(Blog post care of ITUP intern Christina Vane)

Last week on the Blog, we began the conversations about health reform “navigators,” organizations and individuals who will be helping participants embark on what will undoubtedly be the confusing task of applying for and selecting a health insurance plan through the Exchange.

In what seems to be an effort by the Legislature to ease the process even further, AB 2787 (Monning & Alquist) is moving through the legislative process; if passed, the bill would create the California Health Ombudsman Office to further consumers' abilities to digest and navigate the new reform legislation.

What’s an ombudsman, you ask? In simplest terms, it is a trusted person or agency that smooths the process, investigates complaints and mediates settlements between parties (in this case, the insured members and health plans).

As envisioned by AB 2787, the new Ombudsman office would be established using part of the $30 million in newly-appropriated Consumer Assistance Grants with the intention of boosting consumer protections. The creation of the office will hopefully help consolidate the nine (or so) agencies that currently provide consumer assistance with health plans.

If implemented, the Office will help Californians:
• Lean more about their health care choices;
• Enroll in health plans;
• Obtain tax credits created by the health care reform law; and
• Receive answers to their questions through a 24-hour hotline.

The bill would also require state agencies to make referrals as well as coordinate and record consumer complaints in concert with the Ombudsman Office. For this reason, the bill is currently receiving opposition from many health plan and health insurance lobbying groups stating unnecessary spending of funds for duplicative services.

Current status... The bill passed the Senate Health Committee last month and is scheduled to go before the Senate Appropriations Committee sometime in August. Let’s see what happens!

(Blog post care of ITUP intern Kandis Driscoll...)

Heads up that a new maternity care bill -- well, new to this blog -- AB 1825 (De La Torre) is poised to reach the Senate floor.

Some background first... In California, there is no existing law requiring health insurers to designate which basic health care services are covered, so health insurers are not forced to provide coverage for maternity services. As a result, an estimated $21 million is paid for women who already have insurance, but are lacking or enduring substandard maternity care, and thus, seek this care through state programs, such as AIM, the Access for Infants and Mother’s program.

AB 1825 would require health insurers to submit to the CA Department of Insurance revised policy forms that provide coverage for specified maternity services, including prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, inpatient hospital care with labor, delivery and postpartum care.

Status... AB 1825 is currently parked at the Senate Appropriations Committee due to a budgetary analysis stating that two staff positions will be needed for effective implementation, roughly totaling $100,000 each year. (In these lean budget years, most bills with any price tag at all get held up at Approps).

Despite this associated expense, Beth McGovern, legislative director of the California Commission on the Status of Women, believes the bill will actually save money. She is convinced that, "women who don't have health insurance are likely to delay or forego prenatal care, which increases the likelihood of pregnancy complications, and complications at birth…that often involves public cost to take care of both the patient and the child."

The committee is set to take up AB 1825 again in August once the state Legislature reconvenes. Will update readers then...

According to the Council of Economic Advisors' (CEA) quarterly report on the continuing effects of the American Recovery and Reinvestment Act (ARRA), the magnitude of the fiscal stimulus and its positive effect on the U.S. economy have been increasing substantially in the first half of 2010 (from $108 billion in the first quarter of 2010 to $116 billion in the second quarter).

CEA estimates that the 2009 stimulus has (1) boosted GDP by 2.7 percent and (2) raised employment by 2.5 million jobs since February 2009, relative to what would have occurred absent the stimulus.

According to CEA, ARRA has spent $480 billion and using numbers from Stimulus.org, about $260 billion of that is spending and $220 billion is tax cuts. The amounts are further broken down into several tax and spending categories on the Stimulus website.

In Sacramento, as in many state capitols across the country, elected officials are bracing themselves for what could be more bad budget news.

Some background... In the 2009 federal stimulus package, Congress issued assistance to the states ($11 billion to California alone) in the form of increased federal Medicaid spending. The funding was intended to soothe the vast expansion of program utilization due to the recession. Yet the federal assistance was not indefinite; it is set to expire on Dec. 31, 2010.

