Health Insurance | HealthyCal - Part 4
 

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Assembly panel begins health reform roll-out

Published: April 21, 2010 | No Comments

The Legislature has taken the first steps toward implementing California’s version of the federal health reform passed by Congress and President Obama last month.

The Assembly Health Committee this week passed AB 1602, carried by Assembly Speaker John A. Perez. The bill would establish a health insurance exchange to allow individuals and small business owners to join together to purchase insurance coverage, giving them the same kind of bargaining power now enjoyed only by large groups and employers.

The exchange would not be up and running until 2014 if California follows the timelines in the federal bill. But several other provision of Perez’s bill would take effect sooner,

Perez’s bill, for instance, would require health plans and insurance companies to provide coverage for dependent children until the age of 26 beginning in September and would prohibit insurance companies from excluding children from coverage due to pre-existing conditions. It would also prohibit lifetime limits on the dollar value of benefits and allow annual limits only in certain circumstances.

The bill also requires carriers to cover immunizations and certain preventive care and screenings for infants, children, adolescents and women without any cost sharing requirements.

See a staff analysis of the April 20 version of the bill here.

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This employer supports health care mandate

Published: April 4, 2010 | No Comments

Editor’s Note: This is the fifth part of a series on the Healthy San Francisco program, which provides nearly universal health care for the city’s residents. Each part of the series will examine the program through the eyes of different people in the community, including a patient, a doctor who runs a clinic, two employers with different views of the program, and a hospital administrator. To see the entire series, go here.

By Richard C. Paddock

The business of Nibbi Brothers is constructing buildings, not filing legal papers. But when San Francisco city officials asked the company to support its universal health care program, Nibbi Brothers agreed to join the court battle over Healthy San Francisco.

The Potrero Hill construction company submitted an amicus brief to the U.S. Supreme Court last year urging the justices to uphold the law that established San Francisco’s health care program and required companies to pay for health coverage for their workers.

Bob Nibbi, president of Nibbi Brothers Construction, supports the Healthy San Francisco program because it forces his competitors to offer health benefits to their workers, as his company has done for years.

In its brief, Nibbi Brothers argues that Healthy San Francisco is good for employees and the community. The city should avoid a “race to the bottom,” the company says, in which employers try to remain competitive by refusing to provide health benefits for their workers.

Bob Nibbi, the construction company’s president, said his firm already pays more for employees’ health care than required under the law. He would like to see his competitors — especially contractors who cut costs by employing non-union workers — contribute to their employees’ health costs.

“What we spend on health care greatly exceeds the bar that the ordinance sets,” Nibbi said. “But there are some of our competitors out there who don’t have the obligation to pay for health care.”

Nibbi Brothers is something of a rarity in San Francisco. Bob Nibbi and his brother, Michael, are the third generation of brothers to operate the construction company, which has been in business for nearly 60 years.

Nibbi Brothers uses only union labor. And long before Healthy San Francisco came along, the company provided its employees with a full range of benefits, including medical coverage.

Nibbi said he would like to see construction maintained as a well-paying, skilled trade. But his firm increasingly finds itself competing with contractors who hire non-union workers and pay minimal, if any, benefits.

“As a union contractor it becomes harder and harder for us to compete with those kinds of companies,” he said. “The benefit of the health care ordinance is that, at least for health care, it raises the bar a little bit for those companies.”

Without the San Francisco law, Nibbi said, employers who chose not to provide health insurance would leave their workers to rely on the public health care system, placing a greater burden on taxpayers.

“Basically they are not paying the full freight for the necessary health care that employees and their families are going to need,” Nibbi said. “They are taking advantage of the public system, the public resources that are out there and supported by the taxes that we pay.”

With its stand on the lawsuit, the construction company is opposing the Golden Gate Restaurant Assn., which brought the lawsuit challenging the levy on employers to fund Healthy San Francisco.

Nibbi sympathizes with the restaurant owners and acknowledges that the health care law places a heavier burden on low-wage, labor-intensive businesses.

“The city does not make it easy to be an employer here,” he said. “The restaurant business is a very tough business. For us, you can maybe forecast a day 20 or 30 years from now when a union contractor is more of an endangered species and we could be in a similar situation.”

