Dept. of Insurance

Friday, June 29, 2007

Our paper on how few assets California families have suggests a broader distinction between health coverage and other types of insurance.

Insurance is typically bought to protect one assets, in case of a flood, fire, earthquake, a lawsuit, car crash, etc. You have an asset, you want to insure it, so if you lose it, you get some money back. When I bought a house, I got insurance so that if we lost it, we could not start from scratch to replace it. I also got life insurance at that time, so that if I died, my family could retain our home without the resource of my income. But typically, people of lower incomes or few assets don't have insurance, not just because they didn't have the money to buy insurance, but because by definition they don't have significant assets to protect.

We appropriately ask much more of health coverage. We ask that it facilitate us to get the care we need, so we can stay healthy, manage chronic conditions, and deal with the sudden emergency. It's different.

That's why the high-deductible coverage doesn't make sense for many, even if it does in other types of insurance, which are geared toward smaller fractions of the population. The oft-made comparison to car insurance misses the point, that it is focused on a self-selected subsection of the population.
posted by Anthony Wright | Permalink | 9:07 PM


 

We'll always have Paris...

Michael Moore's SiCKO is out today, and many health care activists are leafleting moviegoers at a theater near you. It only adds to the momentum to reform, not just now and its run in theaters, but into the next year, with DVD sales, cable TV showings, etc.

On The Daily Show with Jon Stewart earlier this week, Michael Moore complained that
he was all set to have the hour with Larry King, but then he was bumped for Paris Hilton. For those excited by the power of Moore's fame and media savvy to focus on health care issues, we learn that celebrity-driven attention can cut both ways.

That's the second or third time Paris Hilton has provided a useful lesson in health care politics recently. Earlier, her stint in jail for driving while intoxicated put a spotlight on the personal driving records of LA City Attorney Rocky Delgadillo and his wife, who didn't have car insurance, despite the fact that its mandatory. Just a reminder that a plan with an "individual mandate" isn't universal, just like mandatory care insurance isn't universal, even to a well-educated, top-ranked lawyer.

What else can Paris Hilton teach us? A visit by Paris to Paris to learn more about the French health system? An investigation to whether her family's hotel empire provides coverage to their workers? I see a health policy beat for the tabloids...

Labels: IndividualMandate, InTheNews, SiCKO

posted by Anthony Wright | Permalink | 8:33 PM


 

Taking the challenge on high deductibles...

We've gotten good response from our discussion paper about high deductibles... The omnipresent Don McCanne cites it as his Quote of the Day, for example.

The paper was an honest response to a question by Governor Schwarzenegger and others, which is "Isn't a high deductible policy better than nothing?"

For some people, yes, especially if they have significant assets to protect. But usually, those folks also can afford-and choose-comprehensive coverage.

We have talked to many people where an unexpected $5,000 or $10,000 medical expense is the straw that breaks the camel's back in terms of the family finances, with the kind of debt people already carry.

But is that indicative? Our paper suggests it's not just the lowest-incomes, but well into the middle third of the population.

For this middle third, a one-time incidence wipes out the family savings, including the family car (if it is possible to live in CA outside the Bay Area without a car). A chronic condition over even a few years could still lead to bankruptcy. Imagine the heart attack followed by heart disease.

The other problem is the health impacts. A middle-class patient with a high deductible is going to do every possible thing not to go to the emergency room, since even a quick visit, much less being admitted in the hospital, means their savings is gone. One of our uninsured stories we highlighted didn't go to the emergency room, even with a severe stomach ache, fearing the bill. Similar to somebody with a high deductible, he thought the visit would have been in the thousands, but his reluctance to go to the ER led to a ruptured appendix. That cost him his health, his ability to work for a few months, and was far more expensive for not just him, but the health system as a whole.

But given the financial state of his family (and most families), he made an economically rationale decision. The point of health insurance is to change that equation. If it doesn't change, is such a high-deductible plan worth it, regardless of how cheap the premium is?

Labels: OtherBlogs, Research, Underinsurance

posted by Anthony Wright | Permalink | 7:51 PM


 

Don't take it from us -- here's what others say....

A bunch of interesting public opinion polls have come out recently, so I'll summarize a few of the key points from them here.

PPIC released a poll Thursday showing that 72% of Californians think the state's health care system is in need of major changes. (Take THAT Blue Cross!) Voters, however, are a little less confident that the guv and Legislature will be able to broker a deal (49%).

Another interesting point: 72% of voters support the guv's idea to require residents to have health insurance. From my previous readings, I actually thought voters weren't really hot for such a mandate....but I'm wondering if it's the WAY the question was posed that evoked that response.

The question, verbatim, was: "Would you favor or oppose a plan requiring all Californians to have health insurance, with costs shared by employers, health care providers and individuals?"

Lastly, a SURPRISING number of Californains (73%) said the US should provide health coverage to all children, even if it would require higher taxes. Hopefully Congress and Bush, who are in the process of giving the State Children's Health Insurance Program way too little money hear that.

Poll #2 out of Massachusetts: The Kaiser Family Foundation found that two-thirds of Massachusetts residents polled supported the new law, though support dropped to 57 percent when asked about the individual mandate -- which would penalize those that didn't buy coverage.

The most interesting piece of this poll to me was the part asking about affordability of the plans for people forced to buy coverage on their own without subsidies.

Scenario 1 37-year-old single adult, earning $42,000. The plan:

• Costs $259 a month
• Has a $1,500 deductible; $5,000 maximum out-of-pocket
• Allows 3 doctors visits at $25 a year (the rest would be full-price)
• After the deductible is met, 20% co-insurance
• Generic drugs $15, but brand name drugs would be 50% co-insurance.

