In his speech from the East Room of the White House, President Obama made his final argument for a final comprehensive health reform package. He has distilled his argument as such:
1) consumer protections to end the worst practices of the insurance industry. 2) providing individuals and small businesses seeking health coverage with the choice and purchasing power of large employers and the federal government (like what members of Congress has) through a new Health Insurance Exchange, along with affordability subsidies. 3) helping to control health care costs for everyone, to help our balance our family and federal budgets.
From his speech:
Essentially, my proposal would change three things about the current health care system:
First, it would end the worst practices of insurance companies. No longer would they be able to deny your coverage because of a pre-existing condition. No longer would they be able to drop your coverage because you got sick. No longer would they be able to force you to pay unlimited amounts of money out of your own pocket. No longer would they be able to arbitrarily and massively raise premiums like Anthem Blue Cross recently tried to do in California. Those practices would end.
Second, my proposal would give uninsured individuals and small business owners the same kind of choice of private health insurance that Members of Congress get for themselves. Because if it’s good enough for Members of Congress, it’s good enough for the people who pay their salaries. The reason federal employees get a good deal on health insurance is that we all participate in an insurance marketplace where insurance companies give better rates and coverage because we give them more customers.
This is an idea that many Republicans have embraced in the past. And my proposal says that if you still can’t afford the insurance in this new marketplace, we will offer you tax credits to do so – tax credits that add up to the largest middle class tax cut for health care in history. After all, the wealthiest among us can already buy the best insurance there is, and the least well-off are able to get coverage through Medicaid. But it’s the middle-class that gets squeezed, and that’s who we have to help.
Now, it’s true that all of this will cost money – about $100 billion per year. But most of this comes from the nearly $2 trillion a year that America already spends on health care. It’s just that right now, a lot of that money is being wasted or spent badly. With this plan, we’re going to make sure the dollars we spend go toward making insurance more affordable and more secure. We’re also going to eliminate wasteful taxpayer subsidies that currently go to insurance and pharmaceutical companies, set a new fee on insurance companies that stand to gain as millions of Americans are able to buy insurance, and make sure the wealthiest Americans pay their fair share of Medicare.
The bottom line is, our proposal is paid for. And all new money generated in this plan would go back to small businesses and middle-class families who can’t afford health insurance. It would lower prescription drug prices for seniors. And it would help train new doctors and nurses to provide care for American families.
Finally, my proposal would bring down the cost of health care for millions – families, businesses, and the federal government. We have now incorporated most of the serious ideas from across the political spectrum about how to contain the rising cost of health care – ideas that go after the waste and abuse in our system, especially in programs like Medicare. But we do this while protecting Medicare benefits, and extending the financial stability of the program by nearly a decade.
Our cost-cutting measures mirror most of the proposals in the current Senate bill, which reduces most people’s premiums and brings down our deficit by up to $1 trillion over the next two decades. And those aren’t my numbers – they are the savings determined by the CBO, which is the Washington acronym for the nonpartisan, independent referee of Congress.
Health reform is moving forward, with a schedule of the prospective votes: The House may consider the Senate health reform proposal on March 19, along with (or soon afterwards) a package of improvements needed to get the 216 votes. The Senate would consider those changes beginning on March 26, backing up to Easter weekend. (The changes would be through a majority-vote "micro-reconcilation" process--remember the main bill passed by 60 votes, but the budget-related changes needed to reconcile the bills only need 51 votes--just the situations for which the reconcilation process was intended.
That's the process. On the policy, President Obama sent a letter to the Congressional leadership about what he took away from the summit. It continues the commitment to move forward with health reform, but with some nods to the ideas of the Republican opponents:
Dear Speaker Pelosi, Senator Reid, Senator McConnell, and Representative Boehner:
Thank you again for the time, energy, and preparation you invested in last Thursday’s bipartisan meeting on health insurance reform. I have always believed that our legislative process works best when both sides can discuss our differences and common goals openly and honestly, and I’m very pleased that our meeting at Blair House offered the American people and their elected representatives a rare opportunity to explore different health reform proposals in extraordinary depth.
The meeting was a good opportunity to move past the usual rhetoric and sound bites that have come to characterize this debate and identify areas on which we agree and disagree. And one point on which everyone expressed agreement was that the cost of health care is a large and growing problem that, left untended, threatens families, businesses and the solvency of our government itself.
I also left convinced that the Republican and Democratic approaches to health care have more in common than most people think.
For example, we agree on the need to reform our insurance markets. We agree on the idea of allowing small businesses and individuals who lack insurance to join together to increase their purchasing power so they can enjoy greater choices and lower prices. And we agree on the dire need to wring out waste, fraud and abuse and get control of skyrocketing health care costs.
But there were also important areas of disagreement. There was a fundamental disagreement about what role the oversight of the health insurance industry should play in reform. I believe we must insist on some common-sense rules of the road to hold insurance companies accountable for the decisions they make to raise premiums and deny coverage. I don’t believe we can afford to leave life-and-death decisions about health care for America’s families to the discretion of insurance company executives alone.
No matter how we move forward, there are at least four policy priorities identified by Republican Members at the meeting that I am exploring. I said throughout this process that I’d continue to draw on the best ideas from both parties, and I’m open to these proposals in that spirit:
1. Although the proposal I released last week included a comprehensive set of initiatives to combat fraud, waste, and abuse, Senator Coburn had an interesting suggestion that we engage medical professionals to conduct random undercover investigations of health care providers that receive reimbursements from Medicare, Medicaid, and other Federal programs.
2. My proposal also included a provision from the Senate health reform bill that authorizes funding to states for demonstrations of alternatives to resolving medical malpractice disputes, including health courts. Last Thursday, we discussed the provision in the bills cosponsored by Senators Coburn and Burr and Representatives Ryan and Nunes (S. 1099) that provides a similar program of grants to states for demonstration projects. Senator Enzi offered a similar proposal in a health insurance reform bill he sponsored in the last Congress. As we discussed, my Administration is already moving forward in funding demonstration projects through the Department of Health and Human Services, and Secretary Sebelius will be awarding $23 million for these grants in the near future. However, in order to advance our shared interest in incentivizing states to explore what works in this arena, I am open to including an appropriation of $50 million in my proposal for additional grants. Currently there is only an authorization, which does not guarantee that the grants will be funded.
3. At the meeting, Senator Grassley raised a concern, shared by many Democrats, that Medicaid reimbursements to doctors are inadequate in many states, and that if Medicaid is expanded to cover more people, we should consider increasing doctor reimbursement. I’m open to exploring ways to address this issue in a fiscally responsible manner.
4. Senator Barrasso raised a suggestion that we expand Health Savings Accounts (HSAs). I know many Republicans believe that HSAs, when used in conjunction with high-deductible health plans, are a good vehicle to encourage more cost-consciousness in consumers’ use of health care services. I believe that high-deductible health plans could be offered in the exchange under my proposal, and I’m open to including language to ensure that is clear. This could help to encourage more people to take advantage of HSAs.
There are provisions that were added to the legislation that shouldn’t have been. That’s why my proposal does not include the Medicare Advantage provision, mentioned by Senator McCain at the meeting, which provided transitional extra benefits for Florida and other states. My proposal eliminates those payments, gradually reducing Medicare Advantage payments across the country relative to fee-for-service Medicare in an equitable fashion (page 8). My proposal rewards high-quality and high-performing plans.
