Monthly Archives: March 2008

State Budget Cutting Holes in Health Care Safety Net

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Say what you will about Governor Arnold Schwarzenegger’s failed health care reform plan, it’s goal was noble. If it had worked as planed (which is highly unlikely) it would have not only brought millions of Californians into the health care coverage system, but would have strengthened the state’s medical safety net. Instead, the health care plan failed, the California budget is in tatters and that safety net is in grave danger.

Community health clinics and community health centers play a critical role in assuring that uninsured Californians obtain the health care treatment they need. As is often noted in health care reform debates, no one goes without care. The “safety net” is there to assure treatment is available to everyone. Community health care centers, for example, provide a medical home to 3.6 million uninsured Californians, according to Jason Vega of the Community Clinic Consortiumof Contra Costa and Solano counties.

What’s often overlooked, however, is how fragile that safety net really is. Part of the reason is demand. With millions of uninsured and underinsured Californians, community clinics and the like have no shortfall of clients. The quality of the care provided belies the cost of the care to those patients, who usually pay what they can — if they can at all.

The vast bulk of the funds for community clinics comes from donors and, even more importantly, from government health care programs. And that’s where the danger arises.

Under the Schwarzenegger health care plan, Medi-Cal reimbursement rates (what the state pays doctors, hospitals and clinics) was to increase. There’s certainly room for an increase: California’s reimbursement rates are among the lowest in the country.

But the health care plan failed. Part of the reason was the state’s dire fiscal condition. Even with draconian cuts recently enacted by lawmakers in Sacramento, the state needs to close a multi-billion budget gap. One way they’re likely to do that is to reduce Medi-Cal reimbursement. That, in turn, means fewer doctors will take Medi-Cal patients and, of those that do, many will see fewer of them. And that means more patients turning to community clinics.

The safety net is a critical component of today’s health care system. For those who oppose a government takeover of medical care, it is an element of the system that needs to be strengthened and protected. Yet that’s not happening now. And if the safety net disappears, the government will rush in to fill the vacumn, at great expense and to the detriment of consumer choice.

All this underscores the need for comprehensive health care reform that attacks skyrocketing medical costs while bringing more residents into the health care coverage system. I’m skeptical about whether states are in a position to accomplish this, but the federal government certainly can. As a new administration approaches this task in 2009, they need to make sure the health and vitality of the nation’s community clinics and its partners in the safety net are top of mind.

State Reform Issues More Incremental than Comprehensive

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My personal belief is that comprehensive health care reform is more likely to come from federal action than anything the states do over the next couple of years. That’s certainly true in California where lawmakers are now focused on attacking specific problems rather than fixing the entire system. But the obstacles to state efforts are more than exhaustion, as I’ve written previously, states have limited resources and even more limited levers to exact change on systems as complex as the nation’s health care system.

Yet incremental reforms can make a difference, too, and several states have enacted or are considering interesting approaches. Aetna publishes a “Health Reform Weekly” it distributes to agents (among others) and their March 24th issue provided a roundup of state reform activity. I’ve taken the liberty of  reproducing much of it below. As you’ll see, with the exception of New Jersey — and to a lesser extent, Florida — these are hardly comprehensive efforts:

CONNECTICUT: Many of the health care measures approved by the Insurance Committee last week are focused on the high cost of health care. One of the committee-approved proposals would establish a wellness tax credit for small businesses; another would allow more flexibility to offer lower-cost health plans. Another proposal would allow municipalities to collaborate together to purchase health insurance. The House put forth the Healthy Steps Program, which permits the sale of reduced-mandate products, requires a cost-benefit analysis of mandates and establishes business tax credits for providing employees with health insurance. The Insurance Committee did not act on the “pay or play” health care tax bill, nor did it act on legislation that would dictate the provisions and terms included in the contracts between health insurers and physicians. Disposing of these proposals early in the session provides a boost to the business climate in Connecticut.

FLORIDA: Governor Charlie Crist’s “Cover Florida” plan for the uninsured passed out of its first committee last week and continues to move forward.Aetna has worked with the Governor’s office for several months on this proposal and has been successful in seeing a number of suggestions incorporated into this version. Health plan participation in the plan would be voluntary. Though Cover Florida still contains guaranteed issue language affecting participating plans, the plan would allow pre-existing condition exclusions as well as benefit limits.

