Health Care Reform #2 Issue in 2008 Election

The Kaiser Family Foundation is conducting a series of polls on how health care issues is impacting the 2008 presidential election. Their first poll was in March and the most recent in October. From the very beginning, health care was identified by respondents as the most important domestic issue, and the second most important issue overall, respondents want the new president and Congress to address. (The number one issue is Iraq.)

The Kaiser Foundation keeps tweaking the wording of their question which makes it challenging to compare some of the results over time. However, regardless of how they ask the question, health care reform ranks higher than the economy, immigration, and education, to name just a few additional hot button issues. And it holds this distinction among Democrats, Republicans and Independents. In other words, health care reform is an equal opportunity hot button.

Consider the latest poll. The question was “What do you think is the most important problem for the president and congress to address?” The results were:

All respondents:
1. Iraq (54%)
2. Health care (29%)
3. Economy (16%)
4. Immigration (12%)
5. Frustration with government (6%)
6. Terrorism (5%)

The top four issues were identical among Republicans, Democrats and Independents, although the percentages changed a bit. For example, Health care was the top issue for 22 percent of Republicans, 36 percent of Democrats and 31 percent of Independents. (Republicans were a bit more concerned about terrorism and Democrats with education.)

Interestingly, the top four issues haven’t changed since the tracking surveys started in March. However, since June, health care has become an increasingly more common response. The surveys asked respondents what “two issues would you most like to hear the presidential candidates talk about.” 21 perecent said health care in June. 30 percent listed health care in August 30 and by October the percentage mentioning health care had risen to 38 percent. To put it in perspective, in the October survey, 44 percent mentioned Iraq. Health care reform is still the number two issue in the campaign, but it’s an increasingly important number two.

This isn’t surprising. As I noted in previous posts on California public opinion polls (August post, September post), voters are constantly and consistently hearing that the health care system is broken. They can’t escape the publicity surrounding the film Sicko or ignore the news surrounding health insurer’s behavior. Given this drumbeat, public opinion can’t help but be swayed. 

Within health care issue, two issues emerge: the cost of care and the uninsured. The saliency of these sub-issues varies by political party. Republicans, by more than a two-to-one margin, want presidential candidates to talk about “reducing the costs of health care and health insurance” rather than “expanding health insurance coverage for the uninsured.”  Democrats are nearly equally split on the two issues: 41 percent want to hear about coverage; 38 percent want to hear about costs. While Independents want to hear about costs (39 percent) a bit more frequently than about coverage (30%).  For all groups, “improving the quality of care and reducing medical errors” was the third most mentioned issue followed by “reducing spending on government programs like Medicare and Medicaid.” Only seven percent of all respondents mentioned this last issue.

The tracking polls contain more nuggets of information and I’ll be reporting on them as they’re published. The biggest takeaway for now is that the issues of importance in the 2008 election are solidifying, but they’re not locked in stone. Outside events could change what voters care about. And who is nominated will influence the issues as well. However, regardless of what happens, health care reform will be among the issues that matter when voters cast their ballots. Which means it will be on the agenda of both Congress and the new president come 2009.

Presidential Candidate’s Health Care Plans — For Now

While the effort to enact health care reform in California marches on — or grinds to a halt, depending on your point of view — I thought it was time to start looking more at the national debate. It’s especially timely because the caucuses are just around the corner and also because, as I wrote earlier this month, there’s a fair chance federal health care reform will wind up preempting whatever California comes up with before the state laws have a chance to kick in (which, depending on one’s point of view, could be a good thing).

The New York Times  recently published a helpful summary of the the presidential candidates’ health care reform positions of Democratic and Republican Presidential candidates (minor party candidates are not included). There’s a few trends that emerge:

  • Most of the major candidates, especially on the Democratic side, have offered plans with a respectable amount of specificity — offering at least enough details to provide opponents enough room to attack.
  • The Republican candidates tend to focus on tax incentives to encourage more Americans to obtain coverage and avoid new government programs or much expansion of existing ones.
  • Most of the Democratic candidates call for mandates on individuals and/or businesses to obtain coverage and fund their proposals, at least in part, by rolling back President George W. Bush’s tax cuts for Americans earning over $250,000. Governor Bill Richardson, pretty much alone among the Democrats with significant poll results in the early primary states, avoids the creation of new government bureaucracies.
  • Most significantly, none of the leading Democrats (“leading” meaning those with noticeable numbers in polls of voters in the first states to vote or caucus) are calling for a single-payer system. In fact, the only candidate advocating a government takeover of health care in America is Representative Dennis Kucinich, who, to date, is far from being a “leading” candidate. On the other hand, Governor Bill Richardson, who has reached double-digit numbers in some New Hampshire and Iowa polls, has a health care reform plan which avoids the creation of new government bureacracies altogether.