In addition, my proposal eliminates the Nebraska FMAP provision, replacing it with additional federal financing to all states for the expansion of Medicaid. Admittedly, there are areas on which Republicans and Democrats don’t agree. While we all believe that reform must be built around our existing private health insurance system, I believe that we must hold the insurance industry to clear rules, so they can’t arbitrarily raise rates or reduce or eliminate coverage. That must be a part of any serious reform to make it work for the many Americans who have insurance coverage today, as well as those who don’t.
I also believe that piecemeal reform is not the best way to effectively reduce premiums, end the exclusion of people with pre-existing conditions or offer Americans the security of knowing that they will never lose coverage, even if they lose or change jobs.
My ideas have been informed by discussions with Republicans and Democrats, doctors and nurses, health care experts, and everyday Americans – not just last Thursday, but over the course of a yearlong dialogue. Both parties agree that the health care status quo is unsustainable. And both should agree that it’s just not an option to walk away from the millions of American families and business owners counting on reform.
After decades of trying, we’re closer than we’ve ever been to making health insurance reform a reality. I look forward to working with you to complete what would be a truly historic achievement.
Trying to stay informed on the progress of health care reform can be a tricky. Even a consumer of mainstream media must be saavy enough to figure out which talking heads or commentators are biased -- and then figure out how to block that bias.
That's the only way to really obtain a true picture of what transpired. And if you want, you can declare the winners and losers yourself -- if that's your game.
But if you're lacking the time to view a replay of the summit, and want a straight-forward analysis of what actually transpired -- beyond the talking points of each caucus and the obvious props of the Republicans --here's a good place to go: Paul Krugman's column in the New York Times.
Yesterday, President Obama's bipartisan health reform White House summit reinforced the need and urgency for health reform, to provide security and stability for those with coverage, and to provide affordable choices for those lack it. We had specific reports and reactions on the Health Access Twitter feed, at www.twitter.com/healthaccess.
The systemic health care problems in California came up repeatedly, showing the need for reform in general, and for stronger oversight and regulation of insurers in particular. This should not be a partisan issue: we were pleased to work with Governor Schwarzenegger on health reform in 2007, especially after we got key protections on affordability and other issues.
So we were disappointed yesterday when so many Republican leaders wanted to delay reform and start from scratch, rather than move ahead with the reforms that Californians desperately need.
We are also dismayed that legislators here in California are seeking to remove existing consumer protections, or repeal regulations even before they are passed.
Two specific efforts were spotlighted in the last 48 hours:
* One bill introduced yesterday would prohibit California from implementing the pending health reform--or any other health reform. It's clearly unconstitional. But on the day of a bipartisan summit to figure out areas of agreement, the amendment vividly portrays the GOP opposition to not just this reform, but any reform. The measure would prevent any regulation of the insurance industry--including preventing denials of coverage for pre-existing conditions.
* The major "reform" that Republicans pushed during the summit and through the year is the concept of selling health insurance across state lines. A California bill on the subject was defeated in committee earlier in the week.
Let's be clear: Allowing insurers across state lines would eviscerate all California consumer protections, allowing insurers from other states with much weaker regulations to sell substandard products.
If an insurer or HMO is licensed in another state and a consumer needs recourse, how would the consumer complain? By calling the insurance commissioner in another state? How would the consumer even know where to call? This measure effectively eliminates all enforcement against health insurers and HMOs.
California provides many consumer protections because of a long history of abuses by HMOs and health insurers. Other states provide few or none. Here's a list of the protections that Californians would likely lose by allowing plans licensed from out-of-state:
California Consumer Protections: Process/Financial
1. Fiscal Solvency Requirements (on Insurers, HMOs, medical groups, etc.) 2. Network Adequacy 3. Independent Medical Review 4. Grievance and Appeal Procedures, including urgent appeals 5. Right to Sue an HMO 6. Standards for Utilization Review 7. Reasonable person standard for emergency care 8. Right to a second opinion 9. Public disclosure of criteria for denial of care 10. Timely Access (48 hours for urgent care, doctor's visit within 10 days, etc) 11. Language Access 12. Continuity of care 13. Protection against balance billing for out of network emergency care 14. HMO Help Line: 24/7, 365 days a year
Which consumer protection should Californians go without? Grievance and appeals procedures? Right to a second opinion? Language access?
California Consumer Protections: Benefit Mandates (partial list)
1. Mental Health Parity (1999) 2. Contraceptive Coverage (1999) 3. Diabetes supplies (1999) 4. Prescription drugs: cover medically necessary drugs if drugs covered 5. Cancer screening: “all generally medically accepted cancer screening tests” 6. Drive-through labor and delivery 7. Same-day mastectomy 8. Prostate screening 9. Cleft palate 10. Pap smears 11. Mammograms 12. Well child care
Which benefit mandate should Californians go without? Mammograms? Well child care? Cleft palates? Diabetes supplies?
We wish those who support allowing out-of-state insurers to avoid these regulations would be explicit about what existing consumer protections they would like to effectively repeal. Their proposal would effectively eliminate all of them.
President Obama is hosting a bipartisan White House summit on health reform today, six hours long to be broadcast on C-SPAN.
Among the participants will be four key California leaders, all Democrats from the House of Representatives: Speaker Nancy Pelosi, Chairman Henry Waxman, Chairman George Miller, and Congressman Xavier Becerra.
Two California-specific notes about the Republican participation in this summit:
* State Senator Tony Strickland will be introducing a bill today to prohibit California from implementing the pending health reform--or any other health reform. It's clearly unconstitional. But on the day of a bipartisan summit to figure out areas of agreement, the amendment vividly portrays the GOP opposition to any reform, including any regulation of the insurance industry, including preventing denials of coverage for pre-existing conditions.
* The major reform that Republicans will push is the concept of selling health insurance across state lines. A California bill on the subject was defeated in committee yesterday. Let's be clear about what such a proposal would do: it would obviate all California consumer protections, allowing insurers from other states with much weaker regulations to sell substandard products.
Hopefully, there will be better ideas, and more willingness to move ahead on desperately-needed health reform, at the summit today.
According to various sources, President Obama is slated to post a compromise version of a comprehensive health reform on the White House web site today at 10am East Coast time--7am Pacific.
The big news so far is that the President's package includes a stronger rate regulation component--a response to the Anthem Blue Cross of California rate hike that he has put such a spotlight on in the last week. (Here's the Los Angeles Times story. The New Republic's The Treatment has some analysis, including by yours truly.)
The President is basically adopting a proposal by Senator Dianne Feinstein for a rate authority that would not just review rates, but have the ability to reject them if they were excessive or unjustified.
Both Senator Boxer and Senator Feinstein were working on language for stronger rate regulation well before the Anthem Blue Cross rate hikes came to light, because this isn't a new issue either in California or the country as a whole.
In our state and most of the United States right now, insurers can unilaterally raise rates without justification--especially for individual families and small businesses with little market power. The pending health reform bills already would have provided indirect relief, from the group purchasing power of the exchanges, to the requirement that insurers needed to justify their rates--that by itself was more than what California has now.
So the health reform has several components that can slow the growth in health premiums, but rate authority provides the opportunity for intervention, to ensure that ratepayers actually see the savings.
As part of a larger reform that provides guaranteed issue, community rating and risk adjustment, rate review and regulation would not just check against unwarranted rate hikes, but such increases being used to target certain products or people.
As we know, Assemblyman Dave Jones has attempted to advance a rate regulation bill at the state level, but face a heavy opposition campaign.
Suddenly, whether at the state or federal level, the political prospects for this issue has markedly improved from a mere month ago.
