Our need for health care coverage that doesn’t vanish when the jobs vanish becomes ever clearer each month, as the number of newly unemployed piles up. Given the mounting jobless toll – and subsequent swelling of the uninsured population -- it’s a wonder that debate lives on over whether reform is needed.
Surely, by now we all know someone who has been stripped of their livelihood in this recession. Surely, by now most of us feel that, there but for the grace of God, go I.
Yet Congress members are willing to entertain scaling back health care reform’s figurative big tent of coverage, accepting that millions more than first envisioned may be left out in the cold, uninsured.
Moved by helping care for his ailing elderly father, Olbermann deemed it flat-out unfair that those with means -- like himself – had access to quality care, while others without means were shut out of access. The episode is worth watching, if only to witness the passion of his argument.
Meanwhile, matters are worsening in real time, as joblessness continues to broaden the problem Congress is trying to solve. The elephant in the room is getting bigger by the day, so to speak.
A new report by Families USA calculates the impact of the economy’s double whammy on the workforce. Titled “One-Two Punch: Unemployed and Uninsured,” the report seeks to update U.S. Census Bureau figures from 2008 that were recently released and widely reported:
“Given the close link between unemployment and uninsurance, and given the marked increase in the unemployment rate between 2008 and 2009, we estimate that the number of uninsured working-age adults (19-64) today is substantially higher than the Census Bureau’s 2008 estimate.”
In California, the number of uninsured working-age adults in 2008 was 5.4 million, or 24.3 percent of the population. Families USA expects that number to rise to 6.1 million, or 26.7 percent, when 2009’s job-shedding is taken into account.
The new report says California’s unemployment rate has already grown 4 percent, from 7.2 percent in 2008 to 11.3 percent through August 2009 (the 2009 figure is calculated by averaging the jobless rate from January through August.)
By the end of 2009, California will have “suffered the largest numerical loss in health coverage among working-age adults” of all the states, Families USA says. The organization projects that loss at 661,600 adults. Texas is second-worst with a loss estimated at 396,900, and Florida has the third-worst loss, with 297,600 losing coverage.
That elephant in the room? Families USA projects that by the end of the year, the uninsured ranks nationwide will plump up from 46.3 million to 50 million. Pity Congress: It’s not easy to negotiate a solution to a problem that continues to expand as compromises are being crafted.
Here's a new video about the California budget and the impacts of the health care cuts from the centrist New America Foundation--with whom we don't agree on everything, but they work to be thoughtful. With colorful pie charts and some suggestive accompanying music, they make the point that a single-minded focus on the budget leads to health cuts that simply make no sense if considered regarding the cut's true impact:
From an economic view, the budget choice is clear...
Friday, June 19, 2009
HEALTH ACCESS UPDATE Friday, June 19th, 2009
NEW REPORT UNVEILS ECONOMIC IMPACTS OF PROPOSED HEALTH AND HUMAN SERVICE CUTS
* Over 600,000 Jobs Lost Under the Governor’s Proposal; A Decline of 2.2% of GDP * Conference Committee Report Significantly Reduces Impact, But Still 220,000 Jobs Lost * Report Shows Health & Human Service Cuts Have Dramatically Worse Impact Than Taxes, Taking Into Account Lost Federal Funds, and Multiplier Effects; * HHS Cuts Are Over Four Times Worse For Economy Than Upper-Tax Bracket Restoration
* More Updates on the Health Access Blog: New House Bill on Health Reform!; New Field Poll Shows Californians Overwhelmingly Support Health Reform; Trying to See the Humor in Health Reform; A Mistaken CBO Analysis; Budget Budget Choices for California
* Follow Health Access California on Twitter, at @healthaccess, or www.twitter.com/healthaccess for quick updates on budget and health reform issues.
As the Legislature prepares to consider tough choices to balance an over $20 billion deficit, a new report reveals that the health and human service cuts proposed would also have a dramatic negative impact on California’s economy.
“These health and human service cuts are the worst of both worlds: they not only directly deny people the services that California families need, the cuts cripple our ability to get out of this economic downturn,” said Anthony Wright, executive director, Health Access California, the statewide health care consumer advocacy coalition. “The Governor’s cuts make no sense, since in order to save a few state dollars, California gives up a lot of federal dollars, for our health system, and our economy.”
The Governor’s proposed budget includes dramatic cuts, including the elimination of Healthy Families, CALWORKS, Adult Day Health Centers , as well as major cuts to IHSS home care and many other programs. In addition to the human impacts, the Governor’s budget cut proposals to health and human services would have dramatically negative economic consequences:
· California will lose $7.5 billion in federal funds for health and human services programs this year alone. · Over 600,000 Californian jobs will be lost. · The state’s economy (GDP) will shrink by more than two percent. · Over two million more Californians will lose health coverage, increasing the number of uninsured by one-third.
“The Governor's proposal to eliminate CalWORKs will devastate low income families and the communities they live in. Landlords won't get the rent, electric companies won't get paid, the corner store will have less customers but the homeless shelters will be full,” said Michael Herald of the Western Center on Law and Poverty. “Our legal service offices are getting unprecedented number of calls from frightened recipients worried they will become homeless. It is morally irresponsible of the Governor to threaten to cut off aid to vulnerable families while refusing to even consider tax increases.”
The economic consequences are particularly significant for health and human services for multiple reasons:
· Many health and human services are tied to federal matching funds, so for every dollar we cut from state spending, the state’s economy loses double, triple, or more in economic activity.
· Since spending in health and human services by definition happens in-state and is unable to be “outsourced,” there’s a significant “multiplier effect” where dollars are spent in the community and then spent again, creating economic activity. This study relies on Council of Economic Advisors (CEA) data and formulas for estimating the multiplier effect.
· Funding for health and human services are spent directly into the economy. Both as staff salaries (such as nurses) and as direct assistance to poor families, the beneficiaries of health and human service spending are low- and moderate-income Californians who are likely to spend that money quickly back into the community, by necessity, rather than save it. Studies indicate that such directed resources to lower-income families have a more substantial “multiplier effect” to the local economy.
These factors make it so that cuts to health and human services have a much bigger impact than a commensurate increase in taxes. In a tough budget situation where legislators must choose either service cuts or tax increases, the negative impact of bigger cuts is over 3 to 1. The study reviews an even more stark comparison with restoring the upper tax bracket, where the impact would be offset by a sizable deduction in federal income taxes.
“This package of cuts goes in the complete opposition direction of President Obama’s economic stimulus bill. President Obama had it right, that the top priority was to recover and reinvest in our country, starting with the people who need the most help,” said Wright. “While all our budget options have economic impacts, the choice is clear. If you want to revive the economy, the worst possible action is to make the health and human service cuts proposed, lose those federal dollars and all the resulting economic activity. Those who are concerned about the economic impact of tax increases should recognize that the economic impact of cuts are multiple times greater.”
"This new report is consistent with a recent study released by Beacon Economics, which demonstrates that cuts to human services programs such as Food Stamps, CalWORKs and General Assistance have severe negative economic impacts, with an estimated $1.32 in economic activity lost for every dollar cut. Investment in human services programs is critical to state and local economies," said Frank Mecca of the County Welfare Directors Association.
