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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.

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Cost Sharing Methods Studied

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Covered California contracted with the Center for Healthcare Decisions to design and conduct 10 discussion sessions with uninsured Californians who are potential Covered California customers. Approximately 120 Californians participated in two-hour discussions which included two groups conducted in Spanish. Recruitment criteria included participants who were:

  • without health insurance for at least one year;
  • between 200-400% of the FPL (eligible to qualify for some premium support, but not cost-sharing assistance);
  • legal residents of California; between ages 30 and 64 (those under 30 would qualify for catastrophic coverage only); and,
  • able to read and write English (eight groups) or speak Spanish as their first language (two groups).

Cost Sharinf Options.png

Multiple Cost-Sharing Methods Studied

Since there are multiple ways to structure cost-sharing, Covered California wanted to learn how potential health plan members would respond to the question, What is the fairest way to structure cost-sharing when trying to meet the needs of many people? (Click image to enlarge.)

Responses to cost-sharing models

  • Annual deductible: Disconcerting; a barrier to access.
  • Co-payments: 80% chose Plan B for lowest co-pays.
  • Co-insurance: Huh?
  • Annual OOP maximum: Not as worried; playing the odds.

General Observations

  • Participants tended to focus on those aspects of cost-sharing with which they were familiar. During the ‘choose your cost-sharing plan’ discussion, nearly 80% of participants in each group chose Plan B because of its reasonably-priced co-payments for office visits and medications - services participants most often used.
  • Regardless of the annual deductible, participants still viewed the co-payment as the key to their ability to access health care. The primary concern for many participants was being able to afford to see a doctor when they needed one.

Coinsurance is Problematic

  • Almost all participants were unfamiliar with this type of cost-sharing and did not give it much attention in their discussion and decision-making.
  • As it was presented on the three cost-sharing models chart (Image above), co-insurance was often misunderstood, even after the facilitator gave a specific example of how it might apply.
  • The different rates of co-insurance (30/35/40%) did not raise concerns; participants viewed the differences in co-payments as much more meaningful.

A California Budget Project report released today predicted that the California Health Benefit Exchange, designed to insure small businesses employees and individuals without employer coverage could enroll as many as 8 million Californians when it launches in 2014, Because most Californians -- 55 percent -- receive health care coverage through their employers, they are unlikely to be affected by a requirement that all Americans maintain a minimum level of coverage.

Through subsidies for low- and middle-income families, increased Medi-Cal eligibility and employer incentives, ACA could reduce the number of uninsured Californians by two-thirds, or 4.7 million individuals, the independent fiscal and policy analysis group concluded.

Tangible Benefits in First Year

One year after it was signed into law, the Affordable Care Act (ACA) has provided tangible benefits to millions of Californians. The ACA has started to close the gap in prescription drug coverage for seniors and it offers up to 300,000 Californians who have been denied coverage due to pre-existing conditions an opportunity to sign up for affordable coverage through a temporary insurance pool. Young adults can be covered by their parents' plan up to age 26.

"As California works to swiftly and effectively implement a significant restructuring of our health care system, it is important that policy makers and insurance consumers have the basic facts own what the law means for our state," Budget Project executive director Jean Ross said in a news release. "The ACA is already providing clear benefits to California's seniors, young adults and individual consumers."

Sacramento Business Journal

When you're the first to launch a new program, it is often greeted with a measure of fear and suspicion, according to Jon Kingsdale, former executive director of the Commonwealth Health Insurance Connector Authority in Massachusetts. And one of the common misconceptions about the exchange in Massachusetts and the exchange-to-be in California, he said, has been the worry that somehow the exchange will be constantly at odds with health insurance companies.

"As a non-regulatory marketplace for insurance, with a mandate to serve the public, there is a strong interest in having long-term, value-based relations with health plans," Kingsdale said. "Meaning, we want them to make a little money."

Kingsdale was part of a who's-who panel of health benefit exchange experts that convened in Sacramento yesterday. The event was sponsored by the California HealthCare Foundation. CHCF publishes California Healthline.

