HEALTH ACCESS UPDATE

Tuesday, April 29th, 2003

* BUDGET: Assembly Republican Reveal Budget Plan

* ACCESS EXPANSION: Assembly Health Committee Passes Major Proposals

* LEGISLATION: Other Health Policy Bills Considered

REPUBLICAN BUDGET CUTS PLAN REVEALED

This afternoon, Assembly Minority Leader Dave Cox announced a budget plan sponsored by the Assembly Republican Caucus. While more specific than the Senate Republican proposal announced a few months ago, the Assembly Republican plan also seeks to:

* accept most of the Governor’s proposed cuts,

* avoid raising revenues,

* shift a major part of the burden of the deficit into future years, and

* impose a spending freeze in the subsequent budget year.

The plan would restore some of the Governor’s proposed cuts, but make many other additional reductions that have a similar, if not more damaging effect (see below). They are also pushing for other reforms, from a stricter state spending cap, to the removal of various mandates and regulations on employers. Ironically, even though the plan would refinance around $10 billion of the deficit, it would “limit future deficit financing.” The press release, with some of the details, can be found at the Assembly Republican Caucus web site, at:

http://republican.assembly.ca.gov/news/archived/newsletter344.html

HEALTH IMPACTS: SOME GOOD, BUT LOTS OF BAD, AND EVEN MORE UGLY: In terms of health care, the proposal states that the “Assembly Republicans reject specific provisions of the Governor’s Budget based on severe consequences on public services. Overall reductions need to be made while being mindful of the compassion for the truly needy.” Specifically, the proposal emphasizes the restoration of three key health care cuts. It would:

* Reject the proposed cut to “1931b” cut that would have lowered eligibility for parents from 100% to 61% of the federal poverty level, which would deny coverage to around 300,000 low-income working parents in the first year, and hundreds of thousands more afterwards.

* Reject the proposed 15% Medi-Cal rate reductions to doctors, nursing homes, and other providers.

* Reject the proposed elimination of dental benefits to 2.8 million adults on Medi-Cal, but instead cap dental benefits at $1,000 per individual, and place other utilization controls.

THE BAD: At the same time, the Assembly Republican proposal would keep all of the rest of the proposed health cuts, including the institution of quarterly status reports, and the elimination of 17 medically necessary benefits, from disposable medical supplies to hospice care to wheelchairs to prostetic limbs.

It would also add a full range of additional cuts, some of which would deny basic health care to hundreds of thousands of Californians, mostly children. Health Access California will provide analysis of the impact of these cuts in the near future. Some of the new cuts proposed by Assembly Republicans would:

* Rescind continuous eligibility for children ($76M)

* Eliminate accelerated enrollment for children ($6M)

* Eliminate the Child Health and Disability Prevention Program (CHDP) Gateway ($57M)

* Eliminate state-only health programs ($183M)

* Require co-payments for Medi-Cal recipients ($31M)

* Exclude over-the-counter drugs from Medi-Cal coverage ($8M)

* Place new people with disabilities in Medi-Cal into managed care ($1M)

* Place new seniors in Medi-Cal into managed care ($69M)

* Reduce Medi-Cal county administration by 20% ($110M)

* Cut Expanded Access to Primary Care funding to community clinics ($10M)

* Impose a moratorium on new adult day health centers ($30M)

* Accept President Bush’s Medicaid block-grant proposal that would provide some help now but force major cuts in Medi-Cal in future years. ($390M)

THE UGLY: There are other health care cuts as well, both explicit and implicit. In particular, the proposal calls for a spending freeze in 2004-05, and a strict spending cap afterwards. Given that health care costs rise greater than the rate of inflation, such a freeze would translate into an immediate and steep cut into health care. While such cuts are unspecified, the cuts would have to result in even more people losing coverage and care, having benefits scaled back for those still in public health programs, and reductions in reimbursements to health care providers that we all rely on.

MAJOR ACCESS EXPANSIONS PASS ASSEMBLY HEALTH COMMITTEE

The Assembly Health Committee, chaired by Assemblyman Dario Frommer, considered and passed three bills to significantly expand health coverage in California. While different committee members and organizations expressed concerns about specific provisions in each of the proposals, the sentiment was to move the bills forward to advance the discussion. With the expectation that SB2 (Burton) and SB921 (Kuehl) will move in the Senate through committee tomorrow, Chairman Frommer suggested that he wanted the Assembly to have vehicles of its own. He even suggested that these bills, if passed by the Assembly, may then be send to a Conference Committee with any of the bills that pass the Senate.

The “trilogy” of bills included:

* AB 1527 (Frommer) would require employers with 51 or more employees to provide health care to their workers, or pay into a fund that would provide such coverage. It includes an idea borrowed from Rhode Island that would use Healthy Families matching money to subsidize employer-sponsored health care. The bill was (generally) supported by Health Access California, California Medical Association, California Healthcare Association (hospitals), California Association of Health Underwriters, Kaiser, Blue Shield, Jericho, and others. It was opposed by the California Chamber of Commerce and the National Federation of Independent Businesses.

* AB 1528 (Cohn), sponsored by Blue Shield, Kaiser, and the California Healthcare Association, also includes an employer mandate, as well as a range of other provisions, including a subsidy for employers and individuals to buy health insurance, the definition of an “essential benefits package,” and “community rating” market reforms. The California Chamber of Commerce and National Federation of Independent Businesses opposed. Health Access California did raise opposition to two provisions: the mandate on individuals to purchase health care without any guarantee that it would be affordable and available; and the current definition of the benefit package that is substantially narrower that what is currently defined.

* AB 30 (Richman) would not require participation by employers, but would use state and federal Healthy Families dollars to match employer and employee contributions to cover childless adults up to 250% of the federal poverty level. The bill was supported by the California Medical Association and California Healthcare Association and others. Health Access California raised opposition to a recent amendment that would allow these Healthy Families dollars to subsidize “high deductible catastrophic coverage,” setting a dangerous precedent in terms of what level of benefits are acceptable for low-income people.

OTHER ASSEMBLY HEALTH COMMITTEE ACTIONS

Into the night, the Assembly Health Committee also acted on a full range of other important proposals. Bills of note included:

* AB1163 (Frommer), sponsored by the 100% Campaign, which would increase the retention of children in Medi-Cal and Healthy Families plans. The preliminary vote total was 19-5, with all Democrats and several Republicans supporting the proposal.

* AB910 (Diaz), supported by Health Access California and other consumer and labor organizations, would establish an Attorney General review process for downgrades or closures of hospitals, to ensure oversight over hospitals regarding market concentration. Opposed by California Healthcare Association, Kaiser, and Sutter Health, the bill passed on a party-line vote.

* AB1627, AB1628, AB1629 (Frommer), is a package of bills that would provide transparency and disclosure to hospital costs and billing practices. Opposed by hospitals yet supported by Health Access California and many consumer and labor organizations, the bills were passed on largely party-line votes.

* AB1401 (Wolk) was scheduled but not brought up for consideration, and is not expected to proceed this year. This bill, was sponsored by the California Healthcare Association and actively opposed by Health Access California, Western Center on Law and Poverty, Consumers Union and others. The bill would have established a definition of “charity care” that would have continued to allow anti-consumer billing practices to the uninsured hospital patients. A preferred bill with strong consumer protections for uninsured hospital patients, AB232 (Chan), passed the committee earlier in the year.



Anthony E. Wright

Executive Director

Health Access

1127 11th St., #234, Sacramento, CA 95814

Ph: 916-442-2308, Fx: 916-497-0921

awright@health-access.org

Health Access California promotes quality, affordable health care for all Californians.
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