumer experiences for all entry points
Culturally and linguistically appropriate oral and written communications which also ensure access for persons with disabilities\
Seamless and timely transition between health programs
Minimize consumer burden of establishing and maintaining eligibility
Ensure privacy and security of consumer information
Enable real-time eligibility determination
Ensure timely and accurate eligibility determination
Ensure transparency and accountability
Ensure no gaps in coverage
Enable consumers to make informed choices
Stakeholders expressed grave concerns that the rush to move forward in developing IT systems in order to have them operational in time may back the Board into policy decisions that have yet to be made. Chairwoman Diana Dooley assured everyone that the current work is simply to solicit a contractor to help in the crafting of a solicitation for the IT vendor in a way that reflects the goals of the Exchange, the requirements from the federal government, and technological feasibility.
Many stakeholders were also concerned about accountability in the context of so many state departments working together under shared IT systems.Our colleague Elizabeth Landsberg from WesternCenter on Law and Poverty proposed an alternative "Option #4" to those presented by the board, to better reflect the needs of consumers and other stakeholders.
A broader issue that came up as part of the discussion was the issue of the long term governance of health care eligibility, enrollment, and delivery in a world where more people are covered under more health care options.
Next, there was a discussion on the Exchange Vision, Mission, and Values.The consultant presented a few options for choosing, mixing, and/or matching that were the result of prior board discussions and a great deal of stakeholder input.This item will be acted on in the next board meeting, giving board members, the new Executive Director, and stakeholders more time to provide input. Health Access suggested including language that highlights benefits to consumers beyond a structured marketplace and better information, including subsidies to millions of Californians, and the bargaining power being no longer alone at the mercy of insurers. Also suggested was the inclusion of a broader goal expanding coverage, if not the explicit goal of mass enrollment on day one. Lastly, the Board discussed the coordinated state response to the proposed federal rules on Exchanges.Comment periods on federal rulemaking are an opportunity for the state and other stakeholders to impact how the federal law is implemented.A number of stakeholders have spent innumerable hours combing through the "firehose" of regulations and providing comments to the Exchange Board as well as crafting their own comments.The deadline for comments was extended to October 31 but there are 4 other sets of comments due on that date as well.Advocates brought up a few areas of disagreement with the comments that the consultant drafted that they hoped to change, some of those include: areas where adverse selection may be problematic, a proposal to eliminate premium grace periods, requiring the Exchange (on top of employers) to verify citizenship, allowing multiple rate increases per year in the small group market, and the elimination of special enrollment periods.The board agreed to consider the additional stakeholder comments before finalizing the letter to the federal government.
We look forward to some decisions related to today’s discussions in the coming meetings.Also something to look forward to is the meeting schedule for 2012, which include meetings in Fresno, Los Angeles, and the Bay Area to enable more people to participate in this public process.
The U.S. Department of Health and Human Services (HHS) announced today grants to 61 states and communities with over 120 million residents to fight chronic disease, which is the leading cause of death in Americans. Created by the Affordable Care Act, Community Transformation Grants help states and communities tackle the root causes of chronic disease such as smoking, poor diet and lack of physical activity. Grantees will use these funds, which total more than $103 million, to transform where their residents live, work, play, and go to school so that they can lead healthier, more productive lives.
Grants awarded today included implementation awards to California county agencies like the San Diego Health and Human Services Agency ($3,053,793), San Francisco Department of Public Health ($815,358), and the Los Angeles County Department of Public Health ($9,848,011), as well as the Public Health Institute to serve other parts of the state of California ($5,926,365).
Capacity-building awards also went to California entities, including the Stanislaus County Health Services Agency ($293,899); Fresno County Department of Public Health ($499,695); County of Kern Public Health Services Department ($416,577), Ventura County Public Health ($481,036), and the Sierra Health Foundation ($499,229) and Toiyabe Indian Health Project ($500,000).
Today, Governor Brown has signed the bill to delay for one year, but ultimately collect, the online sales tax. As a result, Amazon agreed to cancel its planned referendum on the budget-balancing policy that was enacted as part of this year's budget.
Amazon had spent millions to collect the signatures--and if they had filed them and proceeded with the referendum, they would have put at risk hundreds of millions of dollars in funding for core state functions like education, health, and human services.
That's why Health Access helped, working with the HHS Network, to create www.thinkbeforeyouclickca.org, a website to educate Californians about the impact of Amazon's actions. We hope that this concerted opposition of a broad coalition representing low- and moderate-income families was a signal to Amazon, among many, that they needed to change course.
We are pleased that California has closed a loophole that benefitted Amazon and other online retailers but hurt the rest of the state. This was an important step in the larger struggle to find and close corporate tax loopholes and irresponsible tax breaks in our state.
Revenue solutions should be our priority in further efforts to balance the budget. After cutting $14.6 billion in essential services, it’s now time to look to lost revenues to fix our state’s budget woes. Amazon was just one example, among many, of companies that are neglecting their obligations to our state or benefitting from loopholes that need to be changed. We thank the Governor and Legislature and ask that when they return in January that they take more steps to close all revenue loopholes.
In addition to the handful of health reforms on the Governor's desk, SB202 (Hancock/Gordon) is an important measure on the timing of ballot initiatives. In particular, the bill ensures that ballot measures are scheduled for general elections in November, rather than primaries in June. It also shifts a planned referendum on a spending cap measure to 2014.
The Timing of Ballot Initiatives: Health Access supports the policy of requiring ballot measures to be voted on during general elections, in November, with the broadest possible electorate, rather than in primary elections in June or otherwise, when a smaller fraction of the voting public turns out.
Health Access California has been actively involved in numerous ballot measures over our two decade history, on issues from HMO consumer protections to prescription drug discounts to expansions of employer-based coverage. Many of these ballot measures would have impacted a substantial portion of the California electorate--yet if they were scheduled in a primary election, a smaller fraction of California voters would have had a voice in adopting those policies. There are times in the future that a primary election might help a health consumer initiative; there are times where it would hurt the prospects of a given initiative--yet as a onetime and likely future initiative proponent, we should not be able to pick-and-choose our voters.