Kingsdale said the California Health Benefit Exchange was formulated with the advice and input of health insurance carriers -- and that California, just like Massachusetts, is counting on active participation in the exchange from those insurance providers.

"You don't want them going out of business because they can't make a decent return," Kingsdale said. "You want to drive value so that they're able to make money. If they do a good job, they get financially rewarded in the marketplace."

And at the same time, patients in California can use the group buying power of the exchange to secure lower premium rates and better coverage, Ed Neuschler of the Institute for Health Policy Solutions said. "The exchange has to offer convenient access to consumers, with a choice of competing qualified plans," he said. "Nobody is required to use the exchange. But there is a core population, several groups that are highly incentivized by tax credits, and that's where the critical mass will come from to make the exchange viable."

Panelists touched on several issues that will have to be dealt with in detail by the exchange's five directors, once they're identified and seated, probably in January. Among the first issues they'll deal with, according to yesterday's panel, are how to use a competitive process to select insurers, how to interact with two different state regulators and how to implement the "no wrong door" policy in the exchange.

California HHS Secretary Kim Belshé, the first speaker at yesterday's briefing, stressed another important aspect of exchange implementation. "Notwithstanding the hope and promise of the exchange," Belshé said, "the rules between Medi-Cal and the exchange will be really important." The national health care reform law, she said, "basically offers universal coverage from poverty up to 400 percent of poverty. That construct raises all sorts of issues. What are the enrollment processes and systems to facilitate that? What standards will we employ to offer these plans?," Belshé said. "Medi-Cal is now about coverage," she said. "It's not your mother's Medi-Cal program anymore. There are very different rules around eligibility and streamlined enrollment. This is all about getting people enrolled. The federal government is picking up the tab for most of that," she said.

California's first-in-the-nation status still doesn't leave a ton of time to plan for all of it, Sumi Sousa of the Assembly Speaker's office said. "In terms of a timeline, everyone was saying, 'Why are you doing this now?' " Sousa said. "Well, just walk back. We need to be ready six months ahead of time, that's up and running. And we'll only just get started January 2011. "That's really just 2½ years to do this entire thing," she said. "And that doesn't happen on a dime. We need to have consumers who want to enroll. We need products that people want to buy. Otherwise, it's not going to last very long. We need everything about that structure to say, we're open for business -- we're open for business for people."

Caifornia Healthline
by David Gorn
Read more: http://www.californiahealthline.org/capitol-desk/2010/10/experts-evaluate-californias-exchange.aspx#ixzz13E6wFONt

California Gov. Arnold Schwarzenegger with Sen. Elaine Alquist, D-Santa Clara, signs legislation creating a health care exchange.

For the 2.5 million Californians who buy their own health insurance, the 6.6 million who are uninsured and the million-plus who get their insurance through their jobs at the state's smallest businesses, finding a good health plan is a daunting task.

Just comparing plans can be confusing. Finding the right plan that's also affordable can be even tougher.

That may be changing. Last month, California became the first state to pass legislation establishing a health insurance exchange as part of federal health care reform, which requires most Americans to have coverage by 2014 or pay a fine.

The California Health Benefit Exchange will provide a place for small businesses and people without employer-based insurance to join together to buy health insurance at lower rates, aided by federal subsidies to low- and middle-income consumers.

Every state is required by the federal law to create an exchange that will begin operating in 2014.

"This is a revolutionary change from the current health care system in California," said Anthony Wright, executive director of Health Access California, a nonprofit consumer group.

"Right now, individuals and small businesses are at the mercy of insurers. This allows the exchange to negotiate on their behalf for the best price and value."

The idea for the exchange is that millions of people who now pay top dollar for insurance because they're buying individually or in small groups -- or forgoing coverage because of cost -- will benefit from the exchange's bulk purchasing power to get a better price. The exchange also is charged with making it easier for consumers to compare plans and choose what works best for them.

Created as an independent government agency, the California Health Benefit Exchange is led by a five-member board that will be appointed by the governor and Legislature early next year.