62% of respondents said this plan was "unfair;'' 58% said it was an unreasonable amount; 62% said this person would remain vulnerable to high medical bills.

The piece about affordability is key as we in California consider what is reasonable and fair for people to pay. The governor's plan requires a $5,000 deductible and $10,000 maximum out-of-pocket for someone earning $26,000. Looking at what people think in Massachusetts, the super-majority of people would say that's unaffordable.

Labels: Affordability, ExpandingCoverage, IndividualMandate, Schwarzenegger, Underinsurance

posted by Hanh Kim Quach | Permalink | 12:02 PM


 

Comprehensive, not Catastrophic

Thursday, June 28, 2007

HEALTH ACCESS UPDATE
Thursday, June 28th, 2007

HIGH DEDUCTIBLES WOULD WIPE OUT MANY MIDDLE-CLASS CALIFORNIANS
* New Health Access Paper Calls for Comprehensive Coverage
* Shows “Catastrophic Coverage” Not Meaningful to Majority With Minimal Assets
* Majority of Californians Could Lose All Savings Under Gov’s Minimum Mandated Plan

New on the Health Access WeBlog: Blue Cross Ad; Maternity Coverage; Denied for Heartburn


As the weeklong “Road to Reform” tour wraps up with a major health care rally in Sacramento today, a new report reveals the need for Californians to have comprehensive, rather than catastrophic, coverage. The Health Access Foundation released a paper showing that many middle-income California families, who lack significant assets, would not benefit and possibly be burdened by such high-deductible plans.

The report, “Thin Protections: High Deductible Plans Provide Little Comfort for Asset Poor Middle-Income Families” shows how middle-income Californians are already living on the financial edge. With a high deductible health plan, more than half of the state’s families could still lose all of their life savings in one year, from a single major medical incident.

These findings are central to the discussion on health reform and the inclusion of high-deductible plans. Governor Arnold Schwarzenegger’s plan includes a reliance on high-deductible health plans as a minimum standard, forcing all Californians, even those with employer-based or public coverage, to have at least a plan with a $5,000 deductible and $10,000 out-of-pocket cost maximum. There would be no subsidies for Californians above $25,500/year, or $42,000/year for a family of three.

Proponents of high deductible plans instead tout them as “catastrophic coverage,” as financial security to protect a family’s assets in an emergency.

However, this pre-supposes that the individual or family has assets to protect. This Health Access paper surveys the literature on the savings and debt of California families, and concludes: providing or requiring high deductible health plans does not provide a benefit to a majority of Californians, who have minimal assets to protect.

A review of the literature on Californian's assets and debts reveals:
* 40% of Californians have a net worth of $7,000 or less, including their car, 401(k) plans, savings, although excluding any home equity. An additional 20% have a median net worth of just $12,333.
* This 60% of California would, with a $5,000 deductible and out-of-pocket maximum of $10,000, would likely have to, in the best case scenario, deplete all savings and sell the family car to deal with one major medical incidence in just one year. A chronic condition over several years would bankrupt such families.
* While most people have their savings invested in their home, California ranks 49th in homeownership among the 50 states. In California, a majority of income groups, even up to those who make up to $50,000/year, do not own a home, as is the case with significant percentages of those even above that income (40% of all Californians, and those between $50,000-$75,000/year, also don’t have a home).

Consumer advocates argue that Californians need comprehensive coverage, not the catastrophic coverage that would still leave many middle-class families financially vulnerable. Under a high-deductible plan, many middle-class families would still be wiped out by a one major medical incident, or face bankruptcy if they have an ongoing chronic condition. Advocates state that paying a premium, even a cheaper one, isn’t worth it if the insurance doesn’t provide needed care upfront, or provide financial security after an emergency. For these middle-income families, these high-deductible plans would be a burden, not a benefit.

Health advocates have also attacked high deductible health plans as discouraging the needed care that health coverage is supposed to provide. Compared with the overall population, patients with high deductibles are half as likely to go to the doctor, half as likely to fill a prescription and half as likely to go to an emergency room. While some high deductible plans may provide some limited preventative care upfront, none provides the disease management of chronic conditions that are proven to not only improve health outcomes, but also save health care costs.

The report can also be found at www.health-access.org.

Consumer advocates have argued that any health reform plan should have guarantees of affordability, not just for the premium, but for the deductible and overall out-of-pocket exposure. Health Access will release another paper next week that focuses on defining affordability for consumers.

This message was a theme of the It's Our Healthcare "Road to Reform" tour, a four-day, six-city series of events starting in San Diego on Monday and ending today in Sacramento with a boisterous rally. The public campaign continues to move forward, working to involve regular California consumers in the health care debate, at:
http://www.itsourhealthcare.org/index.html

Health Access California's resource page on health reform is at our website at: http://www.health-access.org.

Our blog, updated daily, has other updates on the health reform debate this year:
http://www.health-access.org/blogger.html

Labels: Research, Underinsurance, Updates

posted by Anthony Wright | Permalink | 7:42 PM


 

This is NOT from Publisher's Clearinghouse..

The lawyer for a deceased client in LA was a little surprised when she opened her client's bill and found a $1 million .... bill.

The hospital bill for $962,120 was 20 times what the lawyer had been told her client owed for her four-day stay at the Glendale Adventist Medical Center falling and suffering minor injuries last year, according to an LA Times story today.

That's right. The bill was 20 times higher than what the hospital quoted as $46,106. And what the hospital quoted was 10 times higher than what the insurance company's rate, which was $4,350.