GEORGIA: Action on the Georgia Medical Association’s prompt-pay proposal was postponed last week, but it may be acted on in committee this week.While it still contains language applying the prompt-pay requirements to self-insured plans, Aetna has been able to help reduce the bill’s impact by assuring health plans are not assessed penalties regarding prompt payment of claims unless they are below a 95 percent compliance standard. Also, the interest penalty has been reduced from 18 percent to 12 percent.

INDIANA: The Legislature adjourned the 2008 session on March 14. In recent weeks, an Assignment of Benefits bill died in the Senate.However, a “Silent PPO” bill made it through the process. After much negotiation, the industry supported the bill, which requires greater disclosure of information regarding the rental of PPO networks. The provider community attempted to include much more far-reaching, costly, and unnecessary items to the bill, but those were ultimately defeated.

MASSACHUSETTS: Commonwealth Choice health insurance premiums projected for this summer will average 5 percent more than last July’s rates.A state panel last week approved a contract to pay insurers about 10 percent more for each person enrolled in the subsidized insurance program starting July 1, making the lowest premiums in Commonwealth Care $39 a month to $116 a month. Insurers had asked for an increase of about 15 percent but agreed to less after weeks of negotiations. Under the contract, the state also would assume more of the financial risk if the enrollees were to use more medical care than expected. The Connector’s Executive Director John Kingsdale recently reported that more than 300,000 Massachusetts residents have enrolled who were previously uninsured. This large number suggests that the state’s official estimate of the number of uninsured (372,000) was low, so the cost of solving this bigger problem is going to be significantly more than originally thought (an estimated $869 million in FY ’09 instead of $725 million).

NEW JERSEY: Senators Joseph Vitale and Robert Singer and Assemblymen Neil Cohen and Lou Greenwald joined David Knowlton, President of the New Jersey Health Care Quality Institute, last week in announcing a comprehensive health care reform initiative – the Vitale Plan – with the goal of achieving universal coverage in New Jersey.Phase One would feature a Kids First mandate requiring coverage of all children under 18; expansion of New Jersey Family Care to 200 percent of the federal poverty level; and small group and individual market reforms, including prior approval by the Department of Banking and Insurance for premium increases of more than 15 percent, an increase in MLR from 75 percent to 80 percent, and a requirement that insurers selling small group market products also sell in the individual market. Phase 2 would feature an individual coverage requirement, and establishment of a state-operated health insurance plan administered (ASO) by two insurance carriers. Projected costs for the first year total $28.8 million (of which $20.5 is for the children’s component), and funding is purportedly available at present in the form of surpluses totaling $180 million in the state’s Family Care and Medicaid Programs.

SOUTH DAKOTA: The Legislature adjourned its 2008 session on March 17.Recent legislative action includes passage of a transparency bill, which requires licensed hospitals to report charges for any procedure for which the hospital had at least 10 cases. The data will be reported to the South Dakota Association of Healthcare Organizations, which is required to develop a web-based system for making the information available to the public via a link from the Department of Health’s website. In addition, the law requires the dissemination of information about physicians’ charges for certain outpatient procedures.

TENNESSEE: The Tennessee Medical Association this week announced it now officially supports the “Silent PPO” legislation originally introduced by some individual providers.The bill closely follows the AMA model on this issue and contains significant restrictions on insurers’ ability to operate rental networks. Aetna is working with the industry to defeat this legislation.

State lawmakers are not going to ignore health care issues. Nor should they. But when it comes to substantial changes to the structure of health care and health care coverage in this country, the next president and the new Congress will need to take the lead.

California Health Care Reform: The Prequel

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Governor Arnold Schwarzenegger wasn’t the first state executive to try to expand health care coverage in California. He won’t be the last. The effort goes back at least as far as 1945 when then Governor Earl Warren sought to impose a payroll tax to cover workers’ and their families.

Steve Wiegand of the Sacramento Bee describes what happened to the Warren proposal. It’s worth reading as a reminder of just how tough health care reform can be. Back then, Governor Warren faced opposition from Labor, the California Medical Association and the Chamber of Commerce. It was branded by some as “socialized medicine” and wound up being killed in the Assembly Health Committee along with competing reform plans.