 

Whitman, pre-existing conditions and the health insurance mandate

Published: March 31, 2010 | 1 Comment

Meg Whitman might know something about online auctions and business management. But she probably ought to brush up on her understanding of the way health insurance works.

At a campaign appearance in Redondo Beach Tuesday, Whitman drew loud and sustained applause by calling for the repeal of the new federal health reform law. She even suggested she would “force” the state attorney general to join a states’ lawsuit against the plan, though she later conceded that she could actually order an independently elected attorney general to do anything.

Whitman did say there was at least one part of the new law she likes. It’s the same part nearly everyone loves: a prohibition on insurance companies denying you coverage if you have a pre-existing medical condition.

But Whitman, of course, opposes the individual mandate — the requirement that everyone carry coverage.

And as just about any health economist will tell you, you really can’t have one without the other.

If anyone can get insurance, any time, regardless of their health condition, there would be a huge economic incentive to avoid coverage until you needed it. Why pay now when you can get coverage later? It would be like letting people buy car insurance after they’ve already been in a wreck. In health insurance, that kind of incentive would skew the pool of the insured toward the sick and the injured. That would drive up the cost of coverage, pushing still more healthy people out of the pool. And so on.

The fix for this is to require everyone to have insurance, with subsidies for those who can’t afford it. That way everyone — the healthy and the sick — is in the pool, and you spread the risk broadly.

Whitman’s solution has been tried in several states. And it usually leads to even higher insurance premiums than we have now, while doing little to broaden access to care.

 

For universal health care, but not on his shoulders

Published: March 28, 2010 | 1 Comment

Editor’s Note: This is the fourth part of a six-part series on the Healthy San Francisco program, which provides nearly universal health care for the city’s residents. Each part of the series will examine the program through the eyes of different people in the community, including a patient, a doctor who runs a clinic, two employers with different views of the program, and a hospital administrator. To see the entire series, go here.

By Richard C. Paddock

Daniel Scherotter, a restaurant owner and chef, is leading the fight against Healthy San Francisco. It is not that he opposes the health care program. He simply thinks the city’s businesses, particularly restaurants, should not be required to finance universal health care.

As a past president of the Golden Gate Restaurant Assn. and chef and owner of Palio D’Asti restaurant, Scherotter is backing a lawsuit that challenges the Healthy San Francisco law. The case is now before the U.S. Supreme Court.

Daniel Scherotter, a restaurant owner and chef, is leading the fight against Healthy San Francisco, the city's universal health care program.

“San Francisco loves its restaurants but it doesn’t treat us very well,” he says.

For Scherotter, the adoption of Healthy San Francisco is one in a series of city actions that has placed a growing burden on small businesses and made it hard for them to survive. San Francisco’s $9.79 minimum wage and its required 9 days of employee sick leave are among the highest in the nation, he notes.

Under Healthy San Francisco, companies with 20 or more workers must provide employees with health insurance or health reimbursement accounts or pay the city $1.31 per hour for each worker. The rate rises to $1.96 an hour for employers with 100 or more workers.

“Healthy San Francisco is definitely onerous,” Scherotter says. “It’s the straw that broke the camel’s back, which is why we’re suing.”

At one point, he lived in Italy and came to appreciate Europe’s health care system. Like many San Franciscans, he favors universal health care and likes the way care is provided under Healthy San Francisco. His problem is with forcing the low-wage, labor-intensive restaurant industry to shoulder the costs.

Even before the recession, the number of restaurants in San Francisco was shrinking about 5% a year, he said. Several restaurants near his Sacramento Street establishment have closed. Others have gone to self-service to reduce their labor costs.

“I look around here and I am the only major restaurant on the street,” he says.

Scherotter is the son of a lawyer and has a degree in philosophy. But what he really loves is cooking. After college, he came to San Francisco in 1993 to attend the California Culinary Academy.

He got one of his first jobs as a cook at Palio D’Asti in San Francisco’s financial district making $9 an hour and worked his way up, eventually becoming the chef and buying the restaurant.

Many restaurants have added a surcharge to help cover the cost of Healthy San Francisco and put a note on their menus informing customers of the extra fee.

“It has been effective in making a statement,” says Scherotter, although he doesn’t add a surcharge at Palio D’Asti.

Scherotter would like to see the city – and the nation – take an entirely different approach to health care: spend more on better quality food and less on health insurance.

