HEALTH ACCESS UPDATE Wednesday, December 31st, 2008
SEVERE CUTS, INCREASED TAXES, IN NEW BUDGET PROPOSED BY GOVERNOR * Under Governor's Budget, Hundreds of Thousands of Californians Would Lose Coverage * Over 2.5 Million Would Lose Dental, Vision, Podiatry, and Several Other Benefits * Public Hospitals Cut; Low-Income Aged, Blind and Disabled Would Have to Pay More
New on the Health Access WeBlog: More on the New Year's Budget; Obama’s Holiday House Meetings; The Limited Options in a Recession; Congressional Musical Chairs; Searching for a Simpler System; The Impact of the Economy on Health Coverage; The CBO Report on Health Reform; A Fond Farewell to Hanh Quach; Congratulations, Secretary Solis!; The Governor’s Veto Threat; A Majority-Vote Budget Package?
Governor Arnold Schwarzenegger's Department of Finance released today, on New Year's Eve, a summary of the Governor's budget proposals for the current budget year, to close a $41.6 billion budget gap.
The budget proposes $14.3 billion in tax increases and other new revenue, and $17.4 billion in spending cuts over the next 18 months, which includes both the first half of 2009, and the 2009-2010 budget year. It still includes significant borrowing, as well as the previously-approved securitization of the state lottery.
The Governor introduces this budget for the new year while he continues to negotiate (via videoconference line from his holiday vacation in Idaho) with legislative leaders around a mid-year budget package of $18 billion in additional cuts and revenues. That package that was passed the legislature by majority vote a few weks ago, but the Governor has threatened to veto. In the name of economic stimulus, he is demanding changes to worker and environmental protection laws.
SEVERE HEALTH CUTS REVISITED
The budget includes many cuts that were previously rejected by the Legislature as too severe. It proposes to deny coverage to over a half-million Californians, and to deny specific benefits like dental, optometry, podiatry and psychology to millions more. The proposals would significantly impact not just state's health system, but also have an economic impact as well: California would lose hundreds of millions of dollars in federal matching funds, more than doubling the negative impact of these cuts not just in the health system, but the economy as a whole.
Regarding just the health care cuts, the Governor's budget proposal would:
* Deny over a half-million low-income working parents Medi-Cal coverage, by lowering the eligibility from 100% to 72% of poverty level, cutting off eligbility for parents in families of three making more than $13,000. The cut would be $5.2 million in 2008-09; $176.4 million in 2009-10, and $342 million in 2011-12, ultimately impacting over 429,000 California parents. Over 100,000 additional Californians, largely legal immigrants, would lose most of their coverage under other proposed cuts.
* Eliminate dental, optometry, podiatry, psychology, and several other benefits for 2.5 million parents, seniors, and people with disabilities on Medi-Cal coverage. This cut would be $39.4 million in 2008-09 and $258.8 million in 2009-10.
* Impose significant additional costs on low-income aged, blind and disabled Californians--over 73,000 who make just over $890/month as individuals would have to pay potentially hundreds of dollars a month or forgo care and coverage. This cut would be $28.6 million in 2008-09, and $371.6 million in 2009-2010.
* Siphon funds away from counties, providers, and public hospitals on which we all rely. For public hospitals, the proposal would reduce rates by $54.2 million, at exactly the time the demand for their services is increasing. For counties, the proposal would also suspend cost-of-living increases, a cut of $24.7 million, that counties need to administer the Medi-Cal program. For providers, the proposal would also cut $85.5 million by delaying payment to Medi-Cal fee-for-service providers--effectively forcing these health providers to lose a month of reimbursements.
* Eliminate the First Five Commission, and thus significant funding for a variety of health coverage and other services for young children, such as "Healthy Kids" programs in various counties. This cut would be $275 million, but would require voter approval. A version of this proposal had been offered by Republican legislators, but this is the first time it has been adopted as part of the Governor's proposal.
There are also significant cuts to mental health, developmental services, in-home supportive services, CalWORKS, SSI/SSP, food assistance, and other human services. There are over a billion dollars in cuts to health and human services in the budget year, and that number significantly increases as the cuts are fully implemented in future years.
Health Access California, the statewide health care consumer advocacy coalition, has a quick one-sheet detailing the health cuts proposed by the Governor (not including the new First Five Commission cut), along with estimates of the numlber of Californians impacted, on our website: http://www.health-access.org/advocating/docs/MidyearCuts1204308.pdf
THE DEBATE ON REVENUES
Despite his history, Governor Schwarzenegger has proposed some tax increases to deal with this monumental budget problem. They do not match the $16 billion in cuts that have already been made recently, much less the additional cuts that he puts forward in his proposal announced today.
The Governor's budget put forward the following "major revenue proposals:"
* Temporary 1.5-cent increase in the Sales and Use Tax rate. * Broaden the Sales and Use Tax base to include certain services. * Increase the Beverage excise tax by a per gallon surtax equivalent to a “nickel-per-drink.” * Adopt a 9.9-percent Oil Severance Tax. * Reduce the personal income tax dependent exemption credit to equal the personal exemption credit. * Increase the vehicle registration fees. * Shift Tribal Revenues from Transportation to General Fund. * Transfer and borrow balances from special funds.
While these revenues may be inadequate to prevent the severe proposed cuts to health, education, and other vital services, the Governor acknowledges the need for additional revenues, unlike Republican legislators, who have signed pledges against any tax increases--thus forcing even additional cuts. Those Republican legislators--whose votes are needed to meet the 2/3 vote threshold to pass a budget and/or taxes--have so far refused to vote for any proposed budget or taxes as a result.
Because of the Republican blockade, the Democratic majority in the legislature passed in late December a mid-year $18 billion budget package that included cuts and fees--which can be passed by a majority, rather than 2/3, of the legislature. They are currently negotiating with Governor Schwarzenegger, who himself has held out in signing that package.
All experts warn that if at least some budget solutions (cuts and/or revenues) are not passed in the next few weeks, California will run out of money as early as February.
The cuts in health seem to be similar to what has been proposed before: severe cuts in eligibility and benefits. One new element is the elimination of the First Five Commission, which would need to be approved by voters. And there's LOTS of ugly cuts in human services.
Even the Governor recognizes the need for revenues...
From the document, here are the revenues that the Governor proposes:
Major Revenue Proposals * Temporary 1.5-cent increase in the Sales and Use Tax rate. * Broaden the Sales and Use Tax base to include certain services. * Increase the Beverage excise tax by a per gallon surtax equivalent to a “nickel-per-drink.” * Adopt a 9.9-percent Oil Severance Tax. * Reduce the personal income tax dependent exemption credit to equal the personal exemption credit. * Increase the vehicle registration fees. (See “Special Fund Revenue” section below) * Shift Tribal Revenues from Transportation to General Fund * Transfer and borrow balances from special funds
From the write-up of the Governor's proposal for a 2009-10 budget.
The major General Fund policy adjustments include:
* A decrease of $275 million through elimination of the California Children and Families Commission and redirection of all state funds and 50 percent of local funds to support children’s programs administered by the Department of Social Services. This reduction would target resources to high-priority state programs that would otherwise require General Fund support, while also allowing some funding to be retained by counties to continue to fund local priorities. This proposal does not impact local fund reserves.
* A decrease of $24.7 million for suspending the statutory COLA for County Administration in the Medi-Cal Program.
* A decrease of $50.8 million in 2008-09 and $668.7 million in 2009-10 for various eligibility and benefit changes in the Medi-Cal Program, including:
* $39.4 million ($19.7 million General Fund) in 2008-09 and $258.8 million ($129.4 million General Fund) in 2009-10 by eliminating certain Medi-Cal optional benefits for adults, including dental, optometry, and psychology.
* $4.4 million ($9.4 million General Fund and increased federal funds of $5 million due to diminished recoupments) in 2008-09 and $64.6 million ($139.9 million General Fund and increased federal funds of $75.3 million) in 2009-10 by providing “limited-scope” benefits to newly qualified immigrants and immigrants who permanently reside under the color of law.
* $9.6 million ($4.8 million General Fund) in 2008-09 and $142.4 million ($71.2 million General Fund) in 2009?10 by implementing month-to-month eligibility for undocumented immigrants unless a subsequent emergency ensues. * $5.2 million ($2.6 million General Fund) in 2008?09 and $176.4 million ($88.6 million General Fund) by reducing income eligibility for the Medi?Cal 1931(b) program and modifying eligibility for two parent families by redefining under?employment.
* $54.2 million General Fund and an increase of $54.2 million in federal funds in 2009-10 by reducing reimbursement rates for public hospitals and instead using the federal funds for particular public health programs.
* $28.6 million ($14.3 million General Fund) in 2008-09 and $371.6 million ($185.8 million General Fund) in 2009-10 by increasing the Medi?Cal share of cost requirement to the 2001 eligibility level for the Aged, Blind, and Disabled program.
* A shift of $85.5 million from 2008-09 to 2009-10 to reflect a one?month delay in checkwrite payments to Medi?Cal fee-for-service providers. This proposal is in addition to a previously authorized two-week delay under current law.