Ensuring that these measures are voted on in the general election means that the greatest number of Californians have the opportunity to participate and craft policy that will impact everyone in the state.
Delaying ACA 4: Shifting ACA 4 until the 2014 ballot makes sense for both supporters and opponents of the measure. Health Access does oppose the policy that it represents, and believe more time is needed to consider the grave impacts on California and its budget process; but we believe that consideration of ACA 4 is especially troublesome in 2012, as California first needs to address the "wall of debt" before putting resources into a "rainy day" fund.
ACA 4 has sometimes been called a spending cap or a rainy day fund, other times a set of budget handcuffs and constitutional straightjacket. The measure, if enacted, would place significant constraints on the Governor's ability to craft a budget, putting formulas in the constitution that will curtail the power of the Governor and Legislature to come up with a budget agreement.
Beyond that, the formulas in ACA 4 don't take into account key elements of the California budget, such as medical inflation, or the demographics of an aging population. This means that these formulas will, over the years, serve to ratchet down existing core programs. Any spending cap should take these factors into account; ACA 4 does not.
Finally, the measure would start setting aside money for a "rainy day" funds while we are still dealing with a flood. You have appropriately stated that the current need is to retire the "wall of debt" that the state holds. To the extent that the state has additional resources available, we think they should go to restorations and investments that will help stir the economy (for example, by drawing down federal matching funds), or to retiring debt, which will provide for greater budget flexibility in the future, since California would no longer be on the hook for interest payments. At this particular time, we have other, more vital debt service and investments to make--ones that will provide greater bang for the buck in terms of an improved economy and future budget savings.
Fresno fails to take advantage of an opportunity...
Tuesday, September 20, 2011
After a three-hour discussion, testimony of over a dozen community groups, and many questions, the Fresno County Board of Supervisors voted to withdraw their application to launch a Low-Income Health Program. As a result, they are rejecting over $28 million in federal funds available to them for each of the next two years. Supervisors Case, Larson, and Poochigian voted to withdraw the application. Supervisors Anderson and Perea voted against the motion.
This makes Fresno the only county out of all 58 California counties to not take advantage of these federal funds and the opportunity to expand coverage, available under the state's "Medicaid" waiver.
While this is a shame for Fresno, it's unclear what these means for the rest of the state. The biggest issue of concern was unique to Fresno--namely, a 30-year contract between the county and Community Regional Medical Center, to provide care to the indigent. The contract has been a sore point for both the county and the hospital--and both parties believed implementing a LIHP would requirement opening up that contract.
No other county has a situation quite like Fresno, and thus won't have the same barriers to implementing a LIHP--and taking advantage of those federal funds. But still, advocates should continue to talk with their counties about the benefits of seizing the opportunity to expand coverage, bring in federal funds, help create jobs, and bolster the health system everyone relies on.
(This post has been corrected to remove erroneous party identifications of the Fresno Supervisors.)
Today the U.S. Department of Health and Human Services announced $100 million in new grants to help states (including California!) with rate review. Last year, California passed SB1163 (Leno) and began implementing the review of insurance rate filings in accordance with the Affordable Care Act. The ACA empowers states to scrutinize insurance rate increases to prevent unjustified rate increases that go far and beyond any increases in costs on the insurer end.
HHS also highlighted some of California's (and other states') experiences in their report on the efficacy of rate review, which you can read here.
The report strongly endorses that states can and should take the next step, to require prior approval of rates, as is proposed by Senator Feinstein in the U.S. Senate, and is proposed in the state legislature in AB52 by Assemblyman Feuer. The ACA shows that additional scrutiny matters, and is helping provide some resources for that effort... but there's more that California can do.
But before going into specifics, let's take the package as a whole. First of all, it is probably most important what President Obama is NOT proposing. He is not advocating the wholesale restructuring and/or dismantlement of the Medicare and Medicaid programs, as proposed by Congressional Republicans. He is NOT proposing to raise the eligibility age of Medicare, or make other major changes to eligibility or benefits in either Medicare or Medicaid. These GOP proposals don't do anything to control the cost of health care; they simply push more of the cost of care from the federal government onto families or states. That’s not a solution—it’s simply a shift, that makes patients and taxpayers pay more in the end.
As opposed to Congressional GOP proposals, the President is seeking to prevent these radical changes by instead raising revenues, for example allowing some of the Bush tax cuts for the wealthy expire. If we are seeking to reduce the deficit in the long term, it’s appropriate to ask for everyone to share in the solution, not just low- and middle-income families who depend on these programs, but also the folks who have benefitted the most.
But even President Obama’s proposal is weighted toward cuts, 3:1. In health care, some of the cuts are to find more savings in the health system. For example, one of the bigger budget solutions is to get the same discount for prescription drugs in Medicare as we do in Medicaid. There are other solutions that smartly seek to find savings in Medicare and Medicaid.
So while we are happy that the President is protecting the basic core of Medicare and Medicaid, we are concerned about the impact of specific cuts, whether the reduction in funds for prevention and public healt, some cost increases to certain Medicare beneficiaries, or some of the Medicaid cuts that will fall on states.
We were relieved that the savings sought from Medicaid was less than originally feared, given how sparsely funded it currently is. But the cuts that remain continue to be cause for concern. The proposal would change the formula by which the federal government reimburses states for much of the cost of Medicaid, and there’s a real argument for making those formulas simpler and fairer. Depending on the formula, California could win or lose. But the issue is that this recalculation would also seek to save the federal government over $16 billion—which means some combination of states will have to pick up the difference. California would not be in a position to make up the difference—I’m not sure many states would be—and as a result the state would have to make up the difference through cuts or tax increases. Our Governor Brown was very concerned about an earlier "blended rate" proposal because of the risk to the state's general fund, and it's something to watch closely.
But the biggest concern is not what is in the President’s proposal, but what might come out of a negotiation with the Congressional Republicans. The President has appropriately said he would veto any proposal that cuts Medicare without a revenue increase on high-incomes. But given what the GOP has proposed, they may demand significant cuts if they were ever to agree to any deal on taxes.