President Obama made a surprise visit to the White House press room today, and spoke on health reform and other issues. He once again spotlighted the premium increases by Anthem Blue Cross of California. Here are some selected comments (with emphasis added) from the President:
During our meeting [with legislative leaders] we also touched briefly on how we can move forward on health reform. I've already announced that in two weeks I'll be holding a meeting with people from both parties, and as I told the congressional leadership, I'm looking forward to a constructive debate with plans that need to be measured against this test:
Does it bring down costs for all Americans as well as for the federal government, which spends a huge amount on health care?
Does it provide adequate protection against abuses by the insurance industry?
Does it make coverage affordable and available to the tens of millions of working Americans who don't have it right now?
And does it help us get on a path of fiscal sustainability?
We also talked about why this is so urgent. Just this week, there was a report that Anthem Blue Cross, which is the largest insurer in the largest state, California, is planning on raising premiums for many individual policyholders by as much as 39 percent. If we don't act, this is just a preview of coming attractions. Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger. And we have an obligation -- both parties -- to tackle this issue in a serious way...
We've got to control costs, both for families and businesses, but also for our government. Everybody out there who talks about deficits has to acknowledge that the single biggest driver of our deficits is health care spending. We cannot deal with our deficits and debt long term unless we get a handle on that. So that has to be part of a package.
Number two, we've got to deal with insurance abuses that affect millions of Americans who've got health insurance.
And number three, we've got to make health insurance more available to folks in the individual market, as I just mentioned, in California, who are suddenly seeing their premiums go up 39 percent. That applies to the majority of small businesses, as well as sole proprietors. They are struggling.
So I've got these goals. Now, we have a package, as we work through the differences between the House and the Senate, and we'll put it up on a Web site for all to see over a long period of time, that meets those criteria, meets those goals. But when I was in Baltimore talking to the House Republicans, they indicated, we can accomplish some of these goals at no cost. And I said, great, let me see it. And I have no interest in doing something that's more expensive and harder to accomplish if somebody else has an easier way to do it.
So I'm going to be starting from scratch in the sense that I will be open to any ideas that help promote these goals. What I will not do, what I don't think makes sense and I don't think the American people want to see, would be another year of partisan wrangling around these issues; another six months or eight months or nine months worth of hearings in every single committee in the House and the Senate in which there's a lot of posturing. Let's get the relevant parties together; let's put the best ideas on the table. My hope is that we can find enough overlap that we can say this is the right way to move forward, even if I don't get every single thing that I want.
But here's the point that I made to John Boehner and Mitch McConnell: Bipartisanship can't be that I agree to all the things that they believe in or want, and they agree to none of the things I believe in and want, and that's the price of bipartisanship, right? But that's sometimes the way it gets presented...
Health reform continues, at federal and state level...
Monday, February 08, 2010
HEALTH ACCESS UPDATE Monday, February 8, 2010
PRESIDENT OBAMA RECOMMITS TO HEALTH REFORM, SCHEDULES BIPARTISAN SUMMIT * In Renewed Push, Obama To Host GOP at White House on CSPAN on February 25th * President Cites Anthem Blue Cross of California Increasing Premiums up to 39% * New Process Launched for Medi-Cal Federal Waiver Input * Other Items: Some State and Federal Budget Dispatches on our Health Access Blog. * Join Us on Facebook! Follow Us on Twitter!
PRESIDENT OBAMA RENEWS HEALTH REFORM EFFORTS: This weekend, President Obama made a couple of pronouncements renewing his call to pass comprehensive health reform. At a meeting of Democrats in a snow-bound Washington, DC, he said, "Let me be clear: I am not going to walk away from health reform," bringing the audience in the hotel ballroom to their feet. "We can't return to the dereliction of duty," Obama said. "America can't afford to wait, and we can't look backward."
On Sunday, he indicated in an CBS interview before the Super Bowl that he would be inviting leaders from both parties to the White House on February 25th to go over the "best ideas" on health reform, to inform the final negotiations in reconciling the House and Senate bills. The meeting, to be televised on C-SPAN, will likely provide a forum for Republican opponents of the current health reform proposals to provide their alternatives, and to point to parts of the proposals where Republican input has already been taken. Under this schedule laid out by President Obama, the expectation of action on health reform would be possibly in March.
ANTHEM BLUE CROSS HIKES PREMIUMS: In stressing the need for reform, President Obama cited the reasons why the status quo is unsustainable, including the premium increases by Anthem Blue Cross in California, the state's largest insurer. The Los Angeles Times, in an article by Duke Hefland, reports that Anthem Blue Cross -- a subsidiary of Wellpoint in Indianapolis -- is increasing premiums 30% to 39% for the second year in a row for California customers of its individual policies.
Increases are set to take effect March 1, policyholders learned last week. In the Feller household in San Rafael, for instance, that makes the family's health care policy more expensive than their mortgage payment. The Fellers will pay 39% more, driving their annual premium up to $19,896; and then there's a 38% increase for their 26-year-old daughter, adding another $1,572 a year to the Feller's bill.
The letter detailing the increase hints at more hikes to come. It says: "Anthem Blue Cross will usually adjust rates every 12 months; however, we may adjust more frequently in accordance with the terms of your health benefit plan."
If you've got a story about your health insurance premium increases, Health Access would love to hear it. Please contact us directly, or visit www.sickofbluecross.com
SHOULD WE PAY FOR PROBLEMS?: In this memorable past week, we found out that health care spending accounted for more than 17% of the nation's gross national product.
Alan Weil, the executive director of the National Academy for State Health Policy, argues that we can bring down the costs of health care through common sense: Simply pay providers less when they mess up. Weil was in Sacramento for a policy discussion sponsored by the Center for Health Improvement and the California HealthCare Foundation. He argues that providers should face monetary penalties not just for so-called "never" events (mistakes "that should never happen") but for mistakes that are perhaps less drastic such as hospital-acquired infections. Weil calls these "a shouldn't-happen-very-often-event."
It makes us think of a recent article by HealthLeaders Media that began with the question, 'Why do hospital teams unintentionally leave more than 30 types of surgical tools or other items inside their patients, a category of hospital error that California officials say is the second most common preventable adverse event in acute care?"
The Legislature is scheduled to consider launching a study of the phenomena later this year. Either way, the Center for Medicare and Medicaid Services plans to no longer reimburse hospitals for the cost of caring for a patient's injuries, such as hospital-acquired infections, resulting from a "retained foreign object."
GETTING THE BALL ROLLING WITH STAKEHOLDER INPUT ON THE MEDI-CAL WAIVER: The process continues to develop a renewal for California's Medicaid waiver with the federal government. This past week saw the beginning of "technical workgroups" with some stakeholders set to give their input to the California Department of Health Care Services on proposed changes to Medi-Cal, which covers 7 million Californians.
With a focus on ensuring that consumer protections are in place for the Medi-Cal patients affected by the federal waiver request, Health Access is one of several organizations represented, with our Executive Director Anthony Wright (awright@health-access.org) sitting on two stakeholder groups: one on local coverage initiatives, the other on the changes to coverage for seniors and persons with disabilities.
These workgroups and a broader stakeholder advisory committee will consider these issues as the state moves toward submitting a final waiver request to the federal government this coming fall. We'll post more on our blog in the near future.
Got suggestions for future Health-Access Update news items, or notes? Please feel free to send them to updates@health-access.org
This past year's health reform debate went through major holidays, so it isn't a surprise that news is made on the secular holiday of Super Sunday.