“Only a chef could say this, right?” he offered. “But why food doesn’t have a part in the health care discussion I don’t have any idea.”

Europeans who eat a Mediterranean diet are healthier than the average American, he notes, not because their doctors are better but because their food is healthier. Buying cheap, government-subsidized, processed food leads to higher health care costs.

“People spend very little money to eat crap and then have to pay for health insurance,” he said. “It’s about as backwards as it can get. It would make more sense for employers to give lunch insurance to their employees.”

 

The trouble with Medicaid

Published: March 23, 2010 | No Comments
ashby wolfe

Ashby Wolfe MD, MPP, MPH

By Ashby Wolfe

Ashby Wolfe is a resident physician in the Department of Family and Community Medicine at the UC Davis Medical Center in Sacramento. She holds an MD as well as masters degrees in public policy and public health. She blogs at www.ashbywolfe.com and is a guest blogger for HealthyCal.org on issues of family medicine and community health. Her opinions are her own and do not necessarily represent the views of UC Davis or HealthyCal.org

A recent experience I had trying to get one of my patients some simple medications to treat an asthma condition demonstrates why so many doctors are frustrated by dealing with the Medi-Cal program, some to the point of refusing to take patients whose care is paid for by the state.

Medicaid, known as Medi-Cal in California, is the partly state-funded, partly federally-funded health insurance program for low-income families. It’s not Medicare – that is the national health insurance for all persons over age 65. The Medicaid program is available state-by-state to certain eligible groups, particularly low-income women, children and their families.

In California in 2008, of the 36 million California residents, 16 percent of the population received health insurance through this program. I happen to think programs like Medi-Cal are important and worthy of state funding. This program allows women with low incomes to afford care when pregnant, and it allows adults and children to receive basic medical care (vaccines, annual check-ups) and sometimes dental and vision care.

However, as you have probably heard, the number of doctors who see patients with Medicaid insurance is decreasing. Why? If a program like this pays for basic health services to women and children in need, why is it such an unpopular program among doctors?

For starters, Medicaid pays doctors far less for providing care than other insurance plans. To add insult to injury, Medicaid fees paid in California were 83% of the Medicaid national average in 2008, ranking California 47th overall among states.

Doctors also face a significant complexity to providing care to patients with Medicaid, as there are often specific rules, regulations and paperwork that must be completed to get approval for certain types of care. These issues makes the process of care frustrating, and as a result some physicians may choose to stop seeing Medicaid patients, because there is no rule that says doctors must see patients with every type of insurance in their offices.

As a result, sometimes patients who are eligible for Medicaid seek care in emergency rooms, where there is a rule (the national EMTALA legislation) that everyone – regardless of insurance – must be cared for. Patients who come into the ER often have multiple chronic diseases that have gotten worse because they have not seen a regular doctor, and this can be frustrating for both patients and docs alike, since it can feel like there is no one but the ER and hospital to care for these patients on a regular basis.

Yet I still see patients with Medicaid insurance in my office. I have always thought it an important thing for me to provide the same care to patients of all income levels and all insurance types. However, my patience for my own philosophy was tested the other day, when a patient of mine came into my office because she was having trouble breathing. Let’s call her Ms. Jones.

Ms. Jones has asthma, in addition to 3 other medical conditions for which she takes a total of 8 medications. Ms. Jones has Medicaid insurance, which helps pay for her regular visits with me and for her medications. She tends to have breathing problems in the springtime, when pollen in the air irritates her lungs and can cause an asthma attack. This was the reason she was seeing me in my office the other day.

After examining Ms. Jones, I was concerned that she was on the brink of another attack, and so I prescribed a 5-day course of steroids, a relatively inexpensive medication, in addition to her current inhalers in order to treat her condition and prevent worsening of the attack (which could land her in the hospital).

The next day I called the patient to make sure that she was feeling better, and Ms. Jones told me that she tried to get her medications after our visit, but was told by the pharmacy that the 5-day course of steroid medication could not be dispensed because a Treatment Authorization Request (TAR) had to be approved by the state Medicaid office first. She was told her medications would be available in about a week.