The specifics are less important than the overall framework of the choices that we as a country have to make: Are we going to ask everyone to share in the solution to our budget problems, or only ask those low- and middle-income families that depend on programs like Medicaid and Medicare? Are we going to preserve and protect Medicare and Medicaid with some minor adjustments, or are we going to radically restructure them, making Medicare into a voucher program for seniors, and Medicaid a block grant program for states? And more immediately, are we going to focus on jobs and improving our economy, or harming our economy by cutting core programs, especially those that people depend on in a downturn?
We’ve worked for years for the opportunity to expand coverage and improve our health system, nationally, in California. But now we’ll see if it pays off in the county with one of the worst uninsured crises in the state and nation, Fresno.
The Fresno County Board of Supervisors has an historic opportunity to draw down new federal funds to expand coverage to approximately 12,000 county residents and provide as many as 550 new jobs as part of the Low-Income Health Program (LIHP).
Yet on Tuesday, the Board of Supervisors is scheduled to vote on withdrawing from the program, and to reject those federal funds.
The Affordable Care Act expands Medicaid in 2014 to up to 2 million Californians, largely those who are below the poverty level but do not qualify for assistance now. Under a special agreement with the state and federal government, the LIHP allows California to start these expansions early, with 50/50 federal matching funds. The county doesn’t have to spend more money, just the resources that already go to indigent care, to draw down these federal funds.
All 58 California counties, including Fresno, have begun planning to implement LIHP but on Tuesday, the Board of Supervisors will consider withdrawing the county from the program.
Should the Board vote next week to withdraw, Fresno County stands to lose as much as $50 million in federal funds over the next two years and would be the first and only county in the state not to participate in the program.
Please join community members, clergy, health care providers, and other consumer advocates for a county-wide call-in day urging members of the Board not to withdraw from the LIHP.
You can also show your support by attending the Board of Supervisors meeting tomorrow. Contact rauguste@health-access.org for more information.
Details:
Fresno County Board of Supervisors Meeting Tuesday, September 20th from 9 am to 2 pm Fresno County Hall of Records – Room 301 2281 Tulare Street, Room 301, Fresno, CA 93721
Contact the Board of Supervisors at: Henry Perea - Phone: (559) 600-3000 Susan Anderson - Phone: (559) 600-2000 Phil Larson - Phone: (559) 600-1000 Debbie Poochigian - Phone: (559) 600-5000 Judy Case - Phone: (559) 600-4000 County Administrative Officer John Navarrette: (559) 600-1710
Some time this month, the federal Centers for Medicare and Medicaid Services (CMS) will decide on whether to approve some of the steep Medi-Cal cuts that were adopted earlier this year.
Here's a Health Access one-page fact sheet on those Medi-Cal cuts, which include a 10% cuts to Medi-Cal provider rates; a cap on doctor visits to seven a year; and increased cost-sharing such as $50 for an emergency room visit.
Given that Medicaid is a joint federal-state program, half of which is paid for by the federal government, these cuts need federal approval--especially since these cuts bump up against--if not completely violate--the minimum standards established by federal law. The state is formally seeking a "waiver" from these minimums--but there's implications if such approvals are granted.
Two articles of note have spotlighted this issue:
* Kevin Yamamura of the Sacramento Bee reports about the impacts on providers, on access for patients, the viability of Medi-Cal, and in fact the impact of the health care system. These cuts are a big deal for California.
* In a much-discussed LA Times article, the headline, "California could pose problem for Obama's healthcare reform", overstates the case from what Noam Levey ably reports in the text. The article properly documents many of the ways that California continues to lead in the implementation of the Affordable Care Act. But it appropriately indicates that the proposed Medi-Cal cuts could undermine this progress--and in fact pave the way for other states to go backwards in health care at exactly the same we need to go forward.
Will Fresno Turn Down Over $50 Million in Federal Funds for Health Care?
Friday, September 16, 2011
Fresno County has a particularly high rate of uninsurance and unemployment. That's why it's even more stunning that on Tuesday, the County Board of Supervisors might turn down millions of dollars in federal funds to help their situation. And why it's urgent that Fresno citizens call their Supervisors to urge them to put off the vote.
Fresno's Board of Supervisors is scheduled to vote on whether they want to be the first county in the state to withdraw from the Low Income Health Program, a result of the state's Medicaid waiver that allows for an early expansion of Medi-Cal coverage, by having the federal government match funds the county already spends on care to the indigent. Fresno County is home to 111,000 individuals who reported being uninsured last year and another 91,000 who reported that they were uninsured part of the last year.
At their meeting this coming Tuesday September 20, 2011, the Fresno Board of Supervisors will consider withdrawing their application to implement a LIHP in the state. They would be leaving over $50 million dollars over two years in federal funding on the table, and turning down the potential economic benefits that would come with covering more low-income individuals. All 58 counties have recognized the enormous opportunity and have put in an application--Fresno would be alone in pulling out.
Whatever technical and policy issues there are in Fresno County, the answer isn't to walk away from setting up a Low Income Health Plan and the potentially $28 million a year that it represents to Fresno and its health care system, but to take the time to figure it out.
We encourage those who wish to support expanding health coverage to call or write the Fresno Board of Supervisors or to attend the meeting in person on Tuesday, to urge Fresno to put off the vote.
For more information on this effort in Fresno, contact Rose Auguste at rauguste@health-access.org. For more information about LIHPs in general or in your county, contact Linda Leu at lleu@health-access.org.
Both measures draw down more federal funds into California, by taxing certain health industries to come up with the state matching funds--but the industries agree, since it is to their benefit (as well as patients and California's health system as a whole) to have these services better funded.
The Governor signed SB 335 by Senator Ed Hernandez (D-Los Angeles) and Senate President pro Tem Darrell Steinberg (D-Sacramento). This law will provide additional funds to hospitals and protect health care services for low-income, vulnerable patients and children by extending the Hospital Quality Insurance Fee. SB 335 will raise $7 billion in revenue, bring in an additional $6.1 billion in new federal funds and will save the state’s General Fund more than $850 million over a 30-month period. This amounts to over $500 million more in savings to the State General Fund than previously estimated.