The New York Times summary provides a good snapshot of where the candidates stand as of Fall 2007. Keep in mind, however, they’ve got a long road ahead of them to the November 2008 general election. Their positions are likely to evolve over time as they think more about the underlying public policy, of course, but also in reaction to changing political realities. While the leading candidates are avoiding extreme positions at this stage, that could change if their core, and more extreme, constituencies prove potent in the early primaries. If one of their proposals begins to resonate with voters soon, it would not be surprising to see other candidates drift in that direction. Then, shortly after the nominating conventions, a gravitational force seems to emerge which pulls candidates toward the center.

So it’s worthwhile looking at where the presidential candidates stand on health care reform now. Just keep in mind, tomorrow is another day.

What if a Committee Passes Health Care Reform and No One Cares?

I thought doing a round-up of news stories on the Assembly Health Committee’s approval of ABX1-1 (Nunez) and defeat of ABX1-9 (Villines) would be easy to pull together. It’s the most activity yet during the two-month old special legislative session on health care reform. True, the outcome was no surprise. And as I wrote yesterday, the most important takeaway is that there’s no deal yet. But still, something actually happened.

Turns out there’s not a lot of rounding up to do. The Sacramento Bee has a story summarizing what happened as does the California Progress Report blog. But the event didn’t make it into many newspapers. I don’t think this reflects any potency in health care reform as a news item of concern to Californians. Rather it seems to reflect the reality that yesterday’s committee hearing was more perfunctory than meaningful. Like sharks, legislation needs to keep moving to live. So ABX1-1 kept moving. But as the hearing gave no hint that a deal between Governor Arnold Schwarzenegger and the Democratic Leadership was imminent, that’s the only purpose it served — to keep things moving.

At least that seems to be the conventional wisdom. In yesterday’s post I noted the support of Labor and progressive community groups behind ABX1-1, at least in principle, as noteworthy. But I guess it didn’t rise in importance to a level sufficient to justify editors using this news to separate the Macys ads from the Kohl’s advertisements.

Health Care Reform Bill Moves Forward, Compromise (Apparently) Doesn’t.

The Assembly Health Committee today passed ABX1-1 (Nunez), the Democratic Leadership’s health care reform plan, along to the Assembly Appropriation Committee while holding back the Republican reform package, ABX1-8 (Villines). It took nearly three hours and 60 witnesses to get to this preordained destination, but they got there.

That’s what happened legislatively, but politically there was lot more going on. For example:

1. While Speaker Fabian Nunez, the lead author of ABX1-1, committed to several changes to the bill, none seemed aimed at narrowing the gap with Governor Arnold Schwarzenegger. Instead they focused on concerns of his fellow Democrats, some technical issues, and even a broadly supported provision that was inadvertently left out of the bill. If progress towards a compromise with the Governor was moving forward, I would have expected to see more substantial changes.

2. The Governor sent a spokesperson from the Department of Health and Human Services to testify on the bills, not the Agency Secretary, Kim Belshe. The spokesperson spoke highly of the hard work and leadership shown by the Democratic Leadership. She praised some of the provisions in ABX1-1 that brought it closer to the Governor’s position than previous Democratic bills. Then she listed several concerns the Administration had with the bill, chief among them the broad exemption it contains from the requirement that all California residents have health care coverage. What was not given was a progress report on negotiations. Nor any enthusiastic statement that the parties were making terrific progress. Instead it sounded like substantial, difficult differences remain.

3. Speaker Nunez did succeed in rounding up most of his political supporters behind ABX1-1. This could not have been easy and is a testament to his political skill. While they expressed some reservations, it is clear that with some modest tweaking, Labor and it’s progressive allies will fully endorse the bill. However, they made very clear that they’d gone about as far as they could on some issues, especially the exemption from the requirement that all residents have health care coverage. This may indicate there’s not a lot more give in the Speaker’s position on an individual mandate. 