 While Mr. Wiegand doesn’t delve into whether the details of Governor Warren’s plans was frought with problems or the strength of the California’s economy at the time, there’s still enough parallels to the state’s recent debate to create a sense of deja vu.

Over the past year I’ve become convinced that any meaningful reform will have to be national in scope. States are simply too constrained in addressing a national problem to make much headway. If the new president fails to enact meaningful health care reform, however, the states will need to address the matter. Again. Hopefully whoever is governor of California at the time will have learned from Governor Schwarzenegger’s efforts. And from Governor Warren’s, too.

NFIB Calls for Health Care Reform

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The National Federation of Independent Businesses describes itself as “The Voice of Small Business.” And what they’re saying is that, when it comes to America’s health care system, small businesses are fed up with the status quo. They recently posted their health care reform proposal and, while there’s not a lot that’s changed in their proposal, the desire for changes rings through loud and clear.

The NFIB health care reform proposalis built around 11 principles. Notable among them is that all Americans should have access to quality care and protection against catastrophic costs. And while there’s a role for government in providing a saftey net to enable low income Americans to obtain coverage, they make clear “[t]his does not mean a government-run, single-payer system.”

Instead, the NFIB believes “Americans should receive their health insurance and healthcare through the private sector. Care must be taken to minimize the extent to which governmental safety nets crowd out private insurance and care.” They call for affordable coverage that is portable. “Americans should be able to move throughout the United States and change jobs without losing their health insurance.”

In getting specific concerning their reform proposals they call for allowing small business to create multi-state purchasing pools. These Small-Business Health Plans could be sponsored by a variety of organizations including, not surprisingly, the NFIB. This is one of the more controversial aspects of the NFIB reform package as many believe it would undermine state consumer protection laws, creating an unlevel playing field between the pool and non-pool health plans in any given state.

The NFIB’s other provisions include promotion of Health Savings Accounts, full deductibility of health insurance premiums for individuals and the ability for individuals to purchase coverage across state lines. This latter element reflects a component of Senator John McCain’s health care reform plan and is also controversial. It could defeat consumer protections enacted by states as carriers rush to offer plans under the most lenient state regulatory scheme.

While state health care reform proposals will continue to be debated in capitols across the country, my take is that meaningful change will require Federal action. Which means the proposals of advocates like the NFIB will, and should, be part of the debate. And it means proposals from other advocates will be coming fast and furious as a new administration takes shape.

Individual Health Insurance to Get Federal Scrutiny

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Over 17 million Americans purchase health insurance for themselves and their families. Of the 47 million Americans uninsured during any year, academics project that six-to-twelve million could afford coverage, but either cannot obtain it due to their health conditions or choose not to purchase insurance. For argument’s sake, let’s say the market for self-purchased policies — generally referred to as individual coverage or, sometimes individual and family coverage — is around 20 million Americans.

That’s a substantial market. For years, however, it was mostly ignored. To be sure, consumer affairs and financial writers would publish their annual article on how to buy health insurance you’re self-employed. And health insurance agents certainly talk about the product. But for most people, the difference between individual and group coverage was of no interest. It was all “health insurance.”

That’s changing. First, because Senator John McCain and others, mostly Republican lawmakers, want to shift the nation’s health care system from one built around employers to one centered on individuals. Senator McCain’s health care reform plan calls for allowing “individuals to get insurance through any organization or association that they choose: employers, individual purchases, churches, professional association, and so forth.”

The second reason for greater attention being focused on individual insurance is the result of how some insurance companies have reacted to current market realities.  Since purchasing health insurance is voluntary, insurance companies need to protect themselves from those waiting until they’ve got claims in hand before buying. This means they require a health history from all applicants and accept only those posing an “acceptable risk.” In other contexts this behavior is understandable. No one expects auto insurance companies to sell coverage after an accident. No one expects insurers to sell a fire insurance policy after the house has burned down. Yet, surprisingly, many consumers — and policy makers — seem to believe that requiring insurers to sell medical coverage to individuals who have already scheduled their surgery is both financially and morally sound.