Governor Brown also signed ABX1 21 by Assemblymember Robert Blumenfield (D-Van Nuys), which extends a tax on Medi-Cal managed health care plans for an additional year. This law will help maintain health coverage for thousands of children and teenagers through the Healthy Families Program. It will raise more than $200 million in new revenue, bring in an additional $300 million in federal funds, and save the General Fund $103 million this year.
While these are largely extensions of policies put in place in the last few years, they remain key budget solutions that are preferable to the cuts that have been proposed.
Medi-Cal's vital role for those with chronic diseases..
Wednesday, September 14, 2011
A report released today by the American Cancer Society Action Network, the American Diabetes Association, the American Lung Association, and Families USA demonstrates the immense benefit Medicaid, or Medi-Cal in California, has on the health of Californians with chronic disease. As political rhetoric flies about Washington and through the airwaves, it is important to keep the facts in mind.
Some key facts about the benefits of Medi-Cal:
Medicaid insures 140,340 Californians with cancer, of them: 3,340 are children, 67,120 are adults, and 69,890 are seniors.
Medicaid helps 562,720 Californians manage their diabetes and treats complications, of them: 25,090 are children, 298,020 are adults, and 239,600 are seniors.
Medicaid helps 850,510 Californians manage chronic lung disease, of those Californians: 400,250 are children, 320,560 are adults, and 129,690 are seniors.
Medicaid helps 1,225,120 Californians with heart disease or stroke, of them: 59,620 are children, 646,280 are adults, and 519,220 are seniors.
But in the two years since California sharply reduced dental benefits for roughly 3 million Medi-Cal recipients, he and other dentists say the situation has become dire for patients who are waiting until their infections land them in an emergency room or their rotted teeth have to be immediately pulled.
"They aren't coming until the mouth is completely swelled up or the pain cannot be tolerated," Murthy said.
Dental care is the oft-ignored cousin of medical care, experts say. Because dental coverage is an optional benefit under the federal Medicaid program for the nation's poor, several states don't offer it. Others, like California, have slashed the benefit in recent years, meaning millions nationwide are going without treatment and facing heightened risks of serious and costly health problems like respiratory infections and heart disease.
One-third of Americans reported skipping dental checkups and care because of the cost, according to a Kaiser Family Foundation poll released in April. And a report by the national Institute of Medicine in July said "persistent, systemic" barriers, including lack of insurance and a shortage of dentists, are increasingly limiting people's access to dental care and exacerbating socioeconomic disparities in public health. The report urged states to include dental coverage for adults with Medicaid and recommended better training so primary care doctors can spot oral diseases.
If we ever get out of this budget crisis, this is a cut that needs to be reversed. In the meantime, we can't make additional cuts to make this situation worse.
New Census Data: California Uninsured Rate Goes Up...
New US Census data released today includes information on income, poverty, and health insurance collected in 2010. The data showed an increase in the number of people who were uninsured, the number of people with health insurance increased to 256.2 million in 2010 from 255.3 million in 2009.
Between 2009 and 2010, the percentage of people covered by private health insurance declined from 64.5 percent to 64.0 percent, and as a result more people turned to public programs, as evidenced by the growth in the percentage covered by government health insurance increasing from 30.6 percent to 31.0 percent. The percentage covered by employment-based health insurance declined from 56.1 percent to 55.3 percent.
This decline in coverage has been most impactful in California, home to 6.987 million uninsured. Over last three years, 18.9% of Californians uninsured; Over last two years, that number is 19.4%
Other data indicated that median income decreased and the number of people in poverty increasing to a record high of 46.2 million, the highest recorded in the 52 year history of poverty data collection. Meanwhile, income inequality also increased. Both income and income inequality are important determinants of health.
This data provides overwhelming evidence of the importance of aggressively moving forward with federal health reform efforts, and stopping any efforts at rolling back provisions of the Affordable Care Act. Though the most significant provisions of the law do not go into effect federally until 2014, California can and must build on efforts to address the issue now.
California can help address the crisis by enacting recently-passed state laws to further implement health reform. In addition, counties can take advantage of new opportunities to draw down federal funds to begin to expand coverage, in anticipation of the new provisions in 2014. The new county-level Low-Income Health Programs can provide a bridge to health reform and help reduce this staggering figure.
How did we get here? How did the debate on health issues get so politicized, and so removed from reality that GOP Presidential candidates can simply say "Repeal Obamacare" without ever proposing an alternative?
At the CNN "Tea Party" debate, when the candidates were debating the so-called "individual mandate," Wolf Blitzer asked a question about a hypothetical 30-year old, who doesn't buy health coverage and ends up in a debilitating coma for six months. The question is who pays the tab. But when Ron Paul doesn't answer the question, the follow-up is more pointed
"Are you saying that society should just let him die?"
Several members of the audience yell, "Yes!" to great applause.
It's hard to unpack all the implications and emotions of the events of 9/11.
For me, personally, there are many elements that go into a moment of remembrance like today, the 10th anniversary of those attacks. There's the stunning loss of life, both in its enormity, and in recognition of the individuals that perished (including a high school classmate of mine). There's the sense of hurt of my hometown of New York City, from the altered skyline to the practical and psychological impacts on my friends and family who live there. There's the emotions that all Americans felt that day and afterwards, from fear and the recognition of being under attack, to patriotism and a sense of community and common purpose.
But 9/11 also has broad social, political, economic, and historical consequences, from security procedures at airports to wars, civil liberties, anti-Muslim sentiment, and a broader change in our politics and political discourse.
Some ramifications are appropriate to note in a blog about health policy: an economic tailspin that contributed to the beginning of the state budget issues in California and elsewhere that have led to continued crises and cuts throughout the decade; and the federal government's shift of resources to military and domestic security spending, along with additional tax cuts, that now sets the context for the current political push to make big cuts to health and other vital programs at the federal level.
