The Associated Press: Coverage for most Americans, a scramble for states

June 28, 2012

WASHINGTON (AP) — President Barack Obama’s health care overhaul is on the way to its ultimate jury: the families, doctors, business people and state officials who’ll have to grapple with the confusing details while striving to fulfill its promise.
With the Supreme Court hurdle cleared, open enrollment for millions now uninsured is scheduled to begin in just 16 months, in October 2013. Much of the health care industry is ready. People who do have insurance won’t have to worry about the loss of popular new benefits, such as coverage for young adult children or improvements to Medicare’s prescription plan.
And, starting in 2014, insurance companies will no longer be able to turn away people with a history of medical problems, or charge them more.
But carrying out the law will be a mad scramble for states, especially Republican-led ones where officials had hoped this day wouldn’t come. And the court added a new complication by giving individual states more leeway to turn down the law’s expansion of Medicaid, expected to provide coverage to about 16 million uninsured people.
After the ruling, chances of repealing the entire law appear much slimmer for Republicans, although they will again make it an election rallying cry. However, a targeted repeal strategy aimed at individual components of the law including cost controls, taxes and spending cuts, may still work.
Vicki McCuistion of Driftwood, Texas, who shuttles between two part-time jobs and is uninsured, said the Supreme Court ruling has given her new hope. Her husband Dan has back problems so bad he can’t go to work some days, and with a family history of skin cancer she is worried about a mole that she hasn’t been able to get checked by doctors.
“Having access to health insurance that we can actually afford would allow us to improve our lives,” McCuistion said Thursday.
At the White House, Obama repeated his promise that the Affordable Care Act will both deliver health insurance and help get a handle on growing costs. But the glow of victory may be brief. Even some supporters of the law candidly admit it’s only a first installment — a way to get most of the population covered before tackling costs forcefully. Wrenching choices about Medicare and Medicaid cuts could come as early as next year.
Thursday’s decision moves the United States closer to other economically advanced countries that for years have guaranteed health insurance to their citizens.
The law’s controversial mandate that individuals have health insurance or pay a fee — upheld by the court on Thursday — will affect relatively few people, because more than eight in 10 Americans already have coverage. But employers with 50 or more workers will face fines if they don’t provide insurance for employees.
The law is expected to extend coverage to about 30 million of the estimated 50 million uninsured. Illegal immigrants will represent a large share of those still without coverage, but 90 percent of citizens and legal residents will have insurance.
The focus now quickly shifts from Washington to the states.
While health insurers, big hospitals and major employers have spent the last two years planning and carrying out the law, states are all over the lot.
Although they are expected to play a crucial role in delivering insurance to their residents, only 14 states, plus Washington D.C., have actually adopted a plan for doing so. Hoping the law would be overturned, Republican governors and legislatures have resisted setting up new insurance markets that are a linchpin of the legislation, and that could turn into a problem for the whole country.
The National Association of Insurance Commissioners expects only about half the states to be ready to set up new health insurance markets, slated to open for business on Jan. 1, 2014.
If states aren’t ready, the law calls for Washington to step in and run things. Health and Human Services Secretary Kathleen Sebelius says the feds are ready to do that.
State plans for the markets — called exchanges — are due to the federal government this fall. Washington will run the exchanges in states that lag behind. The new Internet-based markets are supposed to provide one-stop shopping for health insurance, steering middle-class households to private plans and low-income people to an expanded version of Medicaid, the federal-state program for the poor and disabled.
But the court added a new wrinkle, ruling that states cannot be threatened with the loss of their entire Medicaid allotments if they refuse to carry out the expansion, which is geared largely to helping uninsured low-income adults. Under the law, the federal government will pick up all of the cost for the first three years, eventually dropping to a 90 percent share.
Matt Salo, head of the National Association of State Medicaid Directors, said it’s too early to tell what states will do.
“This opens up what was a mandate into a state option, and states are going to have to think very, very carefully as they weigh all the political, policy and fiscal ramifications of the decision,” Salo said.
States that turn down the money will still be stuck with the cost of treating uninsured patients in hospital emergency rooms. States that accept the money may be on the hook if Washington later decides to reduce the generous federal matching funds for the expansion.
“What this really means is the decisions are going to be made after the elections this year,” said Wisconsin’s health secretary, Dennis G. Smith, whose state has not moved to put the law in place. “This is going to go back to Congress. We had always thought (the law) was unworkable, and today’s ruling proves the point even more.”
Administration officials predict states will participate, even if some take time to decide. They point out it took three or four years for all states to join the original Medicaid program.
Aside from help for low-income and uninsured people, the Supreme Court decision also means an expanded safety net for all Americans. Starting in 2014, insurance companies will not be able to deny coverage for medical reasons, nor can they charge more to people with health problems. Those protections, now standard in most big-employer plans, will be available to all, including people who get laid off, or leave a corporate job to launch their own small business.
Seniors stand to receive better Medicare coverage for those with high prescription costs, and no copayments for preventive care. But hospitals, nursing homes, and many other service providers may struggle once the Medicare cuts used to finance the law really start to bite.
The health insurance industry’s top lobbyist said the ruling relieved one big concern for insurers — that the mandate would be struck down, allowing people to buy coverage literally on the way to the hospital. But the companies are still worried about costs.
“Without universal participation you have no incentive to purchase coverage until you are sick, and that is not an insurance system,” said Karen Ignagni, president of America’s Health Insurance Plans. “Now it’s time to turn all the attention toward affordability.” The industry continues to fight taxes and other requirements in the law.
In contrast to the states, the nation’s vast health care industry is better prepared. When the law passed in 2010, insurers, hospitals and major employers immediately went to work to carry it out. Some of the changes in the law were already being demanded by employers trying to get better health insurance value.
“The factors driving health care reform are not new, and they are not going to go away,” said Dr. Toby Cosgrove, CEO of the Cleveland Clinic. “We know we have to take costs out of the system and improve quality.”