In an interview with Katie Couric before the Super Bowl, they talked health care:
Politico has the story. The White House will host a meeting on February 25th, televised, with both Democratic and Republican leaders of Congress to discuss their best ideas on health reform. It's not an attempt to start over, the White House says, but to incorporate the best thoughts a final agreement. It'll be one more proof that the President has tried to pursue a bipartisan course, only to face solid opposition.
Lots of people may have thoughts, but one thing is sure: this kind of high-profile effort isn't what a President or Congressional leaders do if they are seeking to drop the issue.
Update: Why won't President Obama walk away from health reform? He cited the increases by Anthem Blue Cross of California in his answer:
BUDGET ACTION HEATS UP AT STATE & FEDERAL LEVEL * Chiang Tells Budget Committee of Cash Crisis, Urges "Credible" Action * Obama's Federal Budget Includes Health Reform and Help for California * Other Items: CBP Report on Growing Need for Services; Single-Payer Bill Advances
* Read Our Health Access Blog for updates on state budget, the latest in D.C. * Join Us on Facebook! Follow Us on Twitter!
ASSEMBLY BUDGET COMMITTEE REVIEWS THE BIG PICTURE: Budget Chair Noreen Evans (D) led committee members Wednesday in a sharply focused Q-and-A with State Controller John Chiang, Legislative Analyst Mac Taylor and representatives with the state Department of Finance.
Not since July 12, 2007, has California actually had cash on hand, Chiang said. Since that date, the Department of Finance has relied on "external borrowing and internal borrowing" from various special funds. In answer to lawmaker's queries, the controller said the state's finance department has identified 710 of the state's 1,000-plus special funds from which it can borrow internally.
Repeatedly, Chiang told legislators that California "needs credible and sustainable budget solutions" that do not include past-year gimmicks such as proposing to sell off the state compensation fund, or EdFund (the state's guarantor of student loans) or the state Lottery -- all of which were said by the administration to be worth far more money than they actually were, and attracted no buyers anyway.
Chiang was firm in telling the budget committee that members needed to make "tough choices" to buck up the state's economic and educational future, as well as to ensure its quality of life does not decline sharply. "We've lost 1 million jobs.... We need to decide what kind of state do we plan to have -- and if we are going to fund essential services, we really need to address the question of revenue."
Both Republicans and Democrats made remarks indicating they've had enough of cutting state services for taxpayers, the disabled, the elderly, and K-12 students as well as university-bound students. Assemblyman Jim Silva (R) said as a teacher he is tired of "seeing students are getting short-changed. I get my back up with I hear that California students are at a disadvantage in getting university educations."
Assemblywoman Diane Harkey (R) noted that she only joined the Legislature about a year ago, but already she'd been through three cycles of closing budget deficits. "We're not just in a budget problem. We are overloaded with debt." Others, including Democrats Jerry Hill and Robert Blumenfield, pointed out that some of the harsh health care service cuts that Gov. Arnold Schwarzenegger is championing will cost the state more money in the long-run as people seek care in emergency rooms or long-term care facilities.
Chiang said Wall Street financial experts do not consider the governor's demand for $6.9 billion from the federal government an intelligent answer to California's perennial deficit woes. "When the governor issued his '6.9 billion solution,' it was not viewed as a totally credible solution, leading Standard & Poors to downgrade California's rating from A to A-."
"We're going to have to educate our students for new economies," Chiang said, "Your actions can make the difference in setting this generation on the right fiscal path. For too long, when people don't make tough choices, students, the aged, disabled and taxpayers all end up suffering."
Evans, the committee chair, said sub-committees will begin meeting next week to scrutinize details of the governor's budget proposal. Regarding an unprecedented Department of Finance letter requesting blanket authority to defer payments to various state creditors, Evans said "I will clean up my language from what I said when I first saw this request for the Department to have legislative authority. I'm extremely skeptical and I suggest you come back with an actual plan." Vice Chair Jim Nielsen (R) joined Republican colleagues in attempting to distance himself from the administration's request for open-ended authority to defer payments. "This is a breath-taking application," Nielsen said. "To just ask us to give you a blank check ... we can't afford that anymore."
PRESIDENT OBAMA PUTS FORWARD FEDERAL BUDGET PROPOSAL: Earlier this week, President Barack Obama released his proposed federal budget. The proposal attempts to balance short-term economic stimulus with long-term efforts at deficit reduction. In attempting to reducing the deficit by $1.25 trillion over 10 years, the proposal lets the Bush-era tax cuts expire, and prioritizes the passage of pending health reforms in Congress. To deal with the immediate recession, the budget proposes a variety of provisions, such as continuing COBRA subsidies to help the unemployed purchase health coverage. It would also extend enhanced Medicaid federal matching funds from the stimulus for six additional months to states, providing $25.5 billion nationally, and at least $1.5 billion to California in the budget year through June 2011.
The Office of Management and Budget has a specific fact sheet on the federal budget and California. Health Access has more about the federal budget on our blog.
CUTS PROPOSED AT TIME OF GROWING NEEDS: The cyclical, seemingly never-ending state budget grind has Gov. Arnold Schwarzenegger stuck in a rut, still swinging away with an ax at the safety net at the time it is needed most. That's the basic message that comes through from a report released Tuesday by the California Budget Project.
California has lost 1,000,000 jobs since the start of the recession, the report says. People need help, families need help, whole communities need help as they scramble against the tide of economic devastation. Cuts, the CBP says, will only further weaken the economy and could impede the national recovery.
The CBP report says that 100 prominent economists of all ideologies recently warned that,"It is economically preferable to raise taxes on those with high incomes than to cut state expenditures [during a recession] ... Steep state budget cuts will exacerbate the economic downturn."
The report noted that California now has 3.6 million more working-age individuals than 10 years ago, but is now down to approximately the same number of jobs as 10 years ago. More than one in five working-age Californians -- or 21.4 percent -- were either unemployed or underemployed in December 2009. (The calculation includes 354,000 jobless people who want and are able to work, but who are left uncounted in official statistics because they have not searched for work in the last month.)
As need grew, California unfortunately responded by cutting off programs -- suspending enrollment in Healthy Families, for example, even though the number of children whose low-income families bought coverage through the program increased steadily by nearly 100,000 kids from July 2007 to July 2009, the report says. To read it and view helpful charts and graphics, go to www.cbp.org.
SINGLE-PAYER, OTHER LEGISLATION STARTS TO MOVE AGAIN: With the new year, bills are starting to move again, including SB 810, the single-payer health reform bill authored by Democratic Senator Mark Leno of San Francisco. That bill looks to be headed to the Governor's desk again this year. It's onto the Assembly after passing the Senate last week, the last week a bill was eligible to pass out of its house of origin. While it still faces the barriers of a two-thirds vote for financing, and a probable gubernatorial veto regardless, it does keep a broad range of health reform options in the policy conversation, and highlights the deteriorating status quo of our health system. If anything, some advocates hope it will provide a lesson from state legislatures to their federal counterparts, that they should not quit just because of a setback.
For more information about anything in this update, contact its author, Cynthia Craft, at ccraft@health-access.org.
Here's the Center for Budget and Policy Priorities' inital commentary, which states, "The President’s budget reflects both the short-term priority of boosting the economy and creating jobs and the longer-term priority of bringing deficits under control while meeting important national needs... The budget would reduce deficits by $1.25 trillion over 10 years, compared to what they would be by continuing current policies."