These numbers, while imposing, are typical -- if you're uninsured. The client HAD insurance, and only had to pay $150.

But uninsured? If you're lucky, you'd get the $46,106 bill. Not? You'd better hope Ed McMahon comes knocking on your door with sweepstakes prizes.

Labels: Affordability, Hospitals, InTheNews

posted by Hanh Kim Quach | Permalink | 5:53 PM


 

No maternity! No new drugs! Buy now!

Wednesday, June 27, 2007

It's rare when a company advertises what its products don't do. Except if you are Blue Cross.

Saw another newspaper ad by Blue Cross yesterday trying to place some doubt onto health reform. Oddly, the pitch was the insurer wanted to "continue to provide consumers more choice and flexibility, and keep premiums affordable--for example offering plans without maternity coverage for seniors and plans that cover only generic drugs."

Let's look past the false statement that places their "premiums among the lowest in the country." California actually ranks in the middle of the states in terms of health care costs.

Some of their products may have a lower premium that others, but are we comparing similar products? Is it really a more "affordable" product if it doesn't cover as much, and sticks you with the bill later? So if your next ailment requires a new drug, rather than one where a generic is available, that plan would be immediately unaffordable.

More importantly, by charging some people less, it means that others get charged much more. Blue Cross, who wants to charge women of child-bearing age more than the rest of us, might want to think they get off easy. My wife, who endured a 48-hour labor, might disagree. (The fact that they chose to illustrate this ad with a young mother, father, and baby is even more galling.)

Despite all the carping about the mandated benefits in California, Blue Cross says they specialize in "giving consumers more innovative coverage options than anywhere else in the country." Choice isn't a virtue if the choices are bad ones--and in this situation, for both for the individual consumer and the system as a whole.

Labels: BlueCross, Insurers, YearOfReform

posted by Anthony Wright | Permalink | 5:04 PM


 

Women and Health and the Glass Ceiling

We all know gender inequality issues still exist in the workplace. Men still get paid more than women. Fewer women are promoted than men.

Another place where gender discrimination is allowed to tacitly continue is in health care. As recently as 2002, women were charged copays of between $500 and $2,000 to deliver babies. Meanwhile (mostly or only men) who had prostate surgery, back surgery, brain surgery, coronary bypass surgery did not have to pay copays.

(Some might argue that maternity costs more. Not so. Average costs for labor and delivery was $1,980 then. Meanwhile, average costs for surgeries for those other procedures ranged from $4,422 to $29,539 -- okay, now i'm really annoyed).

Why am I upset about this now?

Here's the situation: Gov. Arnold Schwarzenegger and Republican cohorts are constantly calling for "flexibility" that would allow insurance companies to offer consumers more "choice'' and more "affordable'' options.

What they really mean is getting rid of a host of "benefits'' that California wrote into the law years ago to make sure health coverage actually covered health care.

Here are some of the benefits they're talking about. (see a full ist of mandates here) California mandates 23 benefits; six directly relate to women. They include coverage for:

• complications of pregnancy, (for plans that provide maternity benefits);
• breast cancer screening, diagnosis and treatment;
• mammograms;
• cervical cancer screening (if policy includes coverage for treatment/surgery of cervical cancer)
• prenatal in the Expanded Alpha Feto Protein program, if maternity benefits are included
• prescription contraceptive methods (if prescription drugs are part of the benefit package)

Two other mandated benefits are "tweeners,'' while they could apply to both genders, I would say they predominantly apply to women:

• diagnosis, treatment and appropriate management of osteoporosis
• immediate accident and sickness coverage for each newborn infant and adoptive child.

Of course, the biggest cost for women -- maternity coverage -- is not a mandated benefit and was actually vetoed by Schwarzenegger in 2004 on the grounds that it would make coverage too expensive for everyone. As I pointed out earlier in this post, the collective "we'' pays for a lot of health care that is used primarily by men, including the gov's various heart surgeries.

So don't buy the wrap about "choice,'' "flexibility'' and "affordability.'' It's just another way to help keep women in their place.

Click here for the San Francisco Chronicle's excellent Sunday Op-Ed about women and health care.

Labels: Affordability, Prevention, Schwarzenegger, Underinsurance

posted by Hanh Kim Quach | Permalink | 1:00 PM


 

Heartburn by Blue Cross

Tuesday, June 26, 2007

I spoke in front of Congress of California Seniors today at their 30th Anniversary Convention in Long Beach, and got a laugh in my presentation by saying off-hand that "living over 50 is a pre-existing condition." But the truth may be worse...

Last week, in response to my op-ed about young graduates falling off of coverage, I got an E-mail from a 27-year old Ph.D. student denied for Blue Cross' "Tonik" product, because of a high cholesterol test.

Today, health policy-obsessed blogger Ezra Klein posts a letter to Blue Cross by a 28-year old denied for coverage for the pre-existing condition of... heartburn.

(In a similar vein, Lt. Governor John Garamendi also spoke today, and lambasted Blue Cross of California as a "lying bunch of thieves.")

Labels: BlueCross, GuaranteedIssue, Insurers, OtherBlogs

posted by Anthony Wright | Permalink | 8:03 PM


 

Gov spends QT with insurers

Monday, June 25, 2007

Gov. Arnold Schwarzenegger told health insurers, "I need you,'' Friday at the industry's convention in Las Vegas.
Noteably, he said he wouldn't support a system where insurers would "go away'' -- a not-so-veiled reference to SB840 (Kuehl), the Legislature's universal, single-payer legislation.

