The Alan Katz Health Care Reform Blog

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Posts Tagged ‘Healthy Families’

California Health Care Reform: A Few Slices is Better Than None

Posted by Alan on December 6, 2007

After months of wrangling, the odds of a negotiated compromise on comprehensive health care reform this year is looking dim. Governor Arnold Schwarzenegger still talks optimistically about fashioning a deal and Speaker Fabian Nunez continues to hold out hope. But most observers, and I am reluctantly among them, have grown increasingly skeptical.

The work done to date will no doubt serve as a starting point for the next push for health care reform. Hopefully that push can begin next month. It would be a shame if the issue is completely pushed aside in 2008. There will be plenty to distract lawmakers next year, but the human cost of delaying meaningful health care reform will hopefully justify carving out some time to try to bridge the remaining gap.

In the meantime, the effort that’s gone into trying to fashion a compromise during the current special session need not go to waste. There’s substantial, bi-partisan support for cost containment measures that could be enacted independently of wider reforms. There’s a recognition that California should not have the lowest Medicad reimbursement rates in the country — the California Hospital Association is even willing to help fund an increase. If the President and Congress ever end their shameful delay in reauthorizing the State Children’s Health Insurance Plan (SCHIP), California should find a way to improve outreach for its Healthy Families program.

These are slices of the loaf, but they’re far more than crumbs. Any effort to make coverage more affordable — as containing costs would do — will make more comprehensive reform easier to achieve later. Increasing federal health care dollars coming to the state, as improving Medicaid reimbursements would do, makes sound financial sense. And providing more children access to health care is not only sound public policy, but also pays financial dividends in the long run.

Settling for mere slices when you’ve worked so hard for the whole loaf is disappointing. Yet enacting pieces of the larger package makes political sense, too. Otherwise, after all the talk and pain, there will be nothing to show for the past year’s efforts other than  … well, talk and pain.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform, Politics | Tagged: , , | Comments Off on California Health Care Reform: A Few Slices is Better Than None

Health Care Reform Lemonade

Posted by Alan on November 11, 2007

They tell me that in golf (I wouldn’t know, believe me), what separates good from fair players is not how far they drive the ball, but how well they recover from a bad shot. Because everyone makes bad shots now and then.

In politics it’s pretty much the same: making lemonade from lemons. In 1992, Governor Bill Clinton was hammered by a host of damaging news stories just before the New Hampshire primary. Instead of winning the state, he came in second.  For some that would be the end of the road. Bill Clinton, however, celebrated the results, proclaiming himself the “Come Back Kid” and no one cared that Senator Paul Tsongas had come in first. 

The Democratic Leadership and Governor Arnold Schwarzenegger may be close to a compromise on health care reform. But as Dan Walters in the Sacramento Bee warns, “If health care … is worth doing, it’s worth doing right. It’s time for those involved to step back, take deep breaths and stop this madcap rush to do something just to say they did something.”

Substantial differences exist between Speaker Fabian Nunez and Senate President Pro Tem Don Perata on one side and the Governor on the other. And they’re playing with fire. If they fail to find the right balance between, to cite one challenge, requiring everyone to obtain health care coverage and a way to make coverage affordable, they could create a mess which will leave the state’s health insurance market in shambles. (And it won’t do much for the careers of some ambitious politicians, either), There are several issues on which a delicate balance must be struck and they’re performing without a net. Taking the time to get it right is of paramount importance.

But what if they can’t? What if, after all the press conferences, proclamations, negotiations, time, money, special session, raised expectations, near misses and pain there’s no deal? What’s the recipe for lemonade in that scenario?

My recommendation is that they pluck three lemons to work with.

1. Constrain Medical Costs
Every health care reform plan on the table includes provisions to control health care costs.  The approaches laid out by Democrats, Republicans and the Post-Partisan Governor overlap and, where they don’t, they often compliment one another. For example, most call for leveraging technology. Most include ways of promoting healthier lifestyles and preventive care. There’s some differences, but not much. It would take a week or two to fashion these ideas into a single, meaningful bill — one that would pass overwhelmingly and cost very little.

2. Capture Federal Medicaid Funds
California has one of the lowest Medicaid reimbursement rates in the country. This is wrong on many levels, but perhaps most significantly because the Federal Government matches a percentage of what the state pays. By underpaying for Medi-Cal (the state’s Medicaid program) California is failing to obtain from Washington what the state is due. This situation is so absurd the California Hospital Association accepted the Governor’s proposal to tax hospitals four percent of their gross revenues so long as the money is first used to fully fund Medicaid reimbursement. For most hospitals in the state the combination of increased reimbursement and federal funds more covers the revenue tax. If comprehensive health care reform is out-of-reach, capturing these federal funds is still possible. And the federal matching funds would help the state reduce the growing deficit.

