Health Reform | HealthyCal - Part 3
 

Posts Tagged health reform

  

Republican nominees want to undo federal health bill

Published: June 9, 2010 | No Comments

Independent opinion polls show that a majority of Californians back federal health reform, but Tuesday’s primary election results will put those surveys to the test this fall. The two business executives Republicans nominated for governor and U.S. Senate both oppose the federal bill and have vowed to try to undo it.

Former eBay CEO Meg Whitman has said she would urge the attorney general to join other states in challenging the law. And at a rally in Modesto last week, Whitman made it personal, calling on current AG Jerry Brown — now the Democratic nominee for governor — to bring California into the litigation. She complains that the measure will be an unfunded mandate on the state and a burden on small business.

Former Hewlett Packard CEO Carly Fiorina, who won the Republican nomination to face US Sen. Barbara Boxer in the fall, says she wants to “repeal and replace” the health care reform with a more modest set of changes aimed at increasing competition in the health care market, cracking down on frivolous lawsuits and making sure that no one is denied coverage because of a pre-existing condition.

Brown and Boxer will no doubt defend the bill as the campaign unfolds. There will be many other issues debated between now and November, and the governor’s race will probably pivot on matters closer to home. But if the two business execs and political newcomers win in the fall, part of the message will be that California voters are not as happy about the new health care law as opinion polls suggested.

I’ll be following this angle during the campaign and looking to both candidates for more details on their positions on the issue.

–Daniel Weintraub

 

Cali urged to start early on new health insurance exchange

Published: May 12, 2010 | 1 Comment

The top state insurance executive in Massachusetts urged California lawmakers Wednesday to “start early” in building a new health insurance exchange that will be at the center of the state’s implementation of the federal health reform passed in March.

Jon Kingsdale is executive director of the Commonwealth Health Insurance Connector, which plays the same role in Massachusetts that the new insurance exchange will play in California. The exchange will serve as a government-supervised market where individuals and small employers can purchase insurance, many of them using tax credits and subsidies.

Kingsdale said it took Massachusetts four years to establish the exchange at the heart of the Bay State’s insurance program, and Massachusetts started with several advantages over California. The state had far fewer uninsured people, already required insurers to cover everyone without regard to pre-exisiting health conditions, and its programs for the poor and the children of the working poor were integrated.

“It’s not too early to begin,” Kingsdale told a joint hearing of the Senate and Assembly health committees.

Under the federal law, Kingsdale said, the exchange can be anything from a passive information bank and online sales site to an aggressive regulator of benefits, rates and insurance company practices.

California already has two agencies that regulate insurers and health plans, the Department of Insurance and the Department of Managed Health Care. Kingsdale cautioned legislators not to try to create a third. But he also said simply listing all the carriers and the benefits they offer in California would not be much help to consumers.

“That would be about as useful as the automated Yellow Pages,” he said.

The middle ground, he said, is to use the exchange to reduce administrative costs, increase competition, standardize benefits and give consumers power by making it easy for them to compare plans and their prices.

Kingsdale said he has been stopped on the street and thanked for the simplicity of the Massachusetts web site through which residents can buy their coverage. The plans are grouped by benefit structure and rated either “gold,” “silver” or “bronze” depending on their level of benefits.

“We make it easy for buyers to shop on price and quality,” he said.

He said the state should be selective in the carriers it allows into the exchange but still err on the side of having too many rather than too few options for consumers. He said legislators and administrators should not assume they know what kind of plans consumers will want to buy. Instead, let them vote with their dollars, he said.

The biggest risk to California in setting up its exchange, he said, was dealing with the job of automating the distribution of subsidies and tax credits. He said that would be a “Herculean task.” He suggested that if the state allows its 58 counties to continue to administer the state’s subsidized insurance programs, the result could be a logistical nightmare.
Sen. Elaine Alquist, chairwoman of the Senate Health Committee, said the exchange, with a potential 8 million customers, is going to be “one of the major pieces” of the new health system brought about by the federal reform.
“How the exchange functions,” she said, “is going to be crucial to ensuring that federal health reform is successful in California.”

 

Explaining health reform: new insurance exchange will play major role

Published: April 28, 2010 | No Comments

By Daniel Weintraub

It will be years before the new health insurance exchange at the heart of the federal health reform passed in March rolls out in California. But decisions being made now could shape how that exchange looks and works, the health benefits it makes available to consumers, how much Californians pay for their coverage and the roles played by the government and the private insurance industry.