The Budget Conference Committee also has negative economic impacts, even though they are significantly less severe than the Governor’s proposal. The economic impacts of the health and human service cuts in the Budget Conference Committee budget package include the loss of over $1.24 billion in federal funds for health and other programs in the budget year, about 220,000 Californian lost jobs, and a shrinkage in GDP of 1.3%. An estimated 550,000 more Californians will be denied health coverage, both in children being directly denied coverage, and in families losing health coverage due to job loss.
Making health care coverage more affordable for Californians who are laid off from their jobs is certainly a priority. And so, Gov. Arnold Schwarzenegger has signed legislation that does just that for former employees of small businesses.
The bill, AB 23, uses federal stimulus funds to subsidize 65 percent of the cost of Cal-COBRA coverage for the newly unemployed of businesses from 2 to 19 workers.
COBRA coverage, which continues a laid-off worker's existing health care coverage for a period of up to nine months, is notoriously expensive and priced out-of-reach for many who have lost their jobs in this down economy. While the individual would still have to pay 35 percent of the premium, the subsidy can help a lot of Californians "between jobs" make ends meet while staying covered.
While the federal COBRA law only goes to employers of 20 or more, Cal-COBRA extends the option to workers of smaller employers. The bill, co-authored by Assemblymembers Dave Jones (D) and Nathan Fletcher (R), extends the new subsidy as well--but it requires proof of involuntary termination, and allows anyone who was laid off since September 1, 2008 to resume coverage.
The legislation, on a fast-track to take advantage of federal premium assistance, was sponsored by California Insurance Commissioner Steve Poizner. Health Access California was in support with many other organizations.
HEALTH ACCESS CALIFORNIA ALERT Thursday, March 26th, 2009
NEW BILL LIST; URGENCY LEGISLATION TO GET FEDERAL FUNDING ADVANCES * Bill to Suspend Additional Paperwork Burdens on Children Passes Senate * Bill Passes Assembly Health Committee to Expand Ability to Use New COBRA Subsidy * List of Bills of Interest to Health Consumer Advocates BELOW
ALERT:Click here and call Congress today to tell your Congressional member to tell them to vote to keep President Obama's health reserve in the budget. You can also call directly at 1-888-436-8427. Health reform depends on it!
More Updates on the Health Access WeBlog: Debating Massachusetts; Drawing Down Federal Stimulus Dollars; Twitter Happy; Action on Federal Reform; Wellpoint's Wrong Prescription; What Are Gold-Plated Benefits?; Becerra on a Public Health Insurance Option; The Sky Didn't Fall in San Francisco; White House Forums on Health Reform in LA on April 6th; The Cuts Depending on The Trigger; Judge Agrees on Prop 1A's Misleading Title; Unlikely Allies Against Proposition 1A; Why We Fight for Single-Payer; Sebelius for HHS; Timely ER Access; Obama on Health Reform This Year.
SACRAMENTO--The California Legislature is moving to allow our state to get our fair share of the economic recovery dollars made available.
On Monday, the California Senate passed, without opposition, SB24xxx (Alquist), a measure to suspend one of the cuts to children's coveage made last year. The increased federal matching funds for Medicaid was conditioned on whether states maintained their eligibility and enrollment procedures. In last year's budget, the legislature had imposed additional paperwork requirements for children: doubling the eligibility reporting, to once every six months, as opposed to once a year. That policy shift was expected to drop 250,000 children from coverage over three years. SB24xxx is focused on suspending the rule, at least until the federal dollars run out.
On Tuesday, the Assembly Health Committee passed, on a fully bipartisan vote, a bill to have California adapt its laws so patients have the better access to the federal subsidy to continue their coverage under COBRA after being laid off. AB23 (Jones) would allow those working in small employers (from 2-19 employees)--which are not covered by the federal COBRA law, but are under the state CalCOBRA law-- and others a second chance for those laid off late last year or early next to be able to sign up for the subsidy.
Both bills are urgency measures, requiring a two-thirds votes of the legislature. So far, they have gotten the bipartisan votes needed, but they are still making their way through the Legislature. Consumer and health advocates are supporting these measures through the Legislature and on to the Governor's desk.
Also in the Tuesday Assembly Health Committee was consideration of mandating maternity benefits, AB98, by Assemblymember De La Torre, which would provide equity for women purhcasing health coverage, and provide cost-saving, long-lasting preventative care.
The conversation on comprehensive reform continues. There are two bills that are being reintroduced, strongly supported by Health Access California and other health advocates, including the universal children's coverage proposal by Senate President Pro Tem Steinberg, and a bill establishing a universal single-payer health care system, now sponsored by Senator Leno, taking over for Senator Kuehl.
Finally, there are two "intent" bill, by the chairs of the Assembly and Senate Health Committees, Assemblymember Jones and Senator Alquist, to continue to pursue comprehensive health reforms--whether moving ahead with specific reform or, perhaps, implementing what is passed by President Obama. While there are no details in these bills as of yet, Health Access California is encouraged by the continued interest of the chairs in health reform.
* AB 1314 (Jones) COMPREHENSIVE HEALTH REFORM: Requires Department of Health Care Services in consultation with Legislature to develop and submit a Medicaid waiver to expand coverage. * SB 1 (Steinberg) UNIVERSAL CHILDREN’S COVERAGE: Expands Healthy Families to all children up to 300% FPL and creates a Healthy Families buy-in for children in higher income families. Support. * SB 56 (Alquist) COMPREHENSIVE HEALTH REFORM: Declares the intent of the Legislature to enact and implement comprehensive reforms in the state’s health care delivery system. * SB 810 (Leno) SINGLE PAYER UNIVERSAL HEALTH CARE SYSTEM: Would establish a single-payer health care system in California that would enable all residents to have health coverage. Support.
Market Reforms & Health Savings Accounts
* AB 326 (Garrick) HEALTH SAVINGS ACCOUNTS: Would allow a tax deduction for health savings accounts to be used with high-deductible health plans. Oppose. * SB 353 (Dutton) HEALTH SAVINGS ACCOUNTS: Would allow a tax deduction for health savings accounts to be used with high-deductible health plans. Oppose. * SB 92 (Aanestad) OMNIBUS HEALTH REFORM MEASURE: Narrows definition of medical necessity; allows association health plans; Health Savings Accounts for CalPERS, commercial HMOs and insurers, and Medi-Cal; allows sale of health insurance across state lines, voiding state consumer protections and financial solvency requirements; weakens utilization review requirements; eliminates mandates for pap smears, mammograms, childhood immunizations, diabetes supplies and numerous other protections but only for those below 350%FPL; changes Medi-Cal to defined contribution plan, including for persons with disabilities; and numerous other provisions. Oppose.
Medi-Cal Eligibility & Retention
* AB 23 (Jones) CONTINUOUS ELIGIBILITY: Would expand Medi-Cal continuous eligibility, which would no longer be limited to six months. Repeals semi-annual status reports. Support. * SB 438 (Yee) CHILDREN’S COVERAGE: Would create the Cal-Health program, allow providers to screen and temporarily enroll children in coverage. Makes changes in eligibility processes and procedures that may be steps back. Watch. * SB 337 (Alquist) CONTINUOUS ELIGIBILITY: Would expand Medi-Cal continuous eligibility, which would no longer be limited to six months. Repeals semi-annual status reports. Support. * AB 963 (Ammiano) ELIGIBILITY PROCESSES: Would update and streamline Medi-Cal computer systems and develop an electronic enrollment and renewal process. Support. * AB 1037 (Lowenthal) MANDATORY MANAGED CARE FOR SENIORS AND PERSONS WITH DISABILITIES: But only in Riverside and San Bernardino Counties. Oppose Unless Amended. * SB 114 (Liu) FOSTER YOUTH: Would simplify the Medi-Cal renewal process for youth in foster care. Support.