Some of these numbers don't look big at first, but these are policy changes, and the full impact of these cuts are not fully seen until a year or two out. In other words, for many of these cuts, the impact is much more severe.
YEAR IN REVIEW: A ROUGH, TOUGH YEAR FOR HEALTH CARE * Comprehensive Health Reform Stalls at Beginning of the Year * Ugly Budget Cuts Health Care; Makes Budget Situation Worse in Future Years * Major Bills Die In Legislature and on Governor’s Desk
New on the Health Access WeBlog: Obama’s Holiday House Meetings; Festivus’ Airing of Grievances; The Limited Options in a Recession; Congressional Musical Chairs; Searching for a Simpler System; The Impact of the Economy on Health Coverage; The CBO Report on Health Reform; A Fond Farewell to Hanh Quach; Congratulations, Secretary Solis?; The Governor’s Veto Threat; A Majority-Vote Budget Package?
In the fight for quality, affordable health coverage for all Californians, the year 2008 was a year of setbacks and steps back--not just opportunities lost, but decisions that will cause many Californians’ coverage to be lost.
It started with the end of the proclaimed “Year of Health Reform,” as a much-watched, much-negotiated comprehensive health reform stalled in January. The year was marked by the failure of many more bills, big and small, ambitious and specific, blocked by legislative action or a Governor’s veto pen.
Ultimately, the year was dominated, from beginning to end, with the grim budget news. On January 10th, Gov. Arnold Schwarzenegger released an austere budget that imposed 10 percent cuts across the board, making cuts to health and other vital services. Those reductions in health would have swelled the number of uninsured significantly. Even as severe cuts were made in the latest budget in history (and perhaps the ugliest), the problem at the end of the year is even worse, and negotiations continue for additional cuts.
Despite the troubled economic and budget times that continue, there is hope for health care with new leadership, especially a new President and Congress at the federal level, as well as in the state legislature.
COMPREHENSIVE HEALTH REFORM
After a year of debate and discussion, a comprehensive health reform measure, ABx1 1, stalled in the first month of 2008. Negotiated between Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez. ABx1 1, failed to pass the Senate Health Committee, chaired by Senator Sheila Kuehl. The bill would have extended health coverage to around 4 million more Californians--more than 70 percent of California’s uninsured—through expanded public programs, a state-negotiated purchasing pool, and employer-based coverage. The bill would have also provided additional assistance and security to millions more who struggle to get and keep coverage.
Several factors led to its demise, from specific policy differences, to a delayed and then rushed negotiation process, to petty personality politics. The rapidly deteriorating fiscal picture did not help. “We are faced with some very particular realities today,’’ said Senate President Pro Tempore Don Perata at the time. “Just because we should, doesn’t mean we can.’’
California began the year with a $14.5 billion budget deficit, which swelled to $17.2 billion and lead to the longest budget stalemate ever – a budget signed 85 days late.
Health advocates vigorously fought proposals by Gov. Schwarzenegger to drastically reduce health services, which would have left a million more Californians uninsured, and millions more with less access to benefits and providers. Cuts that were proposed yet prevented included: * Directly denying low-income parents who work Medi-Cal coverage (resulting in 440,000 uninsured over three years) * Eliminating various benefits for 2.5 million adults on Medi-Cal, such as podiatry, eye doctors, dental and other vital services.
Health Access has a full list of health budget cuts contemplated here. Major health cuts were made in the final budget, passed in September. (A list of the final cuts can be found here.) The budget made health cuts which directly impact the care and coverage of hundreds of thousands of Californians, and the health system on which we all rely: * Cutting already lowest-in-the-nation Medi-Cal reimbursement rates for doctors and hospitals by another 10%. (This cut has been largely prevented, to date, due to a court order.) * Shrinking Medi-Cal enrollment by imposing quarterly status reports for children (resulting in over 300,000 dropping coverage over three years). * Increasing Healthy Families premiums by nearly 70% in some cases (resulting in the loss of coverage for more than 60,000 children). * Cutting a range of services to seniors.
Because of the unique California rule that requires a 2/3 legislative vote for the budget and taxes, the Republican minority in the legislature was able to hold the budget process hostage, ultimately delaying it to be the latest budget in state history. While Republican lawmakers stated their sympathy with providers who could not afford to care for patients on low reimbursements and had urged against reducing rates, they could not be convinced to increase revenues to avoid further cuts. Ultimately, the final budget did not raise any permanent revenues and relied on approximately $10 billion in cuts.
Even worse, it included elements, like a corporate tax giveaway and an unfunded “rainy day” fund, that siphon money away from health, education, and other vital services in future years—making the pressure for devastating cuts even more acute.
Finally, the budget – as signed – anticipated a $1 to $2 billion deficit at the close of the year. As the global economy crumbled, that number ballooned exponentially, leading to continued negotiations about further cuts (and discussion about the need for revenues.)
In related developments over the year, the Managed Risk Medical Insurance Board (MRMIB) twice considered capping enrollment in the Healthy Families, and placing children on a “waiting list” for coverage. Both times, last minute funding efforts, at the federal and state level, provided bridge funding into 2009, but the threat continues.
CONSUMER PROTECTION LEGISLATION
With major comprehensive reform stalled, and a grim budget situation, advocates regrouped and attempted to move forward with a reform package focused on consumer protections in the private market – where little, if any, state money would be needed to advance. This package focused on industry oversight was intended to help consumers feel more secure about their health coverage, improve the quality of health care, and give consumers more options for coverage.
Unfortunately, most of these bills died in the Legislature, both due to the opposition of powerful interests, to petty personality politics.
Health Access’ has a comprehensive bill list here of bills that made it to the governor’s desk, were signed or vetoed. Here is a list of all the bills that health advocates tracked this year. Following is a listing of what health advocates attempted to advance this year, and the final outcome.
REFORMING THE INSURANCE MARKET/INSURER OVERSIGHT: Consumers report growing insecurity about the health coverage they buy and feel they are paying more and getting less.
* STANDARDIZING INSURANCE POLICIES: SB 1522 (Steinberg) would sort health insurance policies into five coverage categories, ranging from “comprehensive’’ to “catastrophic.’’ Organization of plans into these categories would enable consumers to better track premium, benefits and cost-sharing, and assist consumers in making apples-to-apples comparisons between plans. Would weed out “junk’’ insurance by developing minimum benefit standards. Outcome: Failed on the Assembly floor by one vote.
* LIMITING RESCISSIONS: In recent years, news media accounts and court documents have revealed how insurance companies retroactively cancel insurance policies once an enrollee begins an expensive course of treatment. This practice leaves consumers on the hook for thousands of dollars in health care and life saving treatments, for which they believed they had coverage. * OUTLAW INCENTIVES TO RESCIND: AB 1150 (Lieu) would outlaw the industry practice of paying bonuses to insurance company employees when they rescind policies, for setting targets for rescinded policies and/or setting financial goals based on savings on health care claims. Outcome: Signed into law. * COVER FAMILY MEMBERS, DUTY OF HONESTY FOR BROKERS: AB2569 (DeLeon) would require insurers to continue to cover family members if one family member rescinded and would also impose duty of honesty and accuracy on brokers who assist individuals in buying coverage. Outcome: Signed into law. * STATE APPROVAL FOR CANCELLATIONS: AB 1945 (De La Torre) Would establish an independent DMHC/DOI review process if an insurer wants to rescind coverage, and raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history. Outcome: Vetoed * EIGHTEEN-MONTH CUTOFF TO RESCIND: AB 2549 (Hayashi) would impose an 18-month limit in which insurers are allowed to rescind health policies for fraud once consumers’ applications are accepted. Outcome: Held in Senate Appropriations committee.
* INSURING THE UNINSUREABLES/IMPROVING THE “HIGH-RISK POOL”: AB 2 (Dymally) would reform the Managed Risk Medical Insurance Program, which provides coverage for “un-insureables” who have “pre-existing conditions.’’ It would make the high risk pool more affordable and available and eliminate the annual $75,000 annual cap on benefits. Outcome: Vetoed
* USE OF INSURER PENALTIES: SB 1379 (Ducheny) would use some of the fines levied on insurers for improper rescissions to subsidize MRMIP and repay loans for physicians working in underserved areas Outcome: Signed into law.
* FOSTERING A PUBLIC INSURER OPTION: SB 973 (Simitian) would create a statewide public insurer, connecting existing regional, county-based health care plans, to compete with private health care plans and provide consumers more affordable coverage choices. Outcome: Vetoed .
* COVERING ADULT CHILDREN: One bill that will help some Californians, SB 1168 (Runner), would allow adult dependent children, who are covered under their parents’ health plan, to stay on that coverage even if the child takes a medically necessary leave of absence from school. Outcome: Signed into law
* REGULATING RATES: AB1554 (Jones) would regulate insurance rates. Outcome: Held in Senate Health Committee
IMPROVING QUALITY, REDUCING COSTS
* TRANSPARENCY: AB 2967 (Lieber) would require public reporting of cost and quality by doctors, hospitals HMOs and others in the health care industry. Outcome: Significant amendments were forced into the bill. Held in Senate Appropriations Committee.
