First, the victory: Kevin Yamamura reports in sacbee.com's Capitol Alert that today the federal appeals court ruled against Governor Schwarzenegger's cuts to health and human services that include Medi-Cal reimbursement rates for hospitals and pharmacists and In-Home Supportive Services wages:
"The Ninth Circuit agreed with lower court decisions that granted preliminary injunctions against the cuts because California did not comply with the federal Medicaid Act. The cuts were contained in budget agreements over the past two years.
The court decisions not only have blocked past budget cuts, but they could also preclude the state from pursuing similar ways of solving its current $19.9 billion budget deficit. Schwarzenegger, for instance, proposed cuts to IHSS to save roughly $950 million in his January budget plan, but court rulings for now suggest that those solutions will be legally difficult to impose.
The court previously determined that under the Medicaid Act the state Department of Health Care Services must set rates "that bear a reasonable relationship to efficient and economical hospitals' costs of providing quality services, unless the Department shows some justification for rates that substantially deviate from such costs.
The Ninth Circuit on Wednesday determined that the state did not conduct the analysis required under the Medicaid Act to consider the impacts of cuts to IHSS wages or reimbursement rates. In the case California Pharmacists v. Maxwell-Jolly, Judge Milan D. Smith wrote that the court now has handed down "multiple decisions" on how to comply with the Medicaid Act.
Schwarzenegger, for instance, proposed cuts to IHSS to save roughly $950 million in his January budget plan, but court rulings for now suggest that those solutions will be legally difficult to impose."
On Tuesday, Yamamura writes of a different outcome in court regarding the governor's cuts: This time a judge ruled Schwarzenegger's line-item vetoes to reduce funding for several programs were constitutional:
"In a 3-0 decision, Justice J. Anthony Kline wrote that the challenge failed to show that Schwarzenegger had overstepped his executive authority in further reducing expenditures during last July's budget revision. The case, St. John's Well Child and Family Center v. Schwarzenegger, called into question seven line-item vetoes worth $288 million, cutting programs ranging from the Office of AIDS to Healthy Families.
Last year's situation was unique because lawmakers and Schwarzenegger approved the budget act in February, four months early. Because of a further drop in revenues and voter rejection of budget solutions, state leaders had to solve for a new $24 billion deficit last summer.
The language of the July budget revision contained reductions of the budget act, whereas normally the summer budget agreement spells out how much money the state will spend on each program. Governors have the ability to use their line-item veto on "appropriations." Democrats and social service groups claimed that the July reductions did not qualify as appropriations."
Back the California Legislature, a collective sigh of relief wafted from around the Capitol this week as the Assembly and Senate wrapped up their work on mid-year budget cuts.
Meeting the deadline for the eighth special session set by Gov. Schwarzenegger -- yes, that was eight in one year -- Assembly members and state senators advanced a range of "budget solutions."
For now, they avoided the uproar that followed the Legislature's acquiescence to Schwarzenegger's harsh budget cuts last year on health and human services programs. Many advocates, commentators and members of the public pointed out that those were exactly the kinds of programs California families need to survive this punishing recession. The Senate and Assembly appropriately delayed discussion of the proposed health and human services cuts and eliminations until June, after the governor's May revision of his proposed budget is released.
Let's hope that come June, their wisdom holds.
For a brief but detailed overview of the mid-year budget cuts that did pass, see the California Budget Project's analysis at http://www.cbp.org/
U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced that states are able to claim enhanced funds for Medicare Part D drug payments. This should allow California to get $680 million additional money from the federal government.
This decision could mean an additional $160 million more if the enhanced Medicaid match--which the states get through December 2010 due to the American Recovery and Reinvestment Act--is extended by Congress for an extra six months. The House has passed such an extension in both its health reform bill and its jobs bill as well.
After some unfair and harsh statements, Governor Schwarzenegger struck an appreciative tone: “Today’s announcement shows that our bipartisan efforts for a more fair and equitable relationship with the federal government are paying off. Together, state legislative leaders and our Congressional delegation, especially Senators Feinstein and Boxer, have been working to bring California more of the federal dollars we are owed. These funds are important, and while we still have more work to do, I appreciate the commitment of the Obama Administration in responding to our requests for these much-needed funds that are owed to our state.”
This doesn't solve our state budget crisis, but it certainly helps.
There was no escaping the sharp wit and quick tongue of Sen. Denise Moreno Ducheny (D), chair of the Senate Committee on Budget and Fiscal Review, on Tuesday as the panel heard its first airing of the rationale behind the governor's budget proposals to drastically slash taxpayer-funded health services -- for the second year in a row.
Again and again, Ducheny offered succinct retorts that, in effect, signaled to the admininstration that Gov. Arnold Schwarzenegger's ideas amounted to little more than glasses-half-empty. In nearly every area of cuts described, Ducheny demanded more data before moving forward on the governor's punishing health-care cuts for California's most vulnerable populations at a time when the prolonged recession continues to drag down the state's economy.
More than once, Ducheny and other senators questioned why revenue-raising options were not considered as alternatives to decimating services to taxpaying, lower-income citizens. "Most of these programs were started in the first place with the theory that they would save us Medi-Cal dollars in the long run," Ducheny said, demanding more concrete figures from the administration's Department of Finance as it outlined proposed cuts in adult day health care, Healthy Families coverage for children, mental health programs, HIV-AIDS drug assistance and more.
"It's a pig in a poke, is what it is," Ducheny said, chiding the finance department and the Legislative Analyst's Office representatives for not presenting more details to support the claim of potential savings. "It's a bit of an irony that, if we're the seventh-richest state in the union, why the people who put us there couldn't help us more, by paying a [higher] Vehicle License Fee, for example."
Said Sen. Mark Leno (D-San Francisco): "When the governor talked about 'Sophie's Choices,' he didn't suggest revisiting the tax breaks for revenues. He didn't say that was one of 'Sophie's Choices.'"
Still, time and again, both the LAO and DOF representatives fell short in their explanations of how the puzzle pieces of the governor's proposed budget cuts fit together in a way that made sense in helping Californians weather the tsunami of a persistent recession.
Those offering testimony against the governor's cuts raised the discussion to a blunt level not frequently heard in such a formal setting. They spoke of the elderly and the frail expiring before being able to find a bed in a long-term nursing home. They spoke of children being left behind to fail in classrooms; they spoke of more and more people becoming homeless, hopeless, ailing and unjustly relegated to being second-class citizens. Phrases like "fiscally foolish," "morally reprehensible" and "appalling and horrific" replaced the more polite, mutually beneficial language that advocates typically offer up in legislative hearings.
Regarding the proposal that Healthy Families vision care benefits be dropped for children whose low-income parents pay 150% more in premiums than they did a year ago, Ducheny said, "How are the children going to 'Race to the Top' if they can't read?"
Senator Roderick Wright, a Democrat from Los Angeles, provoked the most heated discussion in dismissing what he called "the euphemisms regarding 'reduction of services.'"
Should the governor's proposals be adopted, Wright said, "We are voting to let people die. If we don't face the consequences of these cuts, if we don't face the fact that we are discussing life or death for some folks. . .we are doing a disservice to the public."
GOVERNOR ANNOUNCES BUDGET FOR MORE "MONSTER" FY10-11 CUTS * Gov. Schwarzenegger Has Budget Proposal Similar--but More Severe--Than Last Year * Millions of Californians Could Lose Coverage and Care; Dramatic Impacts * Details Below on $2.9 Billion in Health and Human Services Cuts * An Additional $3.5 Billion of HHS Cuts Would Be Triggered Without Federal Funds
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With California bogged down by a $19.9 billion deficit for the next 18 months, Gov. Arnold Schwarzenegger on Friday once again proposed balancing the state’s budget not with new revenues back with devastating cuts to the state’s least-fortunate -- including up to 6.4 billion dollars of cuts in health and human services. Under the cuts, over 1.5 million Californians, and likely many more, would have their coverage eliminated, other key services would be scaled back, and California would lose jobs and federal matching funds.
As he has in last year's budget cycles, Schwarzenegger proposed severe cuts to health and human service programs, the kinds of safety-net services Californians expect their government to extend to the public in times of deep need, that provide help in getting the state and its people back to work.
In some of the governor’s harshest budget scenarios threatened to shut down altogether a range of existing essential health and human services if the federal government did not respond favorably to his demand for $6.9 billion in federal tax dollars.
“Tough times still lie ahead,” Schwarzenegger proclaimed in announcing a package of budget proposals that included some “monster” cuts that would either lead to “real reform” or a continuation of “the budget roller coaster.” Schwarzenegger said he would declare a fiscal emergency and call a special session of the Legislature so lawmakers would be forced to focus on solutions to the deficit.
