Three Health Care Reform Questions

The health care reform debate has been going on for so long here in California folks seem to have adopted a short-hand for referring to the issues. “Affordability” carriers a lot of weight for just six syllables. “Individual Responsibility” is another phrase with a heavy load. The danger is that this negotiation fatigue boxes out other issues. So here’s three questions I wish folks were asking:

  1. Why is there no outcry concerning the one million Californians who are eligible for, but fail to enroll in, Healthy Families and Medi-Cal?
    You’d think this would be everyone’s number one priority. First, because it’s the right thing to do. Second, reducing this number would demonstrate the state’s ability to deliver on it’s earlier health care reform promises. Third, it’s an easy win as the one million Forgotten represent about 15 percent of the state’s uninsured. CAHU has focused on this situation in its Healthy Solutions reform plan, but no one else seems to mention it. Why isn’t the Legislature holding someone accountable? Why isn’t the Governor calling someone on the carpet? This, of course, assumes someone is responsible. But if so, whatever they’re doing now isn’t working well enough. It’s time to try something new. Healthy Solutions contains a laundry list of ideas. Others no doubt have even better ones. The answer: hold one person accountable, give this person the authority, flexibility and resources to make something happen and a deadline by which it needs to happen. If they can’t deliver, find someone who can.
  2. Why does everyone assume there has to be just one minimum plan?
    At the Assembly Health Committee hearing on October 31st, there was a great deal of discussion about the minimum benefit package. And there should be. If individuals are required to have coverage, it’s useful to know what that coverage might be. Yet the underlying assumption of those questions was that there’d be just one minimum plan. But why? People have different needs. For some, a high deductible plan is a good deal; for others it means access to health care remains out-of-reach. Healthy Solutions recommends three minimum plans (in addition to Healthy Families and Medi-Cal): any HSA-eligible plan; a high deductible catastrophic plan; and a core plan with lots of first dollar benefits, but lower annual and lifetime caps (CAHU borrowed the attributes for the Core plan from a package currently available to farm workers). There are no doubt other acceptable minimum benefit plan designs out there. So why limit the debate to coming up with just one? The answer: put some actuaries in a room and don’t let them out until they produce three or four roughly equivalent plans designs that address the needs of a diverse population. Then let the policy wonks play with them. But at the very least negotiators need to acknowledge the need for more than one minimum plan.
  3. Why are business problems evidence of the failure of the private sector, but the shenanigans of public officials doesn’t seem to worry anyone?
    There are those who hold up the mistakes, crimes and foolishness of some corporate players as conclusive evidence that the private sector is incapable of delivering a fair health care system. Yet there are plenty of examples of government agencies and public officials who are also guilty of mistakes, crimes and foolishness (I can name names if that’s necessary, but I’m sure you can, too). Shouldn’t this be conclusive evidence for these same folks that the public sector is incapable of delivering a fair health care system? The answer: There isn’t one, really. People need to recognize that we’re dealing with human institutions here, perhaps a little less stone throwing would be a wiser approach to the debate. Unfortunately, all sides seem to take comfort in the rockier side of the debate. 

These are three of my questions I wish would be more widely considered. What are yours?

Elements of Effective Health Care Reform

I was talking to an agent the other day who asked a very valid question: “Let’s say CAHU’s Operation Drumbeat is succesful and AB 8 becomes a two year bill. What amendments will we (CAHU) seek? If AB 8 is flawed, what would “good” health care reform look like?”

It’s a valid point. With pressure mounting in Sacramento to pass health care reform — any health care reform — what’s the alternative? So, let’s take a breather from the urgency of the moment and focus on the elements of effective health care reform. Personally, I concur with how CAHU’s Healthy Solutions plan defines the goal of health care reform (disclosure: this isn’t surprising since I helped write the plan). Healthy Solutions calls for reforms which must:

  • ensure that all Californians have basic health care coverage;
  • neither bankrupt families nor the state;
  • provide the state’s diverse population with equally diverse health care choices;
  • promote ongoing and long-term innovation and experimentation that enable the state’s health care system to adapt over time to the evolving needs of its citizens;
  • address and constrain skyrocketing medical care costs;
  • provide consumers access to meaningful information and expert advice and counseling from licensed professions.

That’s why Healthy Solutions seeks to deliver on the promise of universal coverage. Knowing this won’t be inexpensive, Healthy Solutions identifies funding sources. It avoids expensive pitfalls like creating new state bureacracies or purchasing pools. It emphasizes wellness and prevention programs. It calls for reforms that preserve consumer choice, whether it’s in health plan design, the type of networks they have access to, or the kind of help and support they can access in navigating the system. It calls for shared and personal responsibility.

AB 8 has a noble purpose, but it’s approach will do more harm than good. A vote on the bill needs to be delayed until it can be amended. And there are proposals out there which can serve as a model for what AB 8 could — and should be. That’s a critical point. The goal of health insurance agents should not be to avoid reform, but to help bring about constructive, workable changes. Folks interested in what that might look like should visit www.CAHUHealthySolutions.org for an example of what effective health care reform might look like.

Promises Made. Promises Kept?

Every health care reform plans being considered in Sacramento is basically a promise. Several proposals, for example, call for expanding existing public health care coverage programs and creating premium subsidies to help low income Californians ineligible for public programs to better afford private coverage.

Making promises is easy. Keeping them is a lot harder. Sometimes because conditions change after the commitment is made, sometimes even the best and most sincere of efforts fail.  Sometimes it’s all about execution, or more precisely, a lack of execution.