In the budget, President Obama reiterates that he is “committed to ensuring that every American has access to affordable health care,” and his FY 2011 budget proposal continues investments to this end in the health care of Californians. Specifically, California would receive $29.4 billion to provide health coverage to low-income families [Source: OMB factsheet]. In addition, other funding would be used to improve and increase the public health workforce, encourage health centers and providers to provide care to underserved populations, fund initiatives to achieve higher quality care at lower costs, and strengthen regional and local partnerships in rural areas.
STATE RELIEF FOR MEDI-CAL COSTS
Of particular note to those of us who deal with the state budget, there is some continued state relief through Medicaid.
Under the economic stimulus package (ARRA) passed last year, the federal matching rate for California’s Medi-Cal expenditures was increased from 50 percent to 61.6 percent. This totaled $1,991,907,534 for the two quarters from October 1, 2008 through March 31, 2009. In all, California was allotted $11.23 billion for the increased Medicaid match rate that is set to expire on December 31, 2010. [Source: http://www.statehealthfacts.org/]
President Obama’s FY 2011 budget proposal includes about $25.5 billion to extend the increased Medicaid matching rate for another six months until June 30, 2011 [Source: OMB]. This means California could receive an addition $2 billion to $3 billion in federal Medicaid relief under the President’s proposal, depending on actual expenditures and the formula for apportioning the grants to states.
This six-month extension of enhanced Medicaid matching funds is one of the requests for additional federal funding that Governor Schwarzenegger requested, and one that has also been included in other legislative vehicles, including health reform and jobs. However, Governor Schwarzenegger's state budget requested many other funding increases and policy changes, totaling nearly $7 billion. Given the political and procedural barriers in Washington, DC, some are more likely than others, but getting the enhanced Medicaid matching funds is a good first step.
President Obama on health care & more: "We don't quit."
Wednesday, January 27, 2010
Health reform is alive. Speaker Pelosi has indicated she can pass the Senate bill in the House with the appropriate Senate changes through budget reconciliation. But President Obama set the new tone tonight at the State of the Union:
Now let’s be clear – I did not choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn’t take on health care because it was good politics.
I took on health care because of the stories I’ve heard from Americans with pre-existing conditions whose lives depend on getting coverage; patients who’ve been denied coverage; and families – even those with insurance – who are just one illness away from financial ruin.
After nearly a century of trying, we are closer than ever to bringing more security to the lives of so many Americans. The approach we’ve taken would protect every American from the worst practices of the insurance industry. It would give small businesses and uninsured Americans a chance to choose an affordable health care plan in a competitive market. It would require every insurance plan to cover preventive care. And by the way, I want to acknowledge our First Lady, Michelle Obama, who this year is creating a national movement to tackle the epidemic of childhood obesity and make our kids healthier.
Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan. It would reduce costs and premiums for millions of families and businesses. And according to the Congressional Budget Office – the independent organization that both parties have cited as the official scorekeeper for Congress – our approach would bring down the deficit by as much as $1 trillion over the next two decades.
Still, this is a complex issue, and the longer it was debated, the more skeptical people became. I take my share of the blame for not explaining it more clearly to the American people. And I know that with all the lobbying and horse-trading, this process left most Americans wondering what’s in it for them.
But I also know this problem is not going away. By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether. I will not walk away from these Americans, and neither should the people in this chamber.
As temperatures cool, I want everyone to take another look at the plan we’ve proposed. There’s a reason why many doctors, nurses, and health care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Here’s what I ask of Congress, though: Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people.
The big news was the historic passage of the health reform from the Senate Finance Committee, the fifth of five committees. We covered it, including the 14-9 bipartisan vote, on our Twitter feed at www.twitter.com/healthaccess
President Obama has a way of trying to ensure fidelity from partisan opposites once they've voiced early ideological support for the initiatives he was elected to achieve.
In very public speeches, he singles them out by name and elevates them as leaders who are standing up to do right by America. Today, he did so for Maine Sen. Olympia Snowe in a shout-out during a serious Rose Garden speech after which he took no questions.
Obama made it clear that Snowe deserved recognition for being first to break the partisan barrier when she threw her vote behind the 14-9 passage of the Senate Finance Committee version of the health care bill. In making his remarks, Obama was also sending a message: he is statesman enough to give credit where credit is due.
Conceivably, this praise strategy can either bring a politician deeper into the fold, or provide a the public record for a flip-flop, should one be gathering on the horizon. Think Iowa Sen. Chuck Grassley, during the kookiness of August's town-hall season.
And while Snowe, reportedly irked by an ill-timed, deceptive 11th-hour insurance industry blitz against her committee's bill, voted for the bill today, she also made it clear that no one should take her future support for granted:
"When history calls, history calls," Snowe announced in the Senate Finance Committee. Wrapping up, she added, "Finally I say that my vote today is my vote today. It doesn't indicate what my vote will be tomorrow."
Here's hoping the senator will continue to see the greater value in voting for the goal of making health care affordable in America.
Obama was clear today about what's at stake: "As a result of these efforts we are now closer than ever before to getting health reform passed."
As the Senate Finance Committee is set to vote today on health reform, there's some assurance it will passs the committee. The only question is whether Senators Rockefeller, Wyden, and Snowe will be among the "Yes" votes. Stay tuned...
The passage of reform from the fifth of five Congressional committees of jurisdiction certainly gives momentum to health reform efforts, and President Obama highlights this in his weekly address:
Here's a White House video that describes the benefits of health reform in four minutes:
Health Access is giving trainings--longer but more in-depth--around the state to help health reform advocates and community leaders understand the health reform proposals, the "pressure point" issues that are still at issue in the content of the proposals, answer any questions they have, and help them talk about health reform to others. For a training in your area, contact your local Health Access organizer, or Patrick Romano the California campaign director of Health Care for America Now! at promano@health-access.org.
Here's a clip from President Obama's speech to over 15,000 in Minnesota, making the case that the benefits of passing health reform will be felt by millions more than just the uninsured, but also those who might experience a gap in coverage over the next many years.
Here's California Senator Barbara Boxer on the Rachel Maddow Show, talking about her short conversation with the President after his big health reform speech yesterday:
President Obama is about to give his speech. I will be liveblogging at www.sacbee.com, and commenting afterwards at KCRA 3 Sacramento. Here are excerpts:
I am not the first President to take up this cause, but I am determined to be the last. It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every President and Congress, whether Democrat or Republican, has attempted to meet this challenge in some way. A bill for comprehensive health reform was first introduced by John Dingell Sr. in 1943. Sixty-five years later, his son continues to introduce that same bill at the beginning of each session.
Our collective failure to meet this challenge - year after year, decade after decade - has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can't get insurance on the job. Others are self-employed, and can't afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover.
***
During that time, we have seen Washington at its best and its worst.
We have seen many in this chamber work tirelessly for the better part of this year to offer thoughtful ideas about how to achieve reform. Of the five committees asked to develop bills, four have completed their work, and the Senate Finance Committee announced today that it will move forward next week. That has never happened before. Our overall efforts have been supported by an unprecedented coalition of doctors and nurses; hospitals, seniors' groups and even drug companies - many of whom opposed reform in the past. And there is agreement in this chamber on about eighty percent of what needs to be done, putting us closer to the goal of reform than we have ever been.
But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned.
Well the time for bickering is over. The time for games has passed. Now is the season for action.
Now is when we must bring the best ideas of both parties together, and show the American people that we can still do what we were sent here to do. Now is the time to deliver on health care.
The plan I'm announcing tonight would meet three basic goals:
It will provide more security and stability to those who have health insurance. It will provide insurance to those who don't. And it will slow the growth of health care costs for our families, our businesses, and our government. It's a plan that asks everyone to take responsibility for meeting this challenge - not just government and insurance companies, but employers and individuals.