Another thing Arnold said that irks health advocates:
"My plan also reforms some of the state's regulation that now stand in the way of your industry being able to offer lower-cost products to employers and individuals.''
The Translation: Let's get rid of "pesky mandates'' like mammograms and other cancer screenings, preventive care for children, treatment of osteoporosis. If we don't cover health care, health coverage will be cheaper.

The guv also said that while he didn't support "artificial means'' to bring down costs, he believes plans need to play a role in being "efficient, cost-effective, and focused on quality." This emphasis on efficiency and quality -- and insurers reponsibility to assure that -- goes further than what the guv said in January when he unveiled his health reform plan.

Lastly, the guv praised a number of health plans EXCEPT Blue Cross, who are "on board'' with his notion that people shouldn't be denied coverage because of pre-existing conditions. Blue Cross has put $2 million so far into defeating health reform efforts in the state -- which obviously is annoying the gov.

Watch his remarks and read the transcript here.

Labels: BlueCross, GuaranteedIssue, Schwarzenegger, YearOfReform

posted by Hanh Kim Quach | Permalink | 1:07 PM


 

A better deal for employers, part II

Sunday, June 24, 2007

In my last post, I talked about how AB8(Nunez/Perata) was a better deal for employers than 2003's SB2(Burton), less burdensome yet more comprehensive. For those employers that provide coverage, and those that want to, it provides a new, affordable option for them.

How about in comparison with the Governor's proposal? Many reports simply compare the minimum employer contributions in the two plans, 4% in the Governor's plan, 7.5% in the legislative leader's plans. Especially since most employers are spend 8-14% of payroll, it seems superficially that the Governor's plan lets employers off much easier.

But the real question is what employers get in return. As consumer advocates, we just don't argue for the lowest price, but the best value for the dollar.

Under the Governor's plan, those employers that don't provide any health coverage would have to pay a 4% fee. But they wouldn't get any special added value whether they paid the fee or not. The Governor's plan does broadly expand public coverage programs for families up to 250% of the federal poverty level, around $25,000 a year for an individual, or $50,000 for a family of four. For those employers who don't provide coverage and thus pay the fee, their workers over 250% of the poverty level are left to buy coverage on their own.

In contrast, under AB8, the employer who doesn't provide private coverage and pays the 7.5% fee gets to cover his entire workforce (including full-timers and part-timers) through the statewide purchasing pool. That employer gets the benefit of a fully-insured workforce, one that is healthier, more productive, and has less turnover and thus fewer retraining costs.

Most employers have workers at a range of incomes, from entry-level and lower-skill workers to managers and specialists. For these employers, the structure of AB8 seems to be a much better value.

Of course, if the employer doesn't want to provide any coverage, then these details don't matter: they will simply oppose any reform. But for the vast majority of employers that do, or that want to, provide coverage, these different structures of the proposals make a difference, much more than a comparison of 4% and 7.5%.

Labels: Employers, ExpandingCoverage, Legislation, Nunez, Perata, Schwarzenegger, Uninsured, YearOfReform

posted by Anthony Wright | Permalink | 12:34 PM


 

The ghost of SB2

Saturday, June 23, 2007

There's still more work to do on the newly revamped AB8(Nunez/Perata). A delegation of top consumer advocates will be meeting with Speaker Nunez and other key legislators on Monday.

But it's important to acknowledge that the proposal has improved, not just from where it is now, but from some past proposals. Many have compared this to 2003's SB2, but this structure is significantly different, at once less less burdensome on the employers impacted, and much more comprehensive for California consumers.

Under the concept of "shared responsibility," AB8 doesn't just set a minimum employer contribution to health care, as some articles have suggested. It includes contributions not just from employers but from individuals, reinvested state dollars, and new federal funds. It expands and streamlines public programs. It has significant reforms on insurers, in general and in particular in the individual market. Any of these provisions, by themselves, would be a major, headline-worthy, health initiative in any other year.

Most employers will not have to make any changes under AB8. And many employers will benefit. They will now have a new, affordable option to cover their workforce, at significantly less than what they pay now, or what is available on that market. Some will be relieved to no longer have to administer a health benefit. The amount, 7.5%, is by definition as a percentage, scaled to the size of payroll, which provides additional benefit to smaller and low-wage firms. Even for those that don't provide coverage now, they will pay a set amount and in return get a healthier, more productive workforce with less turnover and less retraining costs.

Let's contrast that with SB2, which Health Access California strongly supported as a step forward to getting Californians coverage and security. On businesses, SB2 would have simply required that employers have to provide 80% of the cost of a premium for a standard HMO pack. Many employers do that, and many, many employers were neutral on SB2, given that it really wouldn't have impacted them.

Under AB8, most employers also wouldn't have to change a thing. The differences are beneficial to the employer: under AB8, the minimum contribution is 7.5%, which takes into account size of payroll. Paying the fee to have your workers covered in the statewide pool is less than the average 12-14% than employers pay on average now. They have a new affordable option to provide coverage to their workers. If the 7.5% goes up, it does so only after a public process and deliberation--rather than the status quo, which is to have the costs go up automatically as a percent of premium.

This assistance to employers is possible because of public programs and reinvested state dollars, from aggressive use of bringing in California's fair share of federal funds, and by having the statewide purchasing pool bargain for the best rate. There are also several cost containment components of these bills, and more clearly should be done on that front. We would hope that employers, and the groups that represent them, would support many of the efforts that consumer groups have fought for in past year to help control costs.

Some employers are less inclined to provide coverage to their workers, and will oppose any health reform, no matter how litle is required. But for employers that provide coverage, and those that want to provide coverage, AB8 is not a burden, but a benefit.

