State Budget Gives Health Care to Some Undocumented Immigrants. Arambula Wants to Go Further

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Source: The Sacramento Bee

Assemblyman Joaquin Arambula intends to continue pushing to expand health care options for all undocumented immigrants in California even though the state’s new $214.8 billion budget provides coverage to a fraction of them.

Arambula’s comments this week were among the first he’s made publicly since returning to work in Sacramento following his May trial in Fresno, where a jury found him not guilty of child abuse charges.

The Legislature on Thursday passed a $214.8 billion budget deal that includes $98 million to expand Medi-Cal to young undocumented adults, 19 up to 26, in the upcoming fiscal year. Gov. Gavin Newsom now has 12 days to sign or veto the bill. He can also nix parts of the budget through line-item vetoes.

The state already provides health care coverage to children under the age of 19 through legislation passed in 2016.

In early December, Arambula introduced a bill that would go further by expanding Medi-Cal coverage to all adults, regardless of immigration status.

Assembly Bill 4 made it through the Assembly, and earlier this month, was referred to the Senate’s committee on health.

But the Legislative Analyst’s Office had estimated the Medi-Cal costs to be as much as $900 million in fiscal year 2019-20. It could cost between $3 billion to $3.2 billion in general funding annually going forward, according to an Assembly Appropriations Committee analysis of the bill. There’s a companion bill in the Senate, SB 29.

Arambula said it’s estimated that one in every five residents in 31st District — which covers Fresno, Kerman, Firebaugh and Coalinga — are undocumented.

AB 4 is still moving through the legislative process, but it wasn’t included in the budget approved by lawmakers.

Despite the fact that lawmakers have already included health care for some undocumented immigrants in the budget, it’s not the end of AB 4 or Arambula’s effort to extend health care to all undocumented immigrants.

AB 4 will likely come up in policy discussions at the end of this month, and Aramubla said he will continue the debate. The bill could be amended as it continues to move forward, and Arambula said he “will work hard to get a version” through the Senate.

“But we don’t know its final version or outcome yet,” he said. “In someways, I’ve learned to take it a step at a time, and our big goal at the moment was to secure the funding for the 19-25 year-olds.”

If the bill dies this session, the lawmaker said, he’ll remain hopeful. Arambula in 2018 introduced Assembly Bill 2965, which would have also offered health care to all adults. “I plan to bring the bill back until we are able to achieve universal coverage,” he said.

The appropriations committee’s analysis estimated that out of the state’s 1.8 million undocumented adults, under AB 4 some 1.26 million of them would be eligible for Medi-Cal coverage, since income eligibility is a factor.

Securing funding to expand health care for young undocumented immigrants is a “good down payment and allows thousands of people in the Central Valley” to have access to health care — individuals who otherwise could not, he said.

“I want to be appreciative that we were able to take this first step,” he said.

Meanwhile, Arambula said he’s received a “warm reception” from his colleagues in the Capitol, and his family is also leaving the recent court case behind them. “My family is actually doing quite well — we really are,” he said.

California Relies on Federal Funds to Expand Undocumented Health Coverage

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Source: Politico

California is poised to adopt a sweeping health care expansion that extends full Medicaid benefits to undocumented young adults — with the expectation that the Trump administration will foot some of the bill despite the president’s aggressive stance against illegal immigration.

California will soon become the first state in the nation to provide full publicly financed health coverage to a segment of undocumented adults, a critical component of Gov. Gavin Newsom’s long game to create a universal health care system in the nation’s most populous state.

Federal law generally prohibits states from using federal funds to pay for undocumented health coverage. But California officials say they have a way to offset about a quarter of the expansion cost using Medicaid dollars — nearly $24 million of the $98 million price tag in the first year.

Federal law allows state reimbursement for emergency and labor and delivery care for undocumented immigrants, dating back to a 1986 law intended to prevent hospitals from dumping patients on the street.

California plans to bill the federal government for those services for an estimated 90,000 new undocumented enrollees age 19 to 25 in Medi-Cal, the state’s Medicaid program, according to Department of Finance spokesperson H.D. Palmer. The state will pay for a richer suite of Medi-Cal benefits on its own, including preventive and primary care, prescription drugs and hospitalizations.

The price tag will grow in future years, with total program costs projected at $315 million in 2021. California will pay most of that — $247 million — but bill the federal Centers for Medicare and Medicaid for the remainder. Those costs could rise and fall with changes in projected caseload and the use and intensity of services as more undocumented adults become eligible, according to the Newsom administration.

California officials are so certain that they’re on firm ground that Palmer said if the federal government were to object, “Congress would have to overturn federal law that has governed this issue and been on the books since 1986 under the Reagan administration.”

CMS confirmed Friday that California’s approach appears to be legal as long as the state adheres to existing requirements in Medicaid law. Spokesperson Johnathan Monroe told POLITICO that “illegal immigrants who otherwise meet the requirements for Medicaid in any state are entitled to receive services necessary for the treatment of an emergency medical condition, which includes labor and delivery for illegal immigrant pregnant women.”