3. Keep Our Promise to the Uninsured
Expanding affordable health care coverage for all Californians is the goal, but if it’s out-of-reach for now, let’s at least keep our promise to those already eligible for existing state programs. Nearly one million Californians — about 15 percent of the uninsured in the state — are eligible for Medi-Cal and Healthy Families, yet fail to enroll in those programs.  CAHU’s Healthy Solutions reform plan makes several low- and no-cost suggestions on how to improve outreach programs. Better yet, the Governor and Democratic Leadership should propose restoring $66 million in funds cut from the budget this summer, which was to be used for enrolling more children into Healthy Families. Given the state’s budget situation, it is only prudent to identify the source of new spending. I nominate eliminating the tax loophole benefiting out-of-state yacht purchases. I don’t know how much revenue this would generate, but every penny should be devoted to enrolling children already eligible for Healthy Families. Given that direct a trade-off — reducing the cost of boats for rich yacht owners or providing health care coverage to poor children — even the most fiscally conservative legislator would be hard pressed to claim helping out-of-state yachts sellers is a better use of funds. A bi-partisan spending bill would be a sight to behold.

It would be terrific if meaningful, workable, fair and affordable health care reform can come out of Sacramento in 2007. But it may be the only result will be, as Dan Walters described the state’s 1996 electric utility reforms, “a monumental pile of unintended consequences.” Enacting meaningful cost containment, capturing federal funds and keeping existing promises made to the uninsured would be no small accomplishment. Lawmakers could rightly claim a partial victory. It would address serious problems and lay the groundwork for more comprehensive reforms down the road. That’s a lot more than lemonade, that’s sound public policy.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , | 1 Comment »

Three Health Care Reform Questions

Posted by Alan on November 2, 2007

The health care reform debate has been going on for so long here in California folks seem to have adopted a short-hand for referring to the issues. “Affordability” carriers a lot of weight for just six syllables. “Individual Responsibility” is another phrase with a heavy load. The danger is that this negotiation fatigue boxes out other issues. So here’s three questions I wish folks were asking:

  1. Why is there no outcry concerning the one million Californians who are eligible for, but fail to enroll in, Healthy Families and Medi-Cal?
    You’d think this would be everyone’s number one priority. First, because it’s the right thing to do. Second, reducing this number would demonstrate the state’s ability to deliver on it’s earlier health care reform promises. Third, it’s an easy win as the one million Forgotten represent about 15 percent of the state’s uninsured. CAHU has focused on this situation in its Healthy Solutions reform plan, but no one else seems to mention it. Why isn’t the Legislature holding someone accountable? Why isn’t the Governor calling someone on the carpet? This, of course, assumes someone is responsible. But if so, whatever they’re doing now isn’t working well enough. It’s time to try something new. Healthy Solutions contains a laundry list of ideas. Others no doubt have even better ones. The answer: hold one person accountable, give this person the authority, flexibility and resources to make something happen and a deadline by which it needs to happen. If they can’t deliver, find someone who can.
  2. Why does everyone assume there has to be just one minimum plan?
    At the Assembly Health Committee hearing on October 31st, there was a great deal of discussion about the minimum benefit package. And there should be. If individuals are required to have coverage, it’s useful to know what that coverage might be. Yet the underlying assumption of those questions was that there’d be just one minimum plan. But why? People have different needs. For some, a high deductible plan is a good deal; for others it means access to health care remains out-of-reach. Healthy Solutions recommends three minimum plans (in addition to Healthy Families and Medi-Cal): any HSA-eligible plan; a high deductible catastrophic plan; and a core plan with lots of first dollar benefits, but lower annual and lifetime caps (CAHU borrowed the attributes for the Core plan from a package currently available to farm workers). There are no doubt other acceptable minimum benefit plan designs out there. So why limit the debate to coming up with just one? The answer: put some actuaries in a room and don’t let them out until they produce three or four roughly equivalent plans designs that address the needs of a diverse population. Then let the policy wonks play with them. But at the very least negotiators need to acknowledge the need for more than one minimum plan.
  3. Why are business problems evidence of the failure of the private sector, but the shenanigans of public officials doesn’t seem to worry anyone?
    There are those who hold up the mistakes, crimes and foolishness of some corporate players as conclusive evidence that the private sector is incapable of delivering a fair health care system. Yet there are plenty of examples of government agencies and public officials who are also guilty of mistakes, crimes and foolishness (I can name names if that’s necessary, but I’m sure you can, too). Shouldn’t this be conclusive evidence for these same folks that the public sector is incapable of delivering a fair health care system? The answer: There isn’t one, really. People need to recognize that we’re dealing with human institutions here, perhaps a little less stone throwing would be a wiser approach to the debate. Unfortunately, all sides seem to take comfort in the rockier side of the debate. 