MRMIP High-Risk Pool
* SB 227 (Alquist) HIGH-RISK POOL: Would require insurers to accept members of the highrisk pool at the rate set by MRMIB or pay a fee used to fund MRMIP. Would also increase the tobacco tax funds dedicated to fund MRMIP. Support * SB 57 (Aanestad) HIGH-RISK POOL: Allows insurers to sell policies with “riders” that exclude coverage for a medically uninsurable condition. Creates a “rider” pool for applicants. Increase eligibility barriers for MRMIP, deletes cap on cost-sharing, requires MRMIP to include option compatible with Health Savings Accounts, increase the annual benefit limit in MRMIP plans to $150,000, and increase the tobacco tax funds dedicated to fund MRMIP. Oppose.
Insurance Oversight & Market Reforms
* AB 786 (Jones) INSURANCE MARKET STANDARDS: Would sort health insurance policies into five categories, ranging from “comprehensive” to “catastrophic.” Organization of plan 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. Sponsor. * AB 1521 (Jones) BROKER DISCLOSURE: Would require health insurance brokers to have a fiduciary duty to the client and fully disclose the amount and source of compensation received by the broker. Sponsor. * AB 1218 (Jones) HEALTH INSURANCE RATE APPROVAL: Requires HMOs and health insurer to get approval for increases in premiums and cost-sharing from DMHC and DOI, respectively. Support if Amended. * AB 119 (Jones) GENDER RATING: Would prohibit insurers from charging different premium rates based on gender. Similar to SB54 (Leno). Support. * SB 54 (Leno) GENDER RATING: Would prohibit insurers from charging different premium rates based on gender. Similar to AB119 (Jones). Support. * AB 29 (Price) DEPENDENT COVERAGE: Would allow individuals up to age 27 to remain on a private insurance policy as a dependent. Support. * SB 316 (Alquist) CAPPING ADMINISTRATION AND PROFIT: Would set a minimum medical loss ratio -- requiring every insurer to spend at least 85 percent of premiums on patient care. Support. * AB 722 (Lowenthal) PREEXISTING CONDITION EXCLUSION: Would prohibit insurers from denying coverage because of a pre-existing condition due to a history of mental health treatment or medication. Watch.
* AB 2 (De La Torre) INDEPENDENT REVIEW: Would create an independent, third-party review process when an insurer wishes to rescind a consumer’s health policy and also require approval from the Department of Insurance and Department of Managed Health Care before approval. Also raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history. Support. * AB 108 (Hayashi) TIME LIMIT: Would impose an 18-month time limit in which insurers have to rescind individual health care policies for fraud once consumers’ applications are approved.
* AB 98 (De La Torre) MATERNITY COVERAGE: Would require all individual insurance policies to cover maternity services. Support. * AB 214 (Chesbro) DURABLE MEDICAL EQUIPMENT: Would require group health plans and insurers to offer coverage for durable medical equipment, such as wheelchairs and shower seats. Support. * AB 244 (Beall) MENTAL HEALTH PARITY: Would require health plans to provide coverage for all diagnosable mental illnesses. Support.
Health Care Providers
Doctor and Hospital Oversight
* AB 1503 (Lieu) EMERGENCY ROOM FAIR PRICING: Would limit the amount that emergency room physicians and surgeons can charge an uninsured patient with income below 350% FPL. Sponsor * AB 542 (Feuer) ‘NEVER EVENTS’: Bans providers 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. Support * AB 171 (Jones) CONSUMER PROTECTIONS: Would prohibit 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. Support. * SB 196 (Corbett) PRICE TRANSPARENCY: Would prohibit confidentiality clauses, which keep secret information on pricing and health care quality from consumers, in contract between providers and insurers. Support.
California Hospital Waiver
* AB 342 (Bass) The Medi-Cal hospital waiver expires Sept. 2010. AB342 repeals the existing waiver authorization. It is a placeholder for the waiver discussions. Watch. * SB 208 (Steinberg) The Medi-Cal hospital waiver expires Sept. 2010. SB208 requires DHCS to apply for a new waiver. It is a placeholder for the waiver discussions. Watch.
Today, the Assembly Health Committee considered another bill to help draw down federal money to California.
The federal economic recovery package included a subsidy so laid-off workers can get a 65% subsidy for premiums under COBRA. The bill considered today allows a greater number of Californians to take advantage of those resources.
Right now, the federal COBRA law, which allows workers to keep their groups coverage after they leave an employer, is only available to workers of employers of 20 or more. The new bill extends the COBRA subsidy to the state CalCOBRA law, which covers workers of employers from 2-19 workers. The new law would also give Californians who were laid off late last year or early this year better notice and a second chance to take advantage of COBRA.
This is crucial: Just over half of Californians get coverage from their employer. Losing their employer-based coverage is a big deal, for the sake of continuity of care, for getting the group-negotiated rate, and most of all, for not being denied for "pre-existing conditions," which is possible, even likely, in the individual market. But the problem is losing your job is a tough time to ask to pay full premium for coverage. That's why the subsidy is so important, especially as California reaches a 10.5% unemployment rate.
Earlier today, Health Access was pleased to participate in a press conference with Assemblymembers Dave Jones and Nathan Fletcher, chair and vice-chair of the Assembly Health Committee, respectively, as well as Insurance Commissioner Steve Poizner, and Joe Dunn of the California Medical Association. As that notably bipartisan event indicated, the bill passed later in the day without any "no" votes. That's a good thing, given it is an urgency bill, and thus requires a 2/3 vote.
Yesterday, the Senate passed on a bipartisan vote SB24xxx (Alquist), which despite its name, is a very decent proposal. It suspends the additional paperwork burdens imposed last year in the budget crisis.
The original cut would have doubled the reporting for children to maintain Medi-Cal benefits, from annually to every six months, which would have led to over 250,000 children to lose coverage over three years. The federal stimulus package conditioned billions in federal Medicaid matching dollars on maintaining eligibility and enrollment procedures. So to get the money, we have to void the mid-year status report requirement, at least for the duration of getting the enhanced matching funds.
As potential Medi-Cal cuts loom, one cut from prior years may get restored. As reported by Timm Herdt at the Ventura County Star (in an article worth reading), approximately $11.23 billion in increased federal Medicaid matching funds from the economic stimulus plan is pending...
The only requirement is that California keep its Medi-Cal eligibility and enrollment rules the same. After all, the point of the money is to allow states to prevent health cuts, keep health care jobs, and to be able to meet increased needs in an economic downturn.
One problem: in last year's late budget, California imposed semi-annual reporting requirement on children, for the purpose of getting savings as those families don't fill out the paperwork and end up falling off coverage. We projected that over 250,000 children would lose coverage over three years as a result of the cynical, burdensome paperwork.