Unfortunately, when it comes to delivering on health care coverage promises, the state’s track record is less than reassuring. Consider: according to UCLA’s authoritative California Health Interview Survey, over 630,000 Californians were eligible for, but failed to enroll, in state programs like MediCal and Healthy Families in 2005.  This represents approximately 13 percent of the 4.9 million uninsured identified in this CHIS study (other CHIS studies estimate there are 6.5 million uninsured Californians). For these these 630,000 people, the promise has not been kept.  

You’d think health care reform proposals by the Governor and legislative leaders would address this sad reality. Yet, as far as I’m aware, only CAHU’s Healthy Solutions  plan addresses this issue.

Healthy Solutions calls on the state to increase participation in Healthy Families and MediCal to at least 85 percent before expanding them. CAHU’s position is not “anti-expansion.” It’s pro-keeping promises, as evidenced by the suggestions it offers to increase participation by those currently eligible for the programs.

Healthy Solutions calls on the state to take a business-like approach to current outreach efforts. This means reviewing existing outreach efforts and requiring them to prove their effectiveness. And it calls on the state to consider new approaches to outreach, including:

  • Identifying and enrolling eligible participants when they access the health care system at community clinics, emergency rooms and the like;
  • Identifying and enrolling eligible participants when they enroll for school, whether K-12, community colleges or adult education programs;
  • Simplifying the enrollment process by modifying qualification requirements to tie into other programs aimed at helping low income families, such as Section 8 Housing and food stamps;
  • Commencing inter-agency discussions aimed at combining and simplifying enrollment processes for these programs; and
  • Increasing participation by the working poor by enabling employers and health plans to create a single point of entry to private and public health care coverage programs.

Health care reform is one of the most important promises the state will make to its people in the coming months. It’s similar to Bruce Springsteen’s line in The River: “Is a dream a lie if it don’t come true, or is it something worse?” Enacting legislation with hollow promises is worse than a lie. Promises matter. And so does delivering on them. 

Schwarzenegger’s Health Care Reform Dilemmas

Governor Arnold Schwarzenegger’s health care reform team may have backed themselves into a corner — one which could make passing comprehensive changes problematic.

Governor Schwarzenegger’s health care reform plan is a comprehensive package which would achieve universal coverage. This stands in contrast to proposals put forward by legislative leaders of both parties in both houses. The Governor has made clear he partial measures are unacceptable.

This creates two dilemmas for Governor. One is a morass, the other occupies space between a rock and a hard place.

The Morass: comprehensive reform has to somehow reach those companies which self-insure. These companies, usually large with many employees, assume much of the risk of their worker’s health care costs. An insurer takes over claims payment only if they reach a very large level ($100,000 per person or $1,000,000 for the entire company, for example). The problem for the Governor is that self-insured plans are generally exempt from state regulation under a federal law known as ERISA. Consequently a huge portion of the state’s population will find itself exempt from the Governor’s reform requirements. And as even the Administration’s team admits, without full participation the package begins to unravel. Most every comprehensive state proposal finds itself bogged down in the morass of ERISA exemptions.

But the Governor has a further problem: he also has backed himself into the proverbial rocky, hard place corner. You can’t require individuals and employers to obtain health care coverage if that coverage is unaffordable to them. Which is why the Governor’s plan rightly calls for premium subsidies to help low income individuals pay for the coverage his plan requires them to buy. And subsidies cost money.  Which is why Governor Schwarzenegger’s proposal includes new fees to be imposed on hospitals, doctors, employers and others. The Administration’s calling these revenue enhancements “fees” is critical. Under California law, raising taxes requires a two-thirds vote of the legislature. Fees require only a majority. To achieve a two-thirds majority some Republicans will have to vote for a bill. A simple majority can pass with only Democratic votes. Since Republicans in both chambers of the legislature have flatly ruled out voting for new taxes the funding in the Governor’s plans are called “fees.”

This definitional finesse may work within the Capital, but in the real world, if it quacks, walks and talks like a tax, it’s probably a tax. Which means as soon as the Governor and Democrats might pass “fee-based” health care reform, the law suits begin. And they’ll likely win.

This is all a long way of saying, the Governor’s health care reform plan requires subsidies which in turn requires new revenue. The Rock: If the Governor raises the revenue through taxes, Republican legislators defeat the reform package. The Hard Place: If he raises the revenue through fees which act like taxes the courts strike down the package.

This doesn’t mean comprehensive health care reform is dead in Sacramento. It simply points out that it won’t be easy. I agree comprehensive reform makes sense. CAHU’s Healthy Solutions plan does this is a realistic way. Yes, it suggests new taxes, but they’re appropriate and reasonable. Because it focuses on individuals, not employers, it avoids the ERISA exemption morass. And by calling a tax a tax, it allows for full debate on the trade offs involved in making sure every Californian has access to basic health care coverage. This may not completely avoid the Rock and Hard Place, but it allows attention to be given to the real issues, not the semantics.

Presentation: CAHU’s Healthy Solutions

This speech was presented to the Central California Association of Health at their May 3, 2007 meeting in Fresno. It offers a brief summary of the health care reform proposals put forward by:
– Governor Arnold Schwarzenegger
– The Senate Republicans
– Senate President Pro Tempore Don Perata
– Assembly Speaker Fabian Nunez

The bulk of the speech, however, is a detailed description of the policy behind CAHU’s Healthy Solutions health care reform proposal and its access, financing and cost containment provisions.
CAHU’s Healthy Solutions – CCAHU – May 3, 2007