Earlier this year, it appeared Congress would continue the assistance for an additional six months in an “extenders bill” (HR 4213) that also included a continuation of unemployment benefits. Thirty states, including California, already accounted for the extra funding in their budgets and budget proposals. However, the “extenders bill” – and the $24 billion in extra Medicaid funding it contained – was filibustered and did not pass out of the Senate last month.

Failure to receive the additional federal Medicaid aid – $1.5 billion of the $24 billion is expected to come to the Golden State – would mean California faces even an even larger budget crisis. Entire programs could be eliminated (as is evident in the Governor’s May Revise proposal to completely eliminate CalWORKs).

There’s an irony that many states are experiencing: without the federal assistance, states may have to cut essential safety net programs while simultaneously gearing up to implement health reform, including an expansion to Medicaid that will cover more than 16 million Americans starting in 2014. Many states are hoping Congress can find away to pass the Medicaid extension before the August recess in hopes of preventing significant cuts to programs and jobs.

It is unclear whether Congress will pass a Medicaid assistance provision this year. If so, it could ensure that essential state programs are kept alive. If not, California’s budget woes are looking that much more woeful. Stay tuned...

On Tuesday, ITUP staff joined a discussion with HHS Secretary Kathleen Sebelius as she offered insight about the nation’s new investment in preventive care, "marking a fundamental shift from treatment to prevention." As you can read in the blog post immediately below, starting September 23rd new health plans will be required to cover preventive services at no additional cost to individuals.

Here’s some of the pertinent Q-and-A with Secretary Sebelius:

Disease and Prevention
Q: Will patients with chronic diseases be considered to be seeking preventive care or treatment for their illness?
A: That would not be preventive care; that would be considered medical management, and thus, left up to the health plans.

Q: In the area of colorectal screenings, in which there are at least three different screening options, is there anything that ensures that insurers won’t simply steer patients in one direction, but rather leave the decision to physicians and their patients? Is there any protection involved?
A: No, I don’t believe there is any protection involved. I know this might be an issue, but I’m not aware of any problems in this area.

Benefits of Prevention
Q: Which preventive benefits are included in the new provisions, and will there be a cap?
A: The regulation has tables that list vaccinations and benefits that are included. (See this list). There is no technical cap on the benefits.

Budget for Preventative Services
Q: What percentage of the overall legislation is being devoted to preventive care? I think this needs more priority.
A: The new law aims at ensuring a comprehensive approach in which prevention is an important part. We have allotted $15 billion over the next 10 years in a fund for prevention and public health.

Q: Will there be any financial incentives for plans to participate? Is this something that we should be encouraging, or is there a disconnect in this area?
A: I don’t think there is a disconnect. We are trying to give more Americans access to the preventive services that have usually been typical of large employer health plans.

Wellness
Q: Many people have made reference to wellness; can you speak about grants that will be awarded to small businesses in terms of that?
A: That is an ongoing discussion with Congress, so we don’t currently have a timeline for when this will happen. However, for follow-up information, feel free to reference the newly-launched health reform website.

Q: We are looking to develop a community wellness program. We have seen many benefits in the modified behaviors treatment. Is there any care that specifically addresses this? Do you see anything coming that speaks specifically to modified behaviors?
A: Services have been recommended for body mass index consultations, nutritional counseling, etc. The preventive services page on the health reform website can provide a more comprehensive list for you.

Q: Pesticides have been documented as unhealthy; what will be the reimbursement for services in this area?
A: Part of the recommended services come from the “bright future” guidelines. So we will leave this discussion to doctors and their patients, but we are certain that environmental health will come up in their discussions.

Amid all the movement in Sacramento around the High Risk Pool, Section 1115 Waiver Renewal, Health Benefits Exchange, and even the Single Payer bill, it is easy to forget about the state budget. If you recall, the state is currently in a $19.1 billion budget deficit (in a total budget of +/-$100 billion).