Afterwards, Democratic Assembly Speaker Karen Bass succinctly said of the governor’s proposals: “I call this budget a big pile of denial.” Bass said the governor’s budget plan was simply and plainly “a non-starter” because “it’s calling for the virtual elimination of the safety net.” Besides Bass’ comments, early indications were that Schwarzenegger’s plan had fallen flat with the Legislature’s Democratic leadership, whose cooperation the governor will need to adopt the state’s annual budget.
Senate President Pro Tempore Darrell Steinberg opened his statements to reporters with a blunt: “You’ve got to be kidding me.” He later noted that the governor’s budget solutions lacked “creativity.” Senator Denise Ducheny, chair of the Senate Budget Committee, said she saw in the budget “a recycling of exactly the same proposals he’s had before.” The main difference, Ducheny said, was that previously Schwarzenegger tended to blame the Legislature for a lack of fiscal solutions and, on Friday, the governor focused on blaming Washington D.C.
Indeed, Schwarzenegger did everything but identify the federal government as a foe, leaning heavily on the theme of fiscal fairness. This lead Bass to note that the governor struck a nearly inappropriate tone: “Typically he threatens the Legislature. Now he’s threatening the president of the United States.”
The governor pledged to fly to Washington D.C. with all four partisan legislative leaders to demand the $6.9 billion he said the federal government owes California. Schwarzenegger made the case that, for every $1 Californians pay in federal taxes, the state only gets an average of 78 cents back. (Ironically, his cuts would cause California to lose even more in federal matching funds.)
The governor is also seeking more reimbursement funds for Medi-Cal expenses, saying California receives only 50 cents on the dollar, while the average for states is 57 cents. Chief among the governor’s deep cuts are those that would eliminate coverage and care to millions of Californians, ironically forgoing substantial matching federal fund dollars as a result.
The Governor plans to ask for a $2.9 billion cut in health and human services (including $1.1 billion in Medi-Cal), and an additional $3.5 billion cut in health and human services if California does not get the federal money he seeks.
But even with a massive infusion of federal funds, the Governor would still propose to eliminate coverage to hundreds of thousands of Californians, including children. Health experts say these devastating cuts would further unravel the health care system that we all rely on, where we have already seen services scaled back and full clinics close. Health Access recently released an assessment of the health cuts in the 2009-10 budget, six months in.
THE GOVERNOR'S PROPOSED "TRIGGER" CUTS
The following is a list of proposed cuts and eliminations that the governor proposes to be "triggered" if additional federal funds are not forthcoming:
* Eliminate coverage and benefits for millions in Medi-Cal ($532 million), including: * Reduce Medi-Cal eligibility to the minimum allowed under current federal law (about 72% of the Federal Poverty Level for most adults and 133% FPL for children and pregnant women). For example, this would reduce eligibility for low-income parents from an income of up to $18,310 for a family of three to around $13,000. While this tightening of eligibility standards would not be allowed under the stimulus package until January 1, 2011, it would eliminate coverage for 250,000 Californians in the first six months, coverage for 450,000 in the year after that, and hundreds of thousands more in future years. * Eliminate many Medi-Cal programs (including the Family PACT program for family planning services, the CHDP Gateway for transitional children's coverage, Breast and Cervical Cancer Treatment Program, and the Medically Indigent long-term care program). * Eliminate many remaining optional benefits (including medical supplies like diabetic test strips, prosthetic limbs, orthotics, wheelchairs and other durable medical equipment, hearing aids and other benefits).
* Eliminate the Healthy Families Program, affecting all 874,762 children currently enrolled ($126 million); * Eliminate various health services programs, (including Access for Infants and Mothers, MRMIP's high-risk pools for those denied coverage for pre-existing conditions, Every Women Counts, Asthma control program, and Expanded Access to Care Program), funded by Proposition 99 (tobacco tax) funds, subject to voter approval ($115 million); * Eliminate mental health services funded by Proposition 63 (Mental Health Services Act), shifting the $847 million to fund existing mental health services; * Eliminate CalWORKS, the state's welfare-to-work program ($1.044 billion); and * Eliminate the In-Home Supportive Services programs that provides home care to those not able to assist themselves. ($495 million)
BASE BUDGET PROPOSAL (REGARDLESS OF WHETHER FEDERAL DOLLARS ARE FORTHCOMING) Specifically, as described below, the budget proposal makes a number of cuts to health and human services programs, redirects funding from other sources to health care programs, and relies on significant receipt of federal funds.
Cuts to Medi-Cal: · $750 million in cuts to Medi-Cal by placing limits on services and applying utilization controls, increasing cost-sharing for Medi-Cal beneficiaries, and making “other programmatic changes,” potentially affecting the 7 million Californians on Medi-Cal; · $118 million to eliminate Medi-Cal coverage for recent legal immigrants, effective March 1, 2010, affecting about 90,000 legal immigrants; · $104 million to eliminate the Medi-Cal adult day health care benefit, effective March 1, 2010, affecting about 35,000 frail adults; · $55 million to delay payment to Medi-Cal institutional providers, requiring doctors and hospitals to “float” the state; · $26.4 million from aggressive elimination of fraud in Medi-Cal; and · $28.7 million to rescind a rate increase for Medi-Cal family planning services.
Cuts to the Healthy Families Program: · $85.3 million (including $10.5 million for the current fiscal year) by tightening eligibility requirements for the Healthy Families Program from 250% of the federal poverty level (FPL) to 200% of the FPL, effective May 1, 2010, affecting roughly 225,000 children, plus an additional corresponding $3.9 million cut to the California Children’s Services program for Healthy Families-eligible children; · $21.7 million by eliminating vision coverage from the HFP benefit package and increasing monthly premiums in families 151-200% of the FPL, effective July 1, 2010, affecting 167,000 children.
Other cuts to Health and Human Services programs: · $950.5 million in reducing eligibility, payments and services in the In-Home Support Services (IHSS) program; · $146.1 million by reducing benefits for CalWORKS recipients; · $306.9 million by reducing benefits for recipients of SSI/SSP; · $60 million by eliminating the California Food Assistance Program; · $200 million by reducing support for Regional Centers; · $18 million by eliminating the Substance Abuse Offender Treatment Program.
A redirection of funding to avoid more health care cuts: · Reduce $240 million from children’s health coverage to be replaced by newly enacted hospital fees; · Reduce $36 million from Medi-Cal to be replaced by one-time Proposition 99 (tobacco tax) reserve funds; · Reduce $25 million from the Access for Infants and Mothers (AIM) program to be replaced by one-time use Proposition 99 (tobacco tax) reserve funds; · Reduce $550 million in General Fund expenditures on high-priority health and social programs serving children to be replaced by state and local Proposition 10 (California Children and Families Act) funding, subject to voter approval; and · Reduce $452.3 million in General Fund expenditures on EPSDT services for children and mental health managed cared to be replaced by Prop 63 (Mental Health Services Act) funding, subject to voter approval.
A reliance on federal funding to avoid more health care cuts: · $1 billion from federal funds owed to the state for disabled Medicare-eligible individuals and the rate of Medicare Part D coverage · $1.8 billion from increasing the standard federal matching assistance percentage (FMAP) for Medi-Cal from 50 to 57 percent; · $1.5 billion from continuation of an increased FMAP (through June 30, 2011) as part of ARRA, the economic recovery act.
Governor Schwarzenegger released his proposed 2010-11 budget today, which includes severe cuts and no new revenues.
As part of the cuts, the Governor proposes a $2.9 billion cut in health and human services (including $1.1 billion in Medi-Cal), and an additional $3.5 billion cut in health and human services if California does not get a major infusion of federal funds.
The Governor proposes shocking cuts eliminating coverage and care for millions of Californians, which will have dramatic impacts on not just these families but on the health system on which we all rely. Even *with* a massive infusion of federal funds, the Governor would still propose to eliminate coverage to hundreds of thousands of Californians, including children.
This is an anti-jobs budget that not just harms California families and our healthcare system, but our economic recovery. The most effective way to create jobs is invest in Californians, and in their health and in services to help all of us get through a tough time. This proposal completely undermines our economic recovery efforts.
The economic impacts of these health and human service cuts would be multipled because we would not just lose jobs but billions in federal matching funds.