These are three of my questions I wish would be more widely considered. What are yours?

Posted in California Health Care Reform, Health Care Reform, Healthcare Reform, Politics | Tagged: , | 2 Comments »

State Children Health Insurance Program Problems Don’t Bode Well for Health Care Reform

Posted by Alan on September 27, 2007

Most of the health care reform packages likely to be considered by the Legislature during its current special session will include provisions to expand the State Children’s Health Insurance Program (SCHIP). SCHIP is known as Healthy Families in California. So the political drama unfolding in Washington concerning SCHIP is critical to the state. It also should serve as a warning, especially to those advocating a central role for the government in delivering health care.

Here’s where SCHIP currently stands: On September 25th the House of Representatives reauthorized SCHIP on a relatively bipartisan vote (45 Republicans voted for the bill; eight Democrats voted against it).  The legislation, H.R. 976, provides additional monies for the program and, most importantly, continues the program past it’s sunset date of September 30th — yes, as in this coming Sunday. The Senate will now consider the bill and is expected to pass it as written. This means no conference committee will be required, the measure simply goes to the President’s desk. So far, so good.

However, President George Bush has committed to vetoing the bill. One reason is the cost: the President wants to increase SCHIP spending by $5 billion over five years; Congress is seeking to increase spending by over $35 billion during this time-frame. More significantly, the White House objects to expanding eligibility for the program beyond it’s current income levels, arguing that doing so is “an incremental step toward the Democrats’ goal of a government-run health care system.” Even with Republican support, the House is unlikely to overturn the President’s veto. HR 976 passed with 265 votes in favor; it takes 290 votes to override the President.

The good news is that the SCHIP program is unlikely to end on September 30th. Congress will either tack on short term funding to an existing continuing resolution. If that doesn’t interim funding could be passed as stand-alone legislation. Then the battle for long-term continuation of the program will start-up again.

There’s more than a political soap opera going on here. What we’re also witnessing is a warning. When the government controls health care, it means health care is political. Decisions are not made to respond to market pressures or consumer demand, but to satisfy the politics of the moment. There likely will be an short-term extension of SCHIP. But then again, maybe not. Remember when President Bill Clinton and the then-Republican Congress shut down the federal government they reached a budget impasse?

2007 has provided advocates of government-run health care with lots of cautionary tales: the California budget stalemate; a California budget which slashes funding for mental illness programs and outreach for health programs like Healthy Families; and now the veto of SCHIP funding. There are problems with the current system, but I can’t help but believe that politicizing health care would only make things worse.

Posted in Health Care Reform, Healthcare Reform | Tagged: , , | 2 Comments »

Carpe Diem — or at Least Seize the Special Session

Posted by Alan on September 21, 2007

There are actually two special sessions in Sacramento right now: one on water; the other on health care reform. For reasons due to the timing of potential initiatives, water is the first focus. And from what I hear it’s not going well.

But that’s legislation under the bridge (sorry). In a few weeks the Legislature will turn it’s attention to health care reform in earnest. There will be tremendous pressure to do something. After the budget fiasco, the failure to address reapportionment, perhaps inaction on water, Governor Arnold Schwarzenegger, Speaker Fabian Nunez and Senate President Pro Tem Don Perata need a victory of some kind to salvage the reputation of the the 2007 Legislative Session. This is especially important for the Legislative Leadership who will be asking voters to approve a change to term limit laws on the February ballot. If the initiative passes Speaker Nunez and Senator Perata will likely remain in their positions for several more years. If it fails ….

So health care reform might be the last lifeline left to our heroes. Which means something is likely to emerge from the special session. What’s not known is what.

Many observers I’ve talked to are increasingly pessimistic that comprehensive reform will move forward. They think some insurance market reforms may pass, specifically the requirement that 85 percent of premiums be spent on health care services. But when it comes to insuring more Californians, they consider expansion of Healthy Families eligibility to cover more children is the only likely accomplishment (this would be ironic since approximately $66 million promised for enhancing Healthy Family and MediCal outreach programs was cut from this year’s budget).

This may sound reassuring to those who are concerned lawmakers, in their great need to pass some health care reform legislation will pass bad health care reform legislation. Certainly there’s a lot to be worried about. The 85 percent heatlh care services mandate, as currently proposed, will likely increase premiums and decrease competition, especially in the individual and small group market segments. A requirement that carriers accept all applicants, regardless of their risk profile passes, without an effective mandate for individuals to purchase coverage before they’re on their way to the emergency room, individual insurance premiums will skyrocket and carriers will flee the state. The purchasing pool could become a black hole, sucking up more of the marketplace than is healthy for the state’s economy or the private marketplace. And that’s just the start. There is plenty to fear from getting health care reform wrong.