As you know, the Constitutional deadline has come and gone, and we're now 7 days into the new fiscal year without a budget. While we're still a long way from the record (the 2008-09 budget was signed on Sep. 23rd - 85 days past the deadline), with all the other business in the Capitol, including the broiling minimum wage fight and the fast-approaching mid-term elections, it looks to be another long, hot summer on the budget in Sacramento.

As a quick refresher... in May, Governor Schwarzenegger released his revised budget proposal. The Governor's proposal includes some dramatic cuts and changes to Medi-Cal, Healthy Families, and the mental health safety net. For more, be sure to read ITUP's summary and analysis.

Just last month, the Democratic majorities in the state Senate and Assembly responded to the Governor, announcing their Principles for Finalizing Budget.

Some highlights:
• No further erosion of the critical services for vulnerable children, the disabled, the elderly, and the ill, including proposals that call for elimination of CalWORKs, child care, community mental health, and the draconian reductions in IHSS and Medi-Cal.
• Funding schools in accordance with Prop 98.
• Now is not the time to implement major new programs or to implement new tax breaks.
• Closing loopholes, like the oil drilling loophole, and maintaining existing tax rates that will not negatively impact the economy.
• Reject the scapegoating of state employees.

How and when all of this will unfold, and how the final budget may or may not affect the implementation of reform in California, is almost impossible to say at this point. Stay tuned to the Blog as the saga unfolds...

Also on Tuesday, the CA Assembly Health Committee passed SB 810 (Leno), the California Universal Health Care Act. SB 810 would set up a single payer system in California, essentially replacing private insurance companies with a single health care pool into which all California residents pay. The system would be administered by the state and rates for health services, prescription drugs and medical supplies would be negotiated to and set by a designated commissioner.

State Senator Mark Leno (D-San Francisco) argued that a single payer system would reduce administrative costs, increase shared responsibility, promote choice, allow for actuarially sound reimbursements, streamline benefits, and increase efficiency. Funding for the bill would come from shifting the $200 billion that Californians currently spend on private coverage to the single payer system. SB 810 also calls for bulk purchasing of prescription drugs and medical equipment, estimated to save California $5.2 billion in the first year.

Read the SB 810 fact sheet.

SB 810 is nearly identical to SB 840 (Keuhl), legislation was introduced by Senator Sheila Kuehl in 2006 and again in 2008, and legislation vetoed twice by Governor Schwarzenegger. If it reaches the governor’s desk, SB 810 is expected to be vetoed as well.

The bill now goes to the Assembly Appropriations Committee...

Good news from Sacramento... The Senate just voted on - and narrowly passed! - Assembly Bill 1887 (Villines) and Senate Bill 227 (Alquist).

Now onto Schwarzenegger's desk... A signature from the Governor is expected since he has publicly expressed support for the new high risk pool. With more than $761 million in new federal money being given to the state to cover tens of thousands of uninsured (and medically uninsurable) Californians, Schwarzenegger recently referred to the new pool as a "win-win opportunity for California."

With this vote and expected signature, the state will be moving quickly to establish the new pool. Jeanie Esajian, spokesperson for MRMIB (the agency that runs MRMIP and will administer the new pool), was quoted yesterday as saying that "[o]ur plan, if everything goes smoothly, is to begin taking enrollment in August and be open for business in September."

Next week is going to be an exciting one for health policy in Sacramento. In addition to voting on the High Risk Pool, the 1115 Hospital Waiver, and the Health Insurance Exchange, the Legislature will also be taking up important insurance market reforms.

On June 29th, the Assembly Health Committee will be hearing Senate Bill 890 (Alquist & Steinberg), legislation that addresses many of the shortcomings in the state’s individual health insurance market and provides a bridge to the full implementation of federal reform.