This new enrollment barrier would make us not eligible for the $11 billion. Now there's a debate over whether to eliminate this requirement--which was bad policy to begin with--or to "suspend" it, although the latter option may not be enough to get the federal economic stimulus dollars, or other sources of funding.
Whatever happens, it needs to happen quick, or the state could lose the big bucks from the federal government.
President Barack Obama today signed a $787 billion federal economic recovery package today, which includes significant health care provisions, including some help to the state Medi-Cal program, help to some unemployed looking to continue their health coverage, investments in health research and health information technology, and other efforts at cost containment. The economic recovery package will provide significant and desperately needed help for California, our health care system, and for Californians directly. With our high unemployment rate, California will get particular and much needed help, for our state budget, and for individual Californians trying to keep their coverage.
As President Obama described the health portions of the package this way:
Because we know that spiraling health care costs are crushing families and businesses alike, we are taking the most meaningful steps in years towards modernizing our health care system. It's an investment that will take the long overdue step of computerizing America's medical records – to reduce the duplication and waste that costs billions of health care dollars and the medical errors that every year cost thousands of lives. Further, thanks to the action we have taken, seven million Americans who lost their health care along with their jobs will continue to get the coverage they need, and roughly 20 million more can breathe a little easier, knowing that their health care won't be cut due to a state budget shortfall. And an historic commitment to wellness initiatives will keep millions of Americans from setting foot in the doctor's office for purely preventable diseases. Taken together with the enactment earlier this month of a long-delayed law to extend health care to millions more children of working families, we have done more in 30 days to advance the cause of health reform than this country has done in a decade.
Among other provisions, the compromise economic recovery package includes the following health-related items, and their impacts on California:
* Increase temporarily federal Medicaid matching funds by $87 billion, based on a formula that inlude 65% spread evenly, and 35% targeted to states, like California, with high increases in unemployment rates. California is roughly estimated to get $11.23 billion over the 27 months of the stimulus period, although that number is subject to change.
While increased federal Medicaid matching funds won't solve the California budget crisis, but it is an important part of any solution. We hope specific cuts, to Medi-Cal benefits and public hospitals, will be triggered off with these new funds.
* Subsidize COBRA health coverage, for those eligible who lose employer-based coverage, with over $24.7 billion to cover 60% of the cost of premiums for as long as nine months. This would not include those who are over certain income requirement, who left employment before September 2008, and who don't qualify for COBRA (for example, if the employer folded.) The final package also does *not* include a House provision allowing for some workers to stay on COBRA for a longer period through to Medicare eligibility.
The COBRA subsidies will help some newly unemployed Californians keep their coverage while they look for new work. Some unemployed Californians may not be eligible for COBRA, or may find it unaffordable even with the subsidies in this package. After all, it may be hard to pay 40% of premium after one loses a job and their income. This will help many Californians, but it's not enough to prevent an expected spike in the uninsured that will accompany the spike in unemployment.
* Provide $19 billion for health care information technology to implement electronic health records. There would be bonuses between $44,000 and $64,000 for physicians, and as much as $11 million for hospitals. Physicians and hospitals must implement EHRs by 2014 or face the loss of Medicare reimbursements. * Increase funds to the National Institute of Health by $10 billion for biomedical research. * Provide $1.1 billion for research to compare the effectiveness of medications and medical devices, an important first step in health reform and cost containment efforts. * Establish a new Prevention and Wellness Fund with $1 billion.
We see this package as a down payment for health reform. Whether its preventing cuts to Medicaid which will be a foundation for additional expansions, or put in place the data and information technology tools to help control health care costs and improve quality, these are needed investments to our health care system.
President Obama is right that a sustainable economic recovery requires health care reform... we look forward to working with him this year on comprehensive change in health care!
In the discussion this evening in the Senate, Republican Senator Hollingsworth seemed to scoff at the lost jobs that would result from all the construction projects that would be stopped this week without a budget. He made his own jobs case, arguing about the jobs impact of a sales tax increase, in explaining his "no" vote on the budget and revenues. This is "not in a vacuum."
Certainly not. These decisions are not in a vacuum. For every dollar that California does not raise in taxes, that's a dollar in cuts to health, education, and other vital services. But let's consider not the social but only the economic impact of such additional cuts--on top of the $19 billion in cuts already made, or the $15 billion of cuts in this deal.
In fact, cuts to health and other vital services would have more severe impact on jobs than equivalent changes in tax policy. Every dollar in health and other services goes to a Californian--not outsourced, not saved in an out-of-state bank--who will then spend it again in California. Especially when those services--like in education, health and human services--employ and/or serve low- and middle-income Californians, there's a bigger "multiplier effect", since those folks tend to spend those salaries and benefits immediately on the necessities of life, right back into the California economy.
Senator Cedillo was eloquent when he suggested that public sector worker shopping for groceries has the same economic impact as a private sector worker. Senator Steinberg made the point forcefully about the jobs impact of even additional cuts beyond the billions already in the package.
The basis of the Obama economic recovery package is that there's greater economic multiplier and jobs benefit in protecting services than in tax policy changes.
For Senator Hollingsworth, if there's a real issue with jobs, the real long-term threat to jobs is the spending cap, which would prevent California from ever making the investments to help our economy. Those who are really concerned about jobs should vote against the spending cap, not against the revenues in the budget. A spending cap would force cuts in health care and other vital services, well into the future. With health care inflation and an aging population, a cap would simply force additional cuts to the health system we all rely on, and that is a significant part of our economy.
The House and Senate yesterday passed the economic recovery package, which includes several key health provisions. It is now headed to President Obama's desk, where he expects to sign it on Monday.
A lot has been made of the margin which it passed, and I do find it remarkable that California Congressional Representatives, those who were Republican, decided to oppose a package that included both tax cuts and significant and desperately needed aid to California.
The budget being discussed in the state Capitol does take into account these funds, with much of the money already accounted for to plug the hole in the deficit, and depending on how much the state gets, with triggers to offset some cuts in health and other programs.
On health care, we understand that the Medi-Cal cuts on the "trigger" list are: * elimination of around nine benefits for the three millions adults on the Medi-Cal program, including dental, optometry, podiatry, and psychology. * a 10% cut in reimbursements to public hospitals.
Hopefully it is enough money. One health care cut in the budget proposal that will be made even with the billions in health care dollars coming to California is a $24 million cut to counties in their administration of the Medi-Cal program. The likely result is that there will be fewer social workers able to enroll Californians in Medi-Cal coverage.
I appreciate that California is in a deep, deep budget hole, and with a $42 billion deficit and the state running out of cash, any budget solution will be ugly: cuts, taxes, and borrowing to make the budget balance.
And the this year's budget framework, even after $16 billion in cuts in previous years, is reported to have such a mix: $15 billion in spending reductions, $14.4 billion in new and increased taxes, and $12 billion in borrowing.
But there are elements of the proposal that make it far worse than it needs to be:
* It makes cuts and raises revenues, but the cuts are permanent, while the taxes are temporary. * It contains an artificial cap on spending that would force cuts in future years. * It contains roll-backs in worker and environmental protections
And at the same time we are cutting health, education and other services, the proposal includes hundreds of millions of dollars in tax breaks for corporations! In trying to deal with a budget deficit that was created by tax giveaways in past years, the solution is to pass additional tax giveaways.