Governor Schwarzenegger's office came out with a statement accusing Health Access California of "twisting the facts" and comparing "apples and oranges" about the Governor's stance on health reform. Carla Maranucci at the San Francisco Chronicle has the back-and-forth. We stand by our statements, and here's the facts:
Two years ago, as part of his health reform proposal, ABx1 1, the Governor was willing to raise the revenues to expand the same Medicaid program to the same population, and was willing to raise the revenues to do it, with a 50% of the cost paid for by the federal government.
The current health reforms will expand the same Medicaid program to the same population with the federal government paying for 100% of the expansion population for the first several years, and over 80% from the eighth year on. Much of that small cost to the state--much smaller than what the Governor projects--would be offset by savings elsewhere.
This isn't apples and oranges. The comparison isn't even apples and apples. We are talking about the very same apple.
To be clear: we support and prefer the House health reform proposal that would provide even more assistance to states, by having the federal government pick up over 90% of the cost of the newly eligible population in the eighth year on. That would be a productive means of advocacy for the Governor, rather than attacking the overall health reform package that would provide a new infusion of billions of dollars in needed subsidies to California families, small businesses, and yes, the state of California.
After much anticipation throughout the fall, we are finally having the first stakeholder meeting around the new Medi-Cal waiver.
As you may know, the current agreement between the state and federal government about the administration of Medi-Cal runs out in September of this year. There's lots to discuss, from areas of agreement to issues of contention. In this process, there's lots for California, for low-income patients, and for our health care system to gain, and lots for us to lose.
The first meeting is today, Thursday, January 7th. It is public, starting at 9:30am – 12:30pm at the Sacramento Convention Center, Room 204. All the materials for the festivities are at the Waiver Renewal website of the CA Department of Health Care Services: http://www.dhcs.ca.gov/provgovpart/Pages/WaiverRenewal.aspx
Governor Schwarzenegger's State of the State speech today was anti-jobs and anti-healthcare.
The most effective way to create jobs is invest in Californians, and in their health and in services to help all of us get through a tough time. The investment's impact would be multiplied because of federal matching funds, further helping our economic recovery.
Yet the Governor proposed tax cuts and credits that would force even deeper reductions in health and human services, resulting in not just more lost jobs but also lost federal matching funds needed for our economy. And the Governor opposed a healthreform that would actually provide significantly more money for California families, our health system, and our economy.
THE FACTS ABOUT HEALTH REFORM: The pending health reforms in Congress would provide billions of dollars in new and necessary help to California families and small businesses struggling to afford their premiums. As a state with a high uninsured rate and large population of lower-wage workers, California will likely disproportionately benefit.
Health reform would also expand Medicaid for 1.5 million low-income uninsured Californians in 2013 or 2014, with the federal government picking up the full cost of that expansion for the first several years. Only eight years from now--two Governors from now--would there be any additional cost to the state of California, and those dollars will be matched at more than a 4:1 rate.
For California, health reform is a benefit, not a burden--and its a bargain to boot. Any additional costs are minimal and don't even take effect until eight or nine years from now, and would be offset by savings in other areas. And in return for such investments, our state would cover over 1.5 million more low-income Californians through Medi-Cal, with the federal government picking up over 80% of the tab--a better match than our current programs now.
The Governor's hypocrisy on health reform is stunning. Two years ago, the Governor was willing to raise the revenues needed to expand Medicaid to cover the same population--with the federal government contributing 50% of the cost. Now, the Governor opposes the same expansion when the federal government is offering well over 80% of the cost.
In the health reform bill, some states do better than California, some do worse. We support additional federal assistance for California, but the way to argue for more money is not to misrepresent the bill. And the best way to get more money from our health care system, and our economy, is to make the health care investments now that will bring in the federal money that is already sitting there with our name on it--and prevent the cuts that make us lose even more jobs and federal funds.
Health Access refutes the Governor's numbers about the fiscal impacts of health reform on California, which are based on faulty assumptions. Health Access recently published an analysis of the cost of implementing national health reform in California, which show the dramatically different estimates than what the Governor has stating. The cost to CA in the year 2019 ranges from a savings of almost $200 million under the House bill with moderate take-up rates to costs of about $800 million under the Senate bill with high take-up.
The Governor’s estimate of $3 billion assumes that outpatient Medi-Cal provider rates would be 80% of Medicare and that 100% of those eligible for Medi-Cal would enroll. While Health Access supports Medi-Cal provide rate insurances, federal health reform does not require Medi-Cal provider rates to be 80% of Medicare. Health Access supports maximizing enrollment in Medi-Cal but CBO assumes that only half of those eligible will enroll. The Governor also ignores the fact that for the first several years, the federal government will pick up 100% of the cost of newly eligible populations.
We'll tweet some intial thoughts about the Governor's State of the State today, at www.twitter.com/healthaccess, with more on this blog later. I'll be on KPCC later this afternoon with some reaction as well.
“I have long supported fixing our broken health care system with comprehensive reform. But, I still believe both the House and Senate bills fall short and need additional work. Congress must ensure states are not strapped with unfunded mandates and unfair costs that will only lead to larger budget deficits with unsustainable services. I remain committed to working with Congress and the President as the two houses move forward on reforms that are balanced and focus on slowing the growth in health care costs, improving the quality of care and providing health insurance coverage for the uninsured, while ensuring states can sustain the expansion of programs like Medicaid. This is a historic opportunity and I urge members of Congress and the Obama administration to come together and work through these issues to fix our broken system.”
The Governor took the opportunity of this health reform vote to refocus attention on his letter urging "flexibility to meet current obligations within the revenues available to states." In other words, he wants more money for California, and the ability to make cuts to health programs--seeking authority to make cuts to Medi-Cal and Healthy Families eligibility, benefits and reimbursements to providers.
We're not the only ones who think such actions are very unbecoming, especially at Christmas. Assemblyman Dave Jones, chair of the Assembly Health Committee, called him on the substance of the letter seeking cuts, and on the timing:
“It’s the day before Christmas and like Ebenezzer Scrooge, Governor Schwarzenegger wants to take poor Tiny Tim’s crutch away. And deny him any healthcare. Bah humbug, Governor!
The Governor has asked Congress to allow him to make cuts in healthcare for Californians.
Here we are in the worst recession since the Great Depression. Record numbers of Californians have lost their jobs outright or had their income cut. Record numbers of Californians are without health insurance. They are not able to see a doctor or get treatment for themselves or their loved ones. And the Governor’s response is to look for ways to deprive even more Californians of healthcare, so more Californians will get sick and die.
The Governor, in writing to Congress, is not speaking for Californians or California. California needs Congress to expand healthcare coverage and to increase payments to California to help pay for it. But the answer is not, as Governor Scrooge requests, to turn our backs on those who rely on California for medical care or to cut the already too low reimbursements to our doctors, nurses, hospitals and other medical providers who provide that care.
In a word, what the Governor proposes is worthy only of Scrooge. Lets hope that the Governor is visited by several ghosts tonite who will cause him to see the error of his proposal to cut healthcare for Californians.”
Governor Arnold Schwarzenegger used to be the champion of health reform. He supported a reform model on the basis of "shared responsibility"--the state would do its part, but he'll ask contributions from individuals, employers, providers, and local, state and federal governments, etc. He proposed raising revenues--both legislatively and going to the ballot--to expand programs like Medi-Cal and Healthy Families, as a way to get more of the 50/50 federal matching funds that were available to use, but we were not taking advantage of because of our lack of investment.
Things have changed radically. This past year, he proposed to cut Medi-Cal and eliminate Healthy Families. He refused to consider revenues to save these programs he appropriately sought to expand merely two years ago.
And now, he's been badmouthing health reform as a burden to states. For the last week, GOP Senators have invoked him in their opposition to health reform in floor speeches. For all practical purposes, he has emerged as an opponent to health reform, highlighting the cost to states.
Yesterday, the Governor sent a letter to the California Congressional delegation, circulating a $3 billion figure as the cost to the state of California. It's hard to account for how highly inflated that number is. It includes a Medi-Cal provider rate increase that is not required, an assumption that every single person eligible will sign up, and neglects that it will take nearly 8 years--a couple of Governors from now--for full implementation and any costs to materialize.
Here's the short version: the state gets savings of a couple hundred million dollars in the first several years. Even when the Medicaid expansion for 1.5 to 2 million low-income Californians takes into effect in 2013 or 2014, the federal government will pick up 100% of the cost of newly-eligibles for 2-3 years. Finally, there is a cost to the states--but not with the normal 50/50 split, but with either 82% or 91% of the bill being picked up by the feds. That's somewhere between a 4:1 to a 9:1 match--much more generous than the current matches in Medi-Cal (1:1) or Healthy Families (2:1).
For states, that's not a burden, that's a bargain.