Some states, such as New York and New Jersey, require insurers to guarantee issue coverage to all applicants regardless of their health condition. Consumers in New York and New Jersey also pay premiums costing on average twice as much as those in Californians. But some carriers went beyond screening out high risks at the time they applied for coverage and instead sought to terminate the coverage when they used their insurance. The aggressive rescission practices of these carriers earned insurers tremendous criticism and ill-will.

The convergence of these two factors: the presumptive Republican presidential nominee seeking to expand the individual market and abusive rescissions by some carriers can have but one result: a Congressional inquiry. Democratic House Committee Chairmen John Dingell, Henry Waxman, and Frank Pallone have asked the Government Accountability Office to investigate the state of the individual health insurance market. They have also asked the GAO to look into the operation of state high risk pools which offer coverage to those unable to obtain private insurance.

In making their request, the Congressmen stated “The individual market for health insurance coverage is seriously flawed. Many people who need insurance and apply for it are denied coverage in the individual market or are offered insurance coverage that turns out to be inadequate or it is too expensive or both.” If this sounds like they already know what the GAO investigation will uncover, well, they do.

This makes the results from this Congressional involvement relatively easy to predict. Insurance company CEOs will be required to testify under oath concerning their rescission practices. The Committees will determine that the current individual marketplace underserves consumers by excluding those with existing medical conditions. And while the high risk pools are serving an important purpose, the committees will determine their coverage is too barebones and too expensive.

Next will come a call for guarantee issue in the individual marketplace and, if Congress is serious about real reform, that will mean a call for requiring that all Americans obtain coverage. And that, in turn, means a health care reform package similar to what’s being put forward by Senators Hillary Clinton and Barack Obama — and it might even be acceptable to a President McCain.

Of course, just because what’s coming is predictable doesn’t mean it’s wrong. It just means change is coming, regardless of who is elected president.

Senator Invites Carriers to Help with Health Care Reform

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A coalition of Senators is waiting to help the next president forge a bi-partisan coalition on health care reform. A leader of the group, Senator Ron Wyden of Oregon, spoke before the America’s Health Insurance Plans 2008 National Policy Forum on March 5th and urged health plans to join the effort, not to fight it.

The 12 Senators, six Democrats and six Republicans, have their own health care reform proposal before Congress, the Healthy Americans Act. None of the Senators support every element of the package. But the mere existence of a bi-partisan coalition surrounding health care reform will give the next president a boost in developing a compromise plan.

In Senator Wyden’s address to AHIP, he said the “success of health care reform hinges to a great extent on how your profession responds to the efforts of a new president and a new Congress.” He warned, however, that if medical carriers spend “millions of dollars fighting to preserve the status quo, you may delay reform for awhile but you will increase the likelihood of a government run health system with no role for the private sector.”

In urging the insurance industry to become a part of fashioning a solution, Senator Wyden noted that in a market in which 20 percent of Americans are uninsured, carriers need to be good avoiding risk. As Senator Wyden put it, “If you don’t excel at shedding risk, you are going to enroll too many people who need too much care.  Enrolling too many people who need too much care means that your costs are going to go through the roof.  When your costs soar this way, the healthy people that you do business with are going to start looking for another insurer whose costs aren’t going through the stratosphere.  In other words they’re going to look for another insurer who does a better job of shedding risk.”

This, according to Senator Wyden, is part of the reason the current health care system is broken. Another reason is that health care in the United States is tied to the employer/employee relationship, which the Senator noted hasn’t changed much since 1948. “But economic challenges for business and workers today are very different then they were in 1948,” he noted.  “Sixty years ago employers weren’t operating in a global marketplace and employees who went to work at twenty stuck around long enough to get a gold watch and a steak dinner for retirement.  Employers need cost-containment and workers need quality health care within a system that is portable – where they can truly take their insurance from job to job.”

As an alternative, Senator Wyden suggested carriers consider a new approach in which “everyone who’s not in the military or on Medicare, has a basic private health insurance policy. Private insurance companies are on the same footing – each must take all comers. Competition would be based on price, benefit and quality.”