I grew more concerned listening to the patient describe that she was feeling more out of breath than she did in my office, and her inhalers weren’t helping. Wanting to prevent a serious asthma attack, which could be solved directly with the prescriptions I had ordered yesterday, I told the patient that I would call her right back after speaking with the pharmacist directly. I spoke with the pharmacy, who told me that because the patient was already on 8 chronic medications, any additional prescriptions (regardless of why they were needed or how long they would be needed) could only be approved by a Treatment Authorization Request to the Medicaid office. The pharmacist suggested I call the Medicaid office directly to request a TAR override.

So, that is what I did next. I spent the next 30 minutes on the phone, talking to pre-recorded machine voices, attempting to speak to a real person and ask how to override a TAR for medications. Finally, I managed to speak with a representative who told me that the state office no longer does TAR overrides. However, she advised me that the pharmacy might be able to release the medications to the patient, as long as the patient was willing to pay cash for the full cost of the prescription.

Nevermind that Ms. Jones is on Medicaid because she makes less than $20,000 per year. At this point, I thought to myself that this is exactly why some doctors don’t take Medicaid. They don’t want to deal with this frustration. It should be easier than this to get a cheap prescription filled for a patient the same day she needs it – rather than sending the patient to the ER to get the same treatment at triple the cost (not to mention the cost of seeing another doctor who would do exactly what I did yesterday).

I called the patient back. She didn’t have any extra cash to pay out-of-pocket for her medications, and she was still feeling the same as she was yesterday. Ms. Jones was not in a situation where she needed emergency services, but I worried that if she didn’t get her medications in the next day, she might. So I called another pharmacy – a different pharmacy – and as luck would have it, they were willing to provide the patient with the prescription medications and submit an authorization request to Medicaid so that they would get reimbursed next week for the medications they gave the patient that day. Several days later, Ms. Jones is feeling better and I feel good that because of my work, she didn’t have to go to the ER.

What was the cost of my time to Ms. Jones for my efforts? I could have just told Ms. Jones to go to the ER, where she would have faced a long wait, a large bill and received the same treatment I prescribed. I don’t get paid less if I send my patients to the ER. I don’t get paid more if I spend time helping Ms. Jones get her prescriptions. That day, I didn’t have the time, but I made the choice to make time because I felt strongly about the treatment I felt the Ms. Jones needed. Not every doctor has the time to do what I did for Ms. Jones, and doctors throughout California continue to withdraw from the Medicaid program. Who then will care for people like Ms. Jones?

This week, a new study sponsored by the California Health Care Foundation will be presented by researchers from the University of California, San Francisco (UCSF) and the Medical Board of California, examining reasons behind why doctors stop seeing Medicaid patients. It is due to be presented on March 26th at the Capitol in Sacramento. Let us hope that the information helps lawmakers and health policy leaders understand that doctors like me want to see Medicaid patients, but that choice is made difficult by our experiences. If we truly want to be able to provide good health care, our health system must allow the right choice to be the easy choice for everyone – regardless of insurance.

 

What health reform means to you

Published: March 21, 2010 | Comments (5)

With Sunday’s vote in the House of Representatives, Congress has passed the first piece of an historic overhaul of the nation’s health care system. What will this reform mean for you — as a consumer of insurance, a patient and a California taxpayer?

In the short run, it is going to depend on where you are in the system. Most likely you will not be affected much at all for many years, despite all the fury unfolding in Washington and across the nation. In the long run, the effects could be more profound.

The bill does a lot of things, but most of them can be divided into two major categories. It tightens regulation of the insurance industry. And it expands access to care for the poor and for low-income working people.

Congress and the president, mindful of the costs and also the political implications, have front-loaded the insurance regulations, which are popular with the middle-class and independent voters, and saved the public care expansions for later. Still, if you have insurance now, especially if you have it through work, you probably will not see much if any change in that coverage.

If you are working or self-employed and have been trying to buy coverage, you might find it easier to do so in the near future. If you have been denied coverage because of a pre-existing medical condition, this bill could be just what you have been waiting for. The legislation will also place new mandates on how insurers structure their policies, require them to cover children until an older age, and limit the amount they can make you pay out of pocket.

