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Topics of interest to both consumers and agents related to Covered California and the ACA biased in favor of the successful implementation of the Exchange and deliberately apolitical.

Recently in Health Care Policy Category

The following are excerpts from a recent article by David Lazarus, LA Times.

Republican lawmakers are stll determined to roll back Obamacare, deny coverage to millions, limit treatment for the poor and essentially hand Medicare over to private insurers.

Obamacare is not perfect. It will not cover everyone and it doesn’t do enough to reduce medical costs. But here’s what it’s accomplished so far.

  • Created a system to extend coverage to about 30 million of the roughly 50 million people in this country now without insurance.
  • Provided coverage to about 2.5 million young people who are able to remain on their parents’ insurance policies until age 26.
  • Laid the groundwork for preventing insurers from denying coverage to people with preexisting medical conditions or from canceling people’s policies after they get sick.
  • Set in motion an overhaul of insurance reimbursements to reward doctors for keeping people healthy rather than profiting only when people require costly tests or hospitalization.

Not only would the Republican budget plan take away all these advances, but it would also drastically cut spending for Medicaid, the insurance program for low-income people. The Urban Institute estimated last year that the GOP’s approach could reduce Medicaid enrollment by half.

If Romney Wins

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If Mitt Romney is elected President he will repeal Obamacare. That simple promise makes health care (not jobs or taxes) the election outcome that will have the most immediate and powerful impact on our lives. Abolishing Obamacare would eliminate subsidies and therefore, the viability of the Exchange.

The Free Market Pitch

Romney says that unleashing the power of the free market will bring down costs and raise quality. Sounds good, but the free market doesn’t work when it comes to paying for health care. People don’t have the information available to evaluate doctors, hospitals, or treatments.The actual costs of medical services are hidden. Our insurance company has final say in what to buy or how much to spend. If the price isn’t right, we don’t have the power to say no. It’s not clear why Romney believes that competition among insurers will bring down costs, because that competition already exists, and yet it has done little to reduce health-care costs.

Cuts Spending Not Costs

But the truth is that Romney’s main concern isn’t to bring down over-all healthcare costs. What he wants is just to have the government less involved in health care. His plans would lower federal health-care spending, not because of the power of the free market, but because a Romney Administration would simply have the government do less. Romney would eliminate the Obamacare subsidies for health insurance. He would turn Medicaid into a block grant to the states and trim its annual budget, with the result that its funding would lag behind the rise in health-care costs. With these changes, the government would spend less, but only because it would provide less.

Is Health Care Government’s Responsibility?

Plenty of people think that guaranteeing affordable health insurance is not a core responsibility of government. Mitt Romney seems to be one of them. But plenty of people take the opposite view, and the premise of Obamacare is that health care is a collective good, like national defense—something that government has to help provide. The real issue, come November 6th, isn’t about who has the best ideas for controlling health-care costs. It’s about who has the right idea of what government should do.

Healthy Families is California’s version of the Children’s Health Insurance Program (CHIP), which provides health insurance coverage to children whose parents earn more than the Medi-Cal limit, but not enough to make health insurance affordable. California had 1.7 million children in the program as of 2010. One of Gov. Jerry Brown’s budget-cutting moves this year was to end Healthy Families and cover them instead through Medi-Cal. The elimination of the Healthy Families program begins Jan. 1, 2013 with the first phase of the conversion - moving approximately 415,000 children to Medi-Cal managed care plans during the first month. The balance of the children will be moved into managed care over the following 12 months.

Awkward Timing

Folding Healthy Families into Medi-Cal comes at an awkward time for its members. It forces hundreds of thousands of children to change insurers and doctors now and then again a year later. In Jan 2014, the majority of those parents will be obtaining subsidized coverage through Covered California from private insurers, not from Medi-Cal. As a result, children and their parents would be getting their healthcare from different programs, in many cases with separate networks of doctors and hospitals.

Covered California Wants the Numbers

While the Exchange Board and staff have been largely quiet on this issue, the additional enrollments, perhaps as much as 1 million lives, add to their marketing muscle. Covered California, in its role as active purchaser, is about to engage in the initial round of negotiations with health plans over the the cost of qualified health plans to be offered on Covered California.

Vermont Gov. Peter Shumlin signed a bill yesterday authorizing the state to adopt single payer health care - a move some liberals are cheering, saying the state could be a model for single payer on a much larger scale. In 2017 at the earliest, Vermonters will be guaranteed health care coverage. .In an interview with the International Business Times, Dr. Deborah Richter, M.D. of Vermont Health Care For All (VTHCA), a Vermont-based non-profit organization, responded to questions about this bill.