In particular, the bill:

• Requires there be only five standardized insurance products (5 HMO products and 5 PPO products) so people buying coverage can make an “apples-to-apples” comparison of identical products;
• Requires all health insurance products to cover medically necessary care, and would prohibit annual or lifetime benefit limits;
• Allows people to switch to a different plan offered by a competing plan or insurer if, after one year, the person goes to a competitor’s plan with equal or lower benefits;
• Requires plans to use a standard application for individual coverage with standard scoring for purposes of offering coverage;
• Require plans to change premium rates for adults based on one year changes in a person’s age; and
• Requires plans to meet a medical loss ratio (MLR) in the large group market of 85%, with an MLR of 80% or better in the individual and small group market. The MLR is the percentage of premiums a health plan spends on medical care, versus administration, marketing and profit. If a plan doesn’t meet this standard, the plan would have to provide a refund to consumers at the end of the rate year.

Stay tuned to the blog for updates as SB 890 and other the other health reform implementation legislation moves through the Capitol this summer.

In addition to tackling the High Risk Pool and 1115 Hospital Waiver, policy makers in Sacramento are also hard at work on legislation that will establish the framework for the California Health Insurance Exchange.

AB1602 (Perez) is set for hearing in the Senate Health Committee on June 30th, and SB 900 (Alquist/Steinberg) will be heard in Assembly Health on June 29th.

At or before both hearings, amended language for each bill will be presented. Among others topics, the bills will likely address:
• The general structure and governance of the Exchange;
• Whether the Exchange will be a public agency, a semi-government entity, or a separate, non-profit organization;
• How the individual and small business markets will operate within the Exchange; and
• To what extent health plans -- including local initiatives and county-organized health systems -- will participate in the Exchange.

Here are additional sources of information on the Exchange:
• ITUP's initial analysis and recommendations, April 19, 2010
• Legislative Analysts Office report, May 13, 2010
• Congressional Research Service report, April 15, 2010
• Kaiser Family Foundation brief, April, 28, 2010

Most of us know at least one person who has been denied health coverage because they have diabetes, heart disease, high blood pressure, a history of cancer or some other pre-existing condition. Fortunately, federal health reform included “guaranteed issue and renewability,” requirements that insurers accept applicants regardless of medical condition; however, those policies only begin in 2014.

Between now and then, the federal government has allotted five billion dollars for individuals with one or more chronic conditions who have been uninsured for at least six months. California stands to receive $761 million per year from the federal government for coverage of this population throughout the state. The law allows states to set up new high risk pools, expand existing ones, or allow the federal government to assume the responsibility.

Read more on the high risk pool:
• ITUP's Analysis and Recommendations
• Federal Department of Health and Human Services Fact Sheet
• Questions About the High-Risk Pool from Kaiser Family Foundation
• Secretary of Health and Human Services Letter to Governors

In Sacramento, there are two bills are rapidly moving through the legislature that would establish a new pool. Assembly Bill 1887 (Villines) would allow California to draw down the $761 million starting July 1. A sister bill, Senate Bill 227 (Alquist) mandates that health plans notify denied individuals of the temporary high risk pool or pay a fee to support the pool. By allowing California to run it’s own high risk pool, the state can allow for a more local, appropriately tailored and controlled pool, while bringing in hundreds of millions of dollars to support the state’s high risk uninsured.

The Legislature is likely to vote on the bills in the next two weeks.

According to a new RAND study published Tuesday in the journal Health Affairs, the federal health reform law is the best and most politically feasible option to extend health coverage to the most Americans while keeping government costs low.

RAND researchers analyzed more than 2,000 policy scenarios that differed on elements such as income eligibility for Medicaid, the size of companies subject to the bill’s requirements and the penalties for companies and individuals not complying with the bill’s provisions. The researchers concluded that, “on balance, the new law appears to have landed on a distinctive plain of the policy frontier, where costs and coverage levels achieved were reasonable and passage of the law was politically feasible.”

Read more here.

First, some background... When President Obama signed the American Recovery and Reinvestment Act (aka the federal stimulus) early in his presidency, states got a fiscal boost due to an increase in FMAP. FMAP is the ratio that the federal government pays towards states' Medicaid programs.

For instance, prior to the stimulus, the FMAP for Medi-Cal was 50%. That is, for every $1 spent on our Medi-Cal program in California, the federal government covered 50 cents. After the stimulus, the federal share went up to 61.59%. This resulted in billions of dollars of savings for the state.

