CalPERS health premiums to leap again; expect private industry to follow
It’s known as the Patient Protection and Affordable Care Act – and its title begs the question: Why are insurance rates continuing to climb?
Federal health care overhaul to strain state, legislators told
Even after the federal health care overhaul is in place, 2 million Californians could still be left uninsured, and the budget-strapped state may find it difficult to absorb millions of others who will suddenly have coverage, experts told lawmakers Wednesday.
California has the nation’s largest population of the uninsured – 7 million people.
Many of the people without health coverage will choose not to buy it – despite penalties – or are in the state illegally and will not be eligible for subsidies and other government assistance, said Marian Mulkey, a senior program officer with the California HealthCare Foundation, during testimony before a joint session of the state Senate and Assembly health committees.
In addition to the 2 million people Mulkey estimated would continue to lack coverage, another 2 million poor Californians would likely receive it under an expansion of Medi-Cal eligibility.
While the federal government will pick up the tab for the 2 million additional enrollees, the state will nevertheless find itself financially stressed to pay for its share of existing enrollees, Mulkey said.
“We face ongoing challenges of maintaining the public programs that we have under the difficult budget challenges that we have,” Mulkey said in an interview.
Medi-Cal has been much maligned by health care providers and consumer advocates who say the program is inadequately funded.
Federal health care reform will help extend coverage to more people, Mulkey said, “but it builds on a pretty shaky financial foundation.”
On Friday, the Governor’s Office is scheduled to unveil its updated budget proposal, and health care advocates are bracing themselves for severe cuts to the state’s health care system.
Already, some experts say, California may lack the health care infrastructure – including doctors and clinics – needed to serve millions more people.
“Our health care system will be hard-pressed to deliver that care,” said David Maxwell-Jolly, director of the state’s Department of Health Care Services.
Insurers are scrambling to comply with key requirements of the federal legislation, including putting in place new insurance coverage standards.
Starting in September, insurers will no longer be able to rescind coverage or withhold coverage because of pre-existing conditions.
“We intend to be a constructive voice,” said Charles Bacchi, executive vice president of the California Association of Health Plans, “but will be warning you when policies have unintended consequences.”
Anthem uproar spurs call for closer look at California rate hike filings
Insurance Commissioner Steve Poizner says he had his suspicions from the start. In the end, an outside actuary found deep flaws in the rate filings submitted by Anthem Blue Cross.
Poizner says his department was just doing its job. But some consumer groups say it’s rare for insurers to get such a critical look, and they’re pressing for greater oversight.
“We want to make sure regulators review these things. … What happened there, with Blue Cross, is that they made some basic mistakes, and they probably didn’t think they were going to get all that much scrutiny,” said Michael Russo, a staff attorney for the California Public Interest Group.
“It shouldn’t take a once-in-a-lifetime confluence of circumstances – a massive premium hike, health care reform and public outrage – to bring the kind of scrutiny” health insurance rate filings are getting, Russo said.
The Department of Insurance received the rate filings in November of last year, an agency spokesman said, and requested additional information from the company in December. The agency decided to hire an outside actuary in January as Anthem Blue Cross began notifying thousands of subscribers about rate hikes – some as high as 39 percent.
Earlier this month, the department issued a report that showed Anthem’s rate filing was riddled with errors, including faulty math and bad assumptions. The insurer withdrew the filing and said it would submit a new one sometime this month.
“Anthem seemed to be expecting a rubber stamp,” said Anthony Wright, executive director of Health Access California. “We have a high-profile example with a rate filing with significant errors, and that should trigger other reviews.”
Assemblyman Dave Jones, D-Sacramento, has called on the the Department of Insurance to perform a comprehensive review of recent rate filings.
“Until the department hired a separate auditor, it apparently didn’t have any evidence of math errors” in the Blue Cross case, said Jones, who is running to become the next insurance commissioner. “It seems to me that it should be done more routinely.”
Darrel Ng, spokesman for the Insurance Department, said the department already “has a rigorous system in place to review rate filings.”
“Should our actuaries see red flags in current or future filings, we will subject them to this additional scrutiny of hiring an independent third-party reviewer.”
He said the department also reviews claims data to make sure insurers “pay their claims in a timely manner and accurately.” Its legal team also looks over the documents.
Even with more extensive reviews, the Insurance Department would still lack the authority to reject rate increases.
A coalition of 63 consumer groups have asked the federal government to intercede to give regulators authority to reject rate hikes they deem excessive.