The federal government already covers a portion of the overall cost of the state’s expansion of full-scope Medi-Cal to undocumented immigrant children through age 18, a program that started in 2016.

The consensus among Newsom administration officials and health policy experts interviewed by POLITICO is that the state is well within its existing authority to use federal money to cover a portion of Medi-Cal costs for undocumented young adults. But the state must be careful to only seek federal reimbursement for emergency services and labor and delivery care, said Cindy Mann, who served as the federal Medicaid director under former President Barack Obama from 2009 to 2015.

“There is a federal part, but it’s no different than what exists today,” she said. “People who would otherwise be eligible for full-scope Medicaid but aren’t because of their immigration status, the federal government pays for emergency Medicaid — emergency hospitalizations and labor and delivery.”

California health officials “have to establish, to the satisfaction of the federal government, that they are only paying for emergency Medicaid services,” Mann added. “The state is absolutely responsible for assuring that only the appropriate claims get sent to the federal government … . If they submit a claim and CMS says it’s improper, CMS will recoup those dollars.”

Carter Price, a senior mathematician and federal Medicaid expert with the RAND Corporation, a Washington, D.C.-based think tank, said California stands out as a state that’s willing to test the boundaries of the low-income health benefit. Outside California, five other states and the District of Columbia have expanded their Medicaid programs to cover undocumented children, according to the National Conference of State Legislatures.

“Folks are going to receive health care one way or the other,” Price said. “It’s fighting over how it’s paid for.”

Still, California could face political backlash from the Trump administration or the president himself, said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation. The president has sought to undo Obamacare, impose Medicaid work requirements and stem the flow of immigrants into the country — most recently by threatening tariffs with Mexico.

Even more directly, Trump last year proposed a “public charge” rule that would penalize green card applicants who have used public services, including Medicaid.

“This is now a different political context with immigration being such a flash point nationally and California stepping out in front and expanding coverage for undocumented immigrants,” Levitt said. “Between the governor and the attorney general, California has certainly been a thorn in the side of the Trump administration … and they have staked out positions themselves as public opponents, so I could imagine the Trump administration using this to score political points.

“But it’s not clear to me how there could be retribution,” he said.

Because the Trump administration doesn’t consider the portion of expanded health care services it’ll pay for a new entitlement, it appears California is safe from Trump administrative backlash. But not from the wrath of his 2020 campaign, considering his rapid response director, Andrew Clark, lashed out Monday on Twitter against California Democrats for “providing health care to illegal immigrants” and “taxing people (legal residents!) who don’t have health insurance.”

Newsom, in an exclusive interview this week with POLITICO, said that kind of attack doesn’t bother him.

“I’m sure rhetorically he’ll have at it, but so what,” he said. “I have no doubt that someone who doesn’t believe in expanding health care would be opposed to a state that is … . If I’m going to be worried about Donald Trump’s feelings, and Tucker Carlson’s feelings and Fox News’ feelings, then I won’t be taking care of the people in this state and I won’t be doing justice to this position and to millions of Californians that will benefit because of our health care expansions.”

Democrats argue that universal health care, including coverage for undocumented residents, will ultimately help control rising costs by reducing expensive emergency room visits and ensuring a healthier population.

But legislative Republicans said they’re concerned about using taxpayer dollars for non-citizen health care and how Trump may respond to being an unwilling participant in California’s Medi-Cal expansion to undocumented immigrants.

California still needs federal approval for expansions of opioid treatment and optional Medi-Cal benefits previously cut during the recession. Higher Medi-Cal provider payments also require federal signoff, as does a $63 million proposal to provide free coverage for low-income seniors, half funded by the federal government.

The state also plans to ask CMS to approve an extension of its managed care organization tax and, come 2020, a new Medicaid waiver to administer a broad range of health care, mental health and homelessness prevention innovations. Those are worth billions of dollars.

“There’s a lot of concerns that with the ongoing political battles between the Newsom administration and the Trump administration, that money gets pulled back, which would have further adverse effects that could cause more pressure on the general fund,” said Assemblyman Devon Mathis (R-Visalia). “We’ve seen this happen in recent months with high-speed rail. Ultimately what happens is our citizens and their families are the ones that suffer.”

AHA Among Groups Opposing Price Transparency in Info-Blocking Rule

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Source: Modern Healthcare

Healthcare groups including the American Hospital Association came out strong against a suggestion that the Office of the National Coordinator for Health Information Technology require providers to disclose price information as part of its proposed rule.

The ONC in February released its long-awaited information-blocking proposal as a companion to the CMS’ interoperability proposed rule. The ONC’s rule outlines how regulators will require providers to share health data with patients, as well as steps to discourage healthcare organizations from creating barriers to data exchange.

But what data is included in that mandate has proved a point of contention.

In its proposal, the ONC asked stakeholders to weigh in on whether providers should offer patients information on how much they would be charged for certain services. “ONC has a unique role in setting the stage for such future actions by establishing the framework to prevent the blocking of price information,” the rule reads.