QUESTION: Will it cover everyone?

  • Richter: That is the intention, to cover every resident of Vermont.

QUESTION: How does it work?

  • Richter: Essentially, you no longer need health insurance because it will pay for everyone. Think of it like public schools.

QUESTION: How will it be financed?

  • Richter: Vermont residents will pay into the single-payer fund based on their income.

QUESTION: Can Vermont afford it?

  • Richter: Total costs are already going up 7 to 8 percent per year, so the [status quo] isn’t affordable. The single-payer health care system puts a budget around health care, so we’ll be spending less in total. There are also efficiencies. We will do health planning. For example, if it looks like we have too many hospital beds for our population, we’ll reduce that number. We will save on administrative costs of having only a single-payer [that health care providers deal with. We will have uniform rates, which mean all providers will be paid the same rate. This will further save administrative costs.

QUESTION: How do you think Vermont lawmakers arrived at the conclusion that it’s affordable?

  • Richter: We have an assessment from a Harvard economist who designed the system in Taiwan. The system has a track record of saving money. We have examples around the industrialized world that show us that we, too, can spend less and get better care.

QUESTION: How do you cut down on frivolous hospital visits and waste?

  • Richter: Studies have shown that [frivolous visits] happen mostly because people don’t have a primary care doctor. The bill will expand the primary care workforce, which will cut down frivolous visits. Also, people generally don’t enjoy [spending a lot of time in hospitals.

QUESTION: Any further comments?

  • Richter: It’s the most fiscally conservative way to cover everybody. I’m amazed people don’t want to embrace this. It’s going to cost less money and give everybody better care.

QUESTION: Can every state do it?

  • Richter: Absolutely

Former Health and Human Services Agency Secretary Kim Belshé has taken a new job as senior policy adviser with the Public Policy Institute of California, the nonpartisan think tank and polling outfit announced today.

The former Schwarzenegger administration official had previously served as deputy secretary of the Health and Welfare Agency and director of the Department of Health Services under Republican Gov. Pete Wilson. Belshé is also a member of the new California Health Benefit Exchange Board, which will create an insurance market to be used under the federal health care overhaul. She was appointed to that post by Gov. Arnold Schwarzenegger.

The organization also announced that PPIC board member and retired Edison International Chairman and CEO John Bryson has been elected chair of its board of directors and that Northern Illinois University Center for Governmental Studies Director Robert Gleeson has been hired to as vice president of research.

"We are excited that these three dynamic and experienced leaders are taking on key roles at PPIC," says PPIC President and CEO Mark Baldassare said in a statement. "Their talents will be invaluable in our efforts to improve public policy and shape a better future for California.

Read more: http://blogs.sacbee.com/capitolalertlatest/2011/03/former-hhs-secretary-kim-belshe-joining-ppic.html#ixzz1Ia4TMgbN

California lost millions of dollars in federal funding to provide health care to uninsured kids because it didn't enroll enough eligible children into its government health plans.

In response to a federal incentive program that awarded extra money to states that met certain enrollment numbers, California set a goal of signing up 352,000 new kids in its Medi-Cal or Healthy Families programs. It fell short by about 24,000 kids, which left the state ineligible for the federal funds.

It wasn't that there weren't enough eligible kids in the state. This happened, let's remember, during a year when unemployment in California peaked at 12%. Researchers at the Urban Institute estimated in October that the state was home to nearly 700,000 uninsured children who qualified for state or federal programs but hadn't been enrolled. So why couldn't the state meet its enrollment goals? Because California has a cumbersome system that acts as a roadblock to enrolling eligible children.

One problem is that in 2009, to save money, Gov. Arnold Schwarzenegger cut funding to pay certified application assistants, who help enroll those qualifying for Medicaid.

A second problem is that it has become increasingly difficult to find physicians willing to accept the artificially low payments -- as low as 9 cents on the dollar for some kinds of care -- that have been set by the Medi-Cal program.

A third reason involves the hoops hospitals must jump through to get reimbursed for treating uninsured children who qualify for state or federal programs. If a family without insurance brings a child with a serious medical problem to the hospital, for example, the emergency room staff provides care with the expectation of being reimbursed by the state under a process called retroactive enrollment. But submitting such claims has become increasingly difficult. Delays and denials are commonplace. Some hospitals have grown so wary of participating in this hard-to-win system that they have opted to absorb the loss and chalk up the cost of treating such children to unreimbursed care.