This is the underlying approach established by the Healthy Americans Act. In asking his audience to consider supporting the legislation, he cited six reasons why health plans would benefit from this alternative system:

  1. Bringing the 47 million uninsured into the system would greatly expand the private insurance market.
  2. There would be “no competitive disadvantage for carriers doing the right thing” and, with a risk sharing mechanism as part of the package, there would be no need to specialize in risk avoidance.
  3. The legislation supports increased information and transparency in the health marketplace.
  4. By focusing on wellness and preventive programs, carriers would be selling a product people want more of.
  5. Carriers “wouldn’t be the political football any longer.”
  6. More attention could be given to cost containment issues such as reducing needless medical errors.

He concluded his speech with a plea to carriers to be a part of the solution. “I want to ask you to become a part of the Senate’s bipartisan effort to fix American health care. Both Democrats and Republicans in the Senate want to work with you to get health care right in 2009.”

My take on all this is that the stars may be aligning for a health care reform effort that is more consultative than adversarial. Senator Barack Obama has certainly spoken of the need to have everyone, including carriers at the table. Senator Hillary Clinton has also spoken of leading a more open process than she did during her husband’s Administration. Significantly, Senator John Edwards, who promised to exclude the health insurance industry from participating in the health care reform debate, is out of the race.

I also think a move away from employer-provided coverage is likely to be a strong current in future health care reform discussions. Senator John McCain favors this approach as does the bi-partisan coalition of Senators backing the Healthy Americans Act. The business community would love to be relieved of the burden of shouldering the nation’s health care system. In speeches I began giving in 2006 I predicted that health care coverage might follow the path of pensions. Instead of companies running pension plans they moved to simply administering — and contributing to — their employee’s individual retirement plans. Similarly, employers could administer — and contribute to — employee’s individual health plans. Even though the Democratic presidential candidates still embrace an employer-centric system, the support fora more individual-centric model is gaining momentum..

For health plans this could be good news. They would remain a core part of the nation’s health care system. While the nature of their competition would change, it would still likely be a vibrant, primarily private, market.

The role of health insurance agents could change far more dramatically. If consumers are pushed into exchanges, connectors or purchasing pools, the system administrators might assume they can play the role of agents. It will be important for agents to make sure Americans continue to have access to independent advocates and consultants — in other words, to professional insurance agents. That won’t be easy. Many lawmakers — and even more of their staffs — have never worked with an agent and don’t understand the value we bring to the system.

Senator Wyden and others, however, have expressed a willingness to listen to others. That’s an opportunity agents need to seize. Fortunately agents have a compelling story to tell. 

Lessons Learned: California’s Health Care Reform Effort

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Health Affairs, a highly regarded public policy journal, has been conducting a thoughtful online roundtable concerning California’s unsuccessful health care reform effort in California. The insights are useful and well worth reading. With comprehensive health care reform moving to the federal arena for the next couple of years, whoever occupies the White House next year could learn a lot from the California experience.

The participants in the Health Affairs roundtable are all experienced public policy experts who were deeply engaged in California’s health care reform debate. Indeed, the roundtable’s only shortcoming is that all the participants were, to one degree or another, advisers to or supportive of Governor Arnold Schwarzenegger’s health care reform proposal. A more diverse panel would have been enlightening. Nonetheless, each of those involved were not only qualified, but offer meaningful insights. The panel was comprised of:

  • Rick Curtis, President of the Institute for Health Policy Solutions(IHPS).
  • Rick Kronick, Professor of Family and Preventive Medicine and an Adjunct Professor of Political Science at UC San Diego. He was also a Senior Health Care Policy Advisor in the Clinton Administration and participated in developing that Administration’s health care reform package.
  • Patricia Lynch, Vice President of State Government Relations Services at Kaiser Permanente.
  • Ed Neuschler, Senior Program Officer at IHPS.
  • Lucien Wulsin, Project Director of the Insure the Uninsured Project. He was also the chief aide to Assemblyman Burt Margolin responsible for developing AB 1672, California’s successful small group heath care reform package passed in 1992.

Links to their postings, in the order presented, follow:

For those interested (i.e., Mom), here’s a link to my post on lessons learned from California’s Year of Health Care Reform. It’s not nearly as erudite as the others, but hey, it’s my blog! <g>

Health Care Still Vital Issue in 2008 Campaign

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The Kaiser Family Foundation has been issuing quarterly tracking polls on the issues voters want presidential candidates to address. Health care has been the top domestic issue voters are focused on (Iraq has been the top issue). But now that the mortgage crisis, gas prices and a faltering stock market has had more time to impact family’s sense of financial security, the economy has taken on greater importance to voters.