However, adding price information to the broader umbrella of health data that’s required to be shared with patients would go “well beyond what Congress intended and would seriously harm patients, hospitals and other healthcare providers,” the AHA wrote in a letter to the agency, arguing that the mandate extends past the goals of the 21st Century Cures Act. The data-blocking rule was a provision of the 21st Century Cures Act.

One of the AHA’s concerns is that publicly sharing price information would disrupt negotiations with payers.

Blue Shield of California raised a similar concern in a letter to the ONC, suggesting the agency should solely focus on providing patients with information on out-of-pocket costs, rather than on providers’ negotiated rates with health plans.

“We urge ONC to ensure any future proposals related to pricing information exclude plans’ proprietary pricing information and protect market negotiations between health plans and providers,” the health insurer wrote.

Other groups were more supportive of the idea, although they requested the ONC separate any rulemaking on price information from the information-blocking proposal.

The federal Health Information Technology Advisory Committee in May cautioned that tying price transparency to the information-blocking proposal would have an “unintended consequence of slowing down the finalization of the current ONC rule,” and recommended the ONC convene a price-transparency task force to consider the idea.

“As a task force, we absolutely agreed that we want to enable price transparency,” Andrew Truscott, co-chair of HITAC’s information-blocking task force and Accenture’s managing director for health and public service, said at the May meeting. “We believe that (price transparency) needs to be given a focus.”

Software company Wolters Kluwer voiced a similar sentiment in a letter to the ONC.

“We generally support including price information within the scope of (electronic health information) for purposes of information blocking, but not in the short-term,” the company wrote, noting price information is difficult to calculate, as it it requires knowing details of an individual patient’s insurance status.

“Factors such as insured status, in-network status, insurance deductibles, insurance co-pays and co-insurance add significant complexity to presenting usable information on price and until those factors are adequately addressed, it makes little sense to include price within the definition of EHI,” Wolters Kluwer wrote.

However, a review of individual comments submitted to the ONC—many of which come from patients sharing stories about expensive medical treatments—suggested there is demand for improving how providers share information on price. One submission from an anonymous commenter simply reads: “We want price transparency!”

Holy Name Medical Center in Teaneck, N.J., also expressed support for the inclusion of price information, arguing that current guidelines related to chargemaster prices are “woefully insufficient” as “the public should have the right to see which hospital systems and healthcare providers are driving higher costs.”

“The current healthcare market is a complex system of secret deals and discounts between insurance companies and healthcare providers,” the hospital wrote to the ONC. “In order to truly lower costs for consumers, we need greater transparency in the marketplace.”

As More California Kids Drop Medi-Cal Coverage, Experts Seek Answers

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Source: California Health Report

More than 150,000 California children dropped out of federally funded health insurance programs in 2018, a trend some experts blame on the Trump administration’s anti-immigrant policies and efforts to upend the Affordable Care Act.

Enrollment in California’s low-income health program, called Medi-Cal, and the low-cost Children’s Health Insurance Program (CHIP) dropped 3 percent in 2018, according to a report by the Georgetown University Center for Children and Families. That’s a total of 152,515 children leaving the two programs.

The enrollment drop follows stagnation in California’s uninsured rate among kids in 2017, reversing years of growth in health coverage rates following implementation of the Affordable Care Act.

It’s not yet clear whether these children have lost health insurance coverage altogether, or enrolled in private insurance plans. Health policy advocates and the report’s authors say it’s likely that at least some of decline is a result of wary immigrant families pulling eligible children out of government health insurance programs. Federal attempts to undermine Affordable Care Act reforms, such as by removing the individual mandate for people to enroll in health insurance, may also play a role, they said.

“The loss is alarming,” said Michael Odeh, health policy director for Children Now, a children’s health advocacy group. “We’ve seen an uptick in the number of uninsured kids from other data, so this declining enrolment and lowering of participation in Medi-Cal is truly concerning.”

California’s loss of young Medicaid and CHIP enrollees is part of a national trend. Across the country, more than 820,000 children left the programs last year, the Georgetown report found.

The California Department of Health Care Services attributed the decline to improvements in the economy and the state’s low unemployment rate. In a statement, department spokesman Anthony Cava said it’s likely more families are gaining job-based health insurance and earn too much to qualify for Medi-Cal.

“Medi-Cal enrollment is typically counter cyclical.  During economic downturns, enrollment rises as individuals may see declines in income and/or the loss of jobs that provide for health care coverage. This can create a demand for Medi-Cal coverage,” he wrote. “Conversely, during economic expansions, the demand for Medi-Cal coverage declines, as job opportunities and incomes increase.”

But report co-author Edwin Park, aresearch professor at Georgetown University’s McCourt School of Public Policy, said economic growth is not enough to explain the drop in enrollment. Although enrollment in Medi-Cal and CHIP typically slows during a strong economy, it’s unusual for it to go down, he said. What’s more, the loss of children in the programs is happening across the country, even in states where the unemployment rate is stagnant or has increased, Park added.

“There weren’t any particularly noteworthy changes in economic indicators in (2018) that could explain a sudden reduction in the number of people eligible or a big increase in alternative forms of coverage like employer-sponsored insurance,” he said.