Where does this all end us up in five+ years? * California will have made billions in cuts, on top of billions in cuts already made. * California will have permanent tax cuts that rob money from the general fund, forcing additional cuts to health, education, and other vital services. * California will see the temporary taxes expire, creating budget pressure to force even further cuts to these services. * Even without the lost revenue, the spending cap will make sure that services--especially health, which rises at a greater rate than inflation--will be forced to cut existing programs and services, continually, into the future.
The details of the deal matter, and we believe we have some, and we are still getting more of them. But there are multiple mechanisms to force cuts in future years--and health care is particularly vulnerable.
But for those who care about the state of our health care system, the outline is bleak. And far bleaker than it should be.
HEALTH ACCESS UPDATE Thursday, February 12th, 2009
FEDERAL ECONOMIC RECOVERY PACKAGE PENDING IN THE CONGRESS * Major Economic Package Includes Significant State Aid; COBRA Subsidies, Health IT * State Medi-Cal and Public Hospital Cuts Dependent on Amount of Federal Aid
* State Budget Alert: State Spending Cap Could Force Cuts in Forever Into the Future
New on the Health Access WeBlog: Fast Breaking Budget News; Economic Stimulus Updates; Health Reform & HHS: It's Not the Name, It's the Numbers; This COBRA Won't Bite; SCHIP Passed and Signed!; Who Should--and Shouldn't--Be HHS Secretary; President Obama: Health Care Reform in Year One
Governor Arnold Schwarzenegger and legislative leaders continue to negotiate around a budget package, reported to include significant cuts, taxes and revenues, and borrowing, along with rollbacks of worker and environmental protections and a spending cap.
At the same time, in Congress, a federal economic recovery package is pending for final approval, which includes needed financial assistance to the states, especially around health care issues.
In fact, the state proposal is reported to use much of the $11 billion to deal with the existing deficit hole, which is $42 billion and growing. According to the framework of the budget compromise, significant cuts--including to Medi-Cal benefits and to public hospitals--are pending, to be triggered on or off depending on the amount of general fund money received in total from the federal package.
FINAL ECONOMIC RECOVERY PACKAGE PENDING
Earlier this week, leaders in the U.S. House and Senate agreed to a final compromise between their two different economic recovery packages. Among other provisions, the compromised economic recovery package includes the following health-related items that would:
* Increase federal Medicaid matching funds by $87 billion, based on a formula that inlude 65% spread evenly, and 35% targeted to states, like California, with high increases in unemployment rates. California is roughly estimated to get $11.23 billion over the 27 months of the stimulus period, although that number is subject to change.
* Subsidize COBRA health coverage, for those eligible who lose employer-based coverage, with over $24.7 billion to cover 60% of the cost of premiums for as long as nine months. This would not include those who are over certain income requirement, who left employment before September 2008, and who don't qualify for COBRA (for example, if the employer folded.) The final package also does *not* include a House provision allowing for some workers to stay on COBRA for a longer period through to Medicare eligibility.
* Provide $19 billion for health care information technology to implement electronic health records. There would be bonuses between $44,000 and $64,000 for physicians, and as much as $11 million for hospitals. Physicians and hospitals must implement EHRs by 2014 or face the loss of Medicare reimbursements.
* Increase funds to the National Institute of Health by $10 billion for biomedical research;
* Provide $1.1 billion for research to compare the effectiveness of medications and medical devices, an important first step in health reform and cost containment efforts.
* Establish a new Prevention and Wellness Fund with $1 billion.
MEDICAID EXPANSION NOT INCLUDED: Most disappointing for health advocates, the economic recovery package does not include a provision in the House version that would have allowed states to expand Medicaid coverage to recently unemployed workers, as well as low-income adults without children at home--who currently are not eligible in California for Medi-Cal.
Since many unemployed Californians may not be eligible for COBRA, or may find it unaffordable even with the subsidies in this package, the loss of the Medicaid expansion is a disappointment. While the economic recovery package will help many Californians, it won't prevent a spike in uninsurance that will accompany the spike in unemployment.
THE STATE BUDGET NEGOTIATIONS CONTINUE
Back in California, there are reports of the details of a budget deal between the Governor and both Democratic and Republican legislative leaders
Reports indicate that the deal includes a "spending cap," which is of great concern to health advocates. By definition, the point of a spending cap is to prevent more spending--but even to areas like health care where we have underinvested.
The concern for health advocates is that a spending cap would lock us in to: * the lowest per-patient Medicaid spending in the nation, * over 6 million uninsured Californians, * and the current broken health system for all of us, preventing increased Medi-Cal provider reimbursement rates, coverage expansions, or other reforms and improvements, and investments of our shared health system.
More concerning, a spending cap wouldn't just prevent progress, but it would inevitably force cuts into the future. Even indexed for inflation and population growth, an artificial limit on spending won't take into account: * medical inflation, which typically goes up at a rate greater than regular inflation. Even public programs, which do a better job in keeping costs down than private health coverage, would be forced to cut; and * the aging of our population, a significant trend which will put a greater strain on health and human services in California and nationwide.
The deal includes many cuts, some temporary taxes, and--most concerning to health advocates--a spending limit.
A spending cap would force cuts in health care and other vital services, well into the future. With health care inflation and an aging population, a cap would simply force additional cuts to the health system we all rely on. A cap won't just lock us into a broken health system where we are 50th in the nation in per-patient Medicaid spending--it would force automatic cuts, into the future.
It looks like there are some health care cuts, and even more severe ones depending on whether we get enough from the federal economic recovery package--which had the differences yesterday between the Senate and the House.
The economic recovery package is essential to help California prevent even more devastating cuts to health care and other vital services. While the federal package includes important help for California's high number of newly unemployed residents, it falls short of what is needed, and what the House of Representatives proposed. Some unemployed will be able to keep their coverage because of this package, but we will still see a spike in uninsured Californians because of the provisions taken out of the final deal.
Word that there's a deal on the economic recovery package between the House and Senate.
From CQ: Negotiators also split the difference on a formula for allocating a Medicaid funding increase to states. Sixty-five percent of the funding would be doled out on an across-the-board, flate rate basis to each state, while 35 percent would be distributed based on increases in unemployment, according to House Commerce Committee Chairman Henry A. Waxman , D-Calif. The House had used a 50-50 formula, while the Senate preferred an 80-20 split.
From other sources: On COBRA, there appears to be $21.4 billion, for eligible workers to help with 60% of the premium for COBRA for 9 months. Income eligibility would be capped at $125,000 (single) and $250,000 (couple). Most disappointing for health advocates, it does not look like the temporary Medicaid expansion is included.
It's useful, although it doesn't detail the policy differences, just the totals. So, for example, you can't tell that the COBRA subsidies in the House version come with some changes for older workers can stay on COBRA coverage longers, until they reach Medicare age. Or that Senate version would provide a 50% subsidy for COBRA, rather than the Senate's 65% subsidy. (I blogged more about the need for help people keep group coverage at The Treatment.)
And while the dollar figures look very similar for Medicaid matching funds, there is real difference in how the money in allocated: the House version targets the money more to states with particularly high unemployment rates. According to the Center for Budget and Policy Priorities, California would get over $1.4 billion more in the House version that the Senate.
After passing the amendments by Senators Collins of Maine and Nelson of Nebraska, the Senate just voted to close debate on the economic recovery package, 61-36. A full vote on the package is then expected tomorrow. That will trigger a conference committee to work out the differences between the House and Senate versions.
