The Alan Katz Health Care Reform Blog

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Posts Tagged ‘Insurance Agents’

Assembly Health Committee Hearing: Observations

Posted by Alan on November 1, 2007

On October 31st, the Assembly Health Committee held an “informational” hearing on Governor Arnold Schwarzenegger’s health care reform plan. It was a messy six hour meeting which makes it difficult to describe. Han Kim Quach, Policy Coordinator at Health Access, provides a very thorough summary of the hearing over at the Health Access blog. (Yes, the report skews things towards her organization’s position, but it’s still as thorough and helpful a recounting of the meeting as I’ve read). 

Not wishing to reinvent the wheel I’m simply going to provide some of my observations and link to what others are saying. In future posts I’ll have more to say on many of these issues.

A Deal by Thanksgiving?
If any news came out of the session, it was from Assembly Speaker Fabian Nunez. While noting the deep divide separating the positions of Democrats in the Legislature from those of the Republican/Post-Partisan Governor, he expressed a strong interest and commitment to reach a compromise by Thanksgiving. Whether this is wishful thinking, posturing or a realistic evaluation of the current status of negotiations is open to interpretation. Clearly there are strong political currents driving Speaker Nunez, Governor Schwarzenegger and Senate President Pro Temp Don Perata to find common ground. All of them need a win to come out of this special session. The Governor has created huge expectations, failing to deliver is an option he’d rather not accept.  Speaker Nunez and Senator Perata need to demonstrate to the public that their Legislature can deliver solutions to the state’s problems, preferably prior to the vote on their initiative to modify term limits. Perhaps its no coincidence that the Field Poll reported a sharp drop-off in support for their ballot measure the day of the hearing. This is not to say the Big Three don’t sincerely want to improve California’s health care system. It’s simply to note other motivating factors at play. What also might have been going on is an attempt by the Speaker to prevent failure to become a self-fulfilling prophecy. The San Diego Tribune ran an article yesterday that concludes health care reform is dead for the year and George Skelton in the Los Angeles Times today claims time is running out. I disagree, but that’s certainly becoming the conventional wisdom.

Lawmakers Want to Be Heard
The Big Three aren’t the only ones with a desire to reform California’s health care system. Rank-and-file members of the Legislature do, too. From the very beginning of the year, however, most of the substantive discussions on reforming California’s health care system has primarily been among the Governor, the Speaker, the Senate President Pro Temp and their staffs. Yes, others have had their chance to provide input, but real negotiations have been among a relatively small group. This has to be frustrating to other lawmakers. It’s one of the biggest issues of the day, their constituents care about it, and they’ve had limited opportunity to make a difference. Given an opportunity to insert themselves into the process during the hearing, they took full advantage. Normally one might have expected California Health and Human Services Agency Secretary Kim Belshe’s overview of the Governor’s plan to take around half an hour. Members of the Committee pelted her with questions for nearly two hours. She did a masterful job covering a broad range of topics — and criticism — from both Democrats and Republicans. The San Jose Mercury News report does a good job of describing this aspect of the hearing. The questions were substantive, so maybe I’m just being naive, but to me there was a sense of frustration and a desire to be heard underlying the grilling. As is often the case, once Secretary Belshe’s portion of the program many of the Legislators left the hearing. Once the next panel, this one from the Legislative Analyst Office, was over, even more had other places to be. But before they left, they made sure their views were known. 

Conventional Wisdom: It’s Broken
If participants at the hearing were required to pay a dollar every time they uttered the phrase, “California’s health care system is broken” we could finance coverage for every resident and half of Nevada’s, too.  Speaker Nunez used the term in his opening remark. Secretary Belshe did, too. Democrats, Republicans, conservatives, liberals. They all used the phrase like it was part of some religious liturgy. Over and over and over. I didn’t stay for the entire hearing, but I believe my testimony was the only one which pointed out that, while the system needs improving, it works well  for millions of Californians and that premiums in the state are substantially below the national average. While a few folks pointed out the state’s low Medi-Cal reimbursement rate is a problem, I don’t think anyone else noted that the state is failing to enroll the 15 percent of the uninsured already eligible for existing state programs.  Yes, the system needs improving, but the message from the hearing is that it’s broken nearly beyond repair. This is a dangerous conventional wisdom to foster, because eventually the average voter asks, “If it’s so broken, let’s throw the whole thing out and start over from scratch.” Or, while they realize the promises of a single-payer solution are overblown, they figure it can’t be any worse than today’s broken system. I understand the need to create a political window of opportunity for change. But by focusing exclusively on the problems without pausing to recognize the benefits of what we’ve got, folks are playing with fire. Of course, those who advocate a single payer system are delighted as polls show the consistent and constant negative drumbeat is working to their favor.

Affordability is the Key
Want a solution to the health care reform deadlock? Make coverage affordable. If there was a way to offer coverage with premiums and out-of-pocket expenses limited to no more than 5-to-10 percent of their incomes, it would pass faster than you can say “vote for me.” And that’s what’s interesting. Affordability is defined by the effect, not the cause. The effect is health insurance premiums and cost-sharing. The cause is the cost of medical care and utilization, but no one other than Jeff Shelton, Vice President of State Government Relations for Health Net and me brought that up. Buried in the Governor’s plan are several proposals to reduce the underlying cost of care. These ideas have broad, bi-partisan support. As a separate bill they’d be on the Governor’s desk already. Someone should step forward and introduce them separately because it would be the first step toward meaningful reform.

Which Came First, the Chicken, the Egg or the Omelet
Everyone wants everyone covered by insurance. However, there’s bit of a chicken-and-egg phenomena going on here. If everyone is to be covered, everyone needs to be able to buy coverage. But unless everyone actually obtains coverage guarantee issue in the individual market will be a disaster (see New York or New Jersey). So which do you do first? Well, you can’t ask people to buy coverage unless they can afford the coverage. And unless someone can constrain utilization and medical costs, prices will continue going up (see the previous point on the affordability). This means to be successful, reform must guarantee affordable coverage on a guarantee issue basis while simultaneously and successfully quaranteeing everyone buys coverage. Lets skip the chicken and the egg and just go straight to the omelet.

The Role of the Agent: Anyone Listening?
It was terrific that CAHU and NAIFA-California were invited to testify. It was recognition that we have a perspective that needs to be heard. So some folks clearly understand our role in the system and think it’s meaningful. That’s the good news. The bad news is a lot of folks have no idea what we do. During my panel someone commented that buying health insurance is too confusing for consumers. To help them every carrier should be required to offer a set of identical plans allowing for an apple-to-apple comparison. I’d already testified so I couldn’t jump in, but it was tough not to. My guess is she was thinking about her own testimony instead of listening to mine (understandable, I did the same thing <g>). But I’d just talked about how we help consumers find the right plan for their unique needs. The problem is that the attention is on the big fight (guarantee issue, affordability, employer fees) and the issues important to agents simply aren’t as exciting. So while we plug away — and make progress — behind the scenes, there’s a long way to go to educate the broader public.

What You Read is Not What They Got 
Confession time. You can read the testimony I intended to deliver. You can read the press release CAHU issued about the testimony I intended to deliver. You can even read CAHU’s Healthy Solutions health care reform plan which was given to every Committee member. But the reality is, I didn’t deliver that testimony. Presentation time was cut to three minutes so I basically winged it, touching on as many of the key points as I could cram in. But at least this provided me a paragraph in this post in which I could provide links to the testimony and the press release.

So that’s the highlights of what I took away from the hearing. There’s a lot more debate to come. Of course, the big question is, will anything actually come out of all this?


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