So much for "shared responsibility." What really seems to get Governor Schwarzenegger is that he won't be able to make additional cuts on both Medi-Cal and SCHIP, because there would be "maintenance of effort" requirements that states continue what they have been doing. In his letter, he threatens the complete elimination of In-Home Support Services, CalWORKS and other programs.
I understand that every Governor wants to bring in more federal dollars. But misrepresenting our situation won't help. In order to get federal funds to solve our budget woes, he is ready to take hostages--whether that be IHSS or CalWORKS at the state level, or health reform at the federal.
That can't be the only or best way to get the added federal funds we agree we need.
We have worked with Ana for years, from when she staffed for Senator Deborah Ortiz on one of the first bills to prevent hospital overcharging, to her time staffing health legislation working for the Governor's office. She emerged as a smart and tough-minded negotiator for the Governor in the final efforts in late 2007-08 to pass a state health reform measure.
She has served this Governor loyally; no one should mistake her appointment as a signal of the content of the budget, despite the facts that she is the first Latina to hold the post, her Democratic beginnings or familiarity with health and human services. All indications are she will be a familiar face for a truly awful budget, given not just the severity of the budget situation, but the direction that the Governor has taken in the last year against the additional revenues needed to prevent cuts, even proposing to eliminate Healthy Families, CalWORKS, and other key health and human services.
What might be in the next budget that the Governor will announce sometime before January 10? We will likely revisit and even go beyond the cuts that were rejected last year as too severe--and given the cuts that were made, that's saying something. Some of those cuts had literally life-and-death consequences.
Much more on the budget to come...but for the moment, congratulations and condolences to Ms. Matosantos.
Earlier this week the Governor sent a letter to Congress asking them to support health reform but noting that the cost of Medi-Cal expansions could be as much as $1 billion. To his credit, unlike earlier estimates, the Governor noted that this estimate did not include offsetting cost savings to California.
Health Access has done an estimate of the estimate of the Medi-Cal/Healthy Families impacts of health reform based on our best understanding of the national reform proposals that were in print until today.
The bottom line is that we estimate that the net impact of the Senate Finance Mark for California state government would be costs of about $750 million annually plus a loss of $550 million in DSH funding while HR3200 would cost California about $200 million annually plus a loss of $330 million in DSH funding.
We will revise it again once we have read the House bill that was released this morning! Preliminary information indicates that a larger Medicaid expansion is included in the new House bill: that will be a good thing in terms of affordability and benefits for those covered though a challenge in terms of assuring adequate access to physicians.
Health Access has supported the earlier version of HR3200 for many reasons—the impact on California’s budget is on the long list of good things about the earlier House proposal.
There wasn't much new. It wasn't even his first letter to Congress on health reform this year. Also, given that the Governor has been all over the place on health reform, being at different times both for the expansion of key health coverage programs and for their elimination, for employer mandates to provide coverage and against them, and for new regulations on insurers and against them, the question is not so much where the Governor is but where he is *now* on some of the vital health policy questions.
The Governor's legislative actions on health, in full...
Monday, October 12, 2009
HEALTH ACCESS UPDATE Monday, October 12, 2009
HEALTH BILL ROUNDUP: GOV SIGNS KEY MEDI-CAL IMPROVEMENTS, VETOES MOST CONSUMER PROTECTIONS AND INSURER REGS * Signed Bill To Draw Down Over $2.3 Billion in Federal Matching Funds for CA Hospitals and Children’s Coverage; Additional Legislation Needed
* Signed Measure To End Gender Discrimination in Premium Pricing
* Vetoed Bills Would Have Prevented Rescissions; Require Maternity, Mental Health Services; Give Communities Notice Before ER Closures
Governor Arnold Schwarzenegger signed and vetoed over 700 bills yesterday, including several of interest to California's health care consumers.
Governor Schwarzenegger’s actions on end-of-year legislation was mixed for health care consumers. He signed some key proposals to maintain and improve the Medi-Cal program, from getting more federal funds to improving hospital reimbursements, to helping prevent balance billing of Medi-Cal patients, to extending a program for people with disabilities who are working.
But the Governor sided with the insurance industry to veto most of the consumer protections before him. He did sign a key measure to stop women from being charged more than men for premiums, but vetoed other insurance regulation measures to prevent coverage from being rescinded, and ensure that key services, like maternity, mental health and other treatments, are covered.
Here are some of the highlights of the health bills. All bulleted bills were supported by Health Access California.:
MEDI-CAL IMPROVEMENTS, INCLUDING MORE FEDERAL FUNDS
Perhaps the biggest health news was the Governor’s signing of a measure to draw down $2.3 billion in federal funds to increase Med-Cal reimbursement rates as well as support children’s coverage.
* AB 1383 (Jones): HOSPITAL DIVIDEND FEE: would, per federal approval, impose a coverage dividend fee on hospitals for the purpose of drawing down federal funds for increased reimbursement and children’s coverage expansion. SIGNED.
There is more work to do on this issue. In the Governor’s signing message, he indicated the need for additional legislation to implement the change.
With a tough budget year, a struggling health care system, and Medi-Cal rates that are some of the lowest in the nation, AB1383(Jones) is especially urgent given the enhanced match under the economic stimulus period of the American Recovery and Reinvestment Act.
Other bills that improved the Medi-Cal program included:
* AB 1142 (Price): PROOF OF ELIGIBILITY: To prevent "balance billing" of Medi-Cal patients, would require hospitals, as soon as they have proof of a person’s Medi-Cal eligibility, to provide all information regarding that person's Medi-Cal eligibility to all other providers. SIGNED.
* AB 1269 (Brownley): DISABLED WORKERS: Would allow, to the extent that federal financial participation is available, workers with disabilities who are otherwise eligible for Medi-Cal but are temporarily unemployed to elect to remain on Medi-Cal for a period up to 26 weeks. SIGNED.
KEY CONSUMER PROTECTIONS
The Governor vetoed most of the key health care bills on the Governor's desk would provide consumer protections for patients and needed oversight over health insurers, but signed some notable exceptions.
The biggest surprise was the Governor's signing of AB119(Jones), to ban gender discrimination in the pricing of health policies.
Bills that were vetoed included regulations of insurer rescissions, and mandating key benefits like maternity care and mental health services. These were high-profile issues that have been significantly discussed in the national health reform debate, and included in the major health reform proposals in Congress, like H.R. 3200. The bills included:
* AB 119 (Jones): GENDER RATING: to prohibit insurers from charging different premium rates based on gender. SIGNED
A few bills addressed the controversial insurance company practices of retroactively denying coverage, or rescissions.
* AB 2 (De La Torre): INDEPENDENT REVIEW OF RESCISSIONS, to create an independent review process when an insurer wishes to rescind a consumer's health policy, create new standards and requirements for medical underwriting, and requires state review before plan approval. Also raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history. VETOED (See attached veto message) * AB 730 (De La Torre): POSTCLAIMS UNDERWRITING PENALTIES: Would increase and direct fines on insurers unlawfully engaging in rescissions and post-claims medical underwriting. VETOED (See attached veto message) * AB 108 (Hayashi): RECISSION TIME LIMIT: Would make clear a 24-month time limit in which insurers have to rescind, cancel, or limit individual health care policies or charge higher premiums because of fraud once a consumer’s application is approved. SIGNED (See attached signing message)
The Governor largely vetoed virtually all the bills that required that health insurance include key benefits, so patients who have been paying premiums don’t find themselves without needed coverage or care. They included:
* AB 98 (De La Torre): MATERNITY COVERAGE, to require all individual insurance policies to cover maternity services. VETOED (See attached veto message)
* AB 244 (Beall): MENTAL HEALTH PARITY, to require most health plans to provide coverage for all diagnosable mental illnesses. VETOED (See attached veto message)
Other coverage benefit mandates that were vetoed included SB 158 (Wiggins), for cervical cancer screening of the human papillomavirus vaccination (See attached veto message); AB 56 (Portantino) for mammographies (See attached veto message), and AB 513 (de León) for breast-feeding consultation (See attached veto message). One insurer benefit mandate that was signed was SB 630 (Steinberg) for cleft palate reconstructive surgery.
Other pending consumer protections regarding providers included:
* AB 171 (Jones), on DENTAL CREDIT CARDS - Would prohibit dentists' offices from offering high-interest loans to patients while they are under the influence of anesthesia. Would also prohibit dental offices from charging lines of credit before services have been rendered. SIGNED
* SB 196 (Corbett): HOSPITAL/ER CLOSURE NOTICE: Requires public notice of hospital closure or reduction/elimination of emergency medical services. VETOED (See attached veto message)
Here's a quick overview of the bills supported by Health Access California, and whether they signed and vetoed by Governor Schwarzenegger yesterday...