The legislation establishing the exchange was opposed by the California Chamber of Commerce and some insurance companies that said it would limit customer choice.

Patrick Johnston, chief executive of California Association of Health Plans, said his group believes "the creation of an exchange is a good mechanism for consumers to get health coverage, particularly those who have not had insurance."

The new law raises questions, however, he added.

"One question is whether all qualified plans will be in the exchange marketplace for consumers to consider or whether the exchange will severely limit what plans are available."

Patrick Johnston, a San Diego politician, said the exchange's "selective contracting" power could exclude smaller regional plans such as Sharp HealthCare in San Diego.

Chamber spokeswoman Marti Fisher wrote in an August letter to lawmakers, "A five-member board with unrestrained authority and without oversight is not in the best interest of the people of California."

Although the exchange won't start serving consumers until 2014, experts say there's no time to waste in getting organized.

"The lead time California has is adequate but not overly generous," said Jon Kingsdale. Kingsdale knows the challenges of building an exchange from the ground up -- he was the founding executive director of the Massachusetts agency created in 2006 to administer that state's universal health care law, which has been a model for the federal reforms.

His advice to California: get moving quickly, figure out the marketplace and go on the road with a statewide campaign to "communicate, communicate, communicate" with the public.

"There's a lot of interest and anxiety about health reform in California and across the country," said Kingsdale, who left the Massachusetts Health Connector in June to work as a consultant.

"Without a lot of communication, there's a potential for misinformation and more anxiety. There also is a big opportunity to get out accurate information about the California Health Benefit Exchange and how it will work."

How the state exchanges work is set out in the federal Patient Protection and Affordable Care Act that became law in March. The law specifies that people with a household income between 133 percent and 400 percent of the poverty rate will get an immediate tax credit to help offset the cost of insurance. Depending on income, people would pay no more than 2 percent to 9.5 percent of their income on health insurance.

(People with incomes below 133 percent of the poverty rate will be eligible for Medi-Cal under an expanded federally funded program.)

A study by the nonprofit Families USA estimated that 28.6 million Americans, including nearly 3.5 million Californians, would be eligible for the premium subsidies in 2014. An additional 2 million Californians are expected to buy insurance through the exchange without a subsidy, because it will offer easy comparison shopping, said state Health and Human Services Secretary Kim Belshe.

Still, "there are a lot of important unanswered questions," Belshe said. Among them: Will individuals and small business owners buy coverage or opt, instead, to pay a fine?
"It's really important that we work together across all sectors ... to underscore the value of coverage," she said.

Last month, the U.S. Department of Health and Human Services announced $49 million in grants to help states set up the exchanges. California was awarded $1 million, and more funding is expected in the spring, Belshe said.

Once the exchanges are operating in 2014, they are required to be self-supporting. California's exchange is prohibited from using general fund money to help pay for the program.

Instead, administrative costs will come from insurance premiums. The state Legislative Analyst's Office said in August that it couldn't calculate administrative costs because the agency hasn't been created, but estimated they would be "tens of millions of dollars."

The analyst's office noted that administrative costs account for about 3 percent of the cost of insurance premiums in the Massachusetts exchange. When Massachusetts launched its program in 2006, about 9 percent of residents were uninsured. Today, that's down to 2.6 percent, according to state officials.

Kingsdale said the Massachusetts exchange began offering both subsidized and unsubsidized insurance just six months after legislation established his agency. Programs continue to be added. "I like to say we were laying the tracks and running the trains at the same time," he said.

Kingsdale said the California Health Benefit Exchange board and its new staff must quickly assess the needs of its customers, both subsidized and unsubsidized, and the health plans it will market. For it to succeed, the exchange must become the simplest and best place to get insurance, he said. "We found customers wanted more standardization between carriers so they could compare apples to apples," Kingsdale said. "But that can quash innovation" among plans.

It's a balancing act between consumer concerns and creativity in health plans, he said. "We found that to be a challenge in Massachusetts and I think that will be a challenge in all of the states."