Democrats in the California Legislature have signaled with their early proposals that will try to create an exchange with a large dose of government intervention, with a board appointed by the governor and state lawmakers that would have the power to set benefits, rates, and cost-sharing and regulate the administrative costs of insurance companies that want to sell their policies through the exchange.

The idea behind the exchange is to provide a place for individuals and small businesses to pool their risk and gain the kind of market power now available only to large groups like government and big private employers.

The exchange could simply be a bare-bones online marketplace where insurers list their products and buyers come to make purchases. Or it could be something that begins to resemble the “public option” that Democrats were pushing during the debate over federal reform but eventually dropped before their bill gained final passage.

Assembly Bill 1602 by Assembly Speaker John Perez will be the vehicle for the Assembly’s version of the exchange, at least for now. In the Senate, SB 900, by Health Committee chairwoman Elaine Alquist, is the bill to watch.

AB 1602 is the more ambitious of the measures at the moment.

The exchange in AB 1602 would, at a minimum:

–Certify health insurance companies to participate in the exchange, and decertify those that were no longer allowed to sell their products through this pool;

–Operate a toll-free telephone hotline for consumers who need assistance;

–Maintain an Internet web site where consumers could get standardized information to compare the plans;

–Create an electronic calculator consumers can use to determine the full cost of their coverage, including premiums, deductibles and co-payments;

–Rate the available plans;

–Inform consumers about eligibility requirements for public programs such as Medi-Cal or Healthy Families and enroll them in those programs if they qualify.

But those are only the basic duties the bill envisions for the exchange. The exchange could also do much more, if the state determines that federal law allows it. The expanded duties include:

–Determine who is eligible to buy insurance through the exchange;

–Set standards and selection criteria for health plans that want to sell through the exchange, including setting “reasonable limits” on their administrative expenses;

–Determine the scope of coverage for consumers who buy insurance through the exchange;

–Set premium schedules, process applications, collect premiums, and administer subsidies to low-income consumers and rates paid to the insurance companies;

–Determine the rates paid to the health plans and approve cost-sharing provisions for consumers;

The potential scope of the proposed exchange — setting benefit levels and regulating rates, cost-sharing and administrative costs — has raised eyebrows within the insurance industry. In a letter to the Assembly Health Committee, the California Association of Health Plans raised questions about the bill, suggesting that it might go beyond what is allowed under federal law.

“All of these details point towards an Exchange that is intended to be at its core a purchaser of services,” wrote Charles Bacchi, the association’s executive vice president.

In an interview, Bacchi said the group had not yet taken a position on AB 1602 but views that bill and its Senate counterpart as crucial to shaping the future of health insurance in California.

“These are very important decisions,” he said. “It is really about much, much more than just complying with federal law. It a fundamental decision about what the market looks like in the future in California. The federal subsidies come through in 2015, but the decisions we make today and next year and the year after will build up how this exchanges handles people purchasing insurance, how it handles the subsidies, the basic nature of the exchange and how it’s governed.”

Peter Harbage, a health policy consultant who has closely followed the health reform debate and legislation, said he thinks the federal law is broad enough to allow California to create an exchange with vast powers over the insurance industry.

“My sense is that the federal language in a lot of these cases is really just a floor,” Harbage said. “It is very broad. It talks about a limited role for the exchanges but there is nothing by design to preclude the staes from being more aggressive with their oversight, their contracting, what they want insurance companies to provide in order to be a part of the exchange. Insurers don’t have to participate if they don’t want to, if they think the requirements are too strong.”

 

Federal reform won’t mean end of Healthy SF program

Published: April 22, 2010 | No Comments

By Richard C. Paddock

The federal health care overhaul signed last month by President Obama will not prompt significant changes in the short term for Healthy San Francisco, the city program that provides medical care for more than 51,000 low-income residents.

And even when most major provisions of the federal law take effect in 2014, city officials say, there will still be a need for Healthy San Francisco to serve an estimated 20,000 patients who will not have health insurance under the federal law, including many who are in the country illegally.

Healthy San Francisco Director Tangerine Brigham said a preliminary analysis of the changes in federal law indicate that about 60 percent of the patients now receiving care under the innovative city program will be able to obtain health insurance and leave Healthy San Francisco once the federal law fully takes effect.

But precisely how the federal overhaul will affect the city’s universal health care program will remain uncertain until the federal government drafts regulations for the state to follow in implementing the law, she said.

“As you can imagine we are still in the process of going through the legislation,” Brigham said in an interview Tuesday. “There is much more to come once we have the federal regulations and the state has its regulations.”