Insurance Oversight & Market Reforms
AB 119 (Jones): GENDER RATING: Would prohibit insurers from charging different premium rates based on gender. SIGNED
AB 2 (De La Torre): INDEPENDENT REVIEW OF RESCISSIONS: Would create an independent review process when an insurer wishes to rescind a consumer’s health policy, create new standards and requirements for medical underwriting, and requires state review before plan approval. Also raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history. VETOED
AB 730 (De La Torre): POSTCLAIMS UNDERWRITING: Would impose fines on insurers unlawfully engaging in post-claims medical underwriting. VETOED
AB 108 (Hayashi): RESCISSION TIME LIMIT: Would impose a 24-month time limit in which insurers have to rescind, cancel, or limit individual health care policies or charge higher premiums because of fraud once a consumer’s application is approved. SIGNED
Insurance Benefit Mandates
AB 98 (De La Torre): MATERNITY COVERAGE: Would require most health plans to cover maternity services. VETOED
AB 244 (Beall): MENTAL HEALTH PARITY: Would require most health plans to provide coverage for all diagnosable mental illnesses. VETOED
Medi-Cal Reimbursement, Eligibility & Retention
AB 1383 (Jones): HOSPITAL COVERAGE DIVIDEND FEE: Would, per federal approval, impose a coverage dividend fee on hospitals for the purpose of drawing down federal funds for increased reimbursement and children’s coverage expansion. SIGNED
AB 1142 (Price): PROOF OF ELIGIBILITY: Would require hospitals, as soon as they have proof of a person’s Medi-Cal eligibility, to provide all information regarding that person's Medi-Cal eligibility to all other providers. SIGNED
AB 1269 (Brownley): DISABLED WORKERS: Would allow, to the extent that federal financial participation is available, workers with disabilities who are otherwise eligible for Medi-Cal but are temporarily unemployed to elect to remain on Medi-Cal for a period up to 26 weeks. SIGNED
Provider Oversight
AB 171 (Jones) CONSUMER PROTECTIONS: Would prohibit dentists’ offices from offering high-interest loans to patients while they are under the influence of anesthesia. Would also prohibit dental offices from charging lines of credit before services have been rendered. SIGNED SB 196 (Corbett): HOSPITAL CLOSURES: Requires public notice of hospital closure or reduction/elimination of emergency medical services. VETOED
Governor Schwarzenegger has released a first batch of the hostage bills, but is still promising to blanket veto a whole bunch more depending on the negotiations on unrelated water issues.
In the first batch, there's not a lot of health stuff signed. The big news is that virtually all of the requirements on insurance companies to cover certain benefits--from maternity (AB98) to mental health services(AB244)--were vetoed. Not a surprise that the Governor sided with the insurance industry on these issues, but still a disappointment to patients who find out after the fact that the treatment and services they need are not actually covered.
From the Governor's website, here's a list of some of the health bills that were vetoed:
SB 158 by Senator Patricia Wiggins (D-Santa Rosa) - Health care coverage: cervical cancer screening: human papillomavirus vaccination. See attached veto message.
It's the Governor's deadline day for signing or vetoing bills, and crucial health reform bills are being held hostage under a veto threat over the unrelated issue of water.
Several key health measures hang in the balance today, Sunday, October 11th, the deadline for Governor Arnold Schwarzenegger to sign or veto over 700 bills on his desk. The legislature considered many bills of importance to health care consumers this year (a full list is available at http://www.health-access.org/item.asp?id=158), and many of them made it to the Governor's desk.
It's outrageous that the Governor is taking bills on health and other key areas as hostages in order to extract concessions on unrelated water issues. California consumer and patients will literally pay a price if the Governor follows through on his veto threat. One measure would draw down over $2 billion in desperately needed federal funds for California 's hospitals and children's coverage. Other consumer protection bills would stop women from being charged more than men, help prevent coverage from being rescinded, and ensure that key services, like maternity and mental health are covered.
We'll see what happens later today. Here are some of the highlights of the health bills on the Governor's desk.
FEDERAL FUNDS FOR CALIFORNIA :
With a tough budget year, a struggling health care system, and Medi-Cal rates that are some of the lowest in the nation, there’s an opportunity to draw down over $2 billion in federal matching funds. AB1383(Jones) is especially urgent given the enhanced match under the economic stimulus period of the American Recovery and Reinvestment Act. A veto of this act would be a direct loss of money for both California ’s hospitals and for children’s coverage.
* AB 1383 (Jones): HOSPITAL COVERAGE DIVIDEND FEE - Would, per federal approval, impose a coverage dividend fee on hospitals for the purpose of increased reimbursement and children's coverage expansion.
KEY CONSUMER PROTECTIONS:
Several important health care bills on the Governor's desk would provide key consumer protections for patients and needed oversight over health insurers. These are high-profile issues that have been significantly discussed in the national health reform debate, and included in the major health reform proposals in Congress, like H.R. 3200 which also prevents rescission of coverage, gender discrimination, or coverage that doesn't include such basic benefits as maternity care and mental health.
But any reform measure that emerge from Congress will take years to implement -- and California has the opportunity to provide this relief to consumers quickly, and to start the transition to a reformed and improved health system.
Four selected consumer protection bills awaiting the Governor's action are:
* AB 119 (Jones): GENDER RATING, to prohibit insurers from charging different premium rates based on gender. * AB 2 (De La Torre): INDEPENDENT REVIEW OF RESCISSIONS, to create an independent review process when an insurer wishes to rescind a consumer's health policy, create new standards and requirements for medical underwriting, and requires state review before plan approval. Also raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history. * AB 98 (De La Torre): MATERNITY COVERAGE, to require all individual insurance policies to cover maternity services. * AB 244 (Beall): MENTAL HEALTH PARITY, to require most health plans to provide coverage for all diagnosable mental illnesses.
EVEN CONSENSUS BILLS:
While some of these bills are contentious, there are some consumer protections that have a clear consensus and yet still face a veto—for a second year in the row. AB 171 (Jones), to prevent growing abuses of dental credit cards, passed with unanimous bipartisan votes in the Senate and Assembly, and with the support of both consumer advocates and the California Dental Association. Last year, an earlier version of this bill was blanket-vetoed by the Governor in a similar fashion, over unrelated budget issues, despite the bills’ broad support.
* AB 171 (Jones), on DENTAL CREDIT CARDS - Would prohibit dentists' offices from offering high-interest loans to patients while they are under the influence of anesthesia. Would also prohibit dental offices from charging lines of credit before services have been rendered.
This could be the second year in a row that this common sense consensus measure is vetoed over unrelated issues.
All the bills on this list are supported by Health Access California and other consumer and community organizations, and will be updated regularly and available at www.health-access.org. We'll post a report, on the blog, Twitter, Facebook, etc, when we know what happens...
Will the Governor sign on to greater insurer oversight?
Monday, September 28, 2009
While most of the comprehensive health reform action is at the federal level, there are some important and specific reforms on the Governor's desk, reports Susan Ferriss at the Sacramento Bee.
Even though a lot of health policy is done at the federal level, it is the states that currently regulate insurance companies. Even those federal health reforms pending in Congress that would change the way insurers conduct their business leave an important role for state-based standards.
So it is important that California take advantage of the opportunity to make progress in reforming the ways that health insurers do business. Especially since any federal reform will take years to fully implement.
* AB 119 (Jones): GENDER RATING, to prohibit insurers from charging different premium rates based on gender.
* AB 2 (De La Torre): INDEPENDENT REVIEW, to create an independent review process when an insurer wishes to rescind a consumer's health policy, create new standards and requirements for medical underwriting, and requires state review before plan approval. Also raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history.
* AB 98 (De La Torre): MATERNITY COVERAGE, to require all individual insurance policies to cover maternity services.
* AB 244 (Beall): MENTAL HEALTH PARITY, to require most health plans to provide coverage for all diagnosable mental illnesses.
These are some of the big hot button issues in health reform. These issues have been cited in the national health reform debate--from the reaction to the policy of rescission, to the debate last Friday on whether maternity coverage is necessary or not. These types of issues--like whether people should be discriminated against based on gender or health status, or what insurers need to include as part of a basic benefit package--are also very much in the discussion in other states as well.
If you have an opinion on whether Governor Schwarzenegger should sign these bills, let him know.