Labels: Employers, ExpandingCoverage, Nunez, Perata, Uninsured, YearOfReform

posted by Anthony Wright | Permalink | 8:41 AM


 

Seeing SiCKO Saturday?

Friday, June 22, 2007

Health care activists are putting out the word that Michael Moore's "SiCKO" is playing this Saturday, June 23rd, at key locations around the country. The attendance and response on Saturday may very well have an impact on how wide the movie opens next week, on June 29th. Since many see that the film will propel the health care reform discussion forward, health care activists are urging folks to go see the film, at the following "selected" locations:

Here are the list of theaters in California:
* Pacific ArcLight Cinemas, Hollywood
* AMC Santa Monica 7, Santa Monica
* Edwards University Town Center 6, Irvine
* Pacific Galleria Stadium 16, Sherman Oaks
* Century 9 San Francisco Centre, San Francisco
* AMC Bay Street 16, Emeryville
* Century Stadium 14, Sacramento
* AMC Mission Valley 20, San Diego
* Landmark La Jolla Village Cinemas 4, La Jolla

Labels: InTheNews, SiCKO

posted by Anthony Wright | Permalink | 9:48 AM


 

Places, everybody. Places... Showtime!

Thursday, June 21, 2007

HEALTH ACCESS UPDATE
Thursday, June 21, 2007


ASSEMBLY AND SENATE LEADERSHIP UNIFIED ON HEALTH REFORM PROPOSAL

* Newly-amended AB8(Nunez/Perata) to be heard on July 11 in Senate Health Committee
* Changes include: No individual mandate; affordable premium guarantee in pool
* Negotiations with Governor still expected into the summer

New on the Health Access WeBlog: Full SiCKO Coverage and Review; White House Hopes for Health Care; State Rankings; Limited Benefit Plans; Graduating into Uninsurance


Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata, on Thursday, announced at a Capitol press conference that they would be merging their two health reform bills, AB8 and SB48, respectively into one bill – AB8 (Nunez/Perata).

“This is an expression of faith. This is an expression of real hope and real progress’’ to move the bills forward, Nunez said.

Having passed the full Assembly on June 7th, AB8 (Nunez/Perata) is expected to be heard in Senate Health Committee, chaired by Senator Sheila Kuehl, on July 11th. After the budget deliberations are completed, it is expected that the bill will serve as the basis for negotiations with Governor Schwarzenegger into the summer.

CHANGES FOR CONSUMERS

Senator Perata indicated that the leadership proposals were already "90% similar," seeking to provide more security so people can get and keep coverage from their employer, through a public program, or by purchasing it as an individual. It would extend coverage to roughly 70% of the uninsured,and better ensure that the insured will get the coverage they need when they need it.

The previous bills, as well as the new AB8:
• Would require employers to contribute at least 7.5 percent of payroll to their workers' health coverage. Employers would either provide private coverage for their workers, or pay such a fee.
• Would create a state-run purchasing pool, to provide a new, affordable option to cover their full workforce.
• Would expand existing public programs to cover all children, and subsidize coverage for more lower-income parents through this state-run purchasing pool.
• Would draw down new federal funds by bringing in more matching Medicaid money.
• Would also impose some new rules on insurers, including preventing rampant rejection of consumer for "pre-existing'' conditions, and limiting the amount of premium dollars that goes for administration and profit.

The changes announced today did not change that basic framework, but were noteworthy for consumer advocates who were particularly concerned about affordability.

The bill does not include an "individual mandate"--a requirement that Californians, even those without access to public programs or employer-based group coverage, buy coverage on the individual market. “We know there’s a difference of opinion with the Administration. The reason we decided (to take out the individual mandate) is we need more time to figure out whether or no there is an affordable health care product for the average worker,’’ said Nunez. Given the interest by the Governor, and the financing issues, Perata said of the individual mandate, "that's not there, but it's not dead."

Another key provision was a guarantee that workers in the purchasing pool would not have to pay more than 5% of their income for the premium, an important protection for lower-wage workers. Consumer advocates viewed this as an important step, although they will continue to advocate for corresponding guarantees on out-of-pocket costs, like deductibles.

The amendments does not introduce new concepts to the legislation, including ones that have been supported by consumer advocates, such as public review of insurance rates, or additional cost containment provisions. Rather, the amendments largely reconciled differences between the previous bills, and in that regard, most of those amendments made the legislation more favorable to consumers.

With the amendments, AB8:
* Does not contain an mandate on consumers to buy coverage in the individual market (as was required in SB48).
* Assures that premiums do not exceed 5 percent of income for workers earning less than 300% of poverty ($51,510 for a family of three) who are in the statewide purchasing pool.
* Requires all employers to pay at least 7.5 percent of payroll toward the health care for their workers. (Previously, Nunez’ legislation had exempted some businesses)
* Allows MRMIB to adjust employer fees on health coverage.
* Makes Section 125 plans available to all workers, to get a state and federal tax break on health premiums;
* Extends small group insurance rules to mid-size employers from 51-250 employees;
* Allows everyone without serious medical conditions to buy coverage in the individual market. Those with specified medical conditions would go into a high-risk pool, which is funded by an assessment on health plans.

To see the full description of how AB8 and SB48 were merged, click here.

QUESTIONS FROM PRESS

Nunez and Perata fielded a wide range of questions at the press conference. Here are some of their responses:

On AB8’s compliance with the federal ERISA law?