Pending bills in the state legislature to reinstate the individual mandate and to make health insurance more affordable could help keep more children insured, Park said. The state should also double down on outreach to low-income and immigrant families to reassure them it’s safe to enroll their children in Medi-Cal and to educate them on the benefits of having health care, he and Odeh said.

Nevertheless, Park said the data shows California can “only do so much,” in the face of hostile federal policies.

“The national headwinds were hard and likely were contributing to the Medicaid and CHIP enrolment decline in 2018,” he said.

Kids without insurance “may end up in poor health, do worse in school and over the long term have poorer health and other life achievement outcomes than they would if they had health coverage,” he said. “These are all very troubling, worrisome signs.”

California OKs Health Care for Some Adult Immigrants

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Source: Associated Press

Some low-income adults in California living in the country illegally will soon get their health benefits paid for by taxpayers.

Democrats in the state Legislature on Sunday agreed to make adults between the ages of 19 and 25 eligible for the state’s Medicaid program. Not everyone will get those benefits, only people whose incomes are low enough to qualify for the program. State officials estimate the program will cover an additional 90,000 people at a cost of $98 million.

“California believes that health is a fundamental right,” said state Sen. Holly Mitchell, a Los Angeles Democrat who led the budget negotiations.

The move continues to stake California’s position as a bulwark against the policies of Republican President Donald Trump. While the Trump administration has worked to weaken the health care law signed by former President Barack Obama, the budget agreement approved Sunday and expected to pass the state Legislature later this week would strengthen California’s commitment to the law known as the Affordable Care Act.

In addition to covering some adults living in the country illegally, California’s proposed $213 billion budget would make the state the first in the country to help families earning as much as six times the federal poverty level pay for their monthly health insurance premiums. That means families of four earning $150,000 a year would be eligible for help of about $100 a month.

But to pay for part of it, the state will begin taxing people who don’t have health insurance. It’s a revival of the individual mandate penalty that had been law nationwide under Obama’s health care law until Republicans in Congress eliminated it as part of the 2017 overhaul to the tax code.

Republicans on the legislative committee negotiating the budget voted against the proposal, arguing it was not fair to give health benefits to people who are in the country illegally while taxing people who are here legally for not purchasing health insurance.

The budget agreement still must be approved by the full state Legislature. State law requires lawmakers to enact a budget by midnight on June 15. If they don’t, lawmakers would lose their pay. Democratic Gov. Gavin Newsom has 12 days to act on the budget once lawmakers pass it. In a news release, Newsom said the budget initially approved by lawmakers on Sunday is balanced and “creates historic reserves” and said he looks forward “to continuing to work with the legislature.”

The health care proposals are a win for first-term Democratic Gov. Gavin Newsom, who proposed both of them. Several lawmakers in the Democratic-dominated state legislature wanted to go further by offering health coverage to all adults living in California illegally. But Newsom opposed that, noting it would cost $3.4 billion.

Newsom did not get everything he wanted in the deal. Advocates say more than 1 million people in California don’t have access to safe drinking water. Newsom had proposed a 95-cent tax on most residential water bills as well as fees on dairies, animal farms and fertilizer sellers, to help water districts pay for improvements and boost supplies.

Lawmakers rejected the tax, arguing it was too burdensome in a year when the state is projected to have a $21.5 billion surplus — the largest in at least 20 years.

Instead, lawmakers decided to use $130 million in existing tax revenue to pay for the drinking water improvements. Most of that money — about $100 million — would come from the state’s sale of carbon credits as part of its “cap and trade” program. The move means the state’s agricultural industry, whose pollution is often blamed for the drinking water problems, would have about $100 million less than it normally gets from the program for various projects.

Newsom also wanted to spend an additional $800 million to boost the annual tax refunds for low-income people who have at least one child under the age of 6. But to pay for it, he wanted to selectively adopt some of the changes to the federal tax code that Trump signed into law in 2017. The changes, which would mostly impact businesses, would have brought the state an extra $1 billion.

But the legislature did not include the tax changes in its version of the budget proposal. Instead, lawmakers said they hope to reach a tax agreement outside of the budget process by July 1.

Government Health Insurance Systems Pose Serious Risks to Americans

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Source: The Hill

As proponents of Medicare for All struggle to defend their plan to repeal the foundations of American health care — including employer-provided coverage, Medicare, Medicaid, the Affordable Care Act (ACA) and the Children’s Health Insurance Program (CHIP) – and replace it all with a costly, one-size-fits-all, government-run, health-care system, many are claiming that a majority of Americans support their scheme. For example, in a recent opinion piece published by The Hill, George Goehl writes that “across party lines, a majority of Americans are in favor of Medicare for All.”

This claim is misleading at best, as polling makes clear that many Americans are not aware of what “Medicare for All” actually is, and when they are informed of what it means for them, a majority oppose it. In fact, a national poll conducted by the Kaiser Family Foundation earlier this year found that 70 percent of Americans oppose Medicare for All when they learn it would “lead to delays in some people getting some medical tests and treatments,” while 60 percent oppose it when they learn it would threaten the already at-risk Medicare program.

Sixty-percent also oppose the government-run system when they learn it would force most Americans to pay more in taxes, while 58 percent oppose it when they learn it would eliminate employer-provided and other private coverage.

Another national survey by Kaiser shows that most Democrats and Democratic-leaning independents “say they want Democrats in Congress to focus their efforts on improving and protecting the ACA” rather than passing Medicare for All. This should come as no surprise, as Democrats flipped the House last November in large part by focusing on strengthening the Affordable Care Act and protecting Americans with pre-existing conditions, not on upending our entire system.

Meanwhile, the nonpartisan Congressional Budget Office (CBO) recently reported that under Medicare for All, “patients might face increased wait times and reduced access to care,” and such a system “could also reduce the quality of care,” while “[t]he number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities.”

They have also confirmed that Americans “would not have a choice of insurer or health benefits,” and that Medicare for All “might not address the needs of some people.” A one-size-fits-all system, they confirm, “would significantly increase government spending and require substantial additional government resources,” which would mean significant tax increases for working families.

In the wake of last month’s House Budget Committee hearing on the impacts of a one-size-fits-all government-run health care system, it’s clear that many lawmakers on both sides of the aisle are taking experts’ warnings and the public’s opposition seriously.

Assessing the bill’s prospects, Bloomberg reported that Medicare for All “is hitting serious obstacles in the U.S. House … [and] the effort appears unlikely to go much further,” as the legislation “hasn’t gained much support since its release in February,” while POLITICO reported that “House Democratic leaders, who worry Medicare for All could hurt the party with moderate voters, have allowed hearings on the plan, but they haven’t committed to floor votes.”

That’s good news for patients, families and taxpayers, but Americans should be aware that other, so-called “moderate” proposals — like “buy-in” or “public option” systems — would also cost taxpayers’ hard-earned money, put families’ access to and quality of care at risk, and ultimately lead to the same unaffordable one-size-fits-all system they reject.

These new government-run insurance systems are intentionally designed to be “stepping stones” to one-size-fits-all health care — a fact acknowledged even by those in favor of such proposals, including one U.S. Senator who admitted it would cause the “slow death” of employer-provided and other private coverage and serve as an “on ramp to a single-payer system.”

Recent research provides important insight into the negative impacts a new government insurance system would have on Americans’ access to quality care. One study found that hospitals “could face financial peril,” and its affects could even “force the closure of essential hospitals,” while another study found that a government insurance system like “buy in” or a “public option” would “compound financial stresses [hospitals] are already facing, potentially impacting access to care and provider quality.”

In the end, these risky government insurance systems would cause Americans to pay more to wait longer for worse care.

Families, patients and taxpayers shouldn’t be forced to suffer these consequences – and with roughly 90 percent of Americans now covered, there are far more sensible ways to extend coverage to millions more. Rather than embracing costly proposals like these, which would upend our care and start over from scratch with a one-size-fits-all government-run system, our leaders should be building upon what works in American health care, while coming together to fix what doesn’t.

California Gov. Newsom Proposes Penalty To Fund Health Insurance Subsidies

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Source: Kaiser Health News

Claire Haas and her husband are at a health insurance crossroads.

If they were single, each would qualify for a federal tax credit to help reduce the cost of their health insurance premiums. As a married couple, they get zip.

“We talk about getting divorced every time we get our health care bills,” said Haas, 34, of Oakland, Calif. She has been married to her husband, Andrew Snyder, 33, for two years.

“We kind of feel like we messed up. We shouldn’t have gotten married.”

The couple pays about $900 in monthly premiums — which adds up to about 14% of their annual income, said Haas, a self-employed leadership coach and consultant. Snyder is an adjunct professor of ethnomusicology.

Under a proposal by Gov. Gavin Newsom, an estimated 850,000 Californians could get help paying their premiums, including people like Haas and Snyder, who together make too much to qualify for federal financial aid but still have trouble affording coverage.

To pay for the health insurance tax credits, the Democratic governor is proposing a tax penalty on Californians who don’t have health insurance — similar to the unpopular federal penalty the Republican-controlled Congress eliminated, effective this year.

If Newsom’s $295 million plan is enacted, California would be the first state to offer financial aid to middle-class families who have shouldered the full cost of premiums themselves, often well over $1,000 a month.

“This is a gap in the Affordable Care Act, but there’s been no action at the federal level,” said Matthew Fiedler, a fellow with the USC-Brookings Schaeffer Initiative for Health Policy.

Democrats in Congress introduced legislation this year to expand the federal subsidy to more people, but those efforts have stalled in the past in the face of Republican opposition.

In California, legislators are debating Newsom’s penalty and tax credit proposals as part of budget negotiations, which must be wrapped up by June 15. Democrats control the legislature, but Republicans and taxpayer groups are opposed to the proposed penalty, saying people should have a choice about whether to buy insurance.