Here is a breakdown of the major pieces of the legislation, organized by the dates on which they take effect:

Taking effect in 2010
–Increase in Medicare prescription drug benefits. A one-time rebate of $250 for seniors who have exhausted the first part of their drug benefit and are paying 100 percent of the cost of their medication. The following year, low-income and middle-income seniors would begin getting a 50 percent discount on brand-name drugs.
–A high-risk insurance pool for people with pre-existing conditions who have been turned down for regular coverage. This pool would be available until 2014, when new regional insurance exchanges will be created and take over this function.
–Insurers prohibited from imposing lifetime limits on a person’s benefits.
–Insurers prohibited from rescinding coverage when a person becomes sick or disabled, except in cases of fraud.
–Insurers required to cover dependent children on a family policy until the age of 26.
–Subsidies for small business. Tax credits covering up to 35 percent of premiums for employers with 10 or fewer workers and average wages of $25,000 or less. This subsidy would climb to 50 percent of premium costs in 2014 but would phase out as a firm’s number of employees and average wages grows. The credit would end once a company had more than 25 workers or average wages of $50,000 or more.
–Tanning tax. A 10 percent tax on the purchase of indoor tanning services.

Taking effect in 2011:
–Insurers required to spend at least 80 percent of their revenue on medical claims.

Taking effect in 2013
–Higher payments for doctors who treat the poor. The federal government would reimburse states that increase payments to primary care doctors in the Medicaid program to match what is paid under Medicare. These federal subsidies are intended to entice more doctors into the Medicaid program in advance of major expansions in enrollment in 2014. But the new subsidies to the states expire in 2015.
–A higher Medicare payroll tax rate, adjusted for the first time according to income. The rate would increase from the current flat 1.45 percent to 2.35 percent on income above $200,000 for individuals and $250,000 for couples. These groups would pay an additional 3.8 percent tax on capital gains, dividends, interest and other investment income.
–A new cap of $2,500 on the amount of money people can set aside tax-free to pay for medical expenses.

Taking effect in 2014:
–Individual mandate, requiring most people to buy insurance. People who did not comply would face penalties beginning at $95 a year or 1 percent of their income, whichever was higher. These penalties would rise over time.
–Insurance exchange. States or regions would organize new insurance marketplaces for people who could not find coverage in the private market. There would also be two national plans, including one non-profit. Insurers competing to win customers through the exchanges would have to justify rate increases and could be barred from the exchange if they raise rates excessively.
–Insurers prohibited from charging older people more than three times what they charge younger people.
–Insurers required to offer minimum benefits, to be determined later by the federal government. The minimum plan would cover 60 percent of the costs and limit out-of-pocket costs to consumers to about $6,000 annually for individuals and $12,000 for families.
–Subsidies for individuals. Tax credits would be available for low and moderate income people who buy through the exchange. People with incomes below about $33,000 for a family of four would pay 2 percent to 4 percent of their income in premiums, and health plans would be required to pay 94 percent of the cost of their benefits. These subsidies would continue at a lower level for families with incomes up to four times the poverty level, or about $88,000 for a family of four.
–Employer penalties. Employers would not be required to offer coverage to their employees, but if they did not and their workers used the exchange, employers with more than 50 employees would have to pay a fee of $2,000 for every worker who used the exchange, after the first 30 employees. Employers that do offer coverage would also have to pay a fee if their workers opted for insurance sold through the exchange.
–Expansion of Medicaid (Medi-Cal in California). This government-subsidized insurance would expand to cover everyone with incomes up to 133 percent of the poverty level, or about $29,000 for a family of four. Currently, families with children, the aged and disabled qualify for this system, and at lower income levels. The federal government would pay the full cost of this expansion until 2016, then phase down its contribution to 90 percent by 2020. The state would be responsible for the remainder of the cost.
–Higher reimbursement rates for states that cover children through the program for the working poor, known as Healthy Families in California. The federal government currently pays an average of 70 percent of the cost. This would increase to 93 percent.

Taking effect in 2018
–A new tax on so-called “Cadillac” or expensive health insurance plans. This 40 percent tax would take effect on individual plans costing more than $10,200 a year and on family plans costing more than $27,500.

–Daniel Weintraub

Note: This item was updated at 3:43 p.m to correct some of the dates at which insurance reforms will take effect.

Photo by Steve Rhodes.

 

In San Francisco, a rush for health care

Published: March 20, 2010 | No Comments

Dr. Kenneth Tai is a physician and medical director of North East Medical Services, a network of clinics that has 11,000 Healthy San Francisco members as patients.

