Friday, December 21, 2007

Sheila Kuehl on the Speaker's and Governor's Healthcare Bill

So far, this appears to be the best explanation of what the bill is all about.

The Speaker's and Governor's Healthcare Bill: Part of a Series of Essays by Sheila Kuehl

This is my seventh and last essay for 2007. As I write, the Assembly has just passed Speaker Fabian Nunez's healthcare bill and it's on its way to the Senate and a hearing in the Senate Heath Committee in January. A number of people have called and emailed asking for my take on the bill and this essay will give some analysis.

Giant Leap for Health Coverage? Or for premiums...

The press has described the bill in breathless prose as a "giant leap" for health coverage. Unfortunately, this is not quite the case, depending on who you are and how and where you work. Each of the sections below will explain some of the provisions of the bill actually harmful to regular, working-class and middle-class families. And it provides less help than advertised for poor families, as well.

Coverage for everyone?

The press characterizes the bill as providing or extending coverage to all but a few Californians.

This is a mischaracterization, nothing is provided. Instead, all Californians would be required to buy insurance with no caps on premiums, no regulation of the cost of insurance or medical expense, no maximum deductibles, and no floor on how little coverage you can buy and satisfy the legal requirement. If you do not buy insurance within 62 days after the requirement kicks in, the Franchise Tax Board is authorized to collect premiums determined by the Managed Risk Medical Insurance Board by garnishment of wages or mortgage liens.

Your employer would be required to spend from 1% to 6.5% of payroll (depending on the size of the payroll) to buy insurance policies for employees. Employees would be required to take the insurance and to pay whatever supplemental premiums, co-pays and out of pocket costs are not paid by the employer. There are no caps on what the employee would pay, only for the employer. There is a vague term about hardship letting people out of the mandate, but no definition is offered and, as in Massachusetts, if you are excused from the mandatory purchase of insurance, you simply have no insurance!

If your employer does not wish to spend 1% to 6.5% of payroll on your insurance, he or she must pay the same amount into a state fund, and employees of those employers will be required to buy their insurance through the state fund, again with no cap on premiums and no floor on coverage.

Is there at least minimum coverage required in the bill?

No. For the State Fund, for those employers who choose to pay into it, the Managed Risk Medical Insurance Board will set the minimum coverage (what you get for your premiums, what conditions, services, treatments, are covered by your insurance), which will not appear in statute. For those who buy insurance on the open, private market, and those whose employers pay total or partial premiums for insurance chosen by the employer, as well as for self-employed folks, there is no minimum coverage in the bill. One woman reported to me that she had a bare-bones, catastrophic policy and, upon being rushed to the hospital, received the bill for the ambulance ride that got her there, placed on her chest, as she was carried into the hospital.

How is the bill to be financed?

There is no funding in the bill. Instead, there is the promise of an initiative, no language available yet, to tax cigarettes at an additional $1, $1.50 or $2 a pack, tax hospitals in order to draw down federal money which would then go back, to a great extent, to the public hospitals, and require employers to pay a portion of their employees' premiums, as indicated above. There is also a hope that the federal government will provide more money for children's insurance. Instead, of course, the federal government is cutting children's insurance such that the California Legislature will meet in emergency session in January to disenroll children from Healthy Families. Everything else would be paid for by premiums, co-pays and deductibles.

In addition, if the Director of Finance finds that the state cannot afford all the promises made in the bill, the bill goes away. Or does it? There needs to be clarification that, if the initiative fails, we're not still stuck with an individual mandate to buy insurance.

But how do poor people's uninsured?

Better, but still a hardship. Healthy Families coverage for children would allow those whose families who earn up to $40,500 for one adult and one child to be covered (children only) by state or federal money. (Federal cuts mean we already have to kick kids off this program, see above). Since the bill allows all children, even those with undocumented parents, to be covered, but the feds won't pay for those children, there will be increased state costs in Healthy Families. (See budget discussion below)

Families whose income is at or less than $43,000 for a family of three would be subsidized for their premiums only. This means they would be required to pay an unspecified amount for premiums and receive an unspecified amount from the state budget to help. There is no subsidy for co-pays, deductibles or out of pocket (uninsured) expenses associated with their policies, which could be sizeable if they bought a minimal policy.

Families who earn between $43,000 and $68,680 for a family of three would be allowed to pay full boat for their uncapped premiums and then deduct any part of the premium that exceeds 5.5% of their income as a tax credit, refunded dollar for dollar by state money. (Again, see budget discussion, below). There is no tax credit for their required co-pays, deductibles or out of pocket (uninsured) expenses, which could be big if they purchased a minimal policy.

But insurance companies would be required to take everyone

That is correct. However, they are allowed to offer minimal coverage set by the Managed Risk Medical Insurance Board (minimum coverage that may be offered is not specified in the bill) and there is no control over their premiums or deductibles.

In addition, they are allowed to adjust their premiums, not by medical condition, but by age and other demographic factors.

The companies are required to spend 85% of premiums on care, but they maintain they do that now, and count marketing, information technology and other kinds of administrative overhead as care. The bill would allow this characterization to continue.

Unions seem to like the bill, don't they?

Well, some of them. SEIU, who has organized and hopes to organize healthcare workers, is positively salivating over the bill, to the extent that their national leader, Andy Stern, is engineering moving out the current state leader, who has questioned the bill, in favor of a new leader who will go along with it. AFSCME has also come on board with the bill, thinking that public employees will benefit. (However, with all the hits the bill brings on the state budget, this may be short sighted). About half of the unions in the California Labor Federation are with it, and half are against it but not taking a firm position. The California Nurses, the California School Employees and the Teamsters, among others, are strongly in opposition.

Many other troubling sections in the bill.

Troubling (1) rescission
While we are struggling to keep insurance companies from rescinding policies of beneficiaries who do nothing wrong except try to use their insurance, the bill takes a step backward by applying the no retroactive rescission language only to HMO's and not to all insurers.

Troubling (2), no choice of doctors or hospitals
Your insurance company tells you who is in their provider network. Employers are not required to give a range of choices. The state fund would give a range of choices, as soon as they are determined by the Managed Risk Medical Insurance Board.

Troubling (3), more unsupervised healthcare workers
Nurse Practitioners and Physician's Assistants would be allowed, by the bill, to give written instructions (not personal supervision) to medical assistants in retail clinics, such as those proposed for Wal Mart, and the assistants would be allowed to give medication. Currently they can do so in specific clinic settings. The bill removes this requirement.

So, what's next?

The bill goes over to the Senate, into the Senate Rules Committee, which then refers it to the Senate Health Committee and any other committees that should hear it before it goes to the Floor. There may be a hearing on the bill in Senate Health on January 16th, but only if the language of the bill is in its final form according to its author, the Speaker, the requested analysis of the impact of the State Budget by the Legislative Analyst's Office is complete, and the Committee also has the language of the proposed initiative that will, supposedly, fund the bill. Any organizations wishing to support or oppose the bill may send their letters to the Senate Health Committee in Sacramento. The bill may be read online at Press the button for Bill Information and type in ABX1 1 and click on what comes up. The author is Speaker Nunez

No comments: