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Health Reform: A California Perspective

Health Reform: A California Perspective. Insure the Uninsured Project ( www.itup.org ) September 3, 2009 Kaiser Family Foundation Washington, DC. The Uninsured in California Surveys. CHIS vs. CPS CHIS is a California specific survey of health insurance and health status.

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Health Reform: A California Perspective

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  1. Health Reform: A California Perspective Insure the Uninsured Project (www.itup.org) September 3, 2009 Kaiser Family Foundation Washington, DC

  2. The Uninsured in CaliforniaSurveys • CHIS vs. CPS • CHIS is a California specific survey of health insurance and health status. • According to CHIS (2007), about 5 million Californians are uninsured at a point in time and 6.5 million over the course of the year. • CPS is a national survey; a point in time response • The 2008 report found nearly 6.7 million Californians are uninsured over the course of the year. • The high unemployment due to the recession has increased this figure to over 7 million.

  3. The Uninsured in CaliforniaPopulations • 7 million uninsured (7th highest by percentage) • 55% between 18 and 40 years old • Young adults have highest uninsured rate at 25% • 61% have incomes under 200% FPL • 25% have incomes over 300% FPL • 85% are working or the spouses/children of workers • 15% are legal permanent residents • 64% are US citizens

  4. The Uninsured in CaliforniaPopulations

  5. The Uninsured in CaliforniaVariation by County *Residents under 65 with no health insurance at some point in 2006 Source: P. Reese, Interactive Map: Counties with the Most Uninsured, The Sacramento Bee, Aug. 16, 2009

  6. The Uninsured in CaliforniaVariation by Region • Regional variation in uninsured rate • Much poorer access to care • 49% report no usual source of care, compared to 6% of privately insured and 12% of publicly insured

  7. Private Coverage in California • 60% of Californians privately insured • Employer coverage • 70% of businesses offer coverage (63% nationally) • 3-9 employees: 60% offer coverage • 10-50 employees: 83% offer coverage • 27% of lower wage firms offer coverage • Rate of coverage shrunk by 4% from 2002-2008 due to high premium increases • Individual coverage • 2 million buy through individual market • Prices rising sharply and extent of coverage shrinking

  8. Public Coverage in CaliforniaMedi-Cal • Covers 6.8 million in 2009 • $40B in spending • $2,740 per beneficiary in FY 2006 (2nd lowest in nation) CA recently discontinued these services to adults: dental, vision, podiatric, hearing

  9. Public Coverage in CaliforniaHealthy Families/AIM • Covers 925,000 children • Over 70,000 on wait list and growing, with coverage terminations scheduled for November • $1.2B in spending • Subscribers choose among competing public and private plans

  10. Public Coverage in CaliforniaEligibility

  11. Building Blocks in CaliforniaMedi-Cal Managed Care Models

  12. Medically Indigent Adults (MIAs) • MIAs: adults not otherwise eligible for Medi-Cal • 1.5 million persons under 200% FPL • Medi-Cal coverage discontinued in 1982-3 • Counties are responsible for care • $1.8B in spending • $367 per uninsured person, compared to $4,900 average employment based coverage premium

  13. Medically Indigent Adults (MIAs)County Models

  14. California’s Flex Workforce • Temporary, seasonal, part-time, self-employed micro-businesses and contract workers (estimated 16% of workforce) • Child care, agriculture, real estate, construction, service industries • High rates of uninsured • 12% receive coverage through job • Industry wide coverage (Taft Hartley trusts, MEWAS) • Potential building blocks if financing for care to low wage workers can be accessed

  15. Underwriting and Purchasing Pools • 1992 reform, small employers (2-5o employees) • Guaranteed issue and renewal, age rating • 4 family sizes, 9 geographical areas • HIPC/PacAdvantage – purchasing pool fell victim to adverse selection • Individual market • High rate of denials, rescissions, and other practices • MRMIP - Bad risk pool for medically uninsurable • Enrollment frozen at less than 8,000 with over 170,000 eligible

  16. Cost Containment and HMOs • California: competitive model since 1982-83 • High HMO penetration (twice national average) • 50% of insured employees • 50% of Medi-Cal subscribers • CA changed from low priced to medium priced HMO market • Employer premiums increased 9.2% in 2008 (4.8% nationally) • Small employer premiums increased 30% more than large employers • Premiums increased 4X faster than inflation from 2002-2008 Competition resulted in lower costs in urban areas (SD, LA) but is not a viable strategy in rural and single-hospital regions

  17. The Safety Net

  18. The Safety NetDelivery System (2006) • Community clinics • Average 1 visit/uninsured • Range by county from 0.2 to 3 visits/uninsured • Counties • Pay or provide: (per 1000 uninsured) • 85 inpatient days • 90 emergency room visits • 900 outpatient visits • Eligibility limits for MIAs range from 63% to 500% FPL

  19. Uncompensated Care (2006) • Hospitals • $1.7B in bad debt/charity care to uninsured in 2006 (3.3% of expenses) • $2B in uncompensated care to Medi-Cal patients • Net operating losses of $2B (almost 4% of revenue) in 2006

  20. Uncompensated Care (2006) • Clinics • $231M in uncompensated care to uninsured (12% of expenses) in 2006 • DSH and supplemental payments • Public hospitals receive $1B in DSH, $578M in Safety Net Care Pool funds • Private hospitals receive $669M to offset uncompensated care

  21. Local Pilots • 10 counties using different designs targeted to most urgent local needs • $180M in competitive federal allocations • Children’s Health Initiatives (CHIs) for uninsured children

  22. Local PilotsCounty Examples

  23. Proposed Bi-Partisan ReformABX1 1 • Individual Mandate with hardship exclusions • Employer pay or play and required offering of §125 plans • Financing: individuals, employers, government and providers • Counties and federal government to pay part of coverage match for MIAs • Hospitals to pay part of match for rate increases and coverage expansions to the uninsured • MRMIB (state purchasing pool) to set benefits level

  24. Proposed Bi-Partisan ReformABX1 1 • Expand Medicaid to 150% FPL, CHIP to 300% FPL • Refundable tax credits on a sliding scale to 400% FPL through state purchasing pool (Exchange) • Require cost/quality transparency, P4P • Managed competition • Triggered repeal of reforms if costs exceeded revenues and the state government failed to balance the program’s deficit

  25. ObservationsITUP Board of Advisors

  26. RecommendationsITUP Regional Workgroups

  27. For resources and additional information we are available at (310) 828-0338 info@itup.org http://www.itup.org

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