Health care in California has a lot riding on the House version prevailing on a couple of key items. We'll see what happens.
COBRA has been getting a lot of attention, since lots of people are losing their jobs, and likely their health coverage.
One option is COBRA (which stands for the Consolidated Omnibus Budget Reconciliation Act, the law that created in 1985), where you can sign up to keep the coverage you had at work--but you have to pay the employer's share of premium.
But let me be clear: COBRA is often the best and last option for many consumers:
* First, you get the coverage you had with your job, with the same network of doctors and providers, offering continuity of care. * Second, you get the group rate: large employers, representing hundreds or thousands of potential "covered lives" are able to bargain for much better rates than individuals, representing just themselves. * Sure, you may be able to buy something that has a cheaper premium in the individual market, but it likely won't be as comprehensive. There's a lot of "junk" insurance, especially in the individual market, that seems like a good price, but when you find out when it's too late what it does and doesn't cover. You are more likely to have a better, more comprehensive standard of benefits with the group coverage through your past employer under COBRA. * Finally, and most importantly, it may be your only option, because in the individual market you can be denied for "pre-existing conditions." Not do with group coverage, particularly COBRA.
"Please examine your options carefully before declining group coverage or continuation coverage, such as COBRA, that may be available to you. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely."
COBRA is expensive, but it's not just the best option for many, but for some it's the last option. That's why the subsidies in the Economic Recovery package are so important. The House version has more extensive help, both with COBRA, and with a Medicaid expansion... let's see how the negotiations go in the U.S. Congress on this.
C-SPAN 2 has been fascinating today. We're still getting reports about the apparent deal in the Senate, so we'll see how the health items fared: there were health elements that were under attack from Republican Senators, most of whom have announced they aren't going to vote for the package anyway.
It looks like some aspects of state aid were cut, but not the temporary increase in Medicaid matching funds. However, there is still the issue of the formula, which downplays the economic condition of the states, unlike the House version.
We'll see how other provisions, such as the COBRA subsidies, fared. The Senate version never had the temporary Medicaid increase for the newly unemployed... another key issue when the two version go into conference next week. The Senate vote on the package is expected Monday.
BUDGET ACTION ALERT: STATE LEADERS NEAR BUDGET DEAL
* Budget Expected to Include Significant Additional Cuts & Spending Cap * Cap Could Future Health Cuts, Prevent Action on Key Unmet Health Needs * ACTION: Call State Legislators to Oppose Cruel Cuts & Cap TODAY
* Federal Economic Recovery Act Update: Senate Version Fall Short in Help to CA * ACTION: Call U.S. Senators to Urge House Provisions on Medicaid
Click for What’s New on the Health Access Weblog: Report from Families USA Conference in DC; Health Help in the Back; The Responsibilities of a Nonprofit Hospital; The Problems with a Spending Cap; Comments Sought on Timely Access to Care Regulations; Max Healthroom; Contributing to the National Conversation on The Treatment; A Sailing SCHIP…
Big decisions are pending in Sacramento and Washington , DC , that will have a big impact on our health care, our economy, and our budget.
Cruel Cuts---and a Spending Cap That Would Force More Cuts in the Future
As California ’s budget crisis deepens and the state starts to run out of money, the pressure mounts for the Governor and state legislative leaders of both parties to come to a budget deal. After $16 billion in cuts in recent budgets, there has been a deadlock in the legislature—which needs a two-thirds vote to pass a budget or taxes—about how to deal with the over $40 billion deficit for the year and a half through June 2010.
At this late date, there have been indications that, after years of sticking to a “no new taxes” pledge and withholding the votes needed to get to two-thirds for a balanced budget, legislative Republicans may be willing to support some forms of taxes and revenues. However, their price for such support has been even harsher cuts, and a strict spending cap, one that would likely force to health and other vital services in the future and would prevent any attempt to meet existing unmet needs in California .
ACTION: Call your state Assemblymember (www.assembly.ca.gov) and state Senator (www.sen.ca.gov) to urge them to OPPOSE ADDITIONAL CUTS and especially to OPPOSE A SPENDING CAP that forces future cuts and prevent the state from meeting our existing health care needs. CALL TODAY! The Legislature could act quickly.
Federal Help for Health Care in Economic Recovery Act
The state is slated to get some much-needed help from the federal government in the form of the economic recovery bills being considered in the U.S. Congress. On health care, the bills provide for increased matching fund for Medi-Cal, new funding for health informational technology, and temporary subsidies for coverage for the unemployed.
There are two key differences between the two measures:
* While both versions provide some subsidizes to help some unemployed with COBRA payments so they can pay for coverage, only the House version funds a 100% federally funded temporary Medicaid expansion for unemployed adults.
While even the most generous economic recovery package will only make a dent in the state’s dire budget situation, every bit helps.
ACTION:Call Senators Boxer (202-224-3553) and Senator Feinstein (202-224-3841) to urge them to argue for more help for Californian and California ’s unemployed—and then urge them to pass the economic recovery package without delay or dilution. Also urge them to support the House version of Medicaid matching funds, and the temporary Medicaid expansion for unemployed adults.
Growing up, the front page of a newspaper was a powerful thing. This is especially true in New York, where there are newsstands and subways and other venues where even those who don't regularly read the paper will certainly see a memorable headline.
The once great state of California today becomes a national disgrace.
While the federal government races to revive a failing economy, leaders in Sacramento wallow in finger-pointing and self-righteous bluster. Their failure to pass even an interim solution to the state's $40 billion deficit by today's deadline exponentially deepens the fiscal crisis.
The state will stop paying some of its bills and start issuing IOUs to cities such as Los Angeles, to school districts such as LAUSD and even to you.
It will stiff people due income tax refunds, students depending on Cal Grants to stay in college and contractors who have performed work. If the days without a budget continue, economic havoc will spread like a virus, and the state's bad faith and credit will infect every corner of the state.
Californians should be furious. We are.
That's why the Daily News is taking the rare step of running an editorial on the front page. This inaction is so serious that it threatens the economic stability of every resident and business of this state.
We encourage others to raise their voices as well. The political cost of delay must become too high for lawmakers to cling to principles that grim economic reality have rendered meaningless.
Gov. Arnold Schwarzenegger and the Legislature must adopt a new budget now. The people should demand it.
The governor and all 120 legislators share responsibility for this. But most of the blame for the immediate crisis falls on Republicans in the Legislature, who last summer - to a person - signed a pledge not to raise taxes. Since then, Democrats and the Republican governor have offered significant compromise, but GOP lawmakers cling to ideological purity - schools, health care and other essential responsibilities be damned. This day didn't sneak up on anyone. It's the result of too much borrowing and too little political courage over too many years. A systemic problem years in the making can't be solved in a day. But the immediate crisis can. It comes down to cutting costs and raising taxes. No thoughtful person can seriously expect spending cuts alone to get us through this budget year without irreparable harm to our educational system and our economy.
Paralysis is destroying this state. Compromise is the only answer. It must happen now.
There's help, and there's help. The two economic recovery bills that passed by the House and Senate both provide significant help for health in California... but is it enough? The need is great, especially with our sky-high 9.3% unemployment rate and a corresponding rising uninsured rate.