In an effort to get more people signed up for coverage, our nonprofit organization, the San Jose-based Foundation for Health Coverage Education, launched a 24-hour help line for the uninsured in 2005. Through our live call-in center and our coverageforall.org website, we have been able to help more than 2 million uninsured Americans who seek help.

The process is simple. First, we ask five eligibility questions. Then we identify public programs for which the inquirer might be eligible and provide applications for the programs and a list of documentation that will be required. It doesn't have to be an obstacle course.

California needs to simplify its process. One step in that direction would be to allow people eligible for Medi-Cal to sign up for it at the "point of service" -- when they receive medical care. California employs 26,500 state workers who are responsible for enrolling people in public programs, including welfare, Medi-Cal and food stamps. This number could be reduced if Medi-Cal enrollment could be done online at a clinic, doctor's office or hospital where care is delivered.

California lost out this year, and that should never happen again. By revamping its antiquated and inefficient enrollment system, the state need never again leave federal grant money on the table while children go without healthcare.

By Phil Lebherz

Mr. Lebherz is executive director of the Foundation for Health Coverage Education, which operates the U.S. Uninsured Help Line (800-234-1317) and http://www.coverageforall.org.

Newly elected California Insurance Commissioner Dave Jones (D) says he plans to hit the ground running by reining in excessive rate hikes while maintaining an active voice in the development of the health insurance exchange program.

Addressing the new Republican gains in the elections and the challenges to health reform, Jones says people need to look beyond the rhetoric, and at the reform law's individual parts. "There are a number of immediate benefits provided to Americans and to businesses....I believe once people obtain those benefits, they'll see the value in keeping reform intact," Jones tells HRW, challenging the views of his Republican predecessor Steve Poizner, who contended the statute was unconstitutional and would contribute to the state's fiscal problems.

State insurance commissioners obtain their positions either through a governor's appointment or the election process. Four new insurance commissioners were voted into office Nov. 2, among them Jones, who defeated fellow state Assemblyman Mike Villines (R), and Ralph Hudgens (R), who succeeds Republican John Oxendine in Georgia. In Oklahoma, John Doak (R) unseated incumbent Kim Holland (D), while Sandy Praeger (R), who chairs the National Association of Insurance Commissioner's Health Insurance and Managed Care Committee, was re-elected unopposed in Kansas.

Recent media reports have questioned how influential these commissioners will be in crafting health reform policy. There's no doubt they will continue to serve as relevant leaders in their state, Alan Weil, executive director of the nonpartisan National Academy for State Health Policy, tells HRW. "Certainly on the ground the insurance commissioner is going to be very involved in the oversight of plans, particularly the rating provisions, which are a key part of the law."

On other reform matters, however, such as the design of the insurance exchanges, he says, "their voices will be one of many other players," such as the governors and "even the Medicaid state agency or independent boards" appointed to create these things, Weil says.
"The exchanges have multiple functions, the primary one being to enter into contracts with health plans, and the second one is to deliver subsidies to moderate-income families, and neither of those are traditional insurance commissioner functions," Weil says.

Jones sought to challenge some of those views in an interview with HRW. The reform law carves out a very explicit role for the insurance commissioner: "It says both [HHS] as well as the exchange authority in each state needs to consult with and confer with the commissioner in drafting of regulations and implementation of the exchanges. I plan to play a very active role in that process," says Jones, adding that he'll be working with California's newly established exchange authority to accomplish these tasks.

In developing the exchanges, "I think one of the most important things we need to address is making sure that the health insurance companies and HMOs do not have the ability to essentially cherry-pick healthy lives outside of the exchange and just leave in the exchange those who are ill or who have a high propensity for illness. That would undermine success of the exchange," Jones says.

Rate Hike Authority Exists for Other Insurance

Jones also plans to work toward his long-time goal of granting California's insurance commissioner the authority to reject excessive rate hikes. "I continue to believe it's one of the missing pieces of national health care reform," he says. The commissioner already has such authority under a state constitutional provision known as Proposition 103, which applies only to auto, property and casualty insurance.

Insurers have "vociferously opposed my legislation in the three prior sessions [of the state Assembly], and I have every belief they will continue to do so, but in wake of these double-digit increases year after year, there's a growing awareness among California voters that this is a reform that's badly needed," he says.
State legislation to limit insurers to just one rate hike a year was vetoed on Sept. 30 by Gov. Arnold Schwarzenegger (R). The outgoing governor reasoned that the bill was premature since the federal government already was working with states to establish a process for the annual review of unreasonable premium increases.