* NEVER EVENTS: AB 2146 (Feuer) Bans hospitals from billing patients or insurers when they have made an avoidable mistake, such as operating on the wrong person, prescribing the wrong drugs, or leaving foreign objects inside a surgery patient. Outcome: Held in Senate Appropriations Committee
* PREVENTION: AB 1472 (Leno) Would establish the California Healthy Places Act, and require state agencies to work together assess and reduce health disparities in underserved communities. Outcome: Held in Senate Appropriations Committee.
CONTINUING THE CONVERSATION ON COVERAGE EXPANSION
* UNIVERSAL CHILDREN’S COVERAGE: AB1 (Laird/Dymally) and SB32 (Steinberg) would expand children’s coverage, including the Healthy Families program, to all children in families up to 300% of poverty ($49,800 for a family of 3). Outcome: Did advance this year.
* MEDICARE-FOR-ALL SYSTEM: SB840 (Kuehl) would establish a single-payer health care system in California that would enable all residents to have health coverage. Outcome: Vetoed
OTHER LEGISLATIVE EFFORTS
* MANDATED BENEFITS: A number of lawmakers this year also attempted to guarantee better insurance benefit packages by mandating coverage, such as maternity coverage (AB 1962 – De La Torre), mental health parity (AB 1887 – Beall) and the offer of durable medical equipment (SB 1198 – Kuehl). Outcome: Vetoed.
* HOSPITAL OVERSIGHT: A few bills attempted to shed more light on hospital transactions. * AB 2400 (Price) required public notice before closing a hospital. Outcome: Signed into law. * AB 2741 (Torrico) would require for-profit hospitals to undergo health impact analyses to gauge the transaction’s effects on the community’s public interest. Outcome: Did not pass Senate Appropriations * SB 1351 (Corbett) would require attorney general oversight into transactions involving district hospitals. Outcome: Vetoed * AB 2697 (Huffman) would have required so-called “boutique hospitals’’ to asses their impact on a community’s health system annually, specifically whether they siphon doctors, workers, providers from hospitals caring for less affluent populations. Outcome: Signed.
* EMERGENCY DEPARTMENT BILLS: AB 1203 (Salas) would prevent emergency departments – which do not have a contract with a patient’s insurance company -- from directly billing the patient for treatment provided after a patient has been stabilized. Requires the hospital to seek payment directly from insurers. Outcome: Signed
* EMERGENCY PHYSICIAN BILLS: SB 981 (Perata) Would prevent emergency physicians – who do not have a contract with a patient’s insurance company -- from directly billing the patient, requiring providers to seek reimbursement directly from insurers. Outcome: Vetoed
* DENTAL CREDIT CARDS: SB 1633 (Kuehl): Would have prohibited dentists’ offices from offering high-interest loans to patients while they are under the influence of anesthesia. Would also prohibit dental offices from charging lines of credit before services have been rendered. Outcome: Vetoed
Health consumer advocates can take solace in that a few good bills were signed, and that bad bills were stopped, such as those to promote Health Savings Accounts (HSAs). While cuts were made, several other severe cuts were prevented—even if they still remain in discussion.
California’s fiscal situation promises to make for a difficult year, but advocates are primed to continue the fight for the revenues to provide sustainable funding to pay for the state’s basic needs in health and other key services.
These setbacks and steps back does not mean that Health Access or health consumer advocates give up, but that we redouble our efforts—to prevent budget cuts and raise the revenues needed to sustain key health programs, to work for state-level consumer protections and reforms and to continue the push for comprehensive health reform, and to take advantage of the new opportunities at the federal level.
The election of President-elect Barack Obama provides significant hope for health reform at the federal level. He made health reform a top priority in his campaign, spending over $100 million on TV advertising on the issue in the last month alone. His appointments, including Senator Tom Daschle as Secretary-designate of Health and Human Services, indicate his seriousness. And the immediate Congressional agenda includes everything from SCHIP reauthorization to economic stimulus that includes investment in health information technology and aid to states through Medicaid matching funds.
Health Access will continue to keep advocates statewide abreast of efforts in Sacramento, Washington, and beyond in the next year.
I'm a little late in posting this, but discussions are going on through the holiday season and into the new year. One was featured by Robert Pear in the New York Times. They end up being very different, depending who is sponsoring and structuring the conversation, but the fact that they are going on at all is the important and impressive point.
As a health consumer advocate, it seems the most appropriate holiday this season is Festivus, with its annual airing of greivances.
Where would you start? Health reform stalling at the beginning of the year? Many worthy bills dying in the legislature or by the Governor's veto pen, not for policy reasons, or even the standard tug-of-war between interests, but seemingly for petty personality politics?
Any recap of the year starts and ends with the budget crisis--the ugly cuts made (including paperwork burdens for the purpose of having kids drop off coverage), as well as the many threatened; the disastrous September budget that makes the situation worse, with corporate tax giveaways and an unfunded "rainy day" fund that--if not defeated on a future ballot--will siphon money from health and education, and other vital services. We have a "year in review" piece ready to publish, but given that budget negotiations are continuing, we may have more bad news to add to it before the year is out.
In a "bah humbug" mood about the budget, George Skelton in the LA Times has a holiday column that simply takes apart the arguments by those that refuse any discussion of new taxes to prevent devastating cuts. There's no time of year where it's good to deny health care to our fellow Californians, whether they be children, the poor, or others. Hopefully the decisions made in the holiday season start the new year in a positive way.
Funded by Wellpoint (Blue Cross of California) with advisors like newly-elected Republican Congressman Tom McClintock, the Foundation attempts to minimize the health care crisis, suggesting the problem of the uninsured is simply one of consumer education, rather than one in need of signficant public policy reform. The spokesperson made a couple of swipes at "guaranteed issue" policies in other states, for example.
Also, while it is true that there is a significant population that is eligible but uninsured for public programs, their website wildly inflates the number--on the program today, I felt I needed to make the point that there are many people--even under the poverty level of $10,400 for an individual--who do *not* qualify for Medi-Cal or other public program coverage.
The website also characterizes that you aren't "truly uninsured" if you are a family of four making $50,000, since apparently, a $12,000 family policy should somehow be affordable for you. Or if an insurance company like Wellpoint denies you coverage because you have a "pre-existing conditions," which accounts for some of those "non-poor" uninsured.
I was concerned about some of the advice given this morning. When people leave (or are laid off from) an employer, they should strongly consider COBRA, even given the expensive cost. If you turn down the group coverage available under COBRA, then you are largely left powerless in the individual insurance market, where you can be denied for any or no reason. Many people who consider themselves healthy find themselves denied for a relatively minor "pre-existing conditions." Also, while there might be cheaper premiums in the individual market, they often are not better deals: they typically have very expensive deductibles, cost-sharing, and have limited benefits.
While expensive, group coverage often provides a better value in terms of the actual coverage provided. Typically, the individual insurance market is the most expensive, least efficient method of getting coverage. COBRA can be expensive, but think twice before turning it down.
Either way, the radio program ultimately spotlighted many of the problems with the health system, and the callers to the program clearly recognized a strong need for health reform. So while people struggle with the current, limited options, we need to continue to press for those policy changes to give us additional coverage options and health security.
In our hearty congratulations to our own California Congressman Henry Waxman about his elevation to chair the House Energy and Commerce Committee, we mentioned that his predecessor and competitor, Rep. John Dingell of Michigan, has been a champion of health reform in his own right.
So did anything really change? Yes. In this situation, Dingell sheparding reform but with Waxman as chair, still means that California's concerns will get a fuller consideration. And that's important because California's health reform need are particularly acute, as a state with a high cost of living, more low-wage workers, less employer-provided coverage, more people denied for pre-existing conditions, etc.
It's actually useful in providing a snapshot of the current financing streams, but it actually could be more descriptive (and thus messier). We could add SCHIP alongside the Medicaid box, indicate the relative size of employer-provider care (over 50%) compared to other sources, provide a greater description of the mess of the individual insurance market (it looks the most straightforward, when in fact its the ugliest), separate the "health plans" box by type of plan, if not by company, and somehow include the funding streams for "safety-net" providers (and we'd probably need to include county government as well).
To all this complexity, Ezra writes: "Tell me again how national health care would be layered and complex as compared to the sleek elegance of our current composition."
His point is a good one: I remember New York Senator Al D'Amato running around in 1993 with a chart of the Clinton health reform plan that was made to look like spaghetti night at Rube Goldberg's. Yet no one ever compared that chart to the mind-numbing complexity of the status quo, which is the appropriate comparison.
But I think this chart makes the opposite point as well. Health reform will necessarily be complex--perhaps even more complex than this chart, because this is where we start from. Even a transition to a super-simple single-payer system, which I would support, would involve a transition that had to manage disentangling these financing streams, which would include excruciating policy acrobatics. President-elect Obama's plan proposes providing more options--and so potentially more complexity--for consumers and employers, from new purchasing pools to a public plan option.