“It’s a very costly and regressive tax on young people who can’t afford it,” said David Wolfe, legislative director of the Howard Jarvis Taxpayers Association. “They likely aren’t going to get sick, and they want to take that chance.”

Three other states — Massachusetts, New Jersey and Vermont — and the District of Columbia already have adopted state health insurance requirements. Health experts say these mandates encourage young, healthy people to buy coverage alongside older, sicker — and more expensive — enrollees.

If lawmakers approve a state tax penalty, modeled after the now-defunct ACA mandate, some Californians could owe thousands of dollars if they fail to buy insurance.

“Without the mandate, everybody’s premiums go up,” Newsom said at an event in Sacramento in early May. “Every single person in this state will experience an increase in their costs if we don’t have a diversified risk pool.”

Massachusetts and Vermont provide state financial aid to low-income people who qualify for federal aid under the ACA, according to the USC-Brookings Schaeffer Initiative for Health Policy. Newsom wants to go a step further and give financial help to middle-income earners — which could include families of four earning up to about $154,500.

Under his proposal, 75% of the financial aid would go to about 190,000 of these middle-income people who make between 400% and 600% of the federal poverty level. That’s between about $50,000 and $75,000 a year for an individual and between about $103,000 and $154,500 for a family of four.

The average household tax credit in this category would be $144 per month, according to Covered California.

The remaining money would go toward tax credits for about 660,000 people who earn between 200% and 400% of the federal poverty level, or roughly between $25,000 and $50,000 for an individual and $51,500 and $103,000 for a family of four. The average household tax credit in this category would be $13 a month, Covered California estimated.

Exactly how much Californians could receive would vary depending on where they live, their ages, incomes and family size, said Peter Lee, Covered California’s executive director.

For example, a couple, both 62, living in the San Francisco Bay Area making $72,000 a year doesn’t qualify for federal tax credits. They now pay a $2,414 monthly premium — or about 40% of their income.

That couple could qualify for a $1,613 state tax credit under Newsom’s proposal, lowering the cost of health insurance to about 13% of their income, according to a Covered California analysis.

By comparison, the ACA defines an affordable employer-sponsored health plan as one that costs about 9.5% or less of an employee’s household income.

California’s high premium costs are among the biggest concerns middle-income customers raise with Kevin Knauss, an insurance agent in the Sacramento region.

“I have clients, especially those who are self-employed, who have literally discussed the possibility of not working for two or three months or stepping back from projects” so they can earn less and qualify for federal tax credits, Knauss said.

Other insurance agents said they’ve met middle-income families who are willing to forgo insurance for one family member — often the breadwinner — to bring down costs.

Alma Beltran, a small-business owner in Chula Vista, Calif., doesn’t have health insurance, and neither do her husband and 17-year-old daughter.

Beltran knows it’s a risk but said the premiums this year were simply unaffordable: $1,260 a month for a plan with a whopping $13,000 deductible.

“I decided to let my business grow at the expense of my health insurance,” said Beltran, 53, who manufactures labels for the beer and wine industry. “This is the first year ever that I haven’t had health insurance.”

Such stories are why some lawmakers think Newsom’s proposal doesn’t go far enough. For instance, some households wouldn’t qualify for a state tax credit until they spent a quarter of their income on premiums.

“We’re still talking about a substantial portion of someone’s income,” said state Sen. Richard Pan (D-Sacramento). “I appreciate the governor’s leadership, but I think that we do need to more.”

The state Senate wants the governor to double the funding to about $600 million, not only by relying on the penalty revenue but by dipping into the state general fund. California is projected to have a $21.5 billion budget surplus for budget year 2019-20.

While Newsom said he supports giving consumers larger subsidies, he said his plan is fiscally responsible because it has a dedicated revenue source from the proposed health insurance penalty.

“Perfect’s not on the menu, but better than any other state in America is,” Newsom said.

Health Tax Splits California Amid Need for Trump’s Approval

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Source: New York Times

California lawmakers are headed toward a confrontation with Gov. Gavin Newsom over whether to keep a tax that can generate nearly $2 billion for low-income health benefits but means approval from the Trump administration amid a feud between state and federal officials.

Senate and Assembly budget committees finished their versions of the $214 billion annual budget this week and want to keep a tax on managed care organizations. The companies manage Medicaid plans in California, the joint federal-state program that provides health coverage for the poor and people with disabilities.

California uses the money from those taxes to pay its share of Medicaid costs, which then trigger payments from the federal government. When fully implemented, the tax saves the state about $1.8 billion.

The tax is set to expire June 30, and California needs permission from the federal government to keep it. Newsom is worried that might not happen and did not include it in his budget proposal.

California has a rocky relationship with President Donald Trump’s administration. The state is poised to extend Medicaid to cover some adults in the country illegally , which goes against Trump’s immigration policy.

State Attorney General Xavier Becerra also has filed at least 50 lawsuits challenging the administration’s executive actions and policies. And the federal government last week canceled more than $1 billion it had promised to help California build a high-speed rail network.

“I thought it would be imprudent to include it until we had more confidence,” Newsom said of the tax.

Lawmakers disagree, noting that the federal government already has approved a similar tax for Michigan.

