Defining affordability (or not)…

Consumer and health advocates from across the state, as part of the Its Our Healthcare coalition, are delivering thousands of keys to the Governor’s many district offices across the state. Their message? “Affordability is the key” in figuring out a health reform package.

Luckily, affordability is a word very much on minds of many stakeholders and policymakers, including the Governor at his press conference yesterday. But are they talking about the same thing that consumers are talking about?

So in looking at the Governor’s draft and the changes he made since January, it really doesn’t address this issue, except for those who are just above the poverty level (100-150% of FPL) who would qualify for Medi-Cal with no cost-sharing. Other than that, the new language in some ways goes backwards:

* Even though we disagreed with the level it was set at, we certainly agreed with the notion in the January proposal of setting a minimum standard of benefits. The new language no longer defines what the “minimum coverage” should be, leaving it up to the Secretary of Health and Human Services, and presumably the Governor. After proposing and now withdrawing from a $5,000 deductible plan, this gives the Administration the ability to set such “minimum coverage” at a any level, including a $10,000 deductible with no out of pocket maximums. (In California, insurers are already allowed to sell such policies.)

* Whatever the “minimum coverage” that is set really won’t be the minimum. Under the individual mandate, there’s no standard for employer-based coverage in terms of benefits or cost-sharing, so people could be called “covered” with less-than-minimum benefits. It also means that many people with even sub-par employer-based benefit will then be excluded from subsidized coverage or the tax credit–yet still subject to the mandate.

* The language provides state tax breaks to promote Health Savings Accounts, (which can only be used with high-deductible plans), not only in future years but retroactively to 2005.

Let’s contrast this with AB8:

AB8 said that no employee could be required to accept coverage if it cost more than 5% of wages for that employer. That’s not perfect: it means some people will face the choice of spending more or having no coverage. But it creates a labor market standard that no one should be expected to spend more than 5% on health benefits. Who is helped by this? Low-income working families, those who make less than 300%FPL where median spending on health care is over 5% now. And people who make more than 300% who have high health care costs whether it is because it is the year they have the heart attack or cancer or whether it is because they have multiple chronic conditions and coverage with high cost-sharing.

The Governor’s proposal contains no such protections. It says every Californian must have coverage no matter who much they must pay out of pocket. If the employer offers coverage with a very high deductible, or with no out-of-pocket maximum, that counts as meeting the minimum. If the Secretary of Health and Human Services decides the minimum coverage is $2500 deductible

There’s not a lot in the law right now to help consumers with health care affordability–which leaves people uninsured. Both AB8 and the Governor’s plan provide some help. But in the context of the individual mandate in the Governor’s plan, people would be required to take up coverage that is clearly unaffordable to get, and unaffordable to usee. And that just doesn’t work for consumers.

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