And it's a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans - and yes, from some of my opponents in both the primary and general election.
***
Here are the details that every American needs to know about this plan:
First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.
What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies - because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.
That's what Americans who have health insurance can expect from this plan - more security and stability.
Now, if you're one of the tens of millions of Americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange - a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It's how everyone in this Congress gets affordable insurance. And it's time to give every American the same opportunity that we've given ourselves.
***
This is the plan I'm proposing. It's a plan that incorporates ideas from many of the people in this room tonight - Democrats and Republicans. And I will continue to seek common ground in the weeks ahead. If you come to me with a serious set of proposals, I will be there to listen. My door is always open.
But know this: I will not waste time with those who have made the calculation that it's better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what's in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now.
Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true.
That is why we cannot fail. Because there are too many Americans counting on us to succeed - the ones who suffer silently, and the ones who shared their stories with us at town hall meetings, in emails, and in letters.
I watched the Sunday shows this weekend, and yet most media outlets picked up on a story that I didn't, that the White House was seeming to back away from the "public health insurance option" as part of its health reform plan.
That was the headline in the New York Times, Washington Post, AP and other stories. But the text of all of these articles don't reference some internal document or leak by White House staff. It's all based on a tea-leaf reading of these Sunday shows, where the Obama Administration officials have said what they have said on these shows for weeks and months: that the public health insurance option is part of the President's proposal, something he argues for every time he talks about the bill, but he's not drawing any lines in the sand at this point.
An administration official said tonight that Health and Human Services Secretary Kathleen Sebelius "misspoke" when she told CNN this morning that a government run health insurance option "is not an essential part" of reform. This official asked not to be identified in exchange for providing clarity about the intentions of the President. The official said that the White House did not intend to change its messaging and that Sebelius simply meant to echo the president, who has acknowledged that the public option is a tough sell in the Senate and is, at the same time, a must-pass for House Democrats, and is not, in the president's view, the most important element of the reform package.
A second official, Linda Douglass, director of health reform communications for the administration, said that President Obama believed that a public option was the best way to reduce costs and promote competition among insurance companies, that he had not backed away from that belief, and that he still wanted to see a public option in the final bill.
"Nothing has changed," she said. "The President has always said that what is essential that health insurance reform lower costs, ensure that there are affordable options for all Americans and increase choice and competition in the health insurance market. He believes that the public option is the best way to achieve these goals."
The public health insurance option is not the only part of health reform, but it is important. With regulation of the insurance industry, it makes sure that individuals are not left all alone at the mercy of the big insurers. It provide competition and choice, especially if the insurers continue some of their abusive practices. The CBO has scored that it will save money for both consumers and taxpayers alike.
But I think the coverage was overblown because the issue isn't the White House; it is Congress. The President can't sign a bill that Congress doesn't place on his desk. So while the President has some influence, it's ultimately up to Congress. And that means it is up to us.
Virtually all the Democrats in California, even the "Blue Dogs," said they support a public health insurance option. Many California leaders in House of Representatives, from Speaker Nancy Pelosi to Congressional Black Caucus Chair Barbara Lee have stated that a public health insurance option is a top issue for them.
We as health advocates need to continue our advocacy for health reform in general, and for a public health insurance option, to support these champions, and to shore up waverers. President Obama is committed to sign health reform with a public option. We should encourage him to continue to speak up and fight for it.
But it's up to Congress, and that means it is up to us...
UPDATE: From the Swampland blog at Time magazine, here's a transcript of White House spokesman Robert Gibbs, indicating the White House hasn't changed its support of the public health insurance option, and the bills in play still contain a public health insurance option:
Q Just to be completely clear, has anything changed on the public option?
MR. GIBBS: No. I challenge you guys all to go back and see what we've said about this over the course of many, many, many, many months, and you'll find a boring consistency to our rhetoric.
Q The rhetoric, as you say, might be consistent, but the movement on the ground, so to speak, toward legislation hasn't been. Is there any recognition now that a public option is looking less likely to be part of a final deal?
MR. GIBBS: Let me make sure I understand your question, because I want to know if it's -- is this predicated on legislative developments since Congress has been out of session, or are we trying to match the stampede of a series of stories to if not the consistent language that we've all been saying to some now legislative vote?...
Q But you guys have -- you haven't exactly come out publicly since Sebelius' statement yesterday, come in front of the cameras to speak to us, to downplay --
MR. GIBBS: Because nothing has changed.
Q But you haven't downplayed the remarks and the coverage either.
MR. GIBBS: No, no, I think many people talked to you all yesterday. I think people sent e-mails. David Axelrod called people... Nothing has changed. I mean, we can go out and say nothing has changed, but that seems sort of silly since nothing has changed.
Look, in terms of the political realities, obviously there's a public plan -- or public option in the House bill. There is a public option in the HELP bill. I don't know what the Senate Finance Committee will come out with.
As if President Barack Obama didn't have enough to do, today he weighed in as a New York Times op-ed contributor, describing health reform. He makes the case not to the uninsured, but to the insured. It's interesting because it is a compelling case, but also how he makes the pitch. Here's some snippets:
I don’t have to explain to the nearly 46 million Americans who don’t have health insurance how important this is. But it’s just as important for Americans who do have health insurance. There are four main ways the reform we’re proposing will provide more stability and security to every American.
First, if you don’t have health insurance, you will have a choice of high-quality, affordable coverage for yourself and your family — coverage that will stay with you whether you move, change your job or lose your job.
Second, reform will finally bring skyrocketing health care costs under control, which will mean real savings for families, businesses and our government....
Third, by making Medicare more efficient, we’ll be able to ensure that more tax dollars go directly to caring for seniors instead of enriching insurance companies... And our reforms will also reduce the amount our seniors pay for their prescription drugs.
Lastly, reform will provide every American with some basic consumer protections that will finally hold insurance companies accountable. A 2007 national survey actually shows that insurance companies discriminated against more than 12 million Americans in the previous three years because they had a pre-existing illness or condition. The companies either refused to cover the person, refused to cover a specific illness or condition or charged a higher premium.
We will put an end to these practices. Our reform will prohibit insurance companies from denying coverage because of your medical history. Nor will they be allowed to drop your coverage if you get sick. They will not be able to water down your coverage when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or in a lifetime. And we will place a limit on how much you can be charged for out-of-pocket expenses. No one in America should go broke because they get sick.
Most important, we will require insurance companies to cover routine checkups, preventive care and screening tests like mammograms and colonoscopies. There’s no reason that we shouldn’t be catching diseases like breast cancer and prostate cancer on the front end. It makes sense, it saves lives and it can also save money.
President Obama's press conference, if anything, was designed to cut through the clutter and answer the simple question: Why health reform? He put it in the context of economic recovery, and or long-term deficit reduction, of the state of our health system, but ultimately he made the direct pitch about how it will benefit the average American--the voter.
This is not just about the 47 million Americans who don't have any health insurance at all. Reform is about every American who has ever feared that they may lose their coverage, if they become too sick or lose their job or change their job.
It's about every small business that has been forced to lay off employees or cut back on their coverage, because it became too expensive. It's about the fact that the biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid.
So let me be clear. If we do not control these costs, we will not be able to control our deficit. If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket.
If we don't act, 14,000 Americans will continue to lose their health insurance every single day. These are the consequences of inaction. These are the stakes of the debate that we're having right now. I realize that with all the charges and criticisms that are being thrown around in Washington, a lot of Americans may be wondering: What's in this for me? How does my family stand to benefit from health-insurance reform?