“Closed mouths don’t get fed, as my father used to say,” said Holly Mitchell, a Los Angeles Democrat who heads the Senate Budget and Fiscal Review Committee. “I couldn’t support not trying, based on an assumption because (Trump) changes his mind apparently every day.”

The tax is unusual because many managed care organizations want to keep paying it. The money they send to the state is used to draw down federal cash that’s sent back to them for providing coverage to Medicaid recipients.

“The stakes are too high for (the tax) to be disapproved or rejected,” said Brianna Lierman, CEO of Local Health Plans of California, which represents managed care organizations. “We agree with and support the cautious approach to both structuring this tax and seeking approval for it. There is just too much to lose.”

The Senate and Assembly will begin budget negotiations with Newsom next week. Lawmakers adopted his revenue projections, which call for a $21.5 billion surplus, the largest in at least 20 years. Lawmakers must pass a budget by June 15 or they stop getting paid.

The two legislative versions have vastly different health care proposals.

The Senate, following Newsom’s lead, wants to tax people who don’t have health insurance and use that money to help middle-income families pay their monthly insurance premiums.

The Assembly did not include money for that, with budget chairman Phil Ting saying representatives preferred to consider those options later this year. Advocates worry that would significantly delay new benefits.

The Senate also wants to expand Medicaid to include adults in the country illegally if they’re between the 19 and 26 or at least 65 and older. But the Assembly only included money to cover young adults.

“Whenever you do a budget, there are thousands of phenomenal proposals that just don’t make it in. And it’s not that we don’t care, it’s really because we couldn’t quite make room,” said Ting, a San Francisco Democrat.

Another issue dividing lawmakers and the governor: How to improve the state’s drinking water.

Health advocates say more than a million people in the state don’t have access to clean drinking water because of problems with public water systems.

Newsom proposed a 95-cent tax on most residential water customers to help pay for improvements.

The Senate rejected the tax but recommended spending $150 million a year in existing tax dollars to make the improvements. The Assembly did not include any money for it, deferring the issue until later in the year.

Health Insurance Inflation Hits Highest Point in Five Years

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Source: Modern Healthcare

The health insurance inflation rate hit a five-year peak in April, possibly because managed care is rising.

The Consumer Price Index for health insurance in April spiked 10.7% over the previous 12 months—the largest increase since at least April 2014, according to a Modern Healthcare analysis of the U.S. Bureau of Labor Statistics’ unadjusted monthly Consumer Price Index data.

In contrast, the other categories that make up the medical care services index—professional services and hospital and related services—rose 0.4% and 1.4% in April, respectively. The CPI for medical care services in April rose 2.3%, while overall inflation increased 2% year over year.

Because of the way the BLS calculates the health insurance index, the change year over year does not reflect premiums paid by customers, but “retained earnings” after paying out claims. These earnings are used to cover administrative costs or are kept as profit.

The BLS redistributes the benefits paid out portion of the health insurance index to other non-insurance medical care categories, such as physician services.

The likely reason health insurance inflation is rising is because of growth in managed care, including Medicare Advantage, Medicaid managed care and commercial insurance, according to Paul Hughes-Cromwick, an economist at Altarum. He noted that added administrative costs increase insurance price growth.

Hughes-Cromwick said the increase in the health insurance index could also be driven by the fact that insurers’ medical loss ratios may be decreasing as high premiums, particular in the individual health insurance exchanges, exceeded anticipated claims.

The medical loss ratio reflects the percentage of every premium dollar spent on medical claims and quality improvement. Insurers must pay at least 80% of premiums on those things and if they don’t, they must issue rebates to plan members, as part of the Affordable Care Act.

In response to rising inflation, a spokeswoman for America’s Health Insurance Plans, the industry’s biggest lobbying group, commented that “consumers deserve the lowest possible total costs for their coverage and care.” She pointed out the medical loss ratio requirements and said health insurers spend 98 cents of every premium dollar on medical care, operating costs that include care management, and preventing fraud, waste and abuse.

Affordable Care Act exchange insurers hiked premiums higher than necessary in 2018 and now expect to pay out $800 million in rebates to individual market customers this year because they did not meet the medical loss ratio threshold, according to a Kaiser Family Foundation analysis published this month. Because medical loss ratios are declining, health insurers in the individual, small group and large group markets expect to issue $1.4 billion in rebates based on their 2018 performance, the analysis stated.

Still health insurance profits have been on the rise. The eight largest publicly traded insurers posted net income of $9.3 billion in the first quarter of 2019, an increase of 29.9%. They made a combined $21.9 billion in profits over the course of 2018.

Democrats Grapple with Fully Embracing Medicare for All

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Source: Associated Press

A half-dozen presidential candidates back “Medicare for All,” a proposal that would put the government in charge of most health benefits. But some of the Democrats they’re courting aren’t sure that the nation’s health care system should be overhauled so dramatically.