In the March 2008 Kaiser Health Tracking Poll 45 percent of the voters listed the economy as one of the two issues they would most like to hear presidential candidates talk about. 32 percent of the voters listed Iraq and 28 percent mentioned health care. Immigration followed with 14 percent, education with seven percent and terrorism six percent.

The economy topped the list for Democrats, Republicans and Independents alike. For Democrats, however, health care was the second most mentioned issue followed by Iraq.

In the Kaiser poll published in December 2007, Iraq was the top issue, mentioned by 35 percent of those surveyed, followed by health care mentioned by 30 percent and then the economy, cited by 21 percent of the participants. Democrats, Republicans and Independents all ranked the top three issue in this order.

When asked what single issue will most drive their choice for the next president, the economy was at the top of the list for all voters, Democrats, Republicans and Independents. For Democrats and Independents, the next two issues were Iraq and health care; for GOP voters it was terrorism and Iraq.

In March, the top issue for all voters was Iraq, followed by the economy and health care for Republicans and Independents, while Democrats selected health care and the economy as their next two most important issues.

While the economy has supplanted health care as the top domestic issue among voters, health care is still a powerful issue. However, health care costs are a factor in how people feel about the economy. 10 percent of voters cited health care costs as the single most important economic issue facing you and your family. This trailed inflation (26 percent), high taxes (13 percent), and the price of gasoline (11 percent), but it was higher than items like problems getting a good-paying job or a raise in pay (nine percent) and the cost of housing (six percent).

Health care reform remains a critical issue, especially among Democrats and Independents. When evaluating health care reform proposals, 58 percent of what the Kaiser Foundation calls “health-focused voters” want to provide health insurance for nearly all of the uninsured, even if it involves a substantial increase in spending. 30 percent support a more limited plan that would cover only some of the uninsured, but involve less spending.

In 1992, the sign in the Clinton campaign war room read “It’s the economy, stupid.” What’s less well known is the addendum to the sign that read, “And it’s health care, too.” History looks like it’s repeating itself (although this time it may not be a Clinton war room). While Iraq will remain a critical issue, the economy and health care are even more relevant to voters’ decisions. That could change, but barring a terrorist attack on American soil, the voters are increasingly focused on the economy and remain strongly interested in the candidate’s positions on health care.

In other words, future debates will sound a lot like the recent debates. 

Recissions, the LA City Attorney, and the Three Laws of Politics

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The debate over health care plans cancelling policies for members who incur significant claims on the grounds that they omitted or misstated information on their original applications for coverage (a practice called “rescission”) is instructive. Few defend the right of consumers to lie on their applications. In addition, few maintain the carriers haven’t overreached in defending themselves from fraudulent applications. And no one claims the carriers have done a good job of presenting their case to the public on this issue.

In some of my speeches I talk about the three laws of politics I’ve developed over (too many) years dealing with campaigns, the press and politics in general:

  • Law #1: The Law of Political Reality: Political Reality trumps Real Reality for all political parties at all times.
  • Law #2: The Law of Political Activity: Politicians are paid to address perceptions and that’s what they do
  • Law #3: The Law of Political Reporting: The media is paid to report on what politicians do and that’s what they do

The application of these three laws can lead to an echo chamber of surreal proportions. It often begins with the press reporting on a study or action by a company — let’s say questionable rescission practices by a major carrier. That’s what the press is supposed to do. Politicians read the article, perceive a problem and hold a press conference promising to address the problem. That’s what politicians are supposed to do. The press then reports on the press conference held in response to the press’ earlier article. Other politicians see that story, hold their own press conference and so on and so forth. After awhile it doesn’t matter what the original problem was, how widespread it is, or how nuanced it might be. The Laws of Politics do not suffer nuances.

This is the way issues become a part of the public’s consciousness. When real problem (and the problems surrounding abusive rescissions are real) and addressed by sincere politicians (there are more of them than you’d think), the process works great.

