Comparing the Coasts…

HEALTH ACCESS UPDATE
Tuesday, January 15, 2007

PENDING CA HEALTH REFORM WOULD GO WELL BEYOND MA MEASURE

* Fundamentally Different in Financing, Cost Containment, and Other Concepts
* Broader Benefit in Providing Premium Relief, Insurance Market Reform
* California’s Proposals Learns Some of the Lessons from Massachusetts

* Senate Health Committee to Hear AB x1 1(Nunez) Next Wed, Jan 23rd, 9am

New on the Health Access WeBlog: LAO on the Budget; California in Health Wonk Review; A Single-Payer Supporter for AB x1 1; More on the SF Court Case; U.S. Health Rankings;

The Senate Health Committee, chaired by Senator Sheila Kuehl, has postponed the hearing considering AB x1 1 (Nunez), the current health reform proposal negotiated with Governor Schwarzenegger, as they await the analysis by the Legislative Analyst’s Office. The hearing will now be next Wednesday, January 23rd, starting at 9:00am and is expected to last all day. The deadline for letters of support or opposition on the measure are due this Wednesday.

NEW STUDY: As the Senate Health Committee awaits a financial analysis, Health Access is releasing another analysis, comparing AB x1 1 (Nunez) with the recent reform in Massachusetts. This new comparative analysis shows that the pending California Health Security and Cost Reduction Act, AB x1 1 (Nunez), takes major steps in health reform far beyond the much-discussed Massachusetts reform of 2006.

The analysis, entitled “Health Reform in California and Massachusetts: Different from Start to Finish,” concludes that AB x1 1 would provide a broader benefit to California consumers than what was passed in Massachusetts. In addition, the California proposal has a much more stable financing structure of significant new dollars to improve the state’s health care system, and goes far beyond Massachusetts in trying to control health care costs.

A full copy of the 8-page analysis is available at the Health Access website, at:
http://www.health-access.org/advocating/docs/2008CA-MAReformComparison%2001%2014%2008.pdf

The report lists “top ten” major differences between the California’s AB x1 1, and the health reform law, Chapter 58, passed in 2006. In contrast with Massachusetts, the California proposal includes:
1) New, Broader Financing, including a Tobacco Tax
2) A More Meaningful Employer Contribution
3) General Fund Protection
4) Significant Cost Containment
5) Subsidies up to and above 400% of the federal poverty level
6) Key Differences in the Individual Mandate, Affordability and Enforcement
7) A Transition to Guaranteed Issue
8) Medical Loss Ratios and Increased Insurer Oversight
9) Not Just a Connector, but a Negotiator
10) New and Improved Public Health Care Options

The report shows that while there are similarities in the framework, California’s pending proposal goes far beyond Massachusetts in numerous areas.

At the same time, even with their more limited reform, Massachusetts has taken the major step of covering over half of uninsured–over 300,000 people through public program expansions–in a short amount of time, and is on path to close the gap further. The biggest critique is that this success in signing up patients quickly has led to higher-than-expected general fund costs.

The report explains how the Massachusetts plan never raised significant new revenue–it mostly redistributed existing state and federal funds, and relied on new funding from the general fund. In stark contrast, the California proposal would raise $15 billion in new funding, to be in a lock-box protected from the general fund, and vice versa. The new funds raised are from a much more meaningful employer contribution, individual contribution, a hospital fee, significant new federal matching funds, reinvested savings from county and state governments, and a tobacco tax.

In fact, research into the history of the Massachusetts law shows the California’s proposal is much more like the ballot measure originally proposed by the consumer and community advocates, which included significant employer contributions, middle-income subsidies up to 400% FPL, and a tobacco tax–none of which made it in the final Massachusetts package, but is included in the pending California plan. The study goes into the details of the different iterations of these measures.

The conclusion of the report is that Massachusetts and California start from different places, and the plans are different enough, that they will end up having different results. Critiques of the Massachusetts plan simply do not apply to California’s


Again, a full copy of the 8-page analysis is available at the Health Access website, at:
http://www.health-access.org/advocating/docs/2008CA-MAReformComparison%2001%2014%2008.pdf

For more information on health reform, visit the Health Access website and blog, at http://www.health-access.org/blogger.html

To view other resources from the Year of Health Reform, visit our website,at:http://www.health-access.org/advocating/2007_healthdebate.html.

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