Editor’s Note: This is the third part of a six-part series on the Healthy San Francisco program, which provides nearly universal health care for the city’s residents. Each part of the series will examine the program through the eyes of different people in the community, including a patient, a doctor who runs a clinic, two employers with different views of the program, and a hospital administrator. To see the entire series, go here.

By Richard C. Paddock

When the Healthy San Francisco program began three years ago, Dr. Kenneth Tai and his clinic on the edge of Chinatown were flooded with thousands of new patients. Many had serious health problems that had long been neglected.

Some patients had suffered debilitating strokes and were not receiving adequate care, said Dr. Tai, medical director of the North East Medical Services clinic. Others came in with pains they had ignored only to find they had cancer.

“We have quite a number of sick patients that have come through because of Healthy San Francisco,” he said. “A lot of patients with stroke and they can’t walk. Or cancer that was diagnosed because of Healthy San Francisco. They were not being cared for appropriately because of access issues.”

Today, more than a quarter of the clinic’s 40,000 patients are enrolled in San Francisco’s innovative health care program. Dr. Tai sees it as an important step in serving patients who had been unable to afford medical care.

“Healthy San Francisco is a great start toward a universal health care program,” he said. “Healthy San Francisco has enabled a lot of patients to sign up and not worry, ‘Will I be able to pay?’”

The North East Medical Services is a non-profit community clinic that began treating poor patients in Chinatown 38 years ago. It now has five locations.

NEMS, as it is known, was one of the first two Healthy San Francisco clinic sites. “It’s our mission to serve the underserved,” Dr. Tai said. “When Healthy San Francisco came along, that was the type of patient we were serving a lot of already.”

Dr. Tai, 35, became medical director a year ago and spends half his time as an administrator and half seeing patients. Most of the clinic doctors and staff are multilingual. Dr. Tai, who was born in Taiwan and grew up in Chicago, speaks Mandarin and Cantonese.

Of the 11,000 NEMS patients covered by Healthy San Francisco, about half are new to the clinic. The clinic receives a flat fee from the city for each patient and provides all primary care services, preventive care visits, urgent care, medications and lab work. Those with serious medical problems are referred to a hospital.

“Fiscally speaking, it is at best break even,” he said. “The reimbursement is definitely not high. We try to provide the best quality care without breaking the bank.”

In the early days, the clinic was overwhelmed with Healthy San Francisco patients eager to see a doctor. Many were so happy with the free service, they returned frequently. To reduce the crowds, NEMS began requiring a $5 co-payment for the poorest patients and $10 for those with higher income.

“Once patients get their universal access program, the demand is very great,” Dr. Tai said. “They all want to come and see a doctor.”

The clinic also has expanded rapidly. In the past year, it has hired a dozen new doctors. Using federal stimulus money, it added 10 exam rooms to its main clinic on Stockton Street.

With the city program, Dr. Tai sees a shift towards prevention, which experts hope will contribute to a healthier community and reduce medical care costs.

“It’s really going from a paradigm of taking care of the sick to a model that tries to prevent people from getting sick,” he said. “That’s where we are heading with Healthy San Francisco and where we are heading as a nation. We are very excited about that.”

 

The health premium squeeze

Published: March 17, 2010 | No Comments

A smaller percentage of Californians had private health insurance in 2008 compared to 2000, and those who did have still have coverage were paying a lot more for it, according to a new study from the University of Minnesota.

Among the findings:

–The percentage of Californians with employer-sponsored health insurance declined from 57.9 percent to 54.5 percent.

–Among those whose incomes were less than twice the federal poverty level, the percentage with employer-sponsored insurance shrunk from 24.3 percent to 19.3 percent.

–Nearly one in five — or 19.5 percent — of Californians got their health care through the government in 2008. That number grew from 17.2 percent in 2000.

–Inflation-adjusted premiums for single coverage for one year increased from $2,783 to $4,280, a 54 percent increase. For family coverage, premiums increased from $7,435 to $12,254, a jump of 65 percent.

–The average employee contribution increased from $424 to $741 for single coverage and from $1,856 to $3,398 for families.

–California’s median income was flat between 2000 and 2008.

See the full report, with data for all 50 states, here.

 
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