Some politicians, however, are more adept at applying the laws than others. Few would suggest that Los Angeles City Attorney Rocky Delgadillo is in the running for most adroit politician of the decade. He’s had several self-inflicted political mishaps that have shaken his credibility and weakened his future electoral prospects.

The City Attorney is astute enough to know the rescission issue has hit a chord with the public. And he’s clever enough to get his office engaged in the battle. Let’s give him the benefit of the doubt: he’s seen a problem, is sincerely concerned, and is seeking to address it.

Last week he sued Health Net for “engaging in unlawful and deceptive business practices” according to his office’s press release announcing the civil action (He is also initiating a criminal investigation against certain individuals at Health Net). The suit alleges health Net engaged in “unlawful, unfair and fraudulent business practices and unfair, deceptive , untrue and misleading advertising.” City Attorney Delgadillo claims he brought this action against Health Net because “[c]ountless Californians who believe they have insurance actually have policies that aren’t worth the paper they’re printed on.” I’m not sure what the legal definition of countless is, but it’s a lot. Never mind that less than one percent of health insurance policies are ever rescinded.

Using the unfair advertising laws in this context is an interesting legal theory. It’s awfully broad and, taken to extremes, could be abused. But there’s nothing wrong with a prosecutor — elected or otherwise — testing out a theory like this.

And testing it he is. Now City Attorney Delgadillo is turning his attention to Blue Cross of California. This time it’s not for the carrier’s rescission practices, but because the company issued a press release describing changes to its rescission practices. The City Attorney doesn’t believe Blue Cross, apparently because press releases are tools for burnishing a company’s public image and because, well, Blue Cross is an insurance company.

“In all of our dealings with the health insurance industry, our experience would lead me to have little or no confidence that the claims made by Blue Cross … are accurate,” he’s quoted as saying in an interview with the Associated Press. 

Leave aside the irony of an elected official whose official home page is not much more than a listing of the numerous press releases put out by his office publicly criticizing a company for issuing a press release. What’s more disturbing is that in the City Attorney’s mind, insurance company’s are incapable of telling the truth. City Attorney Delgadillo doesn’t claim his office has received complaints about Blue Cross not living up to the promises it made in the press release. It’s that, as an insurance company, the presumption is they’re lying.

That’s a sad statement about both, the low public standing the insurance industry has brought upon itself and the standards of fairness in the City Attorney’s office.

None of this should be taken as a call for the City Attorney to stop investigating insurance companies. But it does underscore that by adhering too closely — and inartfully — to the Law of Politics, the Los Angeles City Attorney is undermining the credibility of the office’s legitimate legal undertakings.

The Oregon Health Insurance Lottery

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It sounds more like something from a science fiction movie – the kind that star actors who you recognize, but can’t remember their name. It would be called “Healthy Luck” and the slogan would be something like, “Get lucky. Your health depends on it.” But it’s not science fiction, it’s the very real state of Oregon. And what they’re doing is holding a lottery where the winners get, not cash, but health insurance.

Back in the 1990s (don’t these stories always start back in the 1990s?) Oregon had one of the most progressive health care reform plans of any state. A key part of the program was the Oregon Health Plan, which covered 132,000 Oregonians in 1995. The Oregon Health Plan offered coverage to those unable to afford traditional health insurance, but not poor enough to qualify for Medicaid.

Then came the budget cuts. Oregon simply couldn’t afford to pay for the program. In 2004 they stopped taking new participants into the Oregon Health Plan. The percentage of the state’s population without insurance is now roughly equivalent to where it stood in the late 80’s, before the creation of the Oregon Health Plan.

Now, however, a few thousand slots have opened up and the state is going to fill it through a series of lotteries. According to the Associated Press, more than 80,000 of Oregon’s 600,000 uninsured have signed up for the chance to enroll in the program which provides basic health care, dental and vision services at little or no cost. It will take a few months to determine the winners.

For those winners, the Oregon lottery is more than science fiction, it’s a dream come true, a life line to the medical care they need. But the very existence of a lottery for health insurance underscores the need for a universal coverage plan that the country and its citizens can afford. That means making tough choices on how to control health care costs. And it means coming up with a workable solution to make access available to all Americans.

And a national health insurance lottery is not the answer.