Nunez: “This is a very different approach... nothing that can be compared to Maryland or even the Hawaii case... . We feel very confident, in the face of ERISA, we are going to be very consistent with federal law. The bigger threat, to be honest with you, is with a referendum. We’re being very careful to not make this bill a Christmas tree that includes everything that everyone wants to throw into it... That is the danger of having a bill like this. There might be some that think, OK, this is really going to happen now.... We are thinking about minimizing the potential for a referendum."

What about exemptions for small businesses? Why isn’t it there anymore?

Perata: "We had everyone all in for ours (SB48) because, even though we’ve heard the plight of small businesses, the program simply does not work... and puts the burden and strain on other parts if you take it out.…That's going to be an issue that will be negotiated, I'm sure. We’re still trying to look at the cost pools. If this were easy, it’d be done.... But now there’s a single vehicle, and people will be paying even more attention.

Nunez: With respect to the question about the employer exemption, to be honest with you, so far, I’ve only gotten criticism for it. No one’s come to the table saying they really like that provision. We didn't see a lot of small businesses running to support us. In fact, people said we didn't like this. There didn’t seem to be a lot of support for that provision.

What are the key differences with the governor’s concept of "shared responsibility"?

Nunez: We agree. We all have a role in this, the Governor says it is shared responsibility, that's fine. I think our bill is pretty consistent with shared responsibility. Everbody has a role to play. Everyone has to tighten their belt. The providers, the doctors and hospitals, the insurance industry. Workers got a responsibility. Employers have a responsibility. and state and federal government has a responsibility... Ours is consistent with that value of shared responsibility.

Perata: You also can't expect people to be responsible if you don't offer them the opportunity to be responsible. And there's so many people people shut out of the system right now. Conceptually, there no disagreement at all between the Governor's ideas about health care reform and what this bill does. And we are hoping now we can get even more focused on discussing it. If it goes downstairs, (the bill)’s gotta be something (the governor’s) comfortable signing.


ADVOCATES STILL HOPING FOR MORE CHANGE

The new amendments do much to help consumers, but health advocates believe that more still needs to be done.

For instance, while the new AB8 caps premiums at 5 percent of income for workers, it does not factor in the costs to use the plans. After paying premiums, consumers still must pay copays, deductibles and out-of-pocket maximums – which in some cases – forces workers to spend as much as 32 percent on health care.

Consumers could also be further protected from price volatility if the state played a greater role in reviewing insurance rate increases and forcing plans to justify when they decide to raise premiums. This could help to mitigate the wild double-digit premium increases that we’ve seen the past decade.

Consumer advocates also remain concerned about workers who may lose coverage when they are between jobs

WHAT HAPPENS NEXT

On July 11, AB8 will receive a thorough review in Sen. Sheila Kuehl’s Health Committee. At some point in July, both leaders will also meet with Gov. Schwarzenegger to try and reach consensus on issues where they do not agree.

Health Access will continue to provide updates as AB8 progresses.

ALSO ON THURSDAY….

Gov. Arnold Schwarzenegger held a press conference about how the state’s current health care landscape discourages entrepeneurship as people are afraid to light out on their owns and start their own businesses because they would not be able to get job-based health coverage. Watch a webcast of the event on the Governor's website here.

The American Heart Association, the American Lung Association, the American Cancer Society, and PICO California called for an increase its tobacco tax to help fund health care reform, as part of the mix.

For more information, contact the author of this report, Hanh Kim Quach, policy coordinator, Health Access California, hquach@health-access.org.

Labels: Legislation, Nunez, Perata, Updates, YearOfReform

posted by Anthony Wright | Permalink | 8:01 PM


 

The three ring circus...

Several health events today...

At 10:00am, Governor Schwarzenegger has a press conference about "job-lock," with people who make career and life decisions in order to get health coverage. It's a big issue: we constantly hear of people who give up their dreams of entrepreneurship for the corporate or government job that will provide health coverage; or the people who unhappily stay in jobs (or marriages) for the health coverage. All this makes the economy less efficient. The solutions? Beyond having a universal system as in SB840(Kuehl), we could at least ensure that all employers are contributing toward their worker's coverage, that our public programs are less restrictive and cover those who need assistance, and that insurers can't deny coverage because of one's health status.

At 10:30am, the American Heart Association, American Lung Association, the American Cancer Society, and PICO California are introducing the notion of a tobacco tax in the debate, as another potential funding source for health reform. Not only would such a proposal continue to decrease smoking and have positive health impacts, but the revenue could fill some gaps in the proposals, to further extend coverage and/or make it more affordable.

At 11:00am, legislative leaders Speaker Fabian Nunez and Senate President Pro Tem Don Perata will be announcing that they are advancing with one bill, rather than the two that are in print today. If there was any doubt, this sets the stage for the next part of the debate in Sacramento. We'll have more of an update later today.

Labels: Nunez, Perata, Sacramento, Schwarzenegger, YearOfReform

posted by Anthony Wright | Permalink | 9:55 AM


 

White House hopes...

Tuesday, June 19, 2007

With all that's going on in California, we haven't covered the presidential candidates and their health care plans too much.

It has been covered by several blogs, including two by independent-minded folks who used to work in the insurance field.

This week, Joe Paduda in Managed Care Matters is at the annual progressive gathering of Campaign for America's Future, Take Back America. He's providing up-to-the-minute reporting of what the candidates are saying about their health plans. So far he's written on Obama, Edwards, and Richardson.

Bob Laszewski at Health Care Policy and Marketplace Review provides a broader context and some insight, wondering where the Republican candidates are on health reform, and noting that the Democratic candidates plan to make health care an issue--but not to distinguish themselves in the primary.