So, on one hand, the Governor’s spokesperson made clear the Administration considers the current exemption unacceptable. On the other hand, the Speaker’s allies made clear the current exemption was as far as they could go. What’s the sound of no hands clapping? I don’t know, but my guess is it doesn’t sound like victory.

Comprehensive health care reform is not dead (contrary to what I predict will be the tone of most news articles tomorrow). The political gain to the Governor and the Democratic Leadership from reaching a deal is enough to keep things moving forward for weeks, if not months.

Yes, a health care reform bill moved forward today. However, I don’t think the chances of comprehensive health care reform did.

Legislative Analysis of ABX1-1 and Running Notes on the Hearing

The Assembly Health Committee is underway. For those who might be listening I thought you might like to see the analyses of the bills prepared by the Committee’s staff. Here is the ABX1-1 (Nunez) Staff Analysis  and the ABX1-8 (Villines) Staff Analysis. (As a reminder for those without a program, ABX1-1 is the Democratic Legislative Leadership’s health care reform plan and ABX1-8 is the package put forward by the Assembly Republican Caucus.

What follows are notes and observations I’m posting during the hearing. I’ll write more about the meaning of what’s happening in a later post.

3:10:As was pre-ordained, the legislation is going to pass. The Committee is hearing witnesses on the bill now, but it’s clear this is a formality. In fact, it sounds like many of the Comittee members have left the room, leaving a smaller group of Legislators to hear testimony from the public. So far it appears the only amendments being made are fairly technical in nature which would suggest more negotiations will be required.

3:30: A win for Speaker Nunez: a lot of consumer groups and unions are lining up behind ABX1-1 (not all of them, but the majority). There was some question as to whether Labor and their allies would support the bill. It appears they are, although most are calling for amendments to, among other things, better define minimum coverage, warn against tightening the exemption to the requirement that all Californians obtain health care coverage, and the need to clarify how the state will pay for the reforms. There are other concerns being expressed (for example, broadening eligibility to enroll in the purchasing pool), but the key news here is that the Speaker’s supporters have not deserted him.

One other interesting element: it appears the assurances the California Hospital Association negotiated with the Governor in exchange for their support of a four percent tax on hospital gross revenues are not in ABX1-1. So there’s still some drafting to do on that account or the hospitals will pull their support. This would make it much more difficult to pass the bill this month and the financing initiative next November. 

3:40: The spokeswoman for the Department of Health and Human Services just testified representing the Administration. While praising several elements of the bill she did express several “significant” concerns. Her strongest language focused on the exemption to the mandate that individuals buy coverage. She described it as undermining the mandate and pretty much called it unacceptable Clearly, the Governor is not on board with ABX1-1.

3:50: Blue Shield’s spokesperson noted that, while the industry supports efforts to make improvements, the changes Committee is considering are dangerous. He only had time to give one example: guarantee issue will only work in conjunction with a strong, effective mandate to purchase coverage.

 4:00: An Association of California Life and Health Insurance Companies spokeswoman opposed the bill for a long laundry list of reasons. She asked the Committee to remove the small group reforms which are in ABX1-1, but not in the Governor’s proposal. She noted the required Medical Loss Ratio provision is drafted in a way which would be disastrous for the marketplace, again recommending the bill be amended to accept the Governor’s approach on the issue. She also warned against giving the state-run purchasing pool in the marketplace. There was more, but I couldn’t keep up. I’ll try to find something on their web site and post it later.

4:15: The Blue Cross spokesman only had a minute to explain why they opposed the bill. The only points he was able to make is that, if ABX1-1 were to pass, 892,000 of Blue Cross’ individual members would face substantial rate increases due to the bills ineffective enforcement of the requirement residents have health care coverage. He also said more than 500,000 of their individual members would have to change health plans as their current coverage would be unlikely to meet the definition of acceptable minimum coverage. A short time later the Kaiser Permanente spokesman stated that ABX1-1 exempts roughly 50 percent of the individual market from the mandate to buy coverage. (I think I heard that right). He recommended California consider an exemption more along the lines of that enacted in Massachusetts.