Governor Schwarzenegger signed AB1422 today, which along with increased premiums, increased copays, and contributions from First Five provide the resources to prevent loss of Healthy Families coverage for over 900,000 children. Anticipating this signature, the Managed Risk Medical Insurance Board has already started processing the nearly 90,000 children that have been left uninsured on a waiting list for the last month or so. We should have never have been in this situation, but this is good news that such a major crisis was averted.
Health Access California joined the 100% Campaign, the community clinics, Western Center on Law and Poverty, and other organizations in supporting AB1422 by Assembly Speaker Karen Bass which creates a gross premium tax on managed care organizations that can be used to draw down federal match to fund Healthy Families. But it was our frequent adversaries, the HMOs and health insurers themselves, that provided essential support for the bill.
We here at Health Access California go head to head with HMOs and insurers day after day, year after year. HMOs and insurers are among our most frequent adversaries and only rarely on the same side with us. So it is a rare day when we give them credit for helping to get something good done. They had their own interest in supporting the measure, but it still was a good thing to do.
Particular credit is due to John Ramey, who now heads the association that represents the local initiatives, California’s home grown public options for Medi-Cal and Healthy Families. John Ramey was one of the first staff at MRMIB when it was created. We know him more recently from his work with the Chamber of Commerce opposing an employer mandate ballot measure in 2004---and in working with Governor Schwarzenegger for health reform in 2006-07. John was committed to avoiding the destruction of the Healthy Families program as a result of the devastating cuts done in the July budget: he revived the notion of reconfiguring the existing provider fee for HMOs into a gross premiums tax that could draw down federal match.
I know the lobbyists who are on staff with the various insurers and HMOs as well as the trade association lobbyists and the very highly paid contract lobbyists from some of the highest billing lobbying firms in Sacramento. I spend a lot of time in the halls of the Capitol with these folks. The lobbying firms included Lang Hansen O’Malley and Miller as well as Sloat Higgins, both firms that bill a million dollars or more a quarter (http://cal-access.sos.ca.gov/Lobbying/Firms) One of these contract lobbyists once accused me of wanting government-run health care because of the modest reforms to label products in our AB786! So the gulf that exists between their world and mine is not just about who their clients are and how much they charge but their perspective on issues.
I watched over the last few weeks as these lobbyists sweated vote by vote to pull out the victory that looks easy from the vote totals but was very much a day by day effort. These lobbyists assured Republican legislators that there was no official opposition, even from many conservative tax groups, and that at the last critical moment, the Chamber of Commerce senior lobbyist came to lobby on our side of the fight. It is the tradition on the corporate side to hire both conservative Republicans and former Democratic staff: it meant that the face of this fight was often a HMO trade association lobbyist who used to lobby for the Chamber of Commerce or a HMO staff lobbyist that is a former Republican staffer well known for his conservatism.
Credit is also due to Sumi Sousa, Speaker Bass’ staff; David Panush, staff to Pro Tem Steinberg and Jennifer Kent in the Governor’s office. The three of them worked in tandem to make this happen. While their bosses get the public credit (after all Bass, Steinberg and Schwarzenegger were elected, not the staff!), the staff does a lot of the day to day, hour by hour work to get things done.
Of course, thanks are also due to the many advocates who supported this effort as well—but for once, we had the easier assignment.
In a year when we have seen such devastating cuts in health and human services, it is good to have averted the worst of the cuts to Healthy Families.
Gov will sign, and no kids kicked off, but many cuts continue...
Thursday, September 03, 2009
With the passage of AB1422(Bass) that draws down new federal funds to help prevent children from being disenrolled from health care coverage, consumer, children's, and health advocates breathed a sign of relief.
Governor Arnold Schwarzenegger has committed to sign the bill that was passed today, and so hopefully MRMIB will start enrolling the 70,000+ children on their waiting list as soon as possible. The Governor issued the following statement after the legislature passed AB 1422 by Assembly Speaker Karen Bass (D-Los Angeles):
“The passage of this bipartisan legislation is a great victory for California’s kids. I am very pleased that all parties came together including the legislature, the health plan industry, children’s health advocates, the First Five Commission and others to find a shared solution to fund this important program that ensures not one child will lose their health care coverage - without any new General Fund dollars. Everyone was forced to make very difficult but necessary decisions to balance our budget, and these are the kinds of solutions we should be looking for in this tough economy. I look forward to signing this bill for our kids.”
The good news is that we have averted a massive health and humanitarian crisis, kicking hundreds of thousands of children off coverage. We shouldn't have been facing such an ugly scenario in the first place. And let's remember that while we've prevented the anxiety of families losing coverage for their kids, those lower-income, working families are now facing increased--even doubled--premiums.
The bad news is that other major cuts will continue. This was a unique opportunity to prevent this specific cut: the calvary isn't coming to prevent the devastating impact of other health cuts, from the elimination of dental and other benefits for three million Californians, or the zeroing out of state funding for community clinics. There is no such savior for millions of other of Californians facing such cuts.
Senator Steinberg announced that using his campaign funds, he would personally sue Governor Schwarzenegger over the additional $500 million in blue-pencil line-items cuts.
Lots of groups impacted were interested in suing, but they were, by definition, the folks hard-pressed to find the resources to sue: community clinics, AIDS services providers, battered women's shelters, low-income families with uninsured children, etc.
It raises troubling questions about the power and purview of the governor and about whether he can take for himself some of the authority to impose midyear spending cuts that he has tried, and failed, to win at the ballot box. California needs to know the answers.
Remember that the Legislature passed, and the governor signed, a budget in February... Last month, lawmakers sent Schwarzenegger a package of appropriations and cuts, and no one disputes the governor's power to veto any of the appropriations. But he also vetoed some of the cuts, not to reject them but to deepen them -- to, in effect, use the opportunity presented by the Legislature's majority-vote cuts to reopen appropriations that the Legislature made, and that he signed, in February. But if an appropriation requires a two-thirds vote, and if a cut is adopted on a simple majority, how can it be deemed an appropriation?
California vests lawmaking power in the Legislature and properly limits the executive by allowing him to veto appropriations, line-by-line if he likes, but not to unilaterally alter those already on the books.
Human services providers want to restore some of the cuts that never got legislative approval, and it's hard to blame them. But there's an even more important reason to subject the vetoes to scrutiny: They amount to a power shift -- one that may well be outside the lines of the state Constitution and beyond the principle of separation of powers.
While the Governor’s vetoes provide a stark reminder of the scope and magnitude of the reductions in the recent budget agreement, they represent a tiny fraction – just 3.0 percent – of the total cuts in the July package. The $50 million “blue penciled” from the Healthy Families Program, for example, is less than the $124 million cut approved by the Legislature. Debate over the legality of the Governor’s vetoes shouldn’t divert attention from the underlying fact that absent additional revenues, future budgets will continue to erode the quality of public services that Californians and the future of the state’s economy depend on.
As the Sacramento Bee's Kevin Yamamura, quoting Assemblyman John A. Perez, it's up to those impacted to file suit against the cuts. But the cruel irony is that the legal and financial burden to file suit is on the very underfunded, struggling families and service providers--community clinics, battered women's shelters, low-income families with uninsured children, maternal and child health providers--they are so negatively impacted by the Governor's draconian cuts.
The Governor should not add insult to injury with regard to these immoral and illegal cuts. The Governor should not wait for a lawsuit... With this decision, he should agree to withdraw the cuts unilaterally, just as he made them.
One person who has taken on that tough job is journalist Joe Matthews, who recently had a post on a conservative website pretending to reveal what's going on in "Arnold's Brain." This isn't as much of a conceit as it may seem: as someone who has literally written a book on Schwarzenegger, many of Matthews' musings seem to come from the Governor, or at least his inner circle. Beyond his sources, he also seems sympathetic to Schwarzenegger, trying to give the Governor the benefit of the doubt. Earlier this year, he was on a radio program suggesting that the Governor's proposals to eliminate major programs like Healthy Families was simply a way to build the case for revenues--something that certainly never panned out. His recent entry, in the voice of Arnold, also seeks to put a positive spin to defend the indefensible cuts he has made:
My personality and celebrity is so big that the media, or what’s left of it, is missing the real story.
Here’s the tale in a nutshell: I tried to give Democrats what they say they want–universal health care and higher taxes. I did this at huge political cost to myself. And they said no...
You’ll forgive me for not committing political suicide a third time. The foreheads say I went back to the right in the last two months. Excuse me, but what other choice did they leave me?
And so now, when we get this terrible budget, full of health cuts that I hate (remember: I’m the guy who put my neck on the line for universal coverage), this is somehow my fault? You want someone to blame, foreheads? Try a f-----g mirror.