This isn't necessarily a bad thing. An iPhone is a complex device inside, but it is an elegant device that is simple to use, and that's the main goal. Sometimes the system has to be more complex internally to provide a simpler consumer experience.
My main point: Having a purchasing pool that standardizes benefits, ensures a basic level of quality coverage, negotiates for the best deal, collects and computes consumers' potential subsidies and tax breaks, and organizes your options in an easy-to-understand manner--all that may be a complex undertaking, but it would provide the real administrative simplicity that many consumers seek. That's what missing from our current, chaotic health system.
The goal is to make coverage not just available and affordable, but administratively simply... if not automatic. And if it takes complexity to get there, so be it.
[UPDATE: I'll be on the radio on this subject, on KQED's Forum, from 9-10am on Tuesday morning.]
With the recession and the expectation that job losses will get worse next year, a growing number of American workers will find themselves not only out of a job, but without access to affordable health coverage. Already, about 46 million Americans have no health insurance....
"Even during good times, employers trimmed and scaled back their coverage. In these tough economic times, we have to be prepared for a dramatic drop in coverage when people are losing their jobs and thus their health insurance," said Anthony Wright, executive director of Health Access California, a coalition of grassroots health care consumer groups.
To make matters worse, traditional safety-net options - public health programs, clinics and other sources of care that receive government funding - are being cut back or threatened by state and national budget crises. Health services face major cuts under proposals made to bridge California's estimated $41.8 billion budget deficit in the next 18 months.
LiveLong Medical Center, a group of nine Bay Area health centers that offer care to the uninsured, saw a 25 percent increase in the numbers of patients from July until the end of October compared with the same period last year.
"The number of uninsured patients knocking on our door is growing. That's not something we budgeted for," she said.
The article has a useful list of the range of (albeit limited) options for people losing their coverage during this economic crisis.
And for policymakers, this is a reminder that this is the exact worst time to make cuts to safety-net programs, like Medi-Cal and Healthy Families, and providers, from community clinics and public hospitals. And that the need for major reform is more urgent now than ever before.
It's not a health reform plan. But it's how the health plan will be evaluated.
As we have reported before, Peter Orzag is leaving an important legacy at CBO, before he swtiches to President-elect Obama's Office of Management and Budget (OMB). He increased the health policy staff there, and has now put forward their thinking about how they intend to look at these issues.
Many, including Ezra Klein, report about CBO's "devastating" role in the Clinton health plan in 2008. We have other examples: During California's reform debate earlier this year, the state's CBO-equivalent, the LAO, was asked to evaluate AB x1 1 (and then later, SB840). It was expected--after all, anything that goes on the ballot is required to have an LAO analysis in the voter guide. When nobody knew what the LAO would say, because there was no previous engagement with the drafters of health reform. It's like turning in a test, and having no idea what criteria the teacher would be using to determine a grade. (We had a problem with the analysis--of what was asked: risks without context, without benefits--and what was not asked: the comparison with the status quo.)
What the CBO has published is like getting the teacher's manual to the class textbook. We may not like the answers, but at least we know what their assumptions are. There is a more transparent process, which also allows us to perhaps challenge some assumptions: Can we count savings from preventative care efforts? What are the assumptions of the rate of growth of health costs over five years? What is the CBO's understanding of the status quo?
For a lot of people interested in health reform, this will be required reading. I haven't read it yet, so we'll post later about our thought, and what we disagree with... but it's good to be having the conversation now, rather than later. The process bodes well for the prospects of health reform.
It is with sadness that we wish farewell and good luck to Hanh Kim Quach, as she moves on to other career opportunities.
Over the last several years, she has served as our policy coordinator, researching and writing many of our reports, fact sheets, analyses, and E-mail updates. Readers of this Health Access WeBlog know she has also been my co-blogger, chronicling the inner workings of the Capitol, and highlighting the interesting news on health policy and politics from around the web and the world.
Today is her last day here, both on the blog and with Health Access, as she moves across the street into the building, to work in the office of Assemblywoman Mary Hayashi, who has been a great ally on health reform even before her election two years ago.
Hanh came to us after many years in journalism around the state of California, working most recently for six year a Capitol Bureau reporter for the Orange County Register, leaving that noble profession just before the recent rounds of downsizing. Her background enabled her to be invaluable in finding information, whether from the web or from her many friends and sources around Sacramento.
We'll miss her writing skill, her doggedness and willingness to work into the night to get our coalition members information and updates in the most timely manner possible; her innate sense of justice; and her warm and fun presence as part of our family here.
We know our blog readers will miss not just her byline but her style and substance. We are hiring, other staff members have already begun contibuting to this blog, and we have some exciting improvements for this blog and website planned for upcoming months.
But for today, we just want to say thanks for her service, and good luck.
But we know her from many other fights for health care here in California: * HMO Reform: Then-Senator Solis carried important legislation on requiring coverage of diabetes supplies and devices. * Hospital finance: Solis carried multiple pieces of legislation on behalf of public hospitals * Office of Multicultural Health * Expansions of Healthy Families * Medi-Cal improvements
Like all good advocates, Hilda Solis was willing to take on good fights and lose in order to move an issue forward. Not all her health care bills became law, something that we at Health Access California, often experience ourselves but that never deterred Solis from fighting to get Californians, all of them, the health care they need.
It is not a surprise to those of us who knew Hilda Solis when she was a California legislator that she would be Secretary of Labor: here in California, she carried legislation creating a Labor Agency, she carried minimum wage bills, and she fought year after year to improve working conditions and workplace safety in the garment industry.
From all of us at Health Access: good luck, Madame Secretary!
Governor Schwarzenegger has now announced he is not signing the Democratically-passed budget solution, as reported by Dan Smith in the Sacramento Bee, Jordan Rau and Patrick McGreevy in the Los Angeles Times, and Judy Lin at the AP.
For months if not years, the blame for this growing crisis has been shared among all, with special mention for the Republicans who seemed more wedded to their "no new taxes" pledge than to actually engaging in serious negotiation. Their position, to want significant cuts and major rollbacks of worker and environmental protections before even talking about the possibility of tax increases to prevent further cuts, was seen by even the Governor's staff as a hostage negotiation. As George Skelton wrote today, it wasn't even that, since hostage takers at least know
The legislative leadership had no choice but to find a way around the legislative Republicans.
The Governor got deserved credit for recognizing the severity of the crisis, and supporting taxes as part of a solution--a position that could not have been easy for him. But now with his threatened veto, the Governor totally owns the fiscal crisis: the stalled infrastructure projects, the threat that California will run out of cash, the additional cuts that will be forced in the future.
For what? Policy changes that will do nothing to stimulate the economy? When the result is stalled infrastructure and additional cuts that will certainly have a much worse economic impact?
This reminds me of the Governor's poor handling of health reform: He delayed any real negotiations for the entire year waiting for the legislative Republicans to come to the table. When he belatedly realizes they never will, he calls a special legislative session, with the focus to work with Democratic leadership on another way to a policy win (in the case of AB x1 1, through a ballot measure to finance the measure). But then he forces some small but specific requirements on the deal, which causes it to lose support with key constituencies and within the legislature, causing the whole deal to fall apart.
But there were lots of overlapping causes for health reform's demise, not just the Governor's stubborness. But at this moment, it seems that's the main cause for the continuation of the budget crisis.
The Senate and Assembly have passed the Democrat's $18 billion midyear relief package -- about $7.3 billion in cuts (no additional reductions to health care) and $9.3 billion in revenue increases and another $1.5 billion in "other solutions.''
Much of the day, Republicans hollered about the legality of the majority-vote revenue increases and have vowed to take the matter to the courts.
It looks, though, that we may be done with budget for this year.
The State Senate is expected to meet at 7pm tonight, to take up an $18 billion budget deficit reduction plan Wednesday evening.
Specifically, the proposal increases general fund revenues by $9.3 billion--but in ways that only require a majority vote, rather than a 2/3 vote for taxes. It would also enact $7.3 billion in cuts (which includes health and human services, but not Medi-Cal or Healthy Families specifically) and finds $1.5 billion in other solutions.
ASSEMBLY AGONIZES OVER BUDGET * Assembly Budget Committee vets Republican Budget Proposal * Full body debates, but fails to pass, $19 billion package of cuts and revenues * Assembly to vote on Republican proposal Wednesday
* Also: Healthy Families to avoid waiting list for children's coverage, for now * ALERT: Join Budget Actions This Friday, in Bay Area, Fresno, and Los Angeles
New on the Health Access WeBlog: Assembly Angst, More Updates and Links; Stay of Execution for Healthy Families, New Republican Budget; Cuts vs. Revenues
The state Assembly on Tuesday started early in the morning and went late into the night in an attempt – a week before Christmas – to shore up the state’s rapidly deteriorating budget -- which is estimated to have a deficit of $42 billion from now through June 2010. By the end of the day, lawmakers had vetted two proposals, one by Republicans that would cut services by $15.6 billion (on top of over $10 billion in cuts already enacted this year), and one proposed by Democrats which contained $7 billion in cuts and $11.3 billion in new revenues.