4:20:After 60 visits the Committee passed ABX1-1 on a party line vote. The bill will now move on to the Appropriations Committee. The Committee is now listening to a presentation on ABX1-8 (Villines), the health care reform plan put forward by the Assembly Republican Caucus.

4:45: The Assembly Republican bill is being strongly attacked most often along three main lines: 

  1. ABX1-8 permits out-of-state carriers to sell in California. Critics point out these carriers would not need to meet California regulations, putting in-state carriers at a disadvantage and endangering California consumers;
  2. AX1-8 promotes HSAs in several ways. Critics contend HSAs, as high deductible plans, results in consumers failing to obtain preventive care. (Clearly the HSA community has some educating to do.)
  3. AX1-8 allows carriers to offer mandate free plans. Critics claim these mandates are important and should be required.

4:50: ABX1-8 just failed to pass the Committee, effectively killing the bill.

So that’s the way it went. No surprises. And not much progress as I’ll discuss in a later post.

Assembly Health Committee: Some Possible Tea Leaves

The Assembly Health Committee will be considering the three major health care reform plans tomorrow in Sacramento. The conventional wisdom is that the Committee will pass ABX1-1 (Nunez), the Democratic Leadership’s health care reform plan, on a party line vote. ABX1-2, the Governor’s plan, and ABX1-8 (Villines), the Republican proposal, are expected to fail along party line votes. Few expect an announcement of a deal among Governor Arnold Schwarzenegger, Assembly Speaker Fabian Nunez and Senate President Pro Temp Don Perata to be announced before, during or after the hearing. Update: Now I’m hearing ABX1-2 will NOT be heard tomorrow. We’ll see.

This means observers will be looking for clues as to where negotiations stand. For those of you planning to listen in on the Assembly Health Committee hearing (please see the previous post for instructions on how to do this) what you may want to listen for is what version of ABX1-1 passes.

If it’s the current version with no substantial changes, it probably means negotiations between Governor Schwarzenegger and Speaker Nunez are not going well.  No meaningful amendments means the Speaker is holding tight to his original negotiating position. This in turn means the legislation will likely pass the full Assembly virtually unchanged on Monday, November 26th. Then attention will turn to the State Senate. If a compromise is to be reached, it will be while the legislation is working it’s way through the upper house.

If, however, Speaker Nunez accepts substantial compromises to the bill, changes which move it closer to Governor’s plan, then a deal more likely and imminent.  For example, if the Speaker accepts changes to the way the exemption from the mandate to purchase coverage is made, that’s a sign negotiations are going well. So would a further reduction in the payroll tax Democrats want to impose on the California businesses to finance reforms (they recently reduced their tax target from 7.5 percent of a company’s Social Security wages to 6.5 percent; the Governor is proposing a 5.5 percent payroll tax). Movement toward the Governor’s approach to reducing the burden of the tax on the state’s smallest businesses would also be a sign of progress. Another sign of progress: if the Governor’s staff testifies that premium subsidies should be raised toward the Assembly Democrat’s levels.

Then there’s financing. Both the Governor and the Speaker require some extraordinary measures to finance their plans (This, of course, assumes they’ve accurately estimated the cost of their reforms — the odds of which are extremely unlikely). The Speaker imposes a $2.00 per pack tax on cigarettes; the Governor would lease the state lottery. A move by one side towards the other’s financing plan would be a huge step toward an eventual compromise.

Not all changes are substantial, however. For example, ABX1-1 revives some of the group health insurance reforms that had been a part of Assembly Bill 8, the previous Democratic health care reform plan. If those are removed it’s a sign of progress, but not as significant as other amendments might be. The Governor’s staff has been intent on minimizing the risk of law suits based on ERISA. They would prefer not touching group coverage directly at all.

One thing to keep in mind is that the rhetoric of the hearing is less important than changes, if any, to ABX1-1. Everyone will be playing to their core constituencies. The key is to listen for what the participants do, not what they say.

California Health Care Reform: Online

Everything related to health care reform is subject to change. However, there’s a couple of critical events coming up and, I believe, there’s a way to listen in on what’s happening online and in real time:

The Assembly Health Committee will hear ABX1-1 (the Democratic leader’s proposal), ABX1-2 (the Governor’s plan) and ABX1-8 (the Assembly Republican’s offering) on Wednesday, November 14th beginning at 1:30 pm. I believe you’ll be able to hear the session by going to the California State Assembly web site. Click on the “Broadcast Room List” (it’s under the state seal) and click on the Committee Room 4202 list. No guarantees it’ll be there, but that’s your best bet to hear what happens as it happens.