With regard to federal matching funds, Evan Halper and Richard Simon at the Los Angeles Times report that the House version would provide $1.5 billion more to California, because the formula takes into account a state's economic climate. The Senate version largely does not, and reflects the inequity of the standard funding formula, where California gets the lowest possible matching rate.
There's another difference that Californians also should care about: Both the Senate and House versions include some subsidies for COBRA for the umemployed, but only the House version has a temporary Medicaid expansion for the unemployed. That would be a big boon to California, given our unemployment rate.
Californians will make a big effort to see if the House version prevails.
The Senate is working on their own version of the economic recovery, with many of the same elements, but some important differences.
Given California’s particularly high 9.3% (!) unemployment rate, our state has a particular interest in two differences: * The House version offers full federal funding for a temporary expansion in Medicaid for those who are on unemployment or who meet certain income requirements. The Senate does not include this provision at all. * The House formula for federal Medicaid matching funds partially takes into account the state’s economic climate (such as a high unemployment rate). The Senate version has much less targeting, and the difference for California could be over a billion dollars.
California advocates have a big interest in seeing the House health care provisions prevail, either as the Senate continues to amend and adjust their proposal, or in conference committee.
Also yesterday, SCHIP was up for debate in the U.S. Senate, and all the hostile amendments from Republicans have been defeated, so far. There’s talk that a final vote could happen today.
In Washington, DC, there is an emerging consensus for the need for increased government spending, to both stimulate the economy in the short term and make critical investments in the long term. In Sacramento, the state requirement for a balanced budget has forced over $16 billion in cuts, and threatens many more.
The contradictions are even starker than described.
In Washington, DC, the assumption is that government spending, rather than tax changes, gives the most "bang for the buck," and that explains the where the focus is. (See Appendix 1 of the Administration's top economists, showing the much more significant multiplier effect of government spending, versus tax changes)
In Sacramento, we've reduced government spending, and negotiations continue to cut more. Part of these negotiations are discussing a "spending cap," which will handcuff the state in the future to make any of these needed investments for the economy. And both these cuts and caps impede our ability to claim our state's maximum share of these federal stimulus dollars.
Many of these dollars--like the increased Medicaid matching funds--are tied to state spending. So every time we cut, we are leaving federal dollars behind--and with the increased match, we would leave even more behind.
Instead, we should be doing everything in our power--including raising taxes and revenues--to take advantage of that increased federal match, and cover more people, especially at a time when they need it. That's the spirit of these funds, to address the increased needs in this economic recession.
The Senate Finance Committee, chaired by Senator Max Baucus, has put out their own version of economic recovery and reinvestment. On the health portions, there's lots of similarities with the house: Health IT investment, COBRA subsidies, some Medicaid funding, and a temporary increase in Medicaid matching funds--partially based on the state's economic climate. There are differences, including that the Senate version does not seem to include the House's version of a Medicaid expansion for unemployed adults.
The most exciting proposal that acts as a "down payment" on health reform is the provision that will allow states to expand Medicaid, temporarily, for unemployed adults. Many people think our public coverage programs cover the poor, but the truth is that they only cover some of the poor. Medicaid largely covers low-income children and parents, and the "aged, blind, and disabled." But there are many adults who don't have a child at home, who are not eligible for any public program-even if they are under the poverty level, which is $10,400/year for an individual, $14,000 for a couple. Sometimes called "medically indigent adults," they are left to whatever their county decides to provide in terms of a safety-net service.
The stimulus would authorize such a Medicaid expansion only temporarily. But many of the reform plans now circulating in Washington, spanning the ideological spectrum, envision childless low-income adults getting coverage through Medicaid anyway. So by enrolling them in Medicaid now, the stimulus would basically jump-start the reform process--making the long-term job of getting everybody covered that much easier.
Their state-by-state breakdown indicates that California could get $11,069,212,000 over 9 quarters--although given that the formula is based on the economic climate in each state, the figure is not certain. Another caveat is that this is the current House version, but presumably there will be changes as this is considered over the next few weeks. We need to continue to press for: * an even higher amount of overall funding for state and Medicaid, and * a formula, like the one in the House, that considers the economic situation of the state (California has been particularly hard hit, and has a high unemployment rate, and the help should recognize that fact).
As proposed, this will significantly help Medi-Cal and health care in California. What it won't do is solve the overall budget crisis. The overall deficit for 2008-09, and 2009-10, is projected at $42 billion. The House economic recovery package is estimated to provide $3,612,818,000 in 2008-09, and $4,911,064 in 2009-10. (The remaining $2,545,330 comes in the 2010-11 budget year.) That's $8.5 billion that can be attributed to our $42 billion problem--a help, but it still leaves California in dire straits.
In other words, the Medicaid matching fund increase is a necessary but not sufficient part of the budget solution. Even with such significant aid, it still leaves tough choices--including the need to raise taxes and revenues, to prevent devastating cuts.
The aid does clarify some of the tough choices. It makes it even clearer that cuts to Medi-Cal and other health services are counterproductive, both in hurting our economy, and losing these federal dollars. It was insane to cut Medi-Cal when we were getting a one-to-one match for federal dollars. Under this bill, we would be getting even more--and each cut would have over twice the impact to our health system and our economy.
We will continue to need to raise revenues to sustain these programs, and to draw down these new and ongoing federal dollars. But this help would be more than enough to prevent current health cuts, restore previous health cuts, and do some targeted expansions, for children and adults, so that these safety-net programs serve their intended purpose in a downturn, and meet the increased needs of Californians.
But before we get to that discussion, California advocates, and legislators, need to continue to make the case for California getting all the help it needs.
FEDERAL DECISIONS TO SET LEVEL OF HELP FOR HEALTH CARE IN CALIFORNIA * First Draft of Economic Recovery Package Includes Significant Health Funding * SCHIP Reauthorization Advances Through U.S. House & Senate Finance Committee * Even With Fed Help, Tough Decisions on Cuts And/Or Revenues Still Needed at State Level
Governor Arnold Schwarzenegger ditched much of the traditional State of the State on Thursday in order to focus solely on the impending budget crisis. He declared that the "state was incapacitated" and in a "state of emergency," because of the current gridlock on deciding on a budget on cuts and revenues.
Meanwhile, in Congress, financial assistance is being actively considered at the federal level, especially around health care issues. While such funding won't be close to matching the full $42 billion deficit, decisions made in the next few days and weeks will make a difference of billions of dollars to California.
The U.S. House Committee on Appropriations chaired by Dave Obey (D-WI) just released its version of the “American Recovery and Reinvestment” package. Representing the House Democrats in consultation with President-elect Obama's team, it includes, regard health care:
Increased Medicaid Matching Funds: It includes $87 billion nationally through the end of federal fiscal year 2010, “with additional relief tied to rates of unemployment.”
Health benefits for the unemployed: The proposal would spend $30 billion to pay 65% of the cost of COBRA for the newly unemployed, for the first 12 months of unemployment.
The proposal would also provide full funding for Medicaid coverage for unemployed workers up to 200%FPL (about $21,000 a year for an individual). And Medicaid eligibility is based on income at the time of application--what would matter is how much unemployment insurance someone is getting, not what they made last year.
Finally, for those over 55 who lose their job or who have worked for an employer for 10 years or more, they could keep their COBRA until they are Medicare eligible—although, after the first year those workers would be expected to pay the full cost of their coverage.