California's legislature did pass a law this year, however, "that will require information on cost drivers of health insurance premiums and independent actuarial analyses of rates. So regulators will have the ability to review all of that data as required now by state law and the new reform law," Patrick Johnston, president of the California Association of Health Plans, tells HRW, adding "we should give these statutes a chance to work."

Blue Shield of California and Anthem Blue Cross in California both declined to comment.

On the issue of medical loss ratios, Jones said he was generally pleased with the NAIC's MLR recommendations, although he conceded there are areas that HHS Sec. Kathleen Sebelius could seek to improve upon in its forthcoming regulations.

"Specifically, I was disappointed to see a number of federal and state taxes [beyond what the Democratic authors of the bill had intended] were allowed to be included as a part of the calculation," he says.

As Jones vows to rally for the health reform law, new Republican commissioners are just as likely to oppose it. While unavailable to provide comment to HRW, Hudgens in a recent radio interview opined that "the insurance commissioner 'can't do squat on the health care law,'" says Stephen Northington, president of Group Insurance Solutions, LLC, an insurance brokerage firm. Northington ran against Hudgens in the primary for commissioner, but lost along with several other candidates.

"Certainly the rest of us in the race were in a very different position on that because we felt the insurance commissioner's office can do something with regard to the regulations being written," Northington tells HRW. He adds that Hudgens has probably changed his mind since the interview. "I do believe he is going to oppose the health care reform law, and I know the attorney general is as well." The two offices in all likelihood will work together to make sure that Georgia espouses that position, he says.

Georgia had previously decided not to participate in the reform law's high-risk pool program on the basis that it would be too costly for the state, Northington says. The state, however, did accept the $1 million HHS provided to set up its health insurance exchange, "so my guess is the insurance commissioner's office is going to move forward with putting the exchanges in. My hope is the state would...not give more power to the federal government, and I would assume Ralph would have that attitude as well.

Reprinted from AIS's HEALTH REFORM WEEK, a new newsletter designed to help savvy business leaders in health care understand what the enormous changes mean to them ... and what they can do about it.

By Jennifer Lubell, Associate Editor (jlubell@aishealth.com)

NEW ORLEANS -- California got a round of applause from health policy leaders around the country this week for being first out of the gate with reform-driven laws to set up a state-run health insurance exchange.

"Let's stop for a minute and thank California for being the first state to pass enabling legislation," said Trish Riley, director of health policy and finance for the governor of Maine and moderator of a panel on exchanges during the National Academy for State Health Policy's 23rd Annual State Health Policy Conference.

"I'm envious of California," Riley told a room full of state officials who hoped to get some insights they could take home to start building their own exchanges. "I think there's a lot we can learn from the process they've already gone through."

Sandra Shewry -- former director of and current adviser to the California Department of Health Care Services -- outlined the California exchange, which was born last week when Gov. Arnold Schwarzenegger (R) signed two bills spelling out the details of the new state entity.

"It's a multipurpose tool, like one of those Swiss Army knives with lots of options," Shewry said. "We think that's the best way for us, but it may not be the best for every state. There isn't a line in the ACA (Affordable Care Act) that defines what an exchange should be, and I think it's quite purposeful that the ACA doesn't say the exchange is X. We have the ability to create what works best for us."
California Chose Middle Road

"Some people who don't know us think we tend to be extreme," Shewry said, "but we picked the middle path in this case."

Shewry said there are three main options in designing an exchange:

  • As a market definer and organizer, in which the exchange becomes the market;

  • As a purchaser, in which the state body selectively contracts with insurers; or

  • As a clearing house in which the exchange acts as a platform for all plans offered by all issuers.

California's exchange, which will be governed by a five-member board, fits firmly in the middle category, Shewry said. "The board will have discretion over many of the details and in some situations may lean further toward one end or the other, but for the most part, our exchange falls in the middle," Shewry said.

Joel Ario, deputy director of the federal HHS Office of Consumer Information and Insurance Oversight and Shewry's co-panelist in the session on exchanges, told state health policy leaders that health insurance exchanges "are more of a Republican idea than most people realize."

"Back in 2004 and 2005, it was Republicans who were pushing for this kind of exchange, and it was Romneycare before it was Obamacare," Ario said, referring to former Massachusetts Gov. Mitt Romney (R).

"In California last week, you had Republicans arguing with a Republican governor that he shouldn't sign those bills (establishing the exchange), but at the end of the day, he did it because it's a good idea for the people of California," Ario added.

California HealthLine
Thursday, October 07, 2010
by George Lauer, California Healthline Features Editor

Read more: http://www.californiahealthline.org/features/2010/california-exchange-gets-lots-of-attention-at-conference.aspx#ixzz11hwIx9N5

This past week, Gov. Arnold Schwarzenegger signed legislation confirming California's position as the national leader on health care reform.

