Federal Health Care Proposals
The Congressional Budget Office has ‘scored’ or analyzed the costs and consequences of the proposed House of Representatives replacement for the Affordable Care Act (ACA). We can now see what will come.
First – it will cut 23 million people from coverage. This is on top of those already not covered totaling 51 million uninsured, the highest number in the history of health coverage.
Included in this number will be people with pre-existing conditions regardless of age. They will nominally have the ‘right’ to coverage but the removal of ACA-guaranteed community benefit costs – sick people are charged the same as healthy people – means premiums will skyrocket. Also there will be no required coverage for preventive or essential issues – gone are guaranteed coverage for maternity, mental health, substance abuse rehab, pediatric dental, physical rehab and home care – all would require cost increases.
Medicaid will be sharply reduced. Those receiving Medicaid (Medi-Cal in California) will be forced to work, despite the fact that they either cannot find jobs or are too unwell to perform them. That is rather the point of the program – to insure those who cannot otherwise do so themselves.
Andrew Dreyfus, president of Blue Cross-Blue Shield of Massachusetts decries this trend. (The Hill, May 31, 2017.) It may seem odd for insurance executives to be against higher premiums, but experience with ACA shows that while insurance company profits are much lower, the extension of coverage provides stability for both patients and for insurers. It’s also a moral good to make sure health is not another ‘wedge issue’ dividing our people.
The House bill also cuts subsidies for the middle class. These are what ACA offered to offset higher costs for the working families especially in the lower end of the earnings spectrum. Up to 250% of the Federal Poverty Level, not only was the premium subsidized, so were the out of pocket costs on copays and deductibles. That’s all gone in the House bill.
Should people now fall on hard times and have to drop coverage – which they may do with no penalty – if they renew it, they pay a ‘surcharge’ for non-insurance. This is the same ploy desired by Mercury Insurance on auto coverage that we, the voters of CA, turned down. The idea that being uninsured somehow requires you to pay more when you begin or renew insurance is outrageous. So if you have a pre-existing condition and renew your insurance, and you are lower income, you will probably have to choose between health care coverage and every other thing you need.
Most of the burden will fall on those getting older. It is a matter of fact that as we age, we may be healthy but can still have problems. Someone over 50 but not yet 65 for Medicare and earning $26,500 per year will see their premiums jump from $1700 per year to as high as $16,200 per the CBO scoring. Growing older is a great thing. It shouldn’t become an impossible one.
California Health Plans
In the May Revise (our non-grammatical, wonky term for the May revision of budget projections) the Governor did not make cuts in Medi-Cal before final decisions are made in Washington, DC on federal plans for health care.
Health advocates are urging the Governor and Legislature to use some of the tobacco-tax funds generated by Proposition 56 that we recently passed to expand or restore benefits to our state’s Medi-Cal program. Since this now covers single adults without children, a huge benefit to homeless and low-wage workers, and since many of them have smoking-related health problems, this is a good and consistent use of these funds. (Note- anecdotally it appears the higher tobacco tax is actually working. Smoking and other tobacco uses are on the decline among homeless people who just cannot afford it.)
Other plans include:
Expanding Medi-Cal to all income eligible young adults, regardless of immigration status building on the success of the #HealthforAllKids expansion last year. Young adults are often those who serve us in food handling and retail. Having them healthy keeps us healthy, too.
Restoring and improving Medi-Cal dental care.
Restoring other coverage removed in the 2009 budget cuts.
Expanding Medi-Cal eligibility for aged and disabled.
Increasing provider rates to improve access to Medi-Cal care.
Single Payer is Back
Last but not least – Single Payer, the long-debated and long-desired health coverage is back.
SB 562 (Lara and Atkins) would create a uniform body of coverage open to all people with no insurance companies and full access to any physician or health system in California.
The sticking point for years has been cost and coverage. Former Senator Sheila Kuehl had done an excellent analysis, but there were sticking points as well. He scaled cost (adopted by the Affordable Care Act) that based cost upon income was excellent, but the other taxes were not acceptable, such as the surtax on all estates regardless of amounts.
Now, however, Robert Pollin, an economist from University of Massachusetts-Amherst, has done an analysis that, while needing tweaking, seems to be solidly possible. While the entire cost of health care ranges around $400 billion, the actual amount needed to replace private premiums is $100 billion. That would come down, simplistically, to a 2.8% payroll tax for working people. This tax would replace premiums and be far lower for most people.
There are still difficulties, especially for organized labor and federal labor laws and for low wage workers who, under ACA paid much less, but overall the evaluation shows that single payer is within the grasp of possibility. A bigger problem may loom in the presumption that many federally funded programs will continue. If they do not, the cost evaluations will be massively out of balance. At this point, however, single payer appears to be a significant proposal with many benefits for everyone.
California is not yet facing serious problems in health care coverage. We will be working with you over the next months to make sure no one is sacrificed to a false fiscal austerity.
Next week we will post what is happening with the federal budget, and how it relates to the proposed cuts in health care. It’s not a pretty story, and it will require our full attention to prevent harm and promote good. This will be a challenging year for all of us.