On 9/11 and after, there was a lot of pride in first responders, police and firefighters and medical professionals. It's a good time to remember the need to invest in and support both an emergency response system, and a health system, on which we all rely. There was also a missed opportunity to formalize the sense of community and common dignity and shared sacrifice, perhaps with a call for national service, perhaps with a push to ensure access to coverage and care for all Americans. It was noteworthy that it took until last year, 2010, for our policymakers to pass a health care measure for those first responders, much less the much broader effort to expand and reform health coverage.
There's no way to resurrect those that lost their lives, or undo the past. But there's always the opportunity moving forward to remember our national purpose and resolve to confront even the worst problems.
KEY HEALTH CONSUMER BILLS NOW ON GOVERNOR'S DESK Key Measures to Implement and Improve Health Reform Passed CA Legislature; Governor Brown to Sign or Veto by October 9th
Bills on Governor's Desk Include: * AB1296 (Bonilla) on Streamlining Eligibility and Enrollment * AB922 (Monning), to Improve Consumer Assistance * SB222 (Evans/Alquist) & AB210 (Hernandez) to Require Maternity Coverage * SB51 (Alquist) to Implement the Medical Loss Ratio, Requiring Insurers to Devote 80-85% of Premium Dollars on Patient Care, Not Administration or Profit * ABx1 21 & ABx1 30 (Blumenfield), to Extend "MCO Tax" to Fund Healthy Families
Already Signed by the Governor: AB151(Monning), Guaranteed Issue for MediGap Plans
The California Legislature ended their session Friday after passing a handful of health consumer protection measures among hundreds of others bills. If signed by the Governor, these health bills will implement and improve some provisions of federal health care reform law, preparing California for a health system of the future.
Health bills now headed to the Governor include crucial consumer protections for Californians, from a requirement that maternity services are covered in all health plans, to a reorganization and expansion of consumer assistance for California patients, to the streamlining of eligibility and enrollment systems so that Californians get the coverage they want and need. Another key bill, implementing the new federal health law, would limit the amount of our health insurance premium dollar that goes to administration and profit, rather than patient care.
Not all health reform-related measures this year advanced to the Governor's Desk. Notably, high-profile rate regulation legislation, AB52 (Feuer), was held by the author because there was not enough support in the Senate at this time. Other health reform implementation measures--AB714 (Atkins) and AB792 (Bonilla) to easily enroll people into coverage starting in 2014, and AB1083 (Monning) to reform the small group market aligned with federal rules--will also not move forward this year. These “two-year” bills will be considered next year, along with several other measures that will need to be passed next year, to be ready for 2014 implementation of the federal Affordable Care Act.
But some key bills did pass and are now on the desk of Governor Brown. The passage of this legislation would provide real benefit to California consumers, and cement California's position as a leader in the implementation of health care reform. He has a month, until October 9th, to decide to sign or veto the hundreds of bills on his desk.
Getting Californians Coverage: Two bills sought to reform and streamline the key system to help consumer get enrolled, and get assistance with questions and complaints.
* STREAMLINING ELIGIBILITY ANDENROLLMENT: AB1296 (Bonilla) requires the California Health and Human Services Agency to establish a standardized single application form and related renewal procedures for Medi-Cal, the Healthy Families Program, the Exchange, and county programs. This is a crucial piece of legislation that sets a framework so that millions of Californians gain meaningful and easy access to coverage as the Affordable Care Act is implemented.
*IMPROVING CONSUMER ASSISTANCE: AB922 (Monning) improves the Office of Patient Advocate to provide better assistance to California health care consumers by providing a central, enhanced center to handle questions and complaints, and for them to be triaged to thappropriate agencies, whether regulatory or administrative, state or federal, etc. The bill also transfers the Office of Patient Advocate, and the Department of Managed Health Care, to the Health and Human Services Agency.
Improving Consumer Protections and Insurer Oversight: Two more measures adopting consumer protections that are, or will be, required by the federal Affordable Care Act.
* GUARANTEEING MATERNITY COVERAGE: SB222 (Evans/Alquist) & AB210 (Hernandez) requires that health plans sold in the individual and small group markets, respectively, stop discriminating against women and provide as a basic benefit, maternity care and maternity-related care, starting in July 2012. This would get Californians needed care and prevent them from falling onto taxpayer-funded programs, but also would allow for a smoother phase-in to the federal requirement that maternity be included in an essential benefits package in 2014. * REQUIRING PREMIUM DOLLARS TO BE SPENT ON HEALTH CARE: SB51 (Alquist) implements the Medical Loss Ration provision of the Affordable Care Act that requires insurers in the large group market to spend 85% of premium dollars on health care and insurers in the small group and individual markets to spend 80% of health care dollars on actually providing health care rather than for administration or profit.
Also Of Interest: Some budget-related bills of interest to health advocates included:
* COVERAGE FOR KIDS, ABx1 21 and ABx1 30 (Blumenfield) are budget trailer bills that would maintain funding for children's coverage by extending a Managed Care Organization (MCO) tax, which in turn will help bring down federal dollars to fund Healthy Families. These bills also prohibit, for one year, the immediate shift of the Healthy Families population into Medi-Cal, a budget proposal by the Governor that raised some concerns, especially if implemented hastily.
As of this writing, also pending the in Senate late Friday night was SB202 (Hancock) which would, as a policy going forward for ballot measures not yet scheduled, place initiatives on general election ballots in November, rather than primary elections where far fewer Californians vote. The measure also would delay a vote on a “spending cap/rainy day fund” previously placed on the June 2012 ballot by the Legislature. Under the bill, the vote on “spending cap” constitutional amendment, opposed by Health Access California and other health advocates since it would force cuts in key programs, would be pushed back for two years to 2014, given the ongoing budget issues including the need to pay down debt.
If you aren't following our Twitter feed @healthaccess, you are missing out on real-time updates on key health bills from the floors of the California Senate and Assembly. Some hashtags to follow are #HCR#CABudget#CALeg.