Yet, the new matching rate is set to expire on December 31. If it does, states in deep fiscal holes, like California, would be forced to make up the difference elsewhere -- either in cuts to other programs/services or increased revenue.

On May 28th, the House of Representatives approved an "extenders" bill for various programs, but omitted the FMAP extension provision in an effort to secure enough votes for passage.

Here's the good news... Today, California Health Line is reporting that the Senate plans to restore FMAP extension in the bill. This would mean California would receive the $1.5 billion in increased federal aid that Gov. Arnold Schwarzenegger assumed in his May revise proposal.

This is by no means a done-deal, but it is a promising sign for our state budget. Stay tuned...

As the summer warms up, California will be required to implement certain components of The Patient Protection and Affordable Care Act (aka "health reform").

By July 1, 2010, a temporary, high-risk pool must be established to provide coverage to uninsured persons with pre-existing conditions that are not able to acquire coverage in the private or individual market. The pool will be in place until 2014, at which point insurance companies will be required to cover the care of pre-existing conditions for both adults and children.

Responsibility for establishing the pool will likely be given to the Managed Risk Medical Insurance Board; MRMIB will either incorporate this new task as part of the high risk pool that it already runs, or MRMIB will be tasked with running a separate program, most likely established through passage of AB 1887 (Villines).

Health reform also requires that by September 23, 2010:
• children be allowed to stay on their parents’ health plan until age 26;
• children can no longer be denied coverage for pre-existing conditions;
• insurance plans can no longer impose lifetime caps or annual limits on coverage; and
• new plans must provide free preventive services to all enrollees.

To implements this, California must first ensure these policies are passed into state law. Right now, there are a few active bills that include these polices, including SB 1088 (Price) and AB 1602 (Perez) which is also one of the two flagship bills that establishes the California Health Insurance Exchange.

A great resource: the Georgetown Center for Children and Families has listed key health reform implementation dates on a really helpful one-page factsheet.

Stay tuned to the ITUP blog for more information and updates about California's early implementation of health reform.

Yesterday, Congress released a summary of the American Jobs and Closing Tax Loopholes Act (HR 4213), which contains a number of provisions related to health programs, to be considered by both houses next week. Here are the major health-related aspects:

-Extends eligibility for the 65% COBRA premium subsidy for individuals terminated from employment until December 31, 2010

-Creates a 3-year 'patch' for the scheduled Medicare physician payment rate (SGR) reductions

-Extends the enhanced Medicaid FMAP through June 30, 2011

-Expands the 340B discount drug program for low-income and uninsured individuals to include inpatient drugs

-Extends hospital geographic 508 reclassifications through FY2011

-Authorizes CMS to collaborate with the IRS to establish a data match to identify fraudulent providers

-Updates the method used to determine the localities used for Medicare’s physician geographic adjustment factor in California, utilizing an approach that is based on metropolitan statistical areas

Apparently responding to ITUP's call for action, Governor Schwarzenegger wholeheartedly pledged support today for implementing health reform in California. Stepping back from his previous inaccurate claims, he acknowledged that the costs to California are spread over multiple years and all the initial costs are fully federally funded. He also called for the formation of a health care reform task force. Here are a few quotes from the news conference:

"The bottom line is that the plan is not without flaws...but it is a good law. And it is the time for California to move ahead with it, thoughtfully and responsibly...if reform is to succeed, it is up to the states to make it happen."

"Today a lot of people (are) asking me, 'Why are you so adamant about health care reform and you are a Republican governor? That's not a Republican issue. Republicans don't like it. 'I say to them, well, the bottom line is I don't see it as a Republican issue or a Democrat issue," he said. "I think that everyone needs health care insurance. Everyone needs to be covered. Everyone ought to have access."

We applaud the Governor's initiative and look forward to working with him for the remainder of his term to maximize reform's implementation.

One of the major provisions in the bill is the establishment of state-run exchanges. Details of each exchange have been very much left up to the states and states have until January 1, 2014 to set up and launch their exchanges.

