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 fare.....today'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 www.leginfo.ca.gov. Press the button for Bill Information and type in ABX1 1 and click on what comes up. The author is Speaker Nunez

The Dismantling of the Fair Employment and Housing Commission

From State Senator Sheila Kuehl:
This is my sixth essay for 2007 and I’m departing from my essays on the 2007-08 Budget to write about the plan to dismantle the enforcement abilities of the Fair Employment and Housing Commission by the Schwarzenegger administration. As you read this essay, the Commission is scheduled to meet to approve a comprehensive and destructive plan put forth by Secretary of Consumer Affairs Rosario Marin.

Visit my website at www.sen.ca.gov/kuehl to read my previous essays. For those of you who received this essay by forwarding, it is written by California State Senator Sheila Kuehl. If you wish to subscribe to receive these essays on a continuing basis, (no charge), please send an e-mail to Sheila.Kuehl@sen.ca.gov, titled “subscribe”.

Enforcement of all State Civil Rights Laws
The Commission is entrusted with the enforcement of all the various civil rights laws in the state. Employees, renters, home buyers, and consumers of all types are protected against discrimination in several of California’s statutes. These laws are nothing but empty shells without the enforcement provided by the opportunity to go to the Fair Employment and Housing Commission for enforcement. Cases filed with the Commission are heard by a panel of Administrative Law Judges (ALJs) specifically trained and assigned for these duties.

Moving the Commission Staff and Doing Away With Judges
Secretary Marin has decided, in order to save such a miniscule amount of money it would be referred to as “budget dust”, to move the Commission staff to Sacramento and do away with the cadre of ALJs who hear the cases. Instead, she will throw all these cases to the more general Office of Administrative Hearings (OAH), a catchall for the enforcement of all general laws.

Why This Change is Bad for Civil Rights Enforcement
A little history......in 1992, with the support of Pete Wilson’s administration, the Legislature specifically authorized the Commission to hire its own ALJs. This was done because the OAH, which had been hearing cases and which Secretary Marin and the Schwarzenegger administration want to put back in charge, had proven to be both uneconomical and inexpedient, not to mention highly ineffective, because the legal staff of the Fair Employment and Housing Commission had been required to revise and rewrite over 90% of all OAH decisions in this area as incorrect on both the law and Commission policy. At the time the Legislature found it shocking that hearing officers knew so little about the area and wrote such ill-informed opinions. One decision would have overruled the Commission’s own regulations. Another allowed an employer to ban all women from his workplace.

The Advent of ALJs for Civil Rights
After the establishment of specific ALJs for these cases, the Commission, over the years this has been in place, has approved 92% of all decisions. This has saved quite a bit of money over the years. During the current Administration, the staff of the Commission, including the legal staff, has been reduced every year, down to a little more than half of what it had been. Even so, the Commission has maintained its workload, as have the ALJs.

Dispute between Schwarzenegger Admin. and FEHC
Secretary Marin has made no secret of her animosity toward the Executive and Legal Affairs Secretary of the Commission, Ann M. Noel. Ms Noel’s major flaw has been her steady insistence on the enforcement of civil rights law, even in the face of great diminution of the staff. The Secretary attempted to replace Ms. Noel with a woman who couldn’t even answer the first question asked of her: “Do you know the difference between FEHA and the ADA?” Answer: “Well, I know one of them is federal.”

The Move is Contrary to Legislative Intent
The Legislature intended that civil rights enforcement be given a high priority and that the staff and ALJs be specifically trained for the adjudications. In moving the office to Sacramento, allegedly to give it more “oversight” and to “save money”, the Administration is dismantling civil rights enforcement in California. Eliminating Commission ALJs and returning to reliance on OAH is a substantial policy change, inefficient and contrary to legislative intent. The move and the diminution of staff would also controvert the goal of expedient drafting of regulations, given that drafting regulations is one of the functions of the ALJs, and there would be only one FEHC staff person available to do these tasks. The Secretary’s office has already overseen a good deal of foot dragging on regulations concerning sexual harassment and the workplace treatment of people with disabilities.

What to Do
A letter was sent to Secretary Marin signed by Senate Pro Temps Perata, Speaker Nunez, myself, and the chairs of Senate Judiciary Committee, Senate Labor Committee, Senate Budget Committee, Assembly Labor Committee, Assembly Judiciary Committee, Assembly Budget Committee, Latino Legislative Caucus, Legislative Black Caucus, API Legislative Caucus and the Legislative LGBT Caucus. So far, there has been no response. If you are concerned, email Secretary Rosario Marin at rmarin@scsa.ca.gov or the Governor’s Cabinet Secretary, Dan Dunmoyer at dan.dunmoyer@gov.ca.gov.