Neither of the proposals was new. The Republican proposal repeated many of the severe cuts that the Legislature has previously rejected. The Democrats combined revenues proposed by Gov. Arnold Schwarzenegger, and some of the cuts proposed in November. What was marked about the day, though, was the tone.
Democrats hit a high note of exasperation. In most speeches, Democratic lawmakers noted how the combination of cuts and taxes was a bitter pill for them to swallow and that Republicans needed to give on the issue of taxes. All but three Republicans have signed a Grover Norquist no-tax-increase pledge from the Americans for Tax Reform group in Washington, DC.
“This is not fun for any one of us,'' said Assembly Budget Chairwoman Noreen Evans. "We are talking about cutting programs that we came here to protect …and yet here I am asking you to cut those very programs.’’
And finally, said Jared Huffman: “We ask you to elevate the people of this state above Grover Norquist, and we ask you to elevate your oath of office above the pledge to Grover Norquist.’’
Republicans, however, seemed impervious to the pleas and continued to hammer away away on their position that taxes would harm the economy, even though Legislative Analyst Mac Taylor has said that both cuts and taxes would cause significant harm similarly, but that the state had no choice but to do both.
THE REPUBLICAN PROPOSAL
A Republican budget proposal, which repeats and combines many of the same severe cuts that the Legislature has previously rejected, received a full airing in the Assembly on Tuesday. Assemblymember Roger Niello, vice chairman of the Assembly Budget Committee, presented the minority party’s proposal, which stayed loyal to the party’s view that Republicans would not raise any new revenues, no matter the cost to children, aged, blind, disabled and others who rely on state services.
The Republicans proposed $15.6 billion in cuts (on top of $10 billion already enacted this year), including more than $10 billion to K-14 education. In health care, advocates will see a familiar list, which was largely vetted last week in the Senate Budget Subcommittee: * Deny Medi-Cal coverage nearly a half-million working parents who are under the poverty level; * Eliminate Medi-Cal benefits, such as dental, podiatry, incontinence creams and washes, and optometry for 2.5 million parents, seniors, and people with disabilities; * Require seniors earning around $900 a month to pay one-third of their income on health care before benefitting from Medi-Cal; * Postpone pilot projects under SB 437, which would streamline enrollment for eligible children into Medi-Cal and Healthy Families, and ensure children stay healthy, productive and don’t contract expensive illnesses; * Reduce rates for family planning services, for which California receives $9 from the federal government for every $1 the state invests; * Siphon funding from public hospitals on which we all rely; and * Impose a waitlist for Healthy Families, closing the door to coverage for over 160,000 kids.
[The last item, closing enrollment in Healthy Families, has acually already been under consideration by the Managed Risk Medical Insurance Board that runs the program, set to make a decision this Wednesday. But earlier this week, the First Five Commission voted to offer $16 million to MRMIB to prevent the waiting list from being imposed through June. However, just as that action was announced, the Republicans has embraced the waiting list as a proposal of their own.]
Overall, the Republican strategy, Niello explained, was to target the areas of the budget that were fastest growing. The areas targeted – health and human services – are growing at a rapid pace because the state’s senior population is growing and needs such services. Health services are now growing, as expected, due to the increased need from the economic downturn.
The discussion centered around what type of action would actually stimulate the economy – and whether simply holding the line on taxes would accomplish the type of stimulus that would resuscitate the state’s finances.
Cuts – particularly in programs for low-income recipients – also hurt the economy. Many economists would argue that cuts to services may have the biggest negative economic impact, given that those benefits are directly spent in the state's economy. In health care especially, the state would forgo valuable federal matching dollars, and curtail investment in the health sector, which tends to have higher wage jobs, as an earlier Health Access report shows.
Assemblyman Ira Ruskin cited other economic studies that “have shown untargeted cuts have done more to harm the economy than well-targeted taxes’’ because, he said, the cuts would be taken out of the pockets of the people who live on such thin margins, that they would need to spend it. Niello said that Republicans simply disagree that the public sector can provide a larger multiplier effect on the economy than the private sector.
Assemblyman Wes Chesbro asked about how the Republican proposal balanced increased need for services – due to increases in an elderly population and a downturn in the economy – against cuts.
“We need to control costs in all areas of government,’’ Niello said succinctly. But Assemblywoman Ana Caballero pointed out that policymakers needed to make a choice: pay now, or pay later.
“The reason these safety nets are in place is so that we can get resources to people. The question is not polemic,’’ she said. Children need to stay healthy. People need workers to care for them in their home so they are not checked-in to more costly nursing home facilities later. Democrats also tried to push Republicans on how flexible they would be on the tax issue -- an area where Niello repeated the no-tax mantra.
On the floor, the Democrats' pleas became increasingly desperate.
“We’ve heard it from every angle of the English language possible: we’re broke,’’ said Mike Davis. “And it’s only a matter of time before the rubber hits the road.”
“We don’t have a choice. We’ve moved to a position of great danger for our state,’’ said Wes Chesbro. “We ask our colleagues not to let it get worse.”
“We need to take one step backwards so that in the future, we can take two steps forward,’’ said Warren Furutani.
Both the Democratic measures put up on Tuesday failed, with 0 or 1 vote. The Assembly will reconvene on Wednesday at noon to review and vote on the Republican "all cuts" measure.
Health Access will continue to monitor the Legislature and budget. For more information, contact the author of this report, Hanh Kim Quach, at email@example.com.
ANTI-BUDGET CUT ACTIONS THIS FRIDAY
Health and human services advocates continue to organize around the state in opposition to deeper cuts and to demand a shared solution that includes taxes and revenues to prevent further cuts to health, human services and schools.
Bay Area: The Bay Area Budget Coalition is sending teams to nine legislators’ offices in the East Bay with the message, “Be our Holiday Hero, take bold action to protect and invest in California ’s people!” Carolers will sing customized holiday carolers to highlight the need for new revenues to prevent further cuts, present legislators with holiday cards, and invite legislators to be a Holiday Hero. More carolers are needed at all offices. For more information or to RSVP: Jessica Rothhaar, firstname.lastname@example.org or 510-873-8787 ext. 107. Here's the schedule:
10am: Group A: 2694 Bishop Dr, San Ramon (Asm. Buchanan) Group B: 2801 Concord Blvd , Concord (Sen. DeSaulnier) 11am: Group A: 39510 Paseo Padre Pkwy, Ste 280 , Fremont (Asm. Torrico) Group B: 815 Estudillo, Martinez (Asm. Torlakson) 12noon: Group A: 22320 Foothill Boulevard, Suite 540 , Hayward (Asm. Hayashi) 1:00pm: Group A: 1057 MacArthur Blvd. Suite 206 , San Leandro (Sen. Corbett) 2:00pm: Groups A + B: 1515 Clay Street , Oakland (Asm. Swanson & Sen. Hancock)
Fresno: The California Partnership is organizing a delegation to visit Assembly GOP leader Mike Villines’ Fresno district office at 1pm on Friday 12/19, to deliver hundreds of empty boxes signifying what many families will get for Christmas. Advocates are including personal messages telling Villines what the holidays look like for low-income families who are already suffering from the severe cuts made to health and other vital services. Their message to the Republican leader is, “In the spirit of the season of giving, it’s time for the Republicans to give a little in the budget negotiating process, instead of just taking away from low-income families.”
Health and human services advocates in Fresno are welcome to participate. For more information or to RSVP: Nancy Berlin, email@example.com or (213) 385-8010.
Los Angeles : The LA Stop the Cuts Coalition is supporting Friday’s Villines action by mailing empty boxes and unpaid bills to Villines district office at 6245 N. Fresno Street, #106 , Fresno , CA 93710
The Assembly is having an all-day budget extravaganza today. We started out the day with a hearing on the Republican proposal (a fuller report on this hearing to come later) and now awaiting the entire Assembly to come into session for some rumored $19 billion package from the Speaker's office that no one has seen.
Jordan Rau at the LA Times has the story about First Five offering the $16.8 million needed to prevent the Healthy Families program from freezing enrollment and starting a waiting list for children's coverage.
But just to be clear that the Healthy Families program, and children's coverage in general, is still in peril, the Republican caucus just included the proposal to cap the program's enrollment as part of their budget package today.
The Republican budget proposes to deny coverage to a half-million parents, and hundreds of thousands of children, and to deny specific benefits like dental, vision, podiatry to millions more.
This budget would not only harm the health system on which we all rely, but also hinder efforts to stimulate our state's economy. California would lose hundreds of millions of dollars in federal matching funds, doubling--and in some cases tripling--the negative impact of these cuts on jobs not just in the health system, but the economy as a whole.
The proposals include: * Denying nearly a half-million low-income working parents Medi-Cal coverage, by lowering the eligibility from 100% to 72% of poverty level, cutting off eligbility for parents in families of three making more than $13,000. The cut would be $8.6 million in 2008-09; $109 million in 2009-10, and $342 million in 2011-12, ultimately impacting over 429,000 California parents. * Denying coverage to hundreds of thousands of children, by freezing funding and enrollment for the Healthy Families program (potentially closing the door to coverage for over 160,000 children), as well as suspending pilot programs authorized under SB437 to more easily enroll already-eligible children. * Eliminating dental, vision, podiatry and several other benefits for 2.5 million parents, seniors, and people with disabilities on Medi-Cal coverage. * Imposing significant additional costs on 73,000 "aged, blind and disabled" who make just over $890/month as individuals. * Siphoning funds away from public hospitals on which we all rely.
While supporting a so-called "no-new-taxes" pledge, Republican legislators are supporting proposals to force low-income children, parents, seniors, and people with disabilities to pay more for basic and emergency health care.
Let's be clear: Calfornia have already made $16 billion in cuts to health, education, and other vital services; it is time for a shared solution that includes taxes and revenues to prevent even steeper cuts.
MomsRising, which was active in supporting California health reform, is on the case about the threat to cut off California kids from coverage:
For the first time, kids in California who are eligible for healthcare coverage through the state's Healthy Families Program might be denied coverage and put on a wait-list due to a funding shortfall. Unless the Governor and California Legislature act in the next few days to identify funding for the program, over the next six months as many as 162,000 kids won't get the coverage they need during this economic downturn.
Now is not the time to cut healthcare for kids. Tell the Governor and legislators that when the economy is tanking, now, more than ever, families need health coverage to stay afloat: www.momsrising.org/nowaitlist
Truly, this could not come at a worse time. Because of the current economic crisis, never before has the Healthy Families Program been more needed. Enrollment into the low-cost program is now at an all-time high, reaching an average of 27,125 additional children per month. Covering all kids is doable and there's no reason to deny eligible children access to the health coverage they need. Because times are tough in California and other states, President-elect Obama has pledged to work with the new Congress in January to increase money for the states for children's health coverage. We're going to need your help in the coming months to make sure they make good on their promise. Then, we'll play watchdog - when this money is sent to California, make sure the Legislature actually uses this money to cover all kids.
This is just one of the many efforts, by many organizations, to spotlight the impact of the budget crisis, and how these health care cuts hurt all Californians.
HEALTH ACCESS UPDATE Thursday, December 11th, 2008
ADDITIONAL CUTS TO HEALTH SERVICES WEIGHED * Senators revisit previously rejected proposals, including denying coverage to low-income working parents, eliminating Medi-Cal benefits, cutting money from public hospitals, etc. * Democrats and Republicans Senators spar over values; decisions * Governor warns of “financial Armageddon,” chastises Legislature for inaction
TODAY: Health Access/CPEHN Holiday Party, Oakland: THU, DEC 11th, 4-7pm You are invited! Drinks and good company: Max's Diner & Bar, 500 12th St; Come join us!
Click for What's New on the Health Access WeBlog: Daschle official as HHS Secretary; Say no to "saying no;" Old reports get new life; Tough choices in a bad economy;
SACRAMENTO--The Senate Budget Subcommittee which oversees the health and human services budget, chaired by Los Angeles-are Senator Alex Padilla, reviewed an array of 25 cuts to the health budget, many of which have already been heard and rejected several times this past decade.
Still, with a growing budget gap approaching $30 billion by July 1, 2009, lawmakers are shining a light in every corner. Earlier this week, the state’s four top financial officers issued dire warnings on Monday when describing the state’s fiscal future. By March, the state would literally not have any cash to pay its bills.
It was against that backdrop that the Senate subcommittee Wednesday heard proposals that would have made extremely low-income seniors pay more and low-income children get less.
The cuts included: * Denying nearly a half-million low-income working parents Medi-Cal coverage, by lowering the eligibility from 100% to 72% of poverty level, cutting off eligbility for parents in families of three making more than $13,000. The cut would be $8.6 million in 2008-09; $109 million in 2009-10, and $342 million in 2011-12, ultimately impacting over 429,000 California parents. * Eliminating dental, vision, podiatry and several other benefits for 2.5 million parents, seniors, and people with disabilities on Medi-Cal coverage. * Siphoning funds away from public hospitals on which we all rely.
To view the entire agenda of the hearing, click here.
The tenor of the debate was set almost immediately with the first proposal, which would require seniors, blind and disabled individuals who earn $871 a month to have to spend at least $271 on medical services before their expenses are picked up by the state.
“How would an aged, blind and disabled person be able to pay over $270 a month for health care services, and then pay rent and eat with $600,’’ said Sen. Elaine Alquist. “And that isn’t considering the high cost of living.”
The Department of Finance answered: “We recognize that these are difficult choices..’’
But Alquist shot back, “I only ask that they be real choices….and I don’t hear an answer on how this is really doable.’’
Fellow committee member Roy Ashburn shot back that he was fed up with this type of examination of social programs.
“If that is going to be the reaction, then there are some in this committee that are not going to go for cuts. And there are some who recognize the dire situation,’’ he said. “I’m not advocating that we be heartless or harsh. But we can’t balance this budget if the answer is going to be ‘no.’’’ said Ashburn, who has signed the American’s for Tax Reform “no tax’’ pledge.
The remainder of the hearing continued with a similar tone, with administration and department officials testimony giving a hook for lawmakers to become more passionate about their positions.
In another testy exchange, Republican Bob Huff proposed a $50 copay to use the emergency room for non-emergency services as a means to divert people to other places for care. “If this is not a critical urgent thing, there’s another place to go nearby,’’ Huff said.
The Department of Health Care Services, however, reported that the state already charges a $5 co-pay for using the emergency room inappropriately, prompting a snicker from Sen. Dave Cox of Fair Oaks. “With a $5 copay, why should I go anyplace else,’’ Cox said. Angela Gilliard from the Western Center on Law and Poverty explained: “Five dollars may not sound like a lot to many of us on this committee; we buy lattes and go to lunch. But $5 is a lot’’ to the population that must rely on the state’s health safety net for services--and $50 was enough to discourage a low-income Californian from getting needed care, even emergency care.
The committee took no votes today, but Padilla made clear that wasn’t the purpose. The purpose was, “to create daylight to work together.’’
For instance, Padilla noted the copay issue – that perhaps some level of copay between $5 and $50 was in order. Padilla also seemed inclined to continue to delay the start of the SB437 pilot programs, which would streamline enrollment for children into Medi-Cal and Healthy Families, thus getting more eligible children insured--a worthy goal but one that would cost more money.
The Senate and Assembly budget committees will be meeting throughout the next two weeks before the December holidays. At a press conference the same time, a frustrated Gov. Arnold Schwarzenegger told reporters that he felt lawmakers are doing a dismal job while the state “headed toward financial Armageddon.’’ Schwarzenegger has called the Legislature into a second special session to address the budget, under which the body has until January 15th to pass some mix of “solutions’’ – cuts or revenues – on the magnitude of between $17 billion to $24 billion.
Health Access will continue to keep advocates abreast of budget movements in Sacramento. For information, contact Hanh Quach at firstname.lastname@example.org.
Senate Budget Subcommittee on Health is meeting this morning. Republican Sen. Roy Ashburn just chastised Democrats, specifically Sen. Elaine Alquist. Alquist had asked how plausible it was to expect aged, blind and disabled individuals, with incomes of about $870 could possible pay for rent and food on top of $270 for medical care.
“I only ask for real choices…and I don’t hear an answer on how this is really doable,’’ she had said.
Ashburn shot back that he was fed up with this type of examination of social programs. “If that is going to be the reaction, then there are some in this committee that are not going to go for cut. And there are some who recognize the dire situation,’’ he said.
“I’m not advocating that we be heartless or harsh. But we can’t balance this budget if the answer is going to be ‘no.’’’ said Ashburn, who has signed the American’s for Tax Reform “no tax’’ pledge.
LAWMAKERS MEET IN RARE JOINT SESSION ON BLEAK FISCAL FUTURE * Lawmakers warned that they need to act now * State fiscal officers say current situation is the worst they’ve seen in decades * Parties spar over the economic impact of cuts versus taxes
REMINDER: Health Access/CPEHN Holiday Party in Oakland: THURS, DEC 11th * You're invited! Max's 500 12th St, Oakland. 4-7pm. RSVP to email@example.com What's new on the Health Access WeBlog: CPR for CPR, Live Blogging from the Joint Convention, Bankruptcy Debt and Medical Debt, Tough Cookies, New Senate Budget Committees and Chairs, Health Care as Economic Stimulus, Obama and Daschle Asks for Advice; Insurance for Insurance?
SACRAMENTO--All 120 legislators – from those who’ve been here 8 days to those who’ve been here 8 years – gathered in a rare “joint convention’’ in the Assembly Chambers on Monday to get the full fiscal debrief from the state’s fiscal luminaries – the Treasurer and the Controller, the Legislative Analyst’s Office, and the Governor's Department of Finance.
The purpose of the gathering was part Budget 101 for the newbies and a wake-up call, of sorts, even for those who have been at it for a while. The numbers expressed were not new to those who have been watching the budget implosion since it was signed in late September: That California will face a nearly $30 billion deficit if lawmakers do not do something in the next five weeks.
What was striking was the urgency with which all the top fiscal officers spoke. Treasurer Bill Lockyer, whose career in Sacramento spans four decades (1973) intoned that lawmakers need to “adopt an honest and balanced budget very soon. No gimmicks. No phony accounting. Stop plying on the tooth fairy.’’
What makes this year’s deficit so much worse than usual, said Legislative Analyst Mac Taylor, is the fact that the state has already turned over every rock and no longer has money – or tricks – remaining up its sleeve to balance the budget. Additionally, tricks and borrowing that were employed in previous years will be coming due, exacerbating the problem.
The scenario is so scary, said State Controller John Chiang, that the state will not be able to pay its bills beginning in March. While that timeline has been widely known – what was striking about Monday’s testimony is the juxtaposition of numbers.
The state’s general fund is about $103 billion. Typically, California has about $18 billion it can pass around from fund to fund (internal borrowing), like borrowing $100 from a savings account until payday, then repaying that loan.
The problem, Chiang said, is that the state has borrowed so much that that internal borrowing capacity will dwindle to $882 million (that’s 5% of what it usually is). In March, California will have totally maxed out all of that capacity, leaving it $1.9 billion in the red.
Assembly Speaker Karen Bass, speaking to reporters before the joint session, said the reason for the extraordinary meeting was that she wanted all members to hear the same thing at the same time. “I think some of my colleagues, on both sides, are in denial,'’ she said
The Governor last week called lawmakers into a extraordinary fiscal session, which gives them just 45 days to enact midyear cuts and revenues he has re-submitted.
In health care, the Governor's proposed cuts include: * denying Medi-Cal coverage to nearly a half-million low-income parents; * eliminating dental, vision, podiatry, and several other Medi-Cal benefits for 2.5 million parents, seniors, and people for disabilities; and * reducing funding for public hospitals.
MORE COAXING NEEDS TO HAPPEN FOR REVENUES
Even after the fiscal Armageddon layed out by the state’s financial officers, lawmakers – new and old – made statements and asked leading questions that largely fell along party lines. As an alternative to taxes and revenues, Republicans invoked the California Performance Review reports, which Gov. Arnold Schwarzenegger commissioned when he first took office to "blow up the boxes." Few of the ideas were implemented.
Last year’s Assembly Budget Vice Chair Roger Niello, a Republican, asked what could be done about the fast-growing social service programs, for instance.
Mike Genest, the Director of Finance and former chief of the Senate Republican Budget office, acknowledged that social service programs grow at a pace that far outstrips the state’s income growth. For instance, while state revenues grow at about 5 percent, Department of Developmental Services grew at 15 percent, Department of Mental Services grew at 12 percent, and In-home supportive services grew at 13 percent.
But, Genest said, “It’s difficult to sit and suggest cuts in in-home supportive services when you’ve seen the workers bathing people, changing their medical devices or taking people to the store. We do not take cuts lightly because this is very serious business and the reason they are growing is because the need is growing.’’
One of the newest lawmakers, Republican Assemblymember Danny Gilmore from Hanford explained that unemployment in his southern Central Valley district was higher than the nation and rest of the state. “How important is job creation. Is it essential to putting (the budget) in balance?” he asked, leadingly.
In fact, job creation is one of the strategies that Treasurer Bill Lockyer and Gov. Arnold Schwarzenegger have spoken about. To create that, the state would have to be able to sell its infrastructure bonds for school building, rail projects and other important projects. California, though, would not be *able* to sell its bonds unless the legislature acted on some kind of midterm package, Lockyer said.
Republicans asked about the impact of increasing taxes on the economy. Democrats asked about the impacts of cuts on the economy.
The California Performance Review (CPR) proposed by Governor Arnold Schwarzenegger several years ago in getting new life as a talking point for Republican legislators, looking for some alternative, any alternative, to raising taxes. There was a lot of such talk today.
Regardless, as the Legislative Analyst Mac Taylor said today, even if California implemented every element of that package, the savings would be a fraction of what is needed to bridge the budget gap. If we need to, we can re-discuss the specifics, but that's not the solution that will prevent the tough budget choices before us.
In the question-and-answer portion of the "joint convention" today, legislators appropriately discussed the economic impact of both taxes and cuts.
The panel of experts suggestly that generally, taxes and cuts of similar magnitude have a similar economic impact: the economic spending still happens in the state, it just a question if it is spent in the public sector (employing a nurse or teacher, or providing a benefit to a senior), versus in the private sector (consumer spending by individuals). As Director of Finance Genest stated, there is some differential depending on who the benefit or tax is applied: a lower-income person is more inclined to spend it, providing a multiplier effect on the economy, as opposed to a higher-income person, who has the option of saving a portion.
Again, as much as some legislators say that it is unwise to raise taxes in a down economy, they neglect to mention the other side of the equation, that it is as--if not more--unwise to cut services.
For every dollar California cuts in health care, we lose a federal matching dollar in the Medi-Cal program, or two federal matching dollars in the Healthy Families program. Beyond the cut to the health care system on which we all rely, these cuts ripple through the local economy, with regard to lose jobs, wages, and individual spending.
If legislators are so sensitive about the economic impact of our budget decisions, California would raise the revenues to prevent these cuts, so we don't leave hundreds of millions of dollars in Washington, DC.
So Assemblymember Chuck Calderon just got up and asked a question, which illustrated *exactly* why Bass needed to call this Joint Convention.
"Given that we’ve had bigger deficits in the past, why is this year different,'' he asked, referring to past years when we have been able to "miraculously'' balance the budget.
In past years, it is true that the Legislature has managed to close deficits of about $38 billion (i think that was 2003?). But the balance maneuvers were pretty tenuous: I'm thinking of the state's attempts to borrow from the pension fund (and keep doing it even though state workers were suing) , and this past year's decision to book the leasing of the lottery, for instance, even though we don't know how much we can garner from that maneuver -- especially since those revenues are declining also.
Mac Taylor , about an hour ago, also encapsulates things pretty well.
Now John Chiang is delivering *un*happy news. First, November revenues down. And then we will have barely enough internal money to borrow (kind of like borrowing from your 401k, it seems). Typically, the state has the capacity to move around $18 billion internally. By February, it's $882 million. In March, it's a deficit of $1.9 billion/
The Wall Street Journal today reports of the twin devastation of abruptly losing a job and health insurance. Not that losing both at once isn't bad enough, but it's especially awful when the company goes bankrupt because employees -- make that "former employees" -- are asked to foot medical bills accrued when they thought they had insurance. (Here is the NY Times story on the same thing)
...A pregnant employee had labor induced before her due date. Another worker bought a $6,000 insulin pump for her diabetic daughter. "I called my doctor at home and said, 'I need to have my gallbladder removed this weekend,'" recalls Janet Esbenshade, a 37-year-old mother of two who lost her job packing cookies.
What employees didn't know was the company was self-insured, meaning that it paid for medical expenses itself, but using a health insurer to administer the program. For employees, that meant once the company declared bankruptcy, announcing to the world it could no longer pay its bills, the medical bills fell back to the employees -- tens of thousands of dollars worth of medical bills.
Some medical services rendered in September -- the month before the company went belly up -- are also becoming the responsibility of employees.
Archway isn't the only company declaring bankruptcy and leaving employees adrift in Dante's world. Bankruptcy filings among companies are surging.
Reading stories like this, you wonder, why the heck do we have an employer-based system anyway?
So while Senate President Pro Tem Steinberg makes good on his promise (threat?) to have *every* member of the Senate sit on the budget committee, and on one budget subcommittee, here's the breakdown, announced today.
For Budget Subcommittee No. 3 on Health and Human Services: Sen. Alex Padilla (D) will chair. Other members include: Sen. Mark Leno (D) Sen. Gilbert Cedillo (D) Sen. Elaine Alquist (D) Sen. Leland Yee (D) Sen. Dave Cox (R) Sen. Bob Huff (R) Sen. Sam Aanestad (R)
The other subcommittee of note for health advocates is Budget Subcommittee No. 5 on Revenues and the Economy, chaired by the Chair of the full Senate Budget Committee, Sen. Denise Ducheny, Chair (D). Other members include: Sen. Lou Correa (D) Sen. Ron Calderon (D) Sen. Ellen Corbett (D) Sen. Lois Wolk (D) Sen. Robert Dutton (R) Sen. Jeff Denham (R) Sen. Tony Strickland (R)
These committees are expected to meet on Wednesday. No word yet on the official makeup of the Assembly Budget Subcommittees.
I erroneously called Monday's Assembly-Senate meeting a "joint session." It actually has a more impressive name, a "joint convention'' and will feature the top fiscal dogs in our state -- Treasurer, Controller and Legislative analyst. I'm not sure how the format will work as the presentation will be made in the Assembly chambers and I've never really envisioned dais as a lectern, but it should be interesting.
With about one-third of the assembly being new -- and a number (we won't name names) who seem beligerent -- it's important for these guys to scare the bejesus out of them with the widely reported news that California will run out of cash by February is something isn't done. Kevin Yamamura at the Bee has a few more details on what might be said.
In other budget news, the Senate has sent out a press release for budget subcommittee nominees. For those who missed it, Senate Pro Tempore Darrell Steinberg said he wants all senators to "own'' the budget and all sit on a budget subcommittee. Whereas last year, there were three in the Health and Human Services budget subcommittee, this year, there could be eight.
Perfect timing, top economists say, for health reform.
Jonathan Gruber, MIT economics professor who modeled health reform proposals for Gov. Schwarzenegger and then-Speaker Fabian Nunez, gives his reasons in today's New York Times.
Ken Jacobs, chairman of the UC Berkeley Center for Labor Studies and who also did a lot of work on health reform and the employer market in 2007 and the Healthy San Francisco program passed in 2006, gave his take in October.
The rationale: health care reform and investment will create desireable jobs in a growing and essential sector. Not doing anything will make our recession worse. Doing something, though it will cost money, will do us good.
The Obama transition team at http://change.gov is taking comments from the public, especially on health care and health reform. Here's Health and Human Services Secretary-designate Tom Daschle responding to some of them:
HEALTH ACCESS UPDATE Thursday, December 4th, 2008 NEW LEGISLATIVE SESSION STARTS * Full Coverage on New Legislature, Budget, and Reform News at Health Access WeBlog
HEALTH ACCESS ANNOUNCEMENTS: * Health Access/CPEHN Holiday Party in Oakland: THURS, DEC 11th, 4-7pm You are invited! Drinks and good company, including with CA Pan-Ethnic Health Network Max's Diner & Bar, 500 12th St; RSVP to Jessica Rothhaar, firstname.lastname@example.org
Here in Sacramento earlier this week, a new legislature was sworn in, with appropriate ceremony, and the feeling of both the hope of a fresh start and new leadership, and dread of a looming budget deficit that went unresolved--if not made worse--in the last legislative session. Assembly Speaker Karen Bass (D-Los Angeles) has many new members, and gained three more Democratic seats since last session, although three shy of a 2/3 majority. She is joined by new Senate President Pro Tem Darrell Steinberg (D-Sacramento), who set new prioirities and initiatives for the Senate, including on the budget, and health care reform.
In the last two weeks, much has happened with regard to the budget crisis, from the failure of a proposed package of mid-year cuts and revenues in the lame-duck legislative session, to the threat of a waiting list in the Healthy Families program; with regard to new regulations prohibiting "balance billing" on consumers; and with regard to new leadership of the legislative health committees, and of the state's Medi-Cal program.
Finally, there's been a lot of action with regard to federal health reform, from appointments by President-elect Obama, to movement in Congress in the House and Senate.
All of these stories have been fully reported and are being updated regularly on our blog, at the Health Access WeBlog, which you can click to get more details on the following stories:
It's official. We now have a final ruling by Sacramento Superior Court Judge Michael Kenny in California Medical Association (CMA) et al. v. California Department of Managed Health Care and Cindy Ehnes, upholding the DMHC’s recent regulations to protect consumers from balance billing for emergency services.
We went into the details in a previous post, but it's good news for consumers, so they (and their credit history and financial futures) are not held hostage in billing disputes between insurers and providers.
So UnitedHealth is going to start offering coverage that will ensure you can get coverage. Doesn't it sound like a bizarre movie plot?
So basically, if you pass a health test, and anticipate that you might have a pre-existing condition issue later that may prevent you from getting coverage, and may need itinerant coverage on the individual market, you get coverage to ensure you can get coverage.
There has got to be a simpler way: it's called Guaranteed Issue.
Today Senate Pro Tem Steinberg announced the committee chairs.
We are pleased to note that Senator Elaine Alquist (D-Santa Clara) will become chair of Senate Health Committee. Senator Alquist has worked with Health Access and other consumer groups on a long list of health care bills and we also know her well from her more recent service as chair of the Senate Budget Subcommittee that handles the health budget. As an author of various measures, Senator Alquist has been a dogged proponent of her bills, willing to work hard for her own measures. She is conscientious and careful as well as a very hard worker. Senator Sheila Kuehl noted to me that Alquist always came to committee prepared---a feat made even more impressive by the fact that Alquist sat through Senate Education on Wednesday mornings and then went into Senate Health in the afternoon, sometimes with only a 5 or 10 minute break between the two committees.
Senator Christine Kehoe will chair Senate Appropriations and Senator Denise Ducheny will continue as chair of Senate Budget. We do not yet know budget subcommittee chairs in the Senate.
As someone who remembers 1976 when Rose Ann Vuich became the first woman ever elected to the California State Senate, it gives me special pleasure to note not only that there are so many women Senators in key positions but also that it is no longer remarkable that it is so.
In the Assembly, appointments have not yet been made official but we note that consistent with earlier announcements by the Speaker, Dave Jones (D-Sacramento) has moved into the Assembly Health Committee office and is expected to be announced as the chair of the Assembly Health Committee. Dave Jones worked hard on a number of health care measures last year, including his own rate regulation measure as well as helping Sen. Steinberg by doing very hard work to get votes on the Assembly floor for SB1522 (Steinberg), the Health Access sponsored measure to standardize individual health insurance products. Jones is a thoughtful legislator who has served on Assembly Health Committee for several years now, a virtual lifetime in the current Assembly. He was kind enough to keynote our recent 20th Anniversary event, along Sen. Steinberg. (see picture.)
We face a very tough budget year and we still await the appointments of the budget subcommittee chairs as well as the committee members but it is good to know that the chairs of both policy committees will have the interests of health consumers at heart.
At our event, we got a little preview of what Senator Steinberg said today at his swearing in, from his empahsis on legislative product, his commitment on comprehensive health reform, and his effort to move on children's coverage in the next few months. To the Senate chambers today, he reiterated these points and gave more specifics, both about his plans for health care and for the budget process as a whole.
To get of sense of this new legislative leader, it's worth reading the whole thing, but here are some segments of interest to health advocates:
This is a day of great celebration, but there is no shame in acknowledging what public opinion tells us. The public has lost faith in our ability to effectively tackle California’s major problems. Our system is broken. Thirty years after the passage of Proposition 13, our system of state and local government finance is so tied in knots, that it is next to impossible to connect first-rate public services with a stable, ongoing set of revenues to pay for those services....
As we take stock beginning this new session, we have a myriad of real challenges. Millions of Californians lack access to health insurance and quality healthcare....
Today I want to propose three tenets to guide our work. First, let’s change the budget process. Two, let’s demonstrate some early, big successes in the legislature. And, three, let’s make education and the economy, the filter through which we focus, most of our work.
First, on the budget, we all have ideas and our own definitions of reform. Certainly many of those ideas divide along partisan and ideological lines. And those differences will be debated and fought out here, both in the legislature and, undoubtedly, eventually, at the ballot box. But in the meantime, we face a $28-billion-plus problem which demands immediate attention. We will not rest—this Senate will not rest—until we make a dent, and a big dent, in that number.
...let’s speed up the 2009-10 budget process. Let’s set our own expectation and deadline of getting a budget done by May 15 of 2009.
Number two, today I want to announce that beginning with the Special Session, we are going to constitute the Budget Committee as a committee of the whole. Every member of the Senate is going to be a member of the Budget Committee; every member of the Senate is going to sit on a substantive budget subcommittee....
Today I also want to announce the formation of the Senate Office of Oversight and Outcomes. This office will be charged with more aggressively evaluating the institutions and programs of our state government....
...Our legislature needs to build back its confidence, that it can consistently produce results. Working with the Assembly and working with Governor Schwarzenegger, let’s commit ourselves today to four signature successes within the first 120 days of this legislative session....
Healthcare. Last session, the governor showed a great vision in putting forward a proposal that would have covered nearly all Californians with health insurance. The governor’s vision is still the right vision, and we can get there; we can set a date certain. If we don’t get this done by the end of 2010, we can certainly get it done by the end of 2012, but we need to get started. And so I suggest that within the first 120 days that this legislature pass a comprehensive bill that covers all children in California and begins marching towards preventative healthcare in California. And we don’t have to do it alone. We have the First 5 Commission; we have private foundations; and we have a new friend in Washington, D.C., Barack Obama, who has promised to make healthcare and children’s healthcare one of his signature priorities.
The Legislature-- the new one with about three dozen new members -- was just sworn in. Gov. Arnold Schwarzenegger wasted NO TIME calling a special session, yet again, to deal with our $30 billion-ish deficit.
NY Times today has a great story on how the European Union, fed up with high drug prices, raided a bunch of big-name pharmaceutical companies and published some of the documents from their investigation.
“I suppose we have all had conversations around ‘how we can block generic manufacturers.'"
"We identify options to obtain or acquire patents for the sole purpose of limiting the freedom of operation of our competitors.”
These aren't new tactics. The Wall Street Journal did a huge expose about this several years ago. But what's interesting to me is that Europe, which many of us believed did not experience the same high drug prices we do here, is also feeling the burden and they're mad about it.