Labels: OtherBlogs, PresidentialCandidates

posted by Anthony Wright | Permalink | 2:10 PM


 

Just above Tennesee and Alabama.

Monday, June 18, 2007

The Commonwealth Fund put out state rankings, based on a Scorecard of Health System Performance. Interesting data.

California's profile is here. And it's not good: 39th overall. 44th in "Access." 50th(!) in "Quality." The national report indicates there's a correlation: "insurance matters." Either way you look at it, there's a lot to work on here.

We do well on the "Healthy Lives" indicator (3rd), although that may be related to the relatively younger mix of California's population.

Labels: OtherStates, Research

posted by Anthony Wright | Permalink | 4:22 PM


 

Slipping through the net

USA Today last week ran an interesting story about a new breed of health plan that's been hitting the markets: limited medical benefit plans.

Policyholders for these plans pay low premiums to get the illusion of coverage. When an enrollee actually gets sick, they'll find they're insurance to be little more than a bandaid on a broken bone.

Some policies -- such as one offered by Aetna -- cover as little as $2,000 a year. So as long as you have an emergency that doesn't cost more than $2,000 you'll be fine. But other than that....

I bet the premiums paid add up to more than what you actually get out of the coverage.

Seems to me this does exactly the opposite of what a good health coverage policy is supposed to do. We buy health care as a safety net to protect us against financial ruin. But these plans are like a safety net that the rats chewed through.

Labels: InTheNews, Underinsurance

posted by Hanh Kim Quach | Permalink | 10:57 AM


 

Piling on...

Thursday, June 14, 2007

New Health Wonk Review out. Also, Matthew Holt at The Health Care Blog points out that high-deductible and consumer-directed health plans (CHDP) are failing in the market--ironic, since they are often promoted by those who have absolute faith in the market.

He pulls no punches, ending with: "the CDHP is the bastard child of a one night stand between a benefits consultant with nothing to sell and a right-wing think tank that can’t do basic math."

Labels: Funny, OtherBlogs, Underinsurance

posted by Anthony Wright | Permalink | 1:07 PM


 

From "me'' to "we''

A number of users have posted clips on YouTube of Michael Moore's appearance in Sacramento to promote his new movie, SiCKO.

Here's a link to one of them, which will link you up to a whole mess of snippets from his press briefing, rally, legislative briefing and premiere.

http://www.youtube.com/watch?v=khZz0PtR8dE.

Labels: InTheNews, SiCKO

posted by Hanh Kim Quach | Permalink | 12:43 PM


 

Two thumbs up...

On Tuesday, the festival atmosphere in Sacramento around the movie "Sicko" was the biggest media frenzy since the potent combination of celebrity and politics came together during the recall campaign.

Folks in Sacramento are still talking about the movie, but the focus is on the actual movie. A few reactions.

I don't want to spoil the movie for those who may go see it after it opens on May 29th. So instead of saying what the film is, I'll say what it is not:

It isn't too sad, or too serious: While I have my own critique of Michael Moore's style and politics, I have followed him closely throughout his career, not just Roger & Me and Farenheit 911, but The Big One and Bowling for Columbine, and, most importantly, his TV ventures TV Nation and The Awful Truth--which were precursors to the "fake news" satire now provided by Jon Stewart and Stephen Colbert. Throughout his work--even on a subject like Columbine--there's been a wit and a humor in showing the absurdity of our situation, and that as true with Sicko.

In a film that has wrenching health care horror stories--several people I know in the audience cried--it's punctuated with several laugh-out-loud moments. Some are profound, some are simply silly. For a serious subject, and in a film with deadly serious moments, there is welcome room for levity and fun.

It isn't about the uninsured. The opening credits starts with some examples of uninsured people and the tough choices they have to make. But Moore's narration is clear: the film isn't about them. His focus is on the problems facing the insured, and underinsured, and then an explanation of the health systems of other countries. As a political strategy, it's understandable: over 90% of voters are insured.

This doesn't mean that Moore doesn't believe that insurance doesn't matter. He was clear Tuesday that people should be covered, and that not having coverage has a real cost to people, including in lives. But he also offers a damning indictment of insurance companies.

It really isn't even about health care. As a consumer advocate on health care issues, I tend to stay focused on the topic at hand. Moore, on the other hand, perhaps as he is firmly identified as an icon on the left, deliberately wades indiscriminately into the minefields of recent American politics: President Bush, Soviet-era communism, 9/11, France, Guantanamo Bay, Cuba, Castro, Che Guevara, taxes, and the "nanny" state (literally!) and European-style socialism.

It's the luxury of communicating in a 2-hour movie rather than a 10-second soundbite. But these sojourns aren't digressions from his main point: he ultimately is trying to make a much bigger point about "America's soul." Moore is trying to convince people of something more than just the need for a universal, even single-payer, health care system. He's advocating a different way to view government and society.

He merely uses health care as an example for a much broader discussion, that encompasses education and child care, how we treat the homeless and mentally ill, and about our society focused on "me, not we."

That said, health care is a useful issue to make these points. Health care works best in group coverage, when we share the risk and cost of care, knowing regardless of how healthy we are, that one day, by age or accident, we will need significant care ourselves. Health care works worst--and is most expensive--when the individual is left alone, at the mercy of the big insurers and providers. And that's a lesson for the health reform discussion in both California and the nation.

Labels: InTheNews, Sacramento, SiCKO

posted by Anthony Wright | Permalink | 1:02 AM


 

Graduating into insecurity...

With Anita Grier, president of the City College of San Francisco, I had an op-ed in the San Francisco Chronicle today on how graduates (and young people in general) are likely to find themselves uninsured... and how health reform options might provide some relief and security.