The Assembly will convene on Monday, November 26th, presumably to consider whatever comes out of the Assembly Health Committee. You can also listen to this session by going to the California State Assembly web site, clicking on the “Broadcast Room List”and then clicking on the “Assembly Chamber” link.

Stay tuned. 

Health Care Reform Lemonade

They tell me that in golf (I wouldn’t know, believe me), what separates good from fair players is not how far they drive the ball, but how well they recover from a bad shot. Because everyone makes bad shots now and then.

In politics it’s pretty much the same: making lemonade from lemons. In 1992, Governor Bill Clinton was hammered by a host of damaging news stories just before the New Hampshire primary. Instead of winning the state, he came in second.  For some that would be the end of the road. Bill Clinton, however, celebrated the results, proclaiming himself the “Come Back Kid” and no one cared that Senator Paul Tsongas had come in first. 

The Democratic Leadership and Governor Arnold Schwarzenegger may be close to a compromise on health care reform. But as Dan Walters in the Sacramento Bee warns, “If health care … is worth doing, it’s worth doing right. It’s time for those involved to step back, take deep breaths and stop this madcap rush to do something just to say they did something.”

Substantial differences exist between Speaker Fabian Nunez and Senate President Pro Tem Don Perata on one side and the Governor on the other. And they’re playing with fire. If they fail to find the right balance between, to cite one challenge, requiring everyone to obtain health care coverage and a way to make coverage affordable, they could create a mess which will leave the state’s health insurance market in shambles. (And it won’t do much for the careers of some ambitious politicians, either), There are several issues on which a delicate balance must be struck and they’re performing without a net. Taking the time to get it right is of paramount importance.

But what if they can’t? What if, after all the press conferences, proclamations, negotiations, time, money, special session, raised expectations, near misses and pain there’s no deal? What’s the recipe for lemonade in that scenario?

My recommendation is that they pluck three lemons to work with.

1. Constrain Medical Costs
Every health care reform plan on the table includes provisions to control health care costs.  The approaches laid out by Democrats, Republicans and the Post-Partisan Governor overlap and, where they don’t, they often compliment one another. For example, most call for leveraging technology. Most include ways of promoting healthier lifestyles and preventive care. There’s some differences, but not much. It would take a week or two to fashion these ideas into a single, meaningful bill — one that would pass overwhelmingly and cost very little.

2. Capture Federal Medicaid Funds
California has one of the lowest Medicaid reimbursement rates in the country. This is wrong on many levels, but perhaps most significantly because the Federal Government matches a percentage of what the state pays. By underpaying for Medi-Cal (the state’s Medicaid program) California is failing to obtain from Washington what the state is due. This situation is so absurd the California Hospital Association accepted the Governor’s proposal to tax hospitals four percent of their gross revenues so long as the money is first used to fully fund Medicaid reimbursement. For most hospitals in the state the combination of increased reimbursement and federal funds more covers the revenue tax. If comprehensive health care reform is out-of-reach, capturing these federal funds is still possible. And the federal matching funds would help the state reduce the growing deficit.

3. Keep Our Promise to the Uninsured
Expanding affordable health care coverage for all Californians is the goal, but if it’s out-of-reach for now, let’s at least keep our promise to those already eligible for existing state programs. Nearly one million Californians — about 15 percent of the uninsured in the state — are eligible for Medi-Cal and Healthy Families, yet fail to enroll in those programs.  CAHU’s Healthy Solutions reform plan makes several low- and no-cost suggestions on how to improve outreach programs. Better yet, the Governor and Democratic Leadership should propose restoring $66 million in funds cut from the budget this summer, which was to be used for enrolling more children into Healthy Families. Given the state’s budget situation, it is only prudent to identify the source of new spending. I nominate eliminating the tax loophole benefiting out-of-state yacht purchases. I don’t know how much revenue this would generate, but every penny should be devoted to enrolling children already eligible for Healthy Families. Given that direct a trade-off — reducing the cost of boats for rich yacht owners or providing health care coverage to poor children — even the most fiscally conservative legislator would be hard pressed to claim helping out-of-state yachts sellers is a better use of funds. A bi-partisan spending bill would be a sight to behold.