Another challenge was resistance by small employers in offering their workers a choice of health plans, rather than just one, Kingsdale said. "A choice requires new ways of pricing plans, and that remains a challenge," he said. "How the California Health Benefit Exchange sees its role in offering health care to small employers will be interesting."

California reached a pivotal milestone along the road to health reform implementation recently with Governor Arnold Schwarzenegger's historic signing of two bills creating the California Health Benefit Exchange.

This Sacramento briefing will examine the central challenges facing the state as it works to establish an operational health benefit exchange by 2014.

Thursday, October 21
12:00 - 2:00 PM
California State Association of Counties Conference Center
1020 11th Street, Second Floor
Downtown Sacramento

To listen in, call 866-244-8528 and use participant pass code 639160.

Participants will provide a synthesis of the design and policy issues that informed California's approach to establishing an exchange. This will include introductory remarks from Kim Belshé, secretary of the California Health and Human Services Agency, as well as perspectives from Jon Kingsdale, former executive director of the Massachusetts Health Connector, and Rick Curtis, president of the Institute for Health Policy Solutions. Both Kingsdale and Curtis advised California's Health Reform Task Force this year.

Panelists include:

  • Kim Belshé, secretary, California Health and Human Service Agency

  • Rick Curtis, president, Institute for Health Policy Solutions

  • Patrick Holland, managing director, Wakely Consulting Group and former chief financial officer, Massachusetts Health Connector

  • Jon Kingsdale, independent consultant and former executive director, Massachusetts Health Connector

  • Marian Mulkey, director, CHCF Health Reform and Public Programs Initiative

  • Ed Neuschler, senior program officer, Institute for Health Policy Solutions

  • Sumi Sousa, special assistant to Assembly Speaker John Pérez

Lunch will be available starting at 11:15 AM.

We are near capacity for the event and reservations are required. RSVP to Sue Gutierrez of the Center for Health Improvement, and arrive early to guarantee a seat.
Event recording and materials will be made available on this page following the briefing.

California Health Care Foundation - www.chcf.org
Read more: http://www.chcf.org/events/2010/briefing-california-health-benefit-exchange#ixzz12YkbY43p

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

The winner of California's insurance commissioner election will play a key role in setting up the state's new health insurance exchange. Last week, Gov. Arnold Schwarzenegger (R) signed legislation (AB 1602 and SB 900) to lay the foundation for the California Health Benefit Exchange, which will offer a marketplace of health insurance options for individuals and small businesses. The federal health reform law calls for the creation of such exchanges. The two leading candidates for California's insurance commissioner post -- Dave Jones (D- Sacramento) and Mike Villines (R- Clovis) -- are Assembly members whose terms end this year.

Where the Candidates Stand on Health Insurance Exchanges

Jones has emphasized the importance of proceeding carefully during the creation of California's health insurance exchange. He said, "If we don't design the health exchanges well, they'll fail because (insurers) will cherry-pick the market and leave only sick people in the exchange."

Villines has said he would support the exchanges as long as they: allow for health insurance transparency, foster competition, and maintain a safety net.

Jones' Stance on Other Health Issues

Jones has said that he will enforce new regulations under the federal reform law that require insurers to spend at least 85% of premiums on medical care. In addition, Jones previously supported legislation that banned price discrimination against women in the individual insurance market and an unsuccessful bill that would have mandated state approval of health insurance rate increases.

Villines' Stance on Other Health Issues

Villines has said the insurance commissioner's job is to protect consumers and help the economy by creating jobs. He said providing affordable health plans and other insurance products would provide the best protection for consumers. In addition, Villines has said he is willing to cross party lines to effectively implement provisions of the federal health reform law.

AP/San Jose Mercury News reports (Dillon, AP/San Jose Mercury News, 10/5).

Read more: http://www.californiahealthline.org/articles/2010/10/6/new-california-insurance-commissioner-will-help-set-up-health-exchanges.aspx#ixzz11dacNegO

Other states are watching California closely as it begins working out details of an independent board that will oversee the state's new health insurance exchange established under the federal health care reform law.