Some of today's highlights on concurrence votes, as we enter the final day of this year's legislative session:
* The State Assembly passed ABx1 21, the MCO tax to fund Healthy Families coverage for over 300,000 kids, by a bipartisan 58-9 vote. Heads to the Governor
* The State Senate passed SB222(Evans/Alquist) requiring maternity as a basic benefit in health plans, with a 25-11 vote. Now to the Governor with AB210(R. Hernandez).
* The State Assembly passed AB1296(Bonilla), a "no wrong door" eligibility and enrollment bill to get ready for implementing health reform, passed CA Assembly 46-10. Onto the Governor.
* AB922(Monning), sponsored by Health Access and Western Center on Law and Poverty, to improve consumer assistance, passed CA Assembly 45-20. Heads to Governor.
AB922 had some floor debate, after the author, Assemblyman Bill Monning, chair of the Assembly Health Committee, explained the bill and the amendments made in the Senate. GOP Assemblymembers Silva, Garrick, Wagner, and Haldeman argued against AB922, generally using it as a proxy to attack "Obamacare" and what they perceived to be an "expansion of government." Assemblymember Pan and Bonilla actually made the point it would streamline government, by having an easy front line for health consumers to register questions and complaints, whereas there are now over 8 places that Californias might call now. Pan also made the case that this improvement of consumer assistance would be a good policy, even if health reform wasn't looming. But since it is "the law of the land," there would are both federal requirements and federal funds available to undertake these reforms. The bill passed with 45 votes.
Earlier this evening, the Assembly passed AB922(Monning) in a final floor vote, and this bill, to improve consumer assistance, goes to the Governor for his consideration. The bill, which augments the Office of Patient Advocates (OPA), moves both the OPA and the Department of Managed Health Care (DMHC), to the Health and Human Services Agency.
Here in California, we are proud that in 1999 we enacted HMO reform, passing 21 important measures from the right to a second opinion to independent medical review to creating a new Department of Managed Health Care that put consumers first. We won a lot that year—more than we started with in 1996, and more than we hoped for, but we did not win everything we wanted.
Moving the Department of Managed Health Care (DMHC) from the Business, Transportation and Housing Agency to the Health and Human Services Agency recognizes a longstanding goal of Health Access to treat the Department of Managed Health Care as a regulator of health care first and finances second.
Lodging the Department of Managed Health Care at the Business, Transportation and Housing Agency reflected an era in which HMOs managed dollars, not care. The creation of the Department of Managed Health Care, out of the then-Department of Corporations, through legislation in 1999 began its evolution to a department that put first getting care for consumers, and treated financial solvency as a means to that end, rather than the primary objective of the regulator.
Why was DMHC at Business, Transportation and Housing Agency for the last 35 years? Because HMO regulation was transferred from the Department of Health Services when Knox-Keene was enacted in 1975 because the Department of Health Services had so badly mismanaged the regulation of Medi-Cal managed care plans that some plans were taking the capitation payments and sending them to the Bahamas, the Cayman Islands or similar places and not bothering to contract with doctors and hospitals. This is financial solvency and network adequacy are so intrinsic to Knox-Keene: it was the inter-related absence of both that led to the enactment of the law. But why not the Department of Insurance? Because back in 1975, insurers regarded HMOs and capitated payments with undisguised horror as anathema to the very nature of insurance which paid claims in accordance with the insurance contract. The notion of providing comprehensive benefits as required under Knox-Keene is at odds with the insurance mentality that you can insure a wedding ring, a painting, a singer’s voice, or any other separable item; This philosophy still underpins the Insurance Code which allows limited-benefit health insurance policies such as hospital only, no maternity or cancer only coverage.
AB922 will accomplish two more pieces of HMO reform that we fought for but did not win in 1999: a real Office of Patient Advocate that will serve as an ombudsman for consumers and moving the Department of Managed Health Care from the Business, Transportation and Housing Agency to the Health and Human Services Agency.
AB922 revises and expands the responsibilities of the Office of Patient Advocate to make that office a state-level ombudsman who serves as a first line of triage for consumer complaints while leaving with the respective regulators and sources of coverage the responsibility for resolving the complaints and grievances within their jurisdiction. AB922 also connects state government with the federal government agencies responsible for resolving complaints, such as the Department of Labor for ERISA plans and Medicare for Medicare coverage.
So even if people don't know what kind of coverage they have--if it is "individual market" or "small group market," if it is regulated by the Health and Safety or the Insurance Code, if it is private or public, if the issue is regulated by the federal or state government--consumers will have a place to call and be directed to the help they need. This is a step forward for patient rights. With the upcoming federal health reform, with millions of Californians with new coverage, and millions more with new rights and protections, this is not just an improvement, but an imperative.
Earlier today, the Fourth Circuit U.S. Court of Appeals dismissed two challenges to the Affordable Care Act, one by Virginia Attorney General Cuccinelli, and another by Liberty University, both on the lack of standing. Here's a copy of the full opinions here and here.
For those keeping score at home about the legal threats to the federal health law, NHELP did a useful count: "Appellate track record to date: Of the circuits that have decided ACA constitutional challenges (3d, 6th, 9th, 11th), only the 11th Circuit has decided (in a 2-1 opinion) that the individual mandate is unconstitutional. All other courts have either dismissed the case for lack of standing or found the ACA to be constitutional. Attention now focuses on the DC Circuit Court of Appeals and the 8th Circuit, where cases are working their way through."
So of four cases of the ACA, three uphold the law or dismiss the challenge, and the split decision by the final strikes down just one provision of the law as unconstitutional.
While the President mostly focused on jobs, the specific elements of his "American Jobs Act" that he urged Congress to pass, and broad economic themes in his address to Congress tonight, there were elements that touched on health-specific issues, including on Medicare, and on health consumer protections and regulations.
Here's a few excerpts that touched on health issues, with boldface added, not as endorsement, but for emphasis:
THE JOBS PLAN:
"I am sending this Congress a plan that you should pass right away. It’s called the American Jobs Act. There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans – including many who sit here tonight. And everything in this bill will be paid for. Everything."
"The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services. You should pass this jobs plan right away."