Young folks know these issues. The young voted overwhelmingly for Proposition 72 in 2004, more than any age group. If they turned out in Californian at the same levels they did nationally, that significant health reform proposal, which got 49.2% of the vote, would have passed. The young have a big stake--and need to have a big impact--in the debate in Sacramento this year. I've reprinted the op-ed below.

New Graduates Fly Without a Safety Net

by Anita Grier and Anthony Wright

Congratulations, grads. Revel in these last few days while you are still cocooned and cared for in your families and school communities. After graduation, your search for the basics to support your life will be more precarious and risky.

That's because graduation also means almost 400,000 of these young adults (younger than 24) will be cut off from health insurance under their parents' plans or from their universities. A report by the Commonwealth Fund (www.commonwealthfund.org) showed that 2 out of 5 college graduates are uninsured after they leave school.

In California, 20-to-29-year-olds make up the largest percentage of uninsured, at 29 percent. Now some critics say that it is their fault. They think young people are slackers, or don't care about their health, or are spending a fortune on the pleasures of the here and now.

They are wrong. Young people tend to pick up coverage at the same rates as other age groups.

For many new grads who are out looking for work, it's an even harder job to find affordable health coverage.

According to the most recent California Health Interview Survey (www.chis.ucla.edu), young adults are four to five times less likely to be eligible for health care on the job, compared with adults in all other age groups. Why? Young people starting their careers now face a changed job market, with an increased reliance on temporary workers, subcontractors, part-time workers and extended probation and waiting periods. What's more, 20-to-29-year-olds are more than twice as likely to be in jobs that don't offer coverage at all.

So what's a young person to do? If you've shopped for insurance as an individual lately, you already know the answer. Insurance companies don't have to sell you coverage, when you're buying on your own. If you've got a "pre-existing" condition, you're out of luck -- and your "condition" could be something as common as ear infections -- when you were a toddler. Of course, if you can find a company that will sell you insurance as an individual, be prepared to take out a health insurance loan (to go with your student loans now coming due). Health insurance for individuals is expensive (when you can find it).

Let's take a typical, healthy 23-year-old with a liberal arts degree (the top degree in the state), with an entry-level position that would earn about $35,000 in San Francisco. The young adult would have 101 plans to choose from: a "typical" low-end plan starting at around $50 a month.

What does $50-a-month buy you? No coverage for primary care visits, no prescription drug coverage (which means no birth control or antidepressants) and no maternity. Women are allowed OB/GYN examinations but must pick up at least 25 percent of the cost of the office visit. So what are you paying for? Coverage that doesn't kick in until you've spent at least $1,500 for a deductible. Deductibles for these "less expensive" plans can be $5,000.

Blue Cross has an entire line of products dedicated to twentysomethings, called "Tonik" with high-deductibles and no coverage for what a young person is most likely to need -- maternity.

By contrast, the average single California worker who receives coverage on the job pays the same amount, but receives more comprehensive benefits -- such as a fixed co-pay for doctor's visits, and prescription drug coverage. Young adults who want traditional, comprehensive plans that many of us get on the job, they would have to pay no less than $90 a month and up to $410 a month. For new graduates beginning their careers with entry-level salaries and loads of student loans, asking them to pay $46 a month for a policy they can't be used until they've spent at least $1,500 is unreasonable. They're practically paying to be uninsured. Blaming their lack of insurance on them because they can't afford a richer plan is unfair.

We should be focused on systemic changes to ensure that we all share the responsibility of making sure that Californians, young and old, get good, affordable health care. Gov. Arnold Schwarzenegger and leaders in the state Legislature have started that process. We need to make sure they follow through with real health-care reform this year.

A long-standing proposal that could help all Californians -- not just young adults -- is SB840 by state Sen. Sheila Kuehl, which would create a universal, single-payer, Medicare-like system in California. The proposals of Assembly Speaker Fabian Nuñez and Senate President Pro Tempore Don Perata make it more likely for young adults to achieve on-the-job coverage by setting a minimum employer contribution of 7.5 percent of payroll on both full-time and part-time workers' health care. Other reforms in the discussion that would help young adults include: reforming the insurance market for people who must buy coverage on their own; expanding public health programs; guaranteeing that coverage is affordable to buy and use; and setting a minimum standard for insurance packages -- rather than promoting and encouraging bare-bones plans.

Policymakers could also take a cue from other states, such as New Jersey and Utah, which require private insurance to cover dependent children up to a higher age -- 25 or 28 years old, as they pursue higher education.

As for this year, no "break a leg" wishes when your senior goes up to get her or his diploma. In the current state of health care, that could be one expensive wish.

Labels: InTheNews, YearOfReform, YoungAndUninsured

posted by Anthony Wright | Permalink | 12:56 AM


 

Bundles of $-J-$-O-$-Y-$

Wednesday, June 13, 2007

Kaiser Family Foundation and Georgetown University have a new study about how families enrolled in high-deductible health plans pay more than twice as much for child delivery than families with traditional health coverage.

Well, Duh.

The study shows that the average cost of a normal delivery with a traditional plan is $1,455.
Those with high-deductible plans bought on the job would pay between $3,000 to $7,000 for a normal delivery.

That $3,000 to $7,000 is only if you can get coverage on the job.

If you're buying coverage on your own, high-deductible plans rarely even offer maternity coverage.

Karen Pollitz of Georgetown's Health Policy Institute sums it up in the Washington Post:

"If you are contemplating having a baby or having any kind of big heatlh event, this is not the policy for you.''

Labels: InTheNews, Underinsurance