After watching Massachusetts Sen. Elizabeth Warren, a Medicare for All supporter, speak in a packed northeast Iowa tavern, 67-year-old Connie Suby said she backed the ambitious proposal as an ultimate goal. But she cautioned that “we’re not ready for that as a country,” urging “baby steps” that keep private health insurance in place.

“Give people the option,” she said.

Suby is among the Democratic voters concerned that such a major remodeling of America’s health care infrastructure might be too big of a leap for their party’s next president. While polls suggest Democrats like the idea of Medicare for All, it’s not clear that they’re sold on an abrupt shift away from private insurance. In more than two dozen interviews across three early-voting states, most Democratic voters told The Associated Press that they’re open to a more incremental approach toward single-payer health care that starts with making government-run insurance available to more people — such as a publicly funded health plan that Americans could choose as an alternative to their employer-sponsored plan.

That explains the complicated dance Warren and others, including Sens. Kamala Harris of California, Cory Booker of New Jersey and Kirsten Gillibrand, are performing as they balance their support for single-payer with rhetorical room for private insurance companies to still play a role in the system. Warren told a voter at a Virginia town hall on Thursday that it’s not “inconsistent” to pursue Medicare for All as well as smaller steps to get there, such as lowering the age for Medicare eligibility.

Other candidates have simply spurned Medicare for All. Former Vice President Joe Biden has called for the expansion of Medicare as an option for Americans of all ages to buy into “whether you’re covered through your employer or on your own or not.” Former Texas Rep. Beto O’Rourke touts “Medicare for America,” which would automatically provide government-run insurance to those who don’t get it through their jobs.

Only Bernie Sanders, the author of the Senate’s Medicare for All bill, is solely focused on single-payer as a way to “fully solve the health care crisis,” an approach his team thinks adds to his progressive bona fides.

The Vermont senator’s legislation would set up a four-year transition to government-run care for almost all health treatments, free of premiums or deductibles, with private insurance available as a supplement. Warren, Harris, Booker and Gillibrand have been less clear on how they would treat private insurers under a Medicare for All system, and each has supported more incremental steps to increase access to care.

Despite enthusiasm from many progressives for Medicare for All, it’s unclear whether Democratic primary voters will choose a nominee based on a single-minded commitment to ending private health insurance. Chris Jeffrey, a 55-year-old grocery manager from Clive, Iowa, praised Sanders for having “pushed the debate” toward the most far-reaching health care vision. But even though Jeffrey caucused for Sanders in 2016, he said he’s open to Biden or Warren as well. While health care is a top issue for him, he doesn’t favor one candidate’s approach over another’s.

President Donald Trump and the GOP have used Medicare for All as a cudgel in their battle to paint the Democratic agenda as too extreme for most voters. The White House blasted Sanders’ bill last month in a statement predicting it would “cripple our economy and future generations with unprecedented debt.”

Liberal activists working to build support for single-payer are under no illusions about the difficulty of the task ahead of them, particularly given Republican and industry-backed efforts to tar government-run health care as a costly boondoggle. Congressional Democratic leaders are also not yet on board, with House Speaker Nancy Pelosi publicly focused on protecting the Affordable Care Act from Trump-backed efforts to kill it.

“We’re talking about Medicare for All as the policy that’s going to be implemented in 2021,” Jennifer Flynn Walker, senior director of mobilization and advocacy at the progressive Center for Popular Democracy, said in an interview. “We’ll have a new president, and by that time we’ll have done the work so you can’t be a sitting president and not have committed to the idea.”

Laying that groundwork with the Democratic electorate would seem to start with voters like 61-year-old Trudy Rand. The longtime New Hampshire nurse urged policymakers to “seize the day” and push for Medicare for All, adding that “the system is broken.”

But when asked to weigh Sanders’ strategy against a more incremental approach, Rand said it wasn’t a make-or-break issue. “I wouldn’t not vote for somebody because they weren’t going Medicare for All,” she said.

Single-payer health care advocates often point to polling that shows the majority of Americans supporting Medicare for All, though surveys also point to higher levels of support for more incremental changes that would allow for a choice between government-run and private insurance.

While 56% of respondents favored Medicare for All in January polling from the nonprofit Kaiser Family Foundation, up from just 40% between 2002 and 2004, the popularity of optional buy-ins to Medicare and Medicaid were significantly higher, at 74% and 75%, respectively.

“Once the fur begins to fly and arguments for or against the plan are made, in what would be a debate unlike any we’ve ever seen in health . we don’t know what the outcome of that will be,” Kaiser president Drew Altman said in an interview. “And so, no one should mistake current levels of support or opposition with what they might be if there was debate about a real proposal.”

To be sure, several voters said they’d prefer to see Sanders’ single-payer system become a reality.

Lemuel Anderson, a 24-year-old resident of Ames, Iowa, said he’s deciding between Sanders and Warren and health care is one of the issues tipping him toward Sanders. That Warren has left the door open to preserving some form of private insurance after a transition to Medicare for All was a problem for him.

“I think that currently it is about profit when it comes to health care and that’s something that people need, so it shouldn’t be about profit,” Anderson said. “And if you keep private insurance that will continue to be the case.”

Last Updated 06/19/2019

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