ON PAYING FOR IT AND REDUCING THE DEFICIT:
"The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I’m asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan – a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run."
"This approach is basically the one I’ve been advocating for months. In addition to the trillion dollars of spending cuts I’ve already signed into law, it’s a balanced plan that would reduce the deficit by making additional spending cuts; by making modest adjustments to health care programs like Medicare and Medicaid; and by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share. What’s more, the spending cuts wouldn’t happen so abruptly that they’d be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right away."
ON MEDICARE:
"Now, I realize there are some in my party who don’t think we should make any changes at all to Medicare and Medicaid, and I understand their concerns. But here’s the truth. Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising health care costs, we are spending too fast to sustain the program. And if we don’t gradually reform the system while protecting current beneficiaries, it won’t be there when future retirees need it. We have to reform Medicare to strengthen it."
ON BUDGET PRIORITIES:
"So we can reduce this deficit, pay down our debt, and pay for this jobs plan in the process. But in order to do this, we have to decide what our priorities are. We have to ask ourselves, “What’s the best way to grow the economy and create jobs?”
"Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both."
"This isn’t political grandstanding. This isn’t class warfare. This is simple math. These are real choices that we have to make. And I’m pretty sure I know what most Americans would choose. It’s not even close. And it’s time for us to do what’s right for our future."
ON REGULATIONS:
"Now, I realize that some of you have a different theory on how to grow the economy. Some of you sincerely believe that the only solution to our economic challenges is to simply cut most government spending and eliminate most government regulations."
"Well, I agree that we can’t afford wasteful spending, and I will continue to work with Congress to get rid of it. And I agree that there are some rules and regulations that put an unnecessary burden on businesses at a time when they can least afford it. That’s why I ordered a review of all government regulations. So far, we’ve identified over 500 reforms, which will save billions of dollars over the next few years. We should have no more regulation than the health, safety, and security of the American people require. Every rule should meet that common sense test."
"But what we can’t do – what I won’t do – is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy. We shouldn’t be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top. And I believe that’s a race we can win."
Usually when we think of last minute legislative action, we worry that some highly-paid industry lobbyists has managed to slip something in at the last minute that is bad for consumers. Still, every once in a while, our team manages to uses the rules to do some good things for consumers. This is one of those years.
As we reported earlier, both SB155 (Evans) and AB185 (R. Hernandez) had failed in the Assembly Appropriations committee: AB185 back in May when the suspense files were taken up in the first house and SB155 (Evans) only a few weeks ago when the second house suspense files were taken up. Both bills would have required maternity coverage as a basic benefit in health insurance, reversing the trend to the elimination of maternity coverage in individual health insurance. Today only 12% of individual policies cover maternity: five short years ago, it was over 80%.
SB155 and AB185 were stalled, but the effort to mandate maternity coverage lives on: on Friday, the Senate passed AB210 (R. Hernandez) on a 25-19 vote which would require maternity coverage in group health insurance where more and more very small businesses (under 15 employees) are also dropping maternity coverage. Also on Friday, the Assembly, with 49 votes, adopted amendments to SB222 (Evans/Alquist) to require maternity coverage in individual health insurance policies. We hope and expect both bills should pass to the Governor sometime this week: we will keep you updated.
How did this happen? It took a lot of hard work and a considerable willingness on the part of many legislators and their staff to put women and health care first and politics second—and then to use the rules of the legislative process to assure that maternity coverage happened this year. It was also helped by having the support not only of consumer groups but also medical groups and two major insurers, Kaiser Permanente and Blue Shield of California—and the fact that no insurer or trade association of insurers opposes this version. Even insurers that had previously opposed this mandate saw this would be part of the minimum essential benefits package in 2014 under federal health reform; what these bills do is get this benefit to Californians 18 months earlier, and allowing for a smoother transition to the federal rules, giving the industry time to adjust.
Now it is up to Governor Brown to protect women and their families from the lack of timely prenatal care. The Department of Managed Health Care already requires maternity coverage for all products, but it would level the playing field with those plans regulated under the Insurance Code, for the benefit of consumers, insurers, and regulators. Governor Brown can also send a clear signal that California will continue in the effort to implement and improve upon the federal health law.
AB1296 (Bonilla) and SB222 (Evans/Alquist) Move Forward
AB1296, Assemblymember Bonilla's bill to streamline eligibility and enrollment in health programs to create a "no wrong door" system for consumers passed off the Senate floor today. This will help Californians enroll and remain enrolled in health coverage. It goes back to the Assembly for concurrence and then to the Governor's desk.
Passing the Assembly floor was SB222 (Evans/Alquist), a new vehicle for maternity care. This bill requires insurers to cover maternity care and related services, and its companion bill, AB210 (Hernandez) has already passed the Senate floor. These bills makes great strides in eliminating gender inequality in health coverage, and they help transition California's insurance market to 2014, when federal health reform will require maternity as part of an essential benefits package. Both bills now go back for concurrence votes before also moving to the Governor's desk.
AB922 (Monning) on Consumer Assistance Passes Senate Floor!
AB922 by Assemblymember Monning garnered the 21 votes required to pass off the Senate floor. The bill, which is co-sponsored by Western Center on Law and Poverty and Health Access California, would centralize consumer assistance, augmenting the Office of the Patient Advocate to be an easy place to call with questions and complaints about health care and coverage.
Currently, in order to get help with health insurance related issues, individuals must figure out which of the many state agencies and other public and private entities they must call. The Office of Patient Advocate would appropriately triage calls to the right place in state government. This bill will bring help within easy reach of current health insurance consumers and the millions of new consumers who will join the ranks of the insured when coverage is expanded as part of the Affordable Care Act. The bill moves back to the Assembly for a concurrence vote, and then to the Governor's desk for his consideration.
Governor Brown Signs AB151 (Monning) Guaranteeing Seniors Access to Medigap Coverage
This afternoon, Governor Brown signed AB151 by Assemblymember Monning. This bill will enable all persons on Medicare Advantage plans whose premiums or cost sharing increase, or whose benefits decrease, to purchase a Medigap policy if they decide that Original Medicare and a Medigap policy are preferable to continuing in their Medicare Advantage policy.