Last week, Gov. Arnold Schwarzenegger (R) signed legislation (AB 1602 and SB 900) to lay the foundation for the California Health Benefit Exchange, which will provide a marketplace of health insurance options for an estimated 3 million state residents. The California Health Benefit Exchange is slated to be operational by 2014.

AB 1602 and SB 900 also call for the creation of a five-member oversight committee to define how the exchange will operate and run the program. Kathleen Stoll, director of health policy for the advocacy group Families USA, said many states currently are debating how independent to make their health insurance exchange oversight boards. She said, "California now provides a starting point, if not a model, for other states."

Questions About Oversight Board

The California Chamber of Commerce, some taxpayer groups and other critics argue that California's board will lack sufficient accountability to the public. However, the state Legislative Analyst's Office contends that new state legislation includes "numerous provisions" to establish public accountability for the health insurance exchange.
LAO said CHBE's oversight board will:

  • Be appointed by elected officials;

  • Be subject to rules on public disclosure and open meetings;

  • Face audits and yearly performance reviews; and

  • Have four-year terms for its members.

LAO also said that the Exchange will be similar to existing state agencies that operate under independent oversight boards, such as:

  • The Managed Risk Medical Insurance Board, which administers Healthy Families, California's Children's Health Insurance Program; and

  • CalPERS' health benefits division.

Board Members

Schwarzenegger will be able to appoint two members to the board on January 1, 2011, before he leaves office. Senate President Pro Tempore Darrell Steinberg (D- Sacramento) and Assembly Speaker John Perez (D- Los Angeles) each will be able to appoint one member. The final board member will be the new governor's secretary of health and human services

(Calvan, Sacramento Bee, 10/5).
Read more: http://www.californiahealthline.org/articles/2010/10/6/california-in-spotlight-as-it-works-out-details-for-health-benefit-exchange.aspx#ixzz11iIhu225

By signing a pair of bills passed by the California legislature,Gov. Arnold Schwarzenegger has made his state the first to authorize a health insurance exchange in accordance with the Affordable Care Act. Some other states, meanwhile, are consulting companies that run insurance websites before they consider bills to establish exchanges. During this electoral season, it seems, studying the issue is seen as more politically prudent than diving into it.

Meanwhile, the $49 million that the feds are giving 48 states and the District of Columbia to do those studies is creating a new market for companies that have online insurance marketing experience, reports Anna Edney in a Washington Post/Bloomberg article Among the companies that are meeting with officials from a number of states are Choice Administrators of Orange, Calif., and Connecticut Business & Industry Association of Hartford, which already runs a small business insurance exchange. In addition, EHealth, a large e-insurance operator, has won a $19 million federal contract to build and operate a federal website that will allow consumers to compare state-by-state insurance options.

The reform law doesn't allow private companies to run state insurance exchanges. But they can maintain websites, operate call centers, and handle billing, among other services. Considering the sheer size of the future exchanges -- which are expected to enroll about 24 million people when they're fully functioning -- this presents a real business opportunity for firms in a variety of fields.

The Affordable Care Act requires the states to implement insurance exchanges for individuals and small businesses by Jan. 1, 2014. They must build the infrastructure for the exchanges by January 2013. If the states can't or won't do this, the federal government will do it for them. Today, the only states with functioning exchanges are Massachusetts and Utah. These were established before the ACA's passage, so they will have to make some changes to comply with the federal law.

Besides helping states create web platforms that will be easy for consumers to use, the federal study grants can be used for any of these purposes:
• Assess a state's IT systems and delineate new requirements;
• Work with community organizations to include the public in the planning process;
• Plan consumer call centers;
• Hire staff and determine staffing needs;
• Plan coordination between the exchange and Medicaid and the Children's Health Insurance Program;
• Establish performance benchmarks.

Alaska and Minnesota turned down the exchange grants. Alaska did so because it's currently involved in a 20-state lawsuit against the federal reform law. Minnesota spurned the money because state governor Tim Pawlenty, expected to be a Republican presidential candidate in 2012, is refusing to accept any federal health grants. Which brings us back to politics. If states use the study grants to come up with feasible exchange plans, and if they start involving stakeholders in discussions, it will be much harder for them to refuse to participate. But in the end, each state will still have to pass legislation enabling their exchanges -- and that will be a much higher hurdle to pass.

