Basic Health Plan numbers do not add up

One of the most hotly contested issues for the end-of-year special session called by Gov. Brown on healthcare is whether California should create a “Basic Health Plan.”  This proposal would take away subsidies for the purchase of private health insurance from an estimated 800,000 lower-income Californians.  It would require them to enroll instead in a program run by the state’s Medicaid department.

The proponents of the Basic Health Plan claim that it will be vastly more affordable for Californians.  But their numbers do not add up. Continue reading

California health reform threatened by bill for basic health plan

California’s work to create a more affordable and fair health care system is threatened by legislation in Sacramento that would create a Basic Health Plan. This plan poses a grave threat to the California Health Benefit Exchange, which is the linchpin of federal health care reform.

When launched in 2014, the exchange will provide a new competitive marketplace for as many as 2 million consumers and business owners. Californians with incomes up to four times the federal poverty level — more than $90,000 for a family of four — will receive subsidies to purchase insurance. Continue reading

Discussion of health care should focus on lowering prices

The clock is ticking for health care reform, but not for the reason that you may think. It is quite unlikely that the law will be overturned next year even if Mitt Romney is elected president. But the Affordable Care Act must make good on the promise of its name and deliver affordable health care for consumers and businesses. Otherwise, the whole political conflict will be moot, and we’ll have to do something truly radical.

The reason that there is little political risk for health care reform is that we have a very conservative governing system in the United States. Because of checks and balances, the filibuster and federalism, it is very hard to do anything in this country and even harder to undo it. Though it would be technically possible for the Republicans to overturn much of the law, it would be a bare knuckle brawl that would exhaust all of Romney’s political capital. Continue reading

Healthcare: An emergency care mandate isn’t enough

General Views Outside The Supreme Court As Health Care Debate Begins

In his April 8 Op-Ed article on the individual mandate, the aspect of the federal healthcare reform law that requires everyone to have coverage, William Voegeli advances a false dichotomy. He states that while it may be legitimate to require people to carry health insurance that would cover the costs of their care were they to be hit by a bus, it is illegitimate to require them to carry insurance coverage that will cover substance abuse treatment or dental care for their children.

Voegeli acknowledges that the requirement that people have coverage is consistent with John Stuart Mill’s dictum that limiting the freedom of some (in this case the uninsured) is only appropriate when it avoids their harming others (in this case through making others pay for the cost of covering their care). This requirement that others pay is called the “cost shift,” and it is borne, in particular, by California businesses that pay thousands more than their international competitors on health coverage for their employees. Voegeli concludes, though, that “under the guise of preventing cost shifting … Obamacare commits cost shifting” by requiring people to pay for more of the care or protection of others than is absolutely necessary. Continue reading

Can health insurance exchange, regulation co-exist?

Today the California Assembly Health Committee will hold a hearing on a bill that would allow state regulators to reject health insurance rate increases deemed excessive or discriminatory. This hearing will come just six days after the first board meeting of the California Health Benefit Exchange. Many hope that the Exchange will take the lead in holding insurance rate increases down through actively negotiating with insurers. Can active negotiation work in tandem with rate regulation?

Mike Russo, health care advocate and staff attorney for CALPIRG, which is a sponsor of the rate regulation bill, believes it can. In an issue brief, he writes that active purchasing and rate regulation, “combine and complement each other to deliver even better value for consumers.” He further points out that “the large majority of Californians will not get their coverage through the Exchange, meaning the Exchange’s negotiating power will not help them.” Continue reading

Should States Drop Out of Medicaid?

The idea of states dropping out of Medicaid is now being discussed in polite society. A few believe, mistakenly, that entirely state-run and -financed programs can save money in this area and still provide adequate access to care. Others are motivated by the impulse to play politics with health care and bog down President Barack Obama’s agenda.

The real reason for these conversations, though, has little to do with political gamesmanship and everything to do with stark reality: state lawmakers from both parties are staring into the abyss of massive state budget deficits. California will have to fill a hole of as much as $28 billion over the next 18 months, roughly equal to the entire amount of money the state spends on health care and higher education combined. Continue reading

Fulfilling the Promise of the Medi-Cal Expansion

Federal health reform will add as many as two million more people to California’s seven million person Medi-Cal program. What will it take to guarantee this expansion exists not only on paper but results in meaningful access to quality health care for new enrollees?

The first thing to understand is that this may require a substantial commitment of state resources. The California Budget Project estimates that the cost of the expansion to California will be approximately $5 billion dollars over the next ten years. California has to pick up only a small share of the cost of those newly eligible for the program. But the state will continue to split evenly with the feds the cost of those people who were eligible before the law was passed but will be newly enrolled. Continue reading

Why governor should sign bills setting up health care exchange

Gov. Arnold Schwarzenegger is deciding whether to sign legislation that would create the “California Health Benefit Exchange,” a key piece of federal health care reform. This is the perfect time, therefore, to clear the air about what the exchange will and won’t do. A clear-eyed account of the facts about the exchange shows it to be the exact kind of moderate solution that the governor has pushed for throughout his tenure, one that combines a concern for the public good with the power of the private market.

The exchange will be a new state agency that will set up two health insurance purchasing pools, one for individuals and one for small businesses. Only people taking advantage of subsidies or tax credits will be required to purchase through these marketplaces. To be successful, though, the exchange will have to compete for and win a significant chunk of the business of people buying health insurance without financial assistance, particularly in the small-business market. Continue reading