As federal subsidies for Medicare Advantage plans are reduced, Medicare Advantage plans may decide to change the benefits they provide above the federal minimums--but if they do make changes, then seniors should have the ability to make changes as well, including choosing other options. Their health status shouldn't tap them into a plan, especially if that plan changes. AB151 provides an important protection for seniors, ensuring that they will continue to have access to coverage that meets their health care needs.
HEALTH BILLS UP FOR THE FINAL WEEK OF THE LEGISLATIVE SESSION
* Rate regulation bill AB52 (Feuer) held due to lack of support in the Senate * Maternity mandate moves forward as SB222 (Evans) and AB210 (Hernandez) * AB922 (Monning) would improve consumer assistance on health issues * Other bills would also implement federal health reform and help get CA ready for 2014: * AB1083 (Monning) would provide added protections to small businesses buying coverage * AB1296 (Bonilla) would streamline eligibility and enrollment * SB51 (Alquist) would adopt new national standards so premiums dollars go to patient care * ABx1 21 and ABx1 30 by Assemblymember Blumenfield would extend MCO tax to maintain funding for Healthy Families coverage, and would prohibit shift to Medi-Cal for one year.
SACRAMENTO-- This week is the end of the legislative session in Sacramento, as lawmakers scramble to get their bills passed before the end-of-week deadline. Legislation needs to pass both houses by this Friday, September 9th, or the bills are stalled for the year.
RATE REGULATION: The fate of the most prominent health bill of the year--and perhaps of any topic--is already known. Last Wednesday, Assemblymember Feuer, the author of the rate regulation bill AB52, announced that he was parking the measure for the year, due to the lack of support in the state Senate. The measure would have given state regulators the ability to deny unjustified rate hikes by health insurers. Despite an outpouring of strong support working families, small businesses, and consumers throughout California, not enough Senators were prepared to vote for any form of health insurance rate regulation.
The Senate floor vote was the last legislative hurdle in the process--and the highest, as it was where a similar bill died last year. This year, the effort restarted from scratch, and yet the support for the bill took it all the way through the full Assembly and the appropriate Senate committees. AB52 is now a two-year bill. For more on this, please see our blog post.
MATERNITY REBORN: The effort to require maternity care as a basic health insurance benefit is moving forward again. Bills earlier this week and this year were held in Assembly Appropriations Committee, despite amendments and negotiations that had removed industry opposition to the measures. Thankfully, this week the bill has been revived in the form of two separate bills, both moving forward.
AB210 (Hernandez) requires insurers to include maternity services as part of group coverage, and SB222 (Evans/Alquist) requires insurers in the individual market to do the same. The policy content of the bills has not changed, both going into effect in July 2012, 18 months before the requirements of the Affordable Care Act. If passed and signed by Governor Brown, this provides a long-sought consumer protection to California women, while also starting a smooth gradual transition to the new essential benefits package under federal health reform in 2014.
Those following the legislative health reform bills may recall that SB222 was formerly a bill to facilitate joint ventures between county-run health plans. Senator Alquist is expected to continue with that concept in another bill next year.
OTHER INSURANCE OVERSIGHT BILLS: There are other pending bills that would improve health insurance oversight and accountability.
For example, SB51(Alquist) would implement the new federal Medical Loss Ratio requirements in California and gives the state enforcement authority. The Medical Loss Ratio requires insurers to spend 85% of premium dollars on the delivery of health care in the large group market, and 80% of premium dollars in the individual and small group markets. This measure protects consumers and the value and confidence in products, ensuing that premium dollars go to patient care, not administration and profit.
AB1083 (Monning) implements changes in accordance with the federal Affordable Care Act that would reform the small group market and improve the ability of small businesses and self-employed Californians to purchase quality and affordable health care. For example, it adopts the requirement that prevents small businesses from being charged differently based on the health status of their workers. Support is needed to pass this measure on the Senate floor this week.
AB922 (Monning) seeks to improve consumer assistance for Californians with questions or compaints about health care and coverage. It would augment the Office of the Patient Advocate as a central place to take calls, and refer consumers to the appropriate departments. Insurers have opposed this effort to make it easier for consumers to get the help they need. New amendments to AB922 (Monning) also shift the OPA and the Department of Managed Health Care from the agency on Business, Transportation and Housing to the more appropriate and central Health and Human Services Agency. These improvements are to better serve both the millions of new health insurance consumers in 2014 and beyond, as well as the millions more with new rights, leading up to the full implementation of the federal health reform law.
Health consumer advocates are continuing to press forward with these measures, including the last two which face insurance industry lobbyists working to oppose additional oversight over their industry. Some insurance lobbyists, no longer worried about AB52, have deepened their efforts on these measures.
ELIGIBILITY AND ENROLLMENT: Another bill critical to the successful implementation of the federal health law is AB1296 (Bonilla), which would streamline eligibility and enrollment processes to create a seamless, "No Wrong Door" consumer experience for individuals seeking health coverage, whether from Medi-Cal or the new Exchange.
HEALTHY FAMILIES: Two bills crucial for maintaining funding for the Healthy Families program by Assemblymember Blumenfield are moving forward in the First Extraordinary session on the budget. For the purpose of continuing the funding for hundreds of thousands of children, ABx1 21 extends the Managed Care Organization (MCO) Tax to until July 2012. It also prevents the State from adopting the budget proposal that would move children from Healthy Families into Medi-Cal. Instead, ABx1 30 appropriates more money for the Healthy Families program. The bills are pending on the Assembly floor, awaiting a 2/3 vote, including from a few Republicans. On the Senate side, identical measures are numbered SBx1 9 and SBx1 12.
FINAL WEEK OF SESSION
This week is the last opportunity to pass bills off the Assembly and Senate floor. Bills must pass by both houses by September 9th before going to the Governor's desk for signature. The Governor will then have until October 9th in order to sign or veto these measures. Health Access will continue to track these bills, via these E-mail updates, as well as our blog, and Facebook and Twitter feeds.
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.