By Ken Terry | October 5, 2010
Read more at BNet.com

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

Gov. Arnold Schwarzenegger has signed two key health bills that make California the first in the nation to begin establishing its own health insurance exchange - a key component of the federal health overhaul law intended to widen access to health coverage among the country's millions of uninsured.

"For national reform to succeed, it will be up to the states to make it work, and California is moving forward on reforms that will provide affordable and quality health care insurance," the governor said in a statement.

The bills, Senate Bill 900 and Assembly Bill 1602, would establish the California Health Benefit Exchange and an independent, five-member oversight board that will be tasked with defining how the exchange would operate, in time for the federal deadline of January 2014.

At least 2 million Californians could be eligible to immediately buy insurance from the exchange once it is open for business. The exchange would help funnel billions of dollars in subsidies to help Californians and small businesses obtain health coverage.
The governor's office is expected to hold a signing ceremony in Los Angeles on Friday.

The governor was under pressure by some large insurers and business chambers to veto the bills. The California Chamber of Commerce expressed particular worry about the oversight board, saying that the board would be making key decisions without any accountability to elected officials.

Consumer health care advocates, however, applauded the governor. "We're relieved that we're taking this important next step in improving health care in California," said Anthony Wright, executive director of Health Access California.

Sacramento Bee
By Bobby Caina Calvan
Published: Thursday, Sep. 30, 2010 - 5:58 pm

Read more: http://www.sacbee.com/2010/09/30/3070403/schwarzenegger-signs-landmark.html#ixzz11dVh0sgR

Among the more significant bills on Gov. Arnold Schwarzenegger's desk are two that would create a health insurance exchange to implement federal health care reform in California in 2014. The exchange will function as a marketplace for small businesses and low- and middle-income Californians who qualify for subsidized health insurance and tax credits.

Opponents of health reform are mounting a last-ditch effort to dissuade the governor from signing the bills. A recent column in The Bee by Dan Walters draws heavily from a memo by a paid consultant to the California Chamber of Commerce, which opposes the bills. Regrettably, the column and the memo make several misinformed claims, including that the legislation would:

  • "Shift control of the largest single element of the California economy - health care - to a five-member board." The exchange board serves as a portal for low-income Californians and small businesses to obtain federally subsidized coverage if they want it. The exchange board will affect few people with health coverage today unless they qualify for subsidies. It won't control anyone's health care.

  • "Assume management of the state's current multibillion-dollar health program for the poor, Medi-Cal." Under the two bills, Medi-Cal is run by the same state department as it is today. The role of the exchange is to screen and enroll applicants that aren't eligible for the exchange in other programs.

  • "Expand coverage way beyond the federal government's minimum requirements." The legislation says the board must "determine when an enrollee's coverage commences, and the extent and scope of coverage." This means that the board will determine if applicants are eligible for state programs based on eligibility rules, and if they are eligible for the "catastrophic coverage" option, available to those under 30. Both of these responsibilities are required under the new federal law. The exchange cannot "unilaterally expand" benefits, or rack up billions in state costs.

As the nonpartisan Legislative Analyst's Office concluded, "The Legislature would retain full authority to set eligibility and benefit levels for state programs as well as benefit requirements of plans." This conclusion makes sense, because the legislation explicitly prohibits the board from imposing new state costs without the governor's and Legislature's approval.

Three years ago, the governor and then-Assembly Speaker Fabian Núñez helped jump-start the national dialogue over health care reform. It is fitting that the governor can sign these measures now. Despite 11th-hour claims to the contrary, these bills do only what their proponents say they will do: implement health care reform in California.

By David Lansky and Scott Hauge
Special to The Bee
Published: Sunday, Sep. 26, 2010 - 12:00 am | Page 3E

Read more: http://www.sacbee.com/2010/09/26/3055077/health-care-exchange-wont-usurp.html#ixzz11ddtW28l

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