California is wasting no time getting started on this all-important task to sustain reform's momentum. Last week, AB 602 (Perez) was passed by the Assembly Health Committee and SB 900 (Alquist) was passed by the Senate Health Committee. Both contain the base of the language for establishing California’s Health Benefit Exchange. If enacted, the bill would go into effect starting in January 2011 and would give California three years to establish an exchange where individuals and small businesses can purchase health coverage.

AB 1602 (Perez) calls for the creation of an executive board, elected by the Governor and Legislature, to oversee the exchange. Like the Alquist bill, it gives the exchange the responsibility of screening individuals for public programs, enforcing the individual mandate, and acting as a prudent purchaser and identifier of affordable and quality plans. The bill also delivers on additional federal guidelines, including allowing dependents to stay on their parents’ insurance until age 26, eliminating lifetime limits, and prohibiting insurers from denying children based on pre-existing conditions.

The two bills will eventually be merged as they move through the legislative process (much like the federal House and Senate legislation). Follow the status of the bills and read their legislative language below:

SB 900: The California Health Benefits Exchange

AB 1602: California Patient Protection and Affordable Care Act

Want to be able to answer any question about the health bill? Well we have at last completed digging through the coarse legislative language of the entire Patient Protection and Affordable Care Act (2409 pages) and the Reconciliation Act (159 pages) to bring you our featured piece:

The ITUP Section-by-Section Guide to the Health Law

This summary will be an important reference for anyone interested in the many components of the law, and the table of contents will guide you to each major theme.

We have also begun our thought process on arguably the most important provision of the bill, the state-based health insurance exchange. Below are our initial notions as to how best to construct the California exchange over the next three years:

Designing Success for California’s Health Insurance Exchanges

Own a business?

Here is our overview of how the bill effects you.

At 2:35am ET, Republican points of order persuaded the Senate Parliamentarian to strike 16 lines from the Reconciliation Act that deal with technical aspects of federal Pell (education) grants. This afternoon, the Senate ended the amendment process and voted in favor of the Reconciliation Act 56-43. The changes mean the bill goes back to the House for a final (yes, FINAL) vote, expected to pass within the hour before Congress takes off for Spring recess. The vote will mark the end of an unprecedented effort...and the beginning of a new fight.

The law will be tweaked and re-worked for years to come, and many provisions will need to be defended from dismantling. As we have long advocated, coverage expansion is the first and foremost priority in health reform and at its core the law will finally bring the American health care system to near universal coverage, along with the rest of the industrialized world. The next three years of implementation will be crucial to set the foundation, particularly at the state level. Building blocks such as the 1115 Waiver will help bridge that coverage gap while also improving the safety net infrastructure. The unchecked growth in health spending will continue to be a burden on our economy, and though the new law begins to address rising costs we will undoubtedly be forced to meet the growth more head on. Long-term endeavors in cost-containment will take decades, but the short-term benefits of reform will be tangible for millions of Americans.

Today, the Senate takes up amendments on H.R. 4872, The Health Care & Education Affordability Reconciliation Act of 2010, with a final vote as early as tomorrow preceding the President’s signature. If even one word were changed, the bill would have to go back to the House for an additional vote on the new language. Republicans are expected to offer some 32 amendments this afternoon, though lawmakers could have hundreds more in waiting, as there is no rule on maximum number of amendments. Democrats will not offer amendments, and voting requires a simple majority for acceptance/denial.

Early reports show that some of the amendments are meant to put Democrats in an awkward position in voting ‘No,’ such as Senator Tom Coburn’s expected amendment to “prohibit coverage of Viagra for child molesters and rapists.” Most, though, will be challenges to budgetary aspects of the bill, where the Senate Parliamentarian could rule against any specific provision in the bill. The bill’s authors are certain that they have crafted the legislation to meet all budgetary requirements. Any changes shouldn’t be a major setback for the legislation as they would most likely not be substantial enough for House members to vote differently if needed, though the bill’s proponents would much prefer to have the Senate vote be the final chapter in this saga.

Here is our summary of the changes within the Reconciliation Act