According to this take, the Governor really wants to do good and is really opposed to cutting children's coverage, he's just misunderstood. Matthews uses two examples that Health Access California was intimately familiar with: health reform in 2007 (which we ultimately were in support of the Governor's effort with AB x1 1), and Proposition 1A in the May 19th special election (which we were in early opposition).
The broad brush that this voice of "Arnold" uses for "liberals" makes little sense, since there was a diverse response on both issues: I know that for both issues, our Health Access California coalition vote was not unanimous, and we had good friends and allies on both sides of both issues. This is true of legislators as well: much to our chagrin, the Senate Democrats that helped kill health reform in 2007 were his strongest supporters for Proposition 1A in 2009. But this voice of "Arnold" seems to forget some things as well:
* As someone who supported AB x1 1, I agree with the assessment that California lost an opportunity when health reform stalled here, not just to raise revenues for expanded health coverage, but also to influence the national debate in a positive direction. But the Governor does bear some responsibility of his own, for example by delaying negotiations until key initiative and legislative deadlines passed. And by driving such a hard bargain on key affordability issues, he splintered the coalition that was needed to win in the legislature and on the ballot. He deserves some credit for coming to the issue, but shouldn't escape all blame.
* Proposition 1A presented health and human service advocates with the option of temporary taxes and revenues for only two additional years, but at the price of a permanent spending cap. Some proponents may have characterized it as a "soft" spending cap, but many others had different analyses--as is shown by the current debate over whether the Governor had authority to make additional cuts last week. Prop 1A was much less about increasing revenues than his second attempt at the legacy of a spending cap, in the rhetoric of "live within your means."
The main problem with Matthews' piece is he uses only two data points. As the San Jose Mercury News editorial board pointed out, the Governor's history on the issue of children's coverage--to take just one example--is far more spotty. "What other choice did I have?" can be answered with a long litany of his actions or inactions, from his very first budget proposal to a veto of AB772(Chan/Escutia) in 2005, a universal children's coverage bill, to his stance on Proposition 86--which was within 2 percentage points of passing:
Schwarzenegger came into office promising to make universal coverage for children a priority. Instead, he tried to cap Healthy Families in his first year in Sacramento and opposed Proposition 86 in 2006, which would have insured children through an increase in the tobacco tax...
Matthews' piece seems ill-timed, since it was only a few days before another, devastating data point: the Governor chose to unilaterally take another $50 million out of Healthy Families, on top of another $144 million cut he insisted on. So he has been far more consistent in seeking to cut children's coverage, and opposing taxes and revenues that would sustain such cuts.
What's the explanation for the latest cut? Willie Brown wrote in the San Francisco Chronicle, "I suspect his final cuts to children's health care and AIDS programs were made more out of anger at Democrats than sound thinking. They will haunt him for the remainder of his term."
Steve Harmon and Mike Zapler of MediaNews (such as the Oakland Tribune) notes that he seems to enjoy his role of budget slasher: "Gov. Arnold Schwarzenegger seemed to relish the task of reining in government spending, almost as if it was another cinematic role in which to star. With gusto, he launched blistering attacks against fraud in the welfare system, demanding that those abusing the system be kicked out. He unwaveringly stood his ground on taxes, never allowing Democrats to seriously consider including them in negotiations...." Let's not even get into the whole thing with him waving around a knife.
As the Los Angeles Times editorial board puts it, "Funny, isn't it, that when the governor scours the state budget for waste, fraud and abuse, he only seems to find it in programs for the old, the young, the poor and others unable to raise campaign funds or muster political opposition."
Matthews attempted to find a unified theory of Schwarzenegger, but there's an easier narrative available: as a down-the-line corporate conservative who has consistently gotten high marks vetoing proposals the Chamber of Commerce doesn't like throughout his service, but who had a moderate moment right before and after his re-election campaign. He toned down his rhetoric after being pushed back by the legislature from budget proposals to cut everything from the Lanternman Act to Healthy Families, and then after being rejected by the electorate on a budget spending cap and other efforts in a special election. After accolades for his 2006 pre-election concessions on global warming, minimum wage, and prescription drugs (that last reform for which we applauded him for signing and yet has never been implemented), the Governor sought a continuation of that national attention, and health reform was merely the means to that end. The budget crisis has allowed him cover to impose the conservative agenda that in any other time would be politically impossible.
I have no idea if that's a correct analysis of the Governor. But at some level, it doesn't matter. What the Governor thinks in his brain or feels in his heart doesn't matter. It is what he does and doesn't do.
And right now, his Administration is beginning to deny hundreds of thousands of children health coverage, among many other things. He had other options and choices from day one to the present. He still does, and maybe we'll see yet another version of our Governor in his remaining time. For the sake of California, I hope so.
There was a time when Governor Arnold Schwarzenegger had significant national attention and credibility on health care issues, as a Republican leader who had proposed a serious health reform proposal. But he showed little ability to bring Republicans along with him in California, so it was unclear how he would fare in DC.
And that was before he cut Medi-Cal benefits and savaged the Healthy Families program, denying coverage to hundreds of thousands of children. The notion that he is the "health care governor" now seems a cruel joke.
Here's the Governor's letter in full in italics... and some annotation and commentary exploring the full contradictions of the Governor, where he can be absolutely right on and amazingly wrong-headed in the same breadth.
July 31, 2009
Dear Senator Reid, Senator McConnell, Madam Speaker and Mr. Boehner,
I appreciate your commitment and hard work toward reforming the nation’s health care system. I think we can all agree that the current system is not working as it should, and I have long supported a significant overhaul. Costs continue to explode, while tens of millions remain uninsured or underinsured. Many families are one illness away from financial ruin - even if they do have insurance. We have the greatest medical technology in the world at our fingertips, yet Americans’ health status lags behind many countries that spend less than half what we do per capita. Any successful health care reform proposal must be comprehensive and built around the core principles of cost containment and affordability; prevention, wellness and health quality; and coverage for all.
Here, the Governor makes an impressive and important case for health reform, as he did in 2007, and reiterates the same talking points as he did back then. It's like its 2007 all over again.
Cost Containment and Affordability
Cost containment and affordability are essential not only for families, individuals and businesses, but also for state governments. Congress is proposing significant expansions of Medicaid to help reduce the number of uninsured and to increase provider reimbursement. Today, California administers one of the most efficient Medicaid programs in the country, and still the state cannot afford its Medicaid program as currently structured and governed by federal rules and regulations. The House originally proposed fully funding the expansion with federal dollars, but due to cost concerns, members decided to shift a portion of these expansion costs to states. I will be clear on this particular proposal: if Congress thinks the Medicaid expansion is too expensive for the federal government, it is absolutely unaffordable for states. Proposals in the Senate envision passing on more than $8 billion in new costs to California annually - crowding out other priority or constitutionally required state spending and presenting a false choice for all of us. I cannot and will not support federal health care reform proposals that impose billions of dollars in new costs on California each year.
In the sharpest part of the letter--and perhaps the real point--the Governor is reacting to a change in the House bill demanded by the "Blue Dogs" to lower the cost of the health reform bill, by having the states' pick up a small percentage of the Medicaid expansion, rather than take on the full cost of that expansion.
The Governor has a valid point on the policy: it is preferable for the federal government to fund the cost of health expansions in Medicaid, even though most of the program now is a state-federal partnership. The federal government has the funding flexibility that states do not have, especially during tough economic times when state revenues are down but the need for such safety-net services increase. States who had to put up even a portion of the match may simply not do the expansion.
That said, the figure that the Senate bill might impose $8 billion in new annual costs seems wildly inflated. And this is a Governor who, a mere 18 months ago, was willing to support billions of dollars in increased taxes and revenues for his own health reform... but now he seems to say he would oppose anything that would require the state to raise a fraction of such revenues to implement a federal health reform that is relatively similar but does not have his name?
I know it only reflects the same inconsistency of the Governor in supporting revenues to expand Medi-Cal and SCHIP in health reform, but opposing revenues in the budget process to prevent steep cuts in those very same programs.
It's not a surprise that this or any Governor would advocate for the California budget. But he missed the opportunity--and responsibility--to advocate for the California consumer. The "Blue Dog" amendments in the House also sought to reduce affordability subsidies to low- and moderate-income families. The Governor refrained from making a comment--even though Californians would be most negatively impacted:
* California has a disproportionately high percentage of low-wage workers that would need and benefit from such affordability subsidies. * And since California has one of the highest costs of living in the nation, having meaningful subsidies go up the income scale to 400% of the federal poverty level is incredibly important.