There’s also much to fear in doing little, or even worse, nothing. There are real problems in today’s health care system. Insurance reforms are a part of what’s needed. It’s not the only part needing a fix, far more important is the need to deal with escalating health care costs.  Yet politics being what it is, the focus now is on the insurance industry. If not changes emerge from Sacramento, the demand for “doing something to stop the evil insurance companies” will continue unabated. Doing something, if it’s done right, will enable politicians, the media and the public to focus on deeper and more serious problems.

Another reason to do something right now is to deflate the momentum of building behind single payer alternatives like SB 840. There is likely to be an initiative next year to bring a Canadian-style system south to California. It will be much easier to defeat — as it should be for a host of reasons — if voters perceive lawmakers as addressing their health care worries.

Finally, it’s important to do something constructive on health care reform because it’s the right thing to do. In unveiling his reform package, the Governor state, “The status quo can no longer be everyone’s second choice.” He’s right. The issues have been on the table long enough. What we need now is to address those issues and then move on. What will be interesting to watch is whether the way lawmakers seek to address health care reform is aimed at scratching their political itch or in enacting constructive, meaningful public policy. We’ll know in a few weeks.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform, Politics, Single Payer | Tagged: , , , , , | Comments Off on Carpe Diem — or at Least Seize the Special Session

Budget a Bad Omen for Insuring the Uninsured

Posted by Alan on September 17, 2007

As lawmakers prepare for a special session on health care reform and the Governor touts a broad coalition backing universal coverage, the recently enacted budget should serve as a reality check.

Governor Arnold Schwarzenegger and his staff has made clear that any reform package emerging from the special session needs to include an “enforceable” requirement for every Californian to obtain health care coverage. This makes sense. Requiring carriers to issue coverage to all applicants without a corresponding mandate to buy is a formula for disaster. People are logical. If it makes economic sense to simply wait until medical services is needed before buying coverage that’s what they’ll do. Of course, when healthier individuals exit an insurance pool, overall claims increase which leads to higher prices for those remaining. This drives more low cost individuals from the pool and premiums move even higher. Eventually you wind up with New Jersey where the average premium for individual health insurance is 350 percent higher than in California.

So the state’s promise of passing an enforceable mandate to buy coverage along with a mandate for carriers to sell that coverage is critical to the overall health care reform package.

One of the tenants of the California of Health Underwriters’ Healthy Solutions health care reform plan is that the state should demonstrate it can meet its current obligations before making new promises. Unfortunately, to date, the state has failed in this regard. As the Healthy Solutions document notes, as many as a million Californians are eligible for state-run health care programs, yet fail to enroll. According to the California Health Interview Survey, 447,000 children are eligible for, but not enrolled in, state health programs. Healthy Solutions calls on the state to first enroll this group before creating new programs.

It seemed the state was going to do just that. Earlier this year the Governor held a press conference at the Northeast Valley Health Corp clinic in the San Fernando Valley promising additional state funds to support enhanced outreach.  According to the Los Angeles Daily News, the commitment was so firm nonprofit health clinics and local government agencies had already increased staff to bring many of those 447,000 into the state’s Healthy Families and MediCal programs. Yet, as part of the deal to pass a budget, an estimated $66 million was cut, resources which health advocacy groups told the Daily News would have enrolled about 100,000 children during the current fiscal year. The Northeast Valley Health Corp had hired nine people in April for this effort. At least half will now be let go and the others reassigned.

So, here’s what we’re about to witness: Legislative Leaders and the Governor will announce plans to expand eligibility for Healthy Families and MediCal. They’ll promise to enforce a requirement for all Californians to obtain health care coverage and offer premium subsidies to those in households with less than 400 percent of the Federal Poverty Level. At roughly the same time, the Northeast Valley Health Corp will be laying off roughly half of the nine people it hired in April to expand outreach to children and reassigning the rest.

This strikes me as a credibility problem of near Lyndon Johnson-like proportions. As CAHU suggests, the state needs to keep its current promises before making new ones. Yet the budget fiasco of 2007 demonstrates this may be beyond its ability.

At the very least all of this should (but won’t) give advocates of single-payer programs pause. After all, it’s a pretty bad omen when a liberal Legislature and a moderate Governor fail to reach out to 100,000 kids. Imagine what might happen when the pendulum swings to a conservative state government. And the pendulum always swings.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , | Comments Off on Budget a Bad Omen for Insuring the Uninsured