Cost containment: The House Democrats propose major investments in lowering costs and improving quality: * Health information technology: $20 billion. Health IT is the infrastructure for better cost and quality data, for coordinating and managing care, for reducing medical errors and improving patient safety. * Prevention: $3 billion to fight hospital infections, grants to public health departments, immunizations, etc. * Health effectiveness research: $1 billion to compare the effectiveness of drugs, devices and other treatments, based on scientific evidence, not just drug company marketing.* Community health centers: $1.5 billion * Training primary care providers: $600 million* Indian health services: $550 million
This proposal is the beginning of a (possibly short) debate about the size, scope, and content of an economic recovery package. California health advocates need to inform the state's Congressional delegation about the need and urgency for this assistance.
LEVEL AND FORMULA MAKES SIGNIFICANT DIFFERENCE TO CALIFORNIA
The Obey proposal includes an increase in Medi-Cal matching funds, as did previous versions of "economic stimulus" proposals. Right now, California spends 50 cents on Medicaid and gets another 50 cents match from the federal government--a lower number than many other states, but still a major influx of federal dollars to our health system and economy. The proposal is to temporarily increase that match.
Using the Congressional Budget Office’s estimate for last fall’s Senate bill of $29.2 billion inadditional federal Medicaid funding as the low end of the range of federal fiscal relief and the Governor’s request for $50 billion a year as the high end of the range, we estimate that: * Using the equal FMAP percentage points per state approach, California's share of the Medicaid relief package would approximate $3.3 to 5.6 billion in FY 2009. * Using the equal proportionate reduction in state cost approach analogous to the S-CHIP adjustment, California's share of the Medicaid relief package would approximate $3.8 to 6.5 billion in FY 2009. * Using the targeted approach with more relief for states with weaker economies, California's share of the Medicaid relief package would approximate $4.0 to 6.8 billion in FY 2009.
An approach that uses the baseline of our lowest-in-the-nation Medicaid matching rate would disadvantage California; a targeted approach based on our economic condition would help California, given our weak unemployment rate.
California health advocates need to make the case with our delegation for * the highest overall level of assistance for health programs, as well as * a fair formula that ensures our dire economic situation is recognized. SCHIP REAUTHORIZATION MOVES QUICKLY
As a separate piece of legislation, the reauthorization for the State Child Health Insurance Program (SCHIP) passed the U.S. House of Representatives Wednesday, 289-139. While it was a strong bipartisan vote, the split in the California delegation was stark, with support all Democrats and only Republican Mary Bono Mack. All other California Republicans voted against it. (Democratic Representative Hilda Solis, Labor secretary-designate, did not vote.)
This is a major boon for the 900,000 children on California's version of the program, Healthy Families, as well as many more children who are still eligible but not enrolled. By raising $32.3 billion with an increase in the federal tobacco tax, the bill extends SCHIP for 4.5 years, provides health coverage for 4.1 million additional children nationally.
The U.S. Senate Finance Committee passed a similar bill Thursday, on mostly a party-line vote, with Republican Senator Olympia Snowe from Maine voting with the Democrats in support. The hope is that a final package is available for President Obama's signature by his first week after his inauguration. Unlike President Bush, who twice vetoed similar child coverage proprosals despite overwhelming bipartisan support, President Obama is likely to make this his first legislative victory.
CALIFORNIA NEEDS KEY PROVISION: California has a strong interest in a key policy provision: Both versions would eliminate an arbitrary provision prohibiting federal matching funds for the first five years legal immigrant children are in the U.S. California, which covers these children, loses millions of dollars each year because of this current exclusion, and would benefit from the change. This important provision needs to stay in the bill: children cannot wait five years for coverage, and California needs the assistance.
THE STATE BUDGET CRISIS CONTINUES
If both the economic recovery package and SCHIP legislation passes shortly, with the formulas and provisions favorable to California, the state would still have a significant deficit to be remedied through cuts and/or taxes. On the other hand, the size of the problem is so great that it is hard to see how any solution is possible without significant federal assistance.
The Governor's current budget proposal offers $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.
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.
Advocates are actively working for both the state revenues and the federal assistance that can prevent these cuts and sustain these programs. 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.
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 US House Committee on Appropriations chaired by Dave Obey (D-WI) just released its version of the “American Recovery and Reinvestment: Action and Action Now!”. It is a remarkable document in many respects, including what it envisions for health care. As President-elect Obama has said, the recovery plan should be a down payment on health reform—and this would be a hefty down payment.
Billions to stop Medi-Cal cuts: We were expecting something on improving the federal match for Medicaid—and it is there, $87 billion through the end of federal fiscal year 2010, “with additional relief tied to rates of unemployment”. Since California has a low Medicaid matching rate but a high unemployment rate, we can hope for significant help in preventing further cuts in Medi-Cal, California’s Medicaid program, and perhaps even the chance to eliminate the cuts we have already done.
Health benefits for the unemployed: We had heard there might be something to help the unemployed keep their health benefits---what is proposed is breathtaking.
First, the proposal would spend $30 billion to pay 65% of the cost of COBRA for the first 12 months of unemployment.
Second, the proposal would provide Medicaid coverage for unemployed workers up to 200%FPL (about $21,000 a year for an individual). And Medicaid eligibility is based on income at the time of application so what would matter is how much unemployment insurance someone is getting, not what they made last year. Third, for those over 55 who lose their job or who have worked for an employer for 10 years or more, they could keep their COBRA until they are Medicare eligible—of course, after the first year those workers would be expected to pay the full cost of their coverage.
Cost containment: The House Democrats propose major investments in lowering costs and improving quality: · Health information technology: $20 billion. Health IT is the infrastructure for better cost and quality data, for coordinating and managing care, for reducing medical errors and improving patient safety. · Prevention: $3 billion to fight hospital infections, grants to public health departments, immunizations, etc. · Health effectiveness research: $1 billion to compare the effectiveness of drugs, devices and other treatments, based on scientific evidence, not just drug company marketing. · Community health centers: $1.5 billion · Training primary care providers: $600 million · Indian health services: $550 million
Altogether it is between $150 billion and $200 billion into health care nationally, just when we really need it.
Of course this is not a law yet. The Congressional process is just starting. This is a proposal, not the final bill. The US Senate has not yet weighed in. But what a different world! Enough federal Medicaid money to avoid further Medi-Cal cuts in California and probably to reverse those already done. Health benefits for the unemployed, instead of letting people between jobs go without and put their lives at risk. An implicit recognition that keeping people in their 50s and 60s insured helps to save Medicare money. Real investment in cost containment and improving quality.
We are looking forward to implementing whatever becomes law in the new Obama Administration.
California imposed additional reporting requirements to have over 250,000 children fall off coverage, and has active proposals by Governor Schwarzenegger to deny coverage to over 500,000 more California adults, largely low-income working parents.
If economic recovery funding comes, we need it not only to prevent these cuts, but to restore those that have already been made.
The expectation is that the new federal money from increased Medicaid funding may be bigger than the proposed cuts in Medi-Cal--but still small compared to the size of the overall budget deficit. But we have a good case to make that the money should be used as intended, to keep our health care programs and system whole, and to meet the increased and urgnet health care needs during this economic downturn.