If you have health insurance, the reform we're proposing will provide you with more security and more stability. It will keep government out of health care decisions, giving you the option to keep your insurance if you're happy with it. It'll prevent insurance companies from dropping your coverage if you get too sick. It will give you the security of knowing that if you lose your job, if you move, or if you change your job, you'll still be able to have coverage.
It will limit the amount your insurance company can force you to pay for your medical costs out of your own pocket. And it will cover preventive care, like check-ups and mammograms, that save lives and money.
Now, if you don't have health insurance, or you're a small business looking to cover your employees, you'll be able to choose a quality affordable health plan through a health insurance exchange, in a marketplace that promotes choice and competition
And finally, no insurance company will be allowed to deny you coverage because of a preexisting medical condition.
It's a strong argument. Hopefully it won't be obscured by all the race horse coverage about the political horserace (rather than the substantic policy issues).
With the passage this week of health reform H.R. 3200 in the House Ways and Means and House Education and Labor Committee early today, and the passage of another bill from the Senate Health, Education, Labor, and Pensions (HELP) Committee on Wednesday, health reform has now passed three of the five relevant committees.
Chairman Miller talked about the importance of the vote:
Floor votes are one committee away in both chambers: the House Energy and Commerce Committee in the House, and the Senate Finance Committee in the Senate.
Even though this is historic--this is the farthest that health reform has ever gotten at the federal level--President Barack Obama has a press conference today to be clear that he wasn't satisfied: he is seeking full passage of health reform this year.
MAJOR HEALTH CUTS PROPOSED IN GOVERNOR'S BUDGET PROPOSALS
* Governor To Ask Federal Government for Permission for a $750 Million Medi-Cal Cut * Cuts Would Harm Health System & Economy; Hundreds of Millions in Lost Federal Funds * Governor Rejects Proposing Long-Term Revenues Needed to Prevent Devastating Cuts
More Updates on the NEWLY REDESIGNED Health Access Blog: More on the Bad Budget Day; Major Developments on Federal Health Reform; The Purple Bus Lady Rolls Through California; Coverage When It Counts; How to Finance Health Reform; President Obama's Health Reform Week; U.S. Senate Assignments; Lots of Links on Health Reform; A Saturday Morning in San Diego with Rep. Susan Davis; Taming "The Beast"; More on Spending Caps Across the Country
Today, Governor Arnold Schwarzenegger announced several proposal cuts to fill a $15.4-21.3 billion deficit in the 2009-10 budget year. The economic crisis has caused the budget agreed to by the Governor and legislative leaders to fall out of balance.
The Governor's "2009-10 May Revision General Fund Proposals," available at the Department of Finance website at http://www.dof.ca.gov/, includes a package of largely cuts to fill a $15.4 billion shortfall, and then additional “contingency proposals” if Propositions 1C (and to a lesser extent, 1D & 1E) fail on the May 19th ballot next week.
"To look for new revenues is out of the question," said the Governor at his press conference. His package includes cuts, borrowing, selling state-owned properties, eliminating some state agencies and boards, accelerating revenues, shifting funds and laying off 5,000 state employees.
SPECIFIC HEALTH CUTS: There are nearly $2 billion in additional cuts to health and human services. If Propositions 1C (as well as 1D and 1E) are rejected, there is an additional $600 million cuts in health and human services.
* The biggest health cut is a $750 million cut to Medi-Cal, contigent on negotiating a waiver from the federal government. The Schwarzenegger Administration wants to revisit rollbacks in eligibility that are now restricted by the federal government in order for California to accept billions in federal stimulus dollars. Those rollbacks were not explicitly specified in the Governor's summary, but have included in the past: * the denial of Medi-Cal coverage to hundreds of thousands low-income parents under the poverty level (a range from around $13-$18,000/year for a family of three); and * the imposition of quarterly status reports on children, with the savings coming from over 250,000 children dropping coverage as a result. * Since these previous proposals do not add up to $750 million in savings, even after full implementation over several years, other cuts and savings would have to be found as well to meet this goal.
* Other specific health cuts include: * $132.2 million in reduced health benefits to those in CALPERS; * $125 million in reducing health services for legal immigrants; * $36.8 million by cutting rates for family planning services; * $20 million by cutting payments to private hospitals, a 10% cut in general support; and * $2.7 million by eliminating certified application assisters that help children & families enroll in coverage
In Medi-Cal, there is also a new prescription drug purchasing effort to save $75 million, and a new anti-fraud initiative targeted at adult day health centers, pharmacy, doctors, durable medical equipment, and transportation, with the goal of saving $47.9 million.
There are other human services cuts as well, to IHSS home care, SSI/SSP for seniors, CALWORKS for low-income families, and also includes the elimination of CAPI and CFAP for legal immigrants.
* If Proposition 1C fails, the projected budget deficit grows by $5 billion. If Proposition 1D & 1E fail, the deficit grows by nearly $1 billion. In those circumstances, the Governor's "contingency budget" includes: * $54.4 million in eliminating Healthy Families coverage for over 225,000 children (who are betweeen 2005-250% of the federal poverty level, or between $36,000-$45,000 for a family of three) * $60 million out of Proposition 99 funded-programs, redirecting money from county health funds, clinics, the Breast Cancer Early Detection, Asthma, rural health, the Access for Infants and Mothers program which provides prenatal care, and the Major Risk Medical Insurance Program, which provides coverage for those denied for "pre-existing conditions." * $25.5 million in reducing adult day health care benefits to three days a week; * $24.6 million to local health jurisdictions of HIV education and prevention; * $10 million cut in maternal, child and adolescent health grants; * $8.8 million through a 10% rate reduction for certain substance abuse treatment services in Medi-Cal; and * $2.9 million in suspending a comprehensive school-based prevention program on dental disease.
THE POLITICS OF THE PROPOSITIONS: The Governor used his press announcement to argue for the package of proposition on the May 19th ballot next week. His document says the budget depends on the passage of 1A, 1B, 1C, 1D, and 1E, even though Propositions 1A and 1B do not have an impact on this or next year's budget. Proposition 1C, which would provide a cash advance from lottery proceeds, is the ballot measure that would make the major difference.
Some health advocates, including Health Access California, argue that Prop 1A, even though it would bring in revenues in 2011-12, includes a constitutional spending cap that would make it harder to ever restore these cuts, even when the economy improves and the state has more revenue.
Regardless of what happens with the fate of the propositions, there is an ugly budget with awful choices on cuts and/or taxes this year, and there continues to be a long-term mismatch between the revenues the state brings in, and the education, health and other vital services that Californians expect and deserve.
The work of consumer and health advocates is to continue to demonstrate the impact of these proposed cuts, not just to directly impacted Californians who will lose their coverage or care, but to the health system and economy as a whole, and all Californians as a result.
Today, President Obama met with leaders of the U.S. House of Representatives on health reform, the third day in a row that the President has focused on health care in his public schedule. He's clearly launching a full campaign on the issue. Here's the press conference, which includes three California representatives of importance: Speaker Pelosi, Chairman Waxman, and Chairman Miller:
The news is that they are committing to pass health reform on the House floor by July 31st, before the August recess. The implication is that the U.S. Senate will do the same--as Chairmen Baucus and Kennedy have committed--and they will use the August recess to negotiate out the differences between the House and the Senate, and pass a full plan as soon as September.
It also means that we expect to see the first versions of bills in a few weeks, with subcommittees taking up those bills next month, in June.