California was the first state in the nation to pass legislation to develop a health benefit exchange to implement the federal law and now will be the first to create an exchange, an entity that will help California consumers and small businesses shop for and buy affordable health insurance.

Janet Coffman, PhD, a professor at the Philip R. Lee Institute for Health Policy Studies and the Department of Family and Community Medicine at UCSF, addresses some of the reasons California is ahead of other states and the benefits of being on the cutting-edge of health care reform.

Q: What is a health benefit exchange?

A: The health reform legislation signed into law in March 2010 by President Obama calls for a health benefit (or health insurance) exchange in each state by 2014. The exchanges aim to make health insurance more affordable for small business and individuals by allowing them to compare the costs of various health plans and different types of health coverage. All health insurance sold through the exchanges will provide comprehensive benefits without annual or lifetime limits on coverage. No one will be denied coverage due to his or her health status. Tax credits and subsidies will also be provided to make coverage more affordable for low- and middle-income persons. Some states may operate their own exchange and others may join a multi-state exchange.

Q: What is California's model for a health benefit exchange?

A: The California Health Benefits Exchange would be its own entity within the state government. Importantly, the California exchange would be an active purchaser that will develop a competitive process to select health insurers who will participate in the exchange. This is different from an "e-insurance" model, which simply provides information about health plans that can be purchased through the exchange. The downside of an "e-insurance" model is that individuals and small business would continue to apply for coverage on their own much as they do today. Being an active negotiator on behalf of large numbers of individuals and small businesses should result in more competitive prices for consumers.

Q: What is the benefit of enacting health care reform legislation more quickly than other states?

A: First and most importantly, California residents will have expanded access to health care sooner. Low-income childless adults comprise one of our state's biggest coverage gaps. Many do not have access to employment-based insurance and are not currently eligible for Medi-Cal, Medicare, or other public programs.

Also, since California will receive funds from the federal government, we'll be able to draw down federal money sooner. For people newly eligible for Medi-Cal, the federal government will pay a larger share of costs than it does for those currently enrolled in the program. The federal government will pay 100 percent of the cost from 2014 through 2016, 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and 90 percent in 2020 and subsequent years. These are large increases over the share of Medi-Cal costs the federal government historically has paid in California (50 percent) and the enhanced share paid during the last two fiscal years (65 percent).

In addition, starting in 2011 and continuing through 2014, states can receive financial assistance to help pay for the cost of creating a health benefit exchange. Given the current budget crisis, our state needs all the money it can get. It's also possible that future lawsuits and skirmishes may start chipping away at some of the provision. The idea of a health benefit exchange was contentious at the federal level, for example, so if the concept ultimately gets watered down, we still have the state legislation.

Q: Why is California in the position of being able to act so quickly?

A: Our leadership in this area in part reflects the energy and efforts put into health care reform discussions in 2007. California had one of the most sustained debates, other than Massachusetts. State health care reform ultimately was not successful here in 2007, but the health exchange was part of that discussion. Leaders had spent a lot of time defining what they wanted to see.

While other states still are wrestling with some of the concepts behind federal health care reform, some of our politicians who considered many of these provisions just three years ago are some of the same people we have in office now. They've been able to move swiftly from contemplation to implementation.

Maryland is the only other state that has gotten anything substantive passed - by substantive I mean legislation that goes beyond forming a committee or task force. In April, for example, Maryland legislators passed a law prohibiting health plans from denying coverage for children with preexisting conditions and allowing dependents up to age 26 to remain on their parents' coverage.

Q: Has the large number of uninsured people in California created a sense of urgency in our state?

A: California does have one of the highest percentages of uninsured people in the country; we're sixth in the nation. Historically there have been two large industries - agriculture and until recently, construction - that traditionally have employed many uninsured people and undocumented immigrants. Meeting this need may have played a role in pushing through health care reform legislation more quickly, but Texas also has a high percentage of uninsured and has not been as proactive as California. I really believe we're building on established thinking by leaders who are committed to propelling us forward.

Q: What other health care reform provisions have California passed?

A: Governor Schwarzenegger has signed legislation that extends eligibility for health care benefits for dependents up to age 26, prohibits insurers from excluding children with pre-existing conditions, and prohibits insurers from cancelling a person's health insurance policy except in cases of fraud or intentional misrepresentation of fact

By: Janet Coffman
University of California, San Francisco
Philip R. Lee Institute for Health Policy Studies

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