The city program, which was approved in 2006 and began enrolling patients in 2007, goes farther than the federal legislation in several ways. It is designed to ensure that every San Francisco resident receives health care; it has a public option and does not exclude anyone with a prior medical condition.

Employers with 20 or more employees are expected to provide health care for their workers or pay into a fund that finances Healthy San Francisco. The poorest patients pay no monthly fee; others pay up to $150 a month, depending on their income.

The major drawback, however, is that Healthy San Francisco is not health insurance. Members who become ill outside the city have no health coverage. For that reason, Brigham said, the city will encourage patients who qualify under the federal law to obtain health insurance

“We have been very clear that health insurance is preferable to Healthy San Francisco,” Brigham said. “For one, it’s portable.”

As features of the federal law begin kicking in this year, some Healthy San Francisco members will be able to get health insurance and leave the city program.

For example, patients who had been denied health insurance because of pre-existing conditions will have access to high-risk insurance pools beginning in July. And young adults under 26 will be eligible for dependent coverage under their parents’ insurance starting in October.

But city officials say the decrease in Healthy San Francisco patients will be relatively small until 2014, when key features of the law take effect, such as the creation of subsidized health insurance exchanges for the uninsured to purchase insurance and the expansion of public health insurance programs.

But even when the federal health care overhaul is complete, Brigham pointed out, not everyone will have health insurance.

While most Americans will be required to purchase insurance under the law, there are some exceptions, she said, including Native Americans and those whose religious beliefs prohibit buying health insurance. In addition, the federal law denies health coverage to undocumented residents, who have a considerable presence in San Francisco.

Based on today’s numbers, Brigham estimates that there could be about 20,000 San Franciscans who come under these exceptions and will still need health care through Healthy San Francisco in 2014. One city clinic already is dedicated to serving Native Americans, she said.

“The provisions don’t apply to those who are undocumented,” she said, noting that San Francisco is a sanctuary city. “We would certainly still have a program for that population.”

 

Poll: Half of Californians support federal health reform

Published: March 25, 2010 | No Comments

Half of California adults support the federal health reform proposals passed by Congress this week, according to a new independent poll that was taken just before the vote and released today.

The survey by the Public Policy Institute of California found that the federal measure to expand coverage and more strictly regulate the insurance industry was supported by 50 percent of adults and opposed by 39 percent. But among likely voters, the proposal was opposed by a narrow margin, 47 percent to 45 percent.

Opinion was divided along partisan lines, with 70 percent of Democrats supporting the plan and 76 percent of Republicans opposed. About half of independent voters said they liked the proposal.

Support for the plan declines as education, income and age increase, according to the poll. Just 39 percent of people age 65 and over like the plan.

The central feature of the proposal is more popular than the entire package. Nearly 70 percent of adults and 61 percent of likely voters said they support requiring all Americans to have insurance, with the government providing financial help for those who can’t afford it. This concept had the backing of 86 percent of Democrats, 64 percent of independents and 38 percent of Republicans.

For the full survey, click here.

–Daniel Weintraub

 

How the reform bills would affect seniors

Published: March 23, 2010 | No Comments

A new policy brief from the University of California provides a great synopsis of how the health reform bills will affect seniors. I covered some of this in my analysis of the bill Sunday night, but this paper goes into more detail focused just on the elderly population and Medicare and Medi-Cal.

–The prescription drug “doughnut hole.” Currently, Medicare pays 75 percent of the first $2,830 of a person’s prescription drug costs. Then the patient is responsible for 100 percent until their costs reach $6,300. After that Medicare pays 95 percent. Under the health reform legislation, people who exhausted the first limit would get a $250 one-time rebate. This rebate would go to about a half million Californians. The legislation also creates a 50 percent discount for brand name drugs for people who are in the “doughnut hole” where they are responsible for 100 percent of their drug costs.

–Improved access to care. The bill grants a 10 percent bonus to primary care doctors who take Medicare patients. In California, only 16 counties have enough primary care docs for their population. The legislation also eliminates co-insurance payments and cost sharing for preventive services, such as cancer screening and diabetes diagnostic tests.

–Long-term care. The legislation provides $10 million a year for four years to increase funding for aging and disability resource center, which help seniors and disabled people find services they need. The bill also provides up to $3 billion to help transition people out of nursing homes and back into their own homes using community-based services. The bill also creates a new national long-term care insurance program to provide resources to care for people in their homes.

To download the full report in PDF form, click here: Health reform impact on seniors.

Photo: From the White House.
–

 

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.

 
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