When Melody Barnes was here in California, she added extra urgency to President Obama's nationally televised quote that "let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year."
She said at the White House forum two weeks ago that in order to pass a bill "this year," then we have essentially "100 days" to craft legislation in order to meet that goal..essentuial
The shortness of the timeline is underscored by Senators Baucus and Kennedy, chairs of the key Senate committees, which yesterday proposed that they will mark up a bill in June! The full text of the letter is at The Treatment.
In a panel at ITUP earlier this year, the question was asked of a panel of stakeholder representatives what they thought of a public health coverage option. None of them, including those representing providers, labor, employers, insurers, and consumers, rejected it out-of-hand. Even the California Association of Health Plans acknowledged that had members that were public (largely county-run), and they, and others, said they would want such a public health insurance plan to be on a "level playing field" with the private coverage.
For skeptics, it meant that the public health coverage plan should not have special advantages in competiting with private plans. For proponents of a public health insurance option, like myself, we sought a "level playing field" to ensure that private insurers should have to play by the same rules (not deny people for pre-existing conditions, maintain a similar minimum benefit standard, etc.), and not undermine the public plan. Yet both skeptics and proponents used the term "level playing field."
This week, UC-Berkeley Professor Jacob Hacker put out a new report called "Healthy Competition", sponsored by the Institute for America's Future. He lays out how a public health insurance option could compete fairly with private insurance, still achieve the benefits that proponents seek: to drive down costs, increase quality, and give all Americans a real choice in their health care.
For public plan choice to provide such guarantees, however, the public plan must be properly structured, compete on a truly “level playing field” with private plans, and have the authority to use its bargaining power as one of many tools to encourage greater value in health care delivery. The most effective and easily implemented model for the new public plan is a “Medicare-like” plan that builds on Medicare’s administrative infrastructure and basic framework of coverage but is separate from Medicare’s risk pool and departs from Medicare in a number of key respects regarding payment and benefits.
To create a level playing field requires attention to the “three R’s” of workable public-private competition: rules that are the same for both the public plan and private plans, risk adjustment that protects plans from being competitively is advantaged if they enroll a less healthy group of people, and regional pricing that allows private plans and the public plan to compete within regions on the same terms, rather than having the public plan compete on a national basis with regionally based private plans (whose premiums may be lower or higher in any given region).
Finally, giving the public plan the authority to bargain for reasonable rates is an essential item on the menu of cost control—and one that the Congressional Budget Office (CBO) and other budget watchdogs are likely to “score” as producing savings (in contrast with many other currently favored cost-control strategies). Nonetheless, there are reasonable concerns about how the new public plan will use its bargaining power—concerns reflected in current proposals for a price-taking (rather than price-making) public plan that would have limited ability to secure fair rates.
As my colleagues at Health Care for America Now indicate, these rules, while leveling the playing field, would still result in the immense savings and the true choice that Americans need.
Hacker also emphasizes a point he, and other public plan advocates, have made before: That a public plan is an essential backstop to private plans, since–even with the best regulations–some private insurers might find ways to avoid covering sick people or addressing their needs properly. In other words, a public plan is essential to make sure private plans don’t keep conducting business the way many of them do now.
But it is on cost control where, Hacker says, the advantages of a public plan are most apparent. It’s not just that public insurance plans operate with lower administrative costs. It’s also that public plans have more bargaining leverage–and, to some extent, are more willing to use their bargaining leverage–than private insurers. A recent report from the Lewin Group backs up this claim: It found that a public plan, using government bargaining power, could reduce premiums dramatically–by around 30 percent.
There will be a lot of deja vu tomorrow. In 2006, Governor Schwarzenegger hosted a health care summit also with Dr. Oz moderating, with many of the same participants. In that summit, the Governor promised that next year would the "year of health reform." I remember having the shortest quote in the Los Angeles Times the next day, calling the event "surreal." We'll see what the impression is this year.
This is expected to be a different event, with much more participation by "real people" with stories of their experiences in the health care system. Back in 2006, nobody knew what Governor Schwarzenegger was thinking with regard to health reform. This year, President Obama comes with a clear commitment and principles, and a plan he actively promoted during the campaign.
Health Care for America Now! will be leafletting the Los Angeles, Oakland, and San Diego cites in support of the Obama principles, urging participants to take the next step and call Congress, both on the urgency of reform, to pass something this year, but also on the principles, on everything from ensuring affordability to providing a public health insurance option.
Today, the Assembly Health Committee considered another bill to help draw down federal money to California.
The federal economic recovery package included a subsidy so laid-off workers can get a 65% subsidy for premiums under COBRA. The bill considered today allows a greater number of Californians to take advantage of those resources.
Right now, the federal COBRA law, which allows workers to keep their groups coverage after they leave an employer, is only available to workers of employers of 20 or more. The new bill extends the COBRA subsidy to the state CalCOBRA law, which covers workers of employers from 2-19 workers. The new law would also give Californians who were laid off late last year or early this year better notice and a second chance to take advantage of COBRA.
This is crucial: Just over half of Californians get coverage from their employer. Losing their employer-based coverage is a big deal, for the sake of continuity of care, for getting the group-negotiated rate, and most of all, for not being denied for "pre-existing conditions," which is possible, even likely, in the individual market. But the problem is losing your job is a tough time to ask to pay full premium for coverage. That's why the subsidy is so important, especially as California reaches a 10.5% unemployment rate.
Earlier today, Health Access was pleased to participate in a press conference with Assemblymembers Dave Jones and Nathan Fletcher, chair and vice-chair of the Assembly Health Committee, respectively, as well as Insurance Commissioner Steve Poizner, and Joe Dunn of the California Medical Association. As that notably bipartisan event indicated, the bill passed later in the day without any "no" votes. That's a good thing, given it is an urgency bill, and thus requires a 2/3 vote.
Yesterday, the Senate passed on a bipartisan vote SB24xxx (Alquist), which despite its name, is a very decent proposal. It suspends the additional paperwork burdens imposed last year in the budget crisis.
The original cut would have doubled the reporting for children to maintain Medi-Cal benefits, from annually to every six months, which would have led to over 250,000 children to lose coverage over three years. The federal stimulus package conditioned billions in federal Medicaid matching dollars on maintaining eligibility and enrollment procedures. So to get the money, we have to void the mid-year status report requirement, at least for the duration of getting the enhanced matching funds.
Those who followed health reform in 2007 recognized that any legislative proposal has three proving grounds: not just an executive, but both houses of the legislature. While much has been written about the U.S. Senate, both as an obstacle (60 votes!), and as a leader in shaping policy with Sens. Baucus and Kennedy, some new articles give some insight into the other arenas:
The powerful chairmen and subcommittee chairs of the House of Representatives--mostly Californians like Waxman, Miller, Stark, etc.--are working together to produce one health reform bill from the House, according to Robert Pear at the New York Times. As reported also by Ezra Klein at The American Prospect, and overheard at the White House Forum on health reform, there is some common framework, including "shared responsibility," including that of individuals and employers, as well as a choice of public or private plans. There's lots of details in how that would be crafted, but it's a start.
Also Jonathan Cohn at The New Republic does some reporting about the internal conversations in the White House that led the Administration to continue to emphasize health reform as a top priority this year, and to set aside real money to invest in it. The short answer is that the commitment keeps coming back to the President himself, who continually reasserts his interest despite concerns from his advisors.
Finally, the action isn't just in DC, as outside forces impact the federal conversation. There's my article at The New Republic's The Treatment about the real prospects of Healthy San Francisco helping spur reform not just in other states, but at the national level.
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.