One would hope that the Governor of our state would make the case not just for the budget, but for his constituents. California was lucky to have the Progressive Caucus, Black Caucus, Asian CaucOne us--led by California Representatives Lynn Woolsey, Barbara Lee, and Mike Honda, respectively--as well as the Hispanic Caucus, fight for those affordability subsidies.
The inclusion of maintenance of effort restrictions on existing state Medicaid programs only compounds any cost shift to states. We simply cannot be locked into a cost structure that is unsustainable. Governors have three primary ways to control Medicaid costs: they can adjust eligibility, benefits and/or reimbursement rates. Maintenance of effort requirements linked to existing Medicaid eligibility standards and procedures will effectively force state legislatures into autopilot spending and lead to chronic budget shortfalls.
Here, the Governor actually argues against the health and welfare of Californians. He wants the ability to limit eligibility, drop reimbursement rates, and scale back benefits--even in the context of a universal health system with an individual mandate.
With a requirement for individuals to take up coverage, there needs to be a resulting requirement that government--at the state and federal level--will provide the necessary assistance to get quality, affordable coverage. It was the Governor's lack of understanding about the need for that commitment that made negotiations on health reform so frustrating... and that prevented a broader coalition from coming around in support of the final proposal in California.
The federal government must help states reduce their Medicaid financing burden, not increase it. A major factor contributing to Medicaid’s fiscal instability, before any proposed expansion, is that the program effectively remains the sole source of financing for long-term care services. Therefore, I am encouraged by congressional proposals that create new financing models for long-term care services. Proposals that expand the availability and affordability of long-term care insurance are steps in the right direction, but they must be implemented in a fiscally sustainable way. More fundamentally, however, the federal government must take full responsibility for financing and coordinating the care of the dually eligible in order to appreciably reduce the cost trend for this group. This realignment of responsibilities is absolutely essential to controlling costs for this population, while ensuring that state governments will be better positioned to fill in any gaps that will undoubtedly arise from federal health care reform efforts.
I also encourage Congress to incorporate other strategies to help stabilize Medicaid costs for states. Delaying the scheduled phase-out of Medicaid managed care provider taxes pending enactment of new Medicaid rates, reimbursement for Medicaid claims owed to states associated with the federal government’s improper classification of certain permanent disability cases, and federal support for legal immigrant Medicaid costs are examples of federal efforts that could provide more stability to state Medicaid programs. Moreover, given the fiscal crisis that many states, including California, are experiencing, I strongly urge Congress to extend the temporary increase in the federal matching ratio to preserve the ability of state Medicaid programs to continue to provide essential services to low-income residents pending full implementation of national health reform.
The Governor here makes the pitch for more federal resources for California and the states in general. He actually brings up issues that are currently in discussion--the budget signed last week includes $1 billion in Medi-Cal savings from negotiating with the federal government over some of these disputed issues.
The Governor missed another opportunity in advocating for Medicaid savings--a robust employer requirement. The more that employers continue to provide coverage to their workers, the less likely they are to fall onto state programs like Medicaid. The proposal in the House (which is closer to what Governor Schwarzenegger agreed to at the end) is much more likely to provide state savings, than the relatively weak employer contribution in the Senate, which might actually increase Medicaid enrollment for currently eligible categories. He had a chance, consistent with his health reform proposal, to make the case for employer responsibility in an area where he could have made a difference, where there is real fluidity in the national discussion.
The Governor also makes the case for continuing the increased federal-state matching rate that California is getting from the stimulus, that has provided nearly $10 billion in federal funds, but that will expire at the end of 2010. Given that California is not likely going to be out of this fiscal hole that soon, such a request is necessary--however, it's probably more likely to come not under health reform, but in a second stimulus or more targeted package of aid to states.
Prevention, Wellness and Health Quality
Prevention, wellness and health promotion, along with chronic disease management, can help to lower the cost curve over the long run and improve health outcomes in the near term. This was one of the cornerstone pieces of my health care reform proposal in California, and I continue to believe it should be a key piece of the federal efforts. Prevention, wellness and chronic disease management programs should include both the individual and wider population levels.
At the individual level, proposals to provide refunds or other incentives to Medicare, Medicaid and private plan enrollees who successfully complete behavior modification programs, such as smoking cessation or weight loss, are critical reforms. To ensure they are widely used, individual prevention and wellness benefits should not be subject to beneficiary cost sharing. Because individuals’ behaviors are influenced by their environments, health reform must place a high priority on promoting healthy communities that make it easier for people to make healthy choices. California has demonstrated through its nationally recognized tobacco control efforts that population-based strategies can be effective and dramatically change the way the people think and act about unhealthy behaviors, such as tobacco use. A similar model, community transformation grants, has been advanced in the Senate Committee on Health, Education, Labor, and Pension legislation, and it should be included to support policy, environmental, programmatic and infrastructure changes that address chronic disease risk factors, promote healthy living and decrease health disparities.
Quality improvement measures are also critical to health reform. The House proposal for a Center for Quality Improvement to improve patient safety, reduce healthcare-associated infections and improve patient outcomes and satisfaction is a positive step. Coordinated chronic disease management is necessary to improve outcomes for chronically ill people. Systematic use of health information technology and health information exchange, including access for public health agencies, is vital to providing the necessary tools to measure the success of quality improvement efforts. Finally, investments in core public health infrastructure can be facilitated through the creation of the proposed Prevention and Wellness Trust.
These are important elements--and we wish the Governor's policies and actions met the rhetoric. He opposed a tobacco tax (Prop 86) on the ballot in 2006, and refused to consider another during this awful budget crisis.
However, this emphasis on focusing on healthy environments and communities--not just personal responsibility for better health--is much needed. His endorsement of "community transformation" and better public health infrastructure are all welcome and should be heeded by the DC policymakers. Unfortunately, some of these items have come under scorn, and maybe he can help defend them from attack.
Coverage for All
Coverage for all is also an essential element of health care reform and I believe an enforceable and effective individual mandate, combined with guaranteed issuance of insurance, is the best way to accomplish this goal. The individual mandate must provide effective incentives to help prevent adverse selection that could occur if the mandate is too weak. Creating transparent and user-friendly health insurance exchanges to help consumers compare insurance options will also help facilitate participation. States should maintain a strong role in regulating the insurance market and have the ability to maintain and operate their own exchanges, with the understanding that some national standards will need to be established. California has a long history of protecting consumers through our two separate insurance regulators, one covering health maintenance organizations and the other monitoring all other insurance products. Maintaining a strong regulatory role at the state level is in the best interest of consumers, and I urge Congress to maintain this longstanding and effective relationship as you design these new market structures.
There's a common understanding that the individual insurance market is broken, from the allowance of insurers to deny coverage for "pre-existing conditions," to the utter complexity and confusion to understand benefit packages or make apples-to-apples comparisons. The new "exchange" would place new oversight over insurers and fix many of these issues, while preserving a wide range of choices for consumers.
In this section, Governor Schwarzenegger argues for the continued role of state regulators. This is an area where a federal floor would be welcome, but also the ability for states to set higher standards where needed. California's insurance market has often been compared to the wild, wild West, in deperate need of taming--on issues from rescissions to the lack of minimum benefits--so a federal presence would be welcome. But there are areas where California has lead the way in consumer protection, such as with our HMO Patients' Bill of Rights, independent medical review, and advances on issues like timely access and language access. We wouldn't want to lose our ability to continue to improve consumer protections.
I hope our experience in California working toward comprehensive health care reform has informed the debate in Washington. There will be many short-term triumphs and seemingly insurmountable roadblocks for Congress and the nation on the road to comprehensive health care reform. We must all remain focused on the goal of fixing our health care system and remember that we all have something to gain from the reforms, and we all have a shared responsibility to achieve them. I look forward to working with you as you move forward on this desperately needed legislation.
The letter seems disjointed, wanting to continue the Governor's rhetoric from last year as a health reformer, but the main thrust--as most media reported it--was to send a signal of opposition, particularly about state costs. Unfortunately, in making that case, especially on any maintenance of effort requirement, he shamefully argues for the state at the expense of its residents. And he
When reading this, our Congressional delegation, who after all represents the same constituency, will reject the self-serving arguments, but also recognize the good points in the letter. There's some common ground for our delegation in supporting more resources for California, prevention-oriented policies, and the ability for state regulators to craft key consumer protections.
With most Republicans attacking health reform, it's just a shame--in more ways than one--that the Governor has lost his pro-reform voice and credibility on the issue with his recent actions. The letter only serves to continue his many contradictions.
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.