It would be terrific if meaningful, workable, fair and affordable health care reform can come out of Sacramento in 2007. But it may be the only result will be, as Dan Walters described the state’s 1996 electric utility reforms, “a monumental pile of unintended consequences.” Enacting meaningful cost containment, capturing federal funds and keeping existing promises made to the uninsured would be no small accomplishment. Lawmakers could rightly claim a partial victory. It would address serious problems and lay the groundwork for more comprehensive reforms down the road. That’s a lot more than lemonade, that’s sound public policy.

Alan Katz Health Care Reform Blog First Unscientific Survey Results

My thanks to those of you who responded to the first Alan Katz Health Care Reform Blog Unscientific Survey. There were literally dozens of responses, but not many dozens. So when I say the results are unscientific, we’re talking extremely unscientific. For what they’re worth, however, here’s the results (to see the survey instrument, please click here):

 1. Do you think any health care reform legislation will be enacted in 2007? Do you think it should?
21% of the respondents predict the state will enact comprehensive health care reform. More than twice as many (46%) believe health care reform should be enacted.  The comments give a clue as to why more than half of the respondents believe health care reform should not be passed this year: they don’t believe the state will get it right. One respondent wrote, “The current legislative solutions do not address the problem. We need better solutions.” Another comment: “Putting reform solely in the hands of bureaucrats and elected officials is a very dangerous thing to do.”  A third wrote, “I think reform is necessary, but reform simply for reform’s sake is a recipe for long term disaster (especially when it involves government involvement). Think it through, get it right.”

2. Do you believe California’s health care coverage should be Employer-based (AB 8), Individual-based (Governor’s plan), or Government-based (SB 840)?
An overwhelming majority of the survey participants, 79%, favor individual-based reforms. 14% favored an employer-based structure and 7% favored a government approach. However, most of the comments indicate that a mix of these approaches would be the most appropriate. Unfortunately, I didn’t allow for multiple selections, which would have provided a more complete picture of people’s opinions. My apologies.

3. What [payroll] tax fee do you think the legislation should use, will use and what do you think it will need to be in two years?
The consensus is that the Governor and Legislative Leaders will compromise on a payroll tax of between 5.0-and-5.9%, that the payroll tax should be less than 4% and that it will need to be greater than 10%.

4. At what [income] level do you think premium support should be made available?
The consensus of the respondents was that premium support should be made available to residents in households earning up to 300% of the Federal Poverty Level (approximately $62,000 for a family of four). However, 400% also received a substantial amount of support. One respondent noted that “The question is wrong. The issue is whether people should be required to pay more than a percentage of their income. Up to a certain point there would be subsidies, after that there should at least be exemptions.” This is the approach the Democratic majority is taking and it does make a lot of sense, as long as the exemption isn’t so large as to negate the requirement that all residents obtain coverage.  Another respondent warned, “Somebody’s got to pay for these subsidies, and the bill is going to be a lot bigger than politicians are telling Californians.”

5. Do you support an 85% Medical Loss Ratio Requirement?
No surprise here: 75% of the respondents opposed an MLR target. Among the comments, “Let competitive market forces work without the monkey wrench of cost controls. ” And “It could be penny-wise and pound-foolish if it prevents reasonable cost containment efforts.” And “Competition and the free market should govern administrative expenses. A 15% cap will discourage the sale of low cost policies. It will discourage investment in infrastructure.”

There you have it. Unscientific, but interesting, at least to me. Thanks again to all those who took the time to participate.

Governor’s Health Care Reform Bill Finally a Bill – But No Author

Governor Arnold Schwarzenegger’s health care reform plan had been put into legislative form a few weeks ago. But it had never been filed as an official bill until now. It’s officially part of the current special session on health care reform: ABX1-2.

What makes it unique is that there’s no author. ABX1-2 had been introduced earlier as a spot bill (think of it as a placeholder) with Assembly Speaker Nunez listed as the author. Yet when the Governor’s health care reform language flowed into the bill, the Speaker’s name flowed out. He does, after all, have his own bill — ABX1-1. So the Governor now has legislation, but no author. There’s something symbolic about all this, I just don’t know what it is.