In California, Jones is pushing a bill that would extend Proposition 103 to health insurers. The proposition was ratified by voters in 1988 and allows the insurance commissioner to review auto and property insurance rates.
Schwarzenegger eschews party line, backs health plan
Gov. Arnold Schwarzenegger again gave a rare Republican stamp of approval for federal health care reform Thursday, and said California will prepare to enact its sweeping changes.
“I’m not a party servant, I’m a public servant,” Schwarzenegger said to applause from doctors and others at the University of California, Davis, Cancer Center in Sacramento.
Schwarzenegger, who tried unsuccessfully to expand health insurance markets in the state, had supported President Barack Obama’s general efforts at health insurance changes.
But he also criticized the resulting bill that emerged from Congress, protesting that it was a “rip-off” for California and rewarded Nebraska – whose Democratic senator, Ben Nelson, had waffled on his support – with more Medicaid money than other states.
On Thursday, though, Schwarzenegger said he was ready to move ahead. The state, he said, will expand its high-risk pool insurance program – which currently covers about 7,000 people – using $761 million in federal funds California has allocated.
The governor also said he backs developing a state-managed exchange to give small businesses and individuals more options to purchase affordable insurance.
Schwarzenegger sent a letter to Health and Human Services Secretary Kathleen Sebelius pledging he will enforce new federal rules, including one allowing children to remain on policies until they are 26 years old.
Sebelius issued a statement in response, saying that “the governor deserves credit for his proactive work to help improve public health and prevent disease and illness.”
Eighteen states have objected to the bill as costly and an overreaching of federal authority, and filed suit.
The top GOP contenders to become California’s next governor, Meg Whitman and Steve Poizner, have both said they would work to repeal the health plan and replace it.
Schwarzenegger, who had national health insurance in his native Austria, compared some opposition to the plan to fears about Social Security that didn’t materialize.
“There are aspects of this bill that I don’t like,” Schwarzenegger said.
But he said “the federal government was sensitive about the ramp-up time,” which extends seven years.
State estimates are that the plan could eventually cost California $2 billion to $3 billion more a year, largely because of more Medicaid enrollment. But the first waves of insurance expansion are fully federally funded.
“When you don’t have health insurance and you go to a hospital, you are forcing other people to pay for your medical care,” Schwarzenegger said. “This is why I feel that the federal government has the right to force you to have a health care plan and to force you to pay for your own health care.”
Editor’s Note: This story has been changed from the print version to clarify that Schwarzenegger alone sent the letter to Sebelius. Corrected on April 30, 2010.
GOP engaging in ‘bogus talk’ on health care, Schwarzenegger says
Gov. Arnold Schwarzenegger talks to reporters outside the White House on Monday following a private meeting with President Barack Obama. The governor rejected GOP calls for Obama to start from scratch on health care.
WASHINGTON – While Republican leaders in Washington are urging President Barack Obama to start from scratch on a health care bill, California Gov. Arnold Schwarzenegger on Monday dismissed the idea as “bogus talk.”
It marked the second day in a row that Schwarzenegger strayed from his party’s positions.
On Sunday, he defended Obama’s economic stimulus plan and chided elected officials, most of them Republicans, who oppose the overall stimulus but are quick to trumpet individual projects in their states that are paid for by the stimulus.
Standing outside the White House after meeting privately with Obama on Monday, Schwarzenegger touted the economic stimulus plan yet again.
“I think the stimulus package has been very successful so far, and I think California has benefited tremendously,” he said.
Schwarzenegger also said it’s good that the president is reaching out to Republicans as he prepares for this week’s health care summit with congressional leaders.
“Since half of the people are Republicans, why would you exclude Republicans?” he asked. “Then half of the people hate you for having done health care reform.”
He sided with Obama on the question of the starting point for the talks, saying it would be wrong to begin all over in preparing health care legislation for Congress to consider.
“I think any Republican that says you should start from scratch, I think that’s bogus talk, and that’s partisan talk,” the governor told reporters.
Obama met with the governors as a group Monday morning. Schwarzenegger was the only governor to get a private meeting later with the president.
Schwarzenegger said he discussed a wide array of issues with the president, including roads and bridges, high-speed rail, education and creating new tax incentives for energy- efficient homes.
But he said the economy was the top issue.
“It was truly encouraging to see him being so interested in talking about job creation being his number one priority,” Schwarzenegger said.