Associated Press writer Jim Kuhnhenn contributed to this report.
Copyright © 2012 The Associated Press. All rights reserved.

Los Angeles Times: Jerry Brown signs budget that relies on voter-backed tax hikes

The governor signs a budget that makes deep cuts to social services and assumes that voters will pass $8 billion in tax hikes in November.,0,2056875.story

By Chris Megerian
June 28, 2012

SACRAMENTO — State lawmakers finished their work on the budget, and Gov. Jerry Brown signed it late Wednesday, ending the haggling over final details of California’s spending plan.

The budget closes the state’s $15.7-billion deficit with cuts in social services and depends on voters approving more than $8 billion in temporary tax hikes at the ballot box in November. Without a higher sales tax and increased levies on the wealthy, the governor says, the state will cut billions from public schools.

The tax question isn’t the only one hanging over the new budget, which takes effect Sunday. Republicans are threatening to withhold votes need to extend a fee on healthcare providers, and a controversy over how aggressively the state can scoop up money from defunct redevelopment agencies could lead to a legal faceoff with local governments.

The budget includes $91.5 billion in general fund spending; total spending is $142.6 billion when dedicated funds and bond money are included. Brown plans to veto some individual items as he signs the budget legislation, according to an administration spokesman, but details are not expected until Thursday.

“This budget reflects tough choices that will help get California back on track,” Brown said in a statement.

Senate President Pro Tem Darrell Steinberg (D-Sacramento), who like many Democrats supports Brown’s tax proposal, said the budget includes tough cuts that will help persuade Californians that state leaders can be trusted with more of their money.

“We are poised to take our case to voters in November,” he said.

Republicans have sharply criticized the budget, saying it relies on gimmicks, as well as taxes that may or may not materialize, to gloss over the state’s problems.

“It’s the typical kind of budget we’ve had in the past that kicks the can down the road,” said Senate Republican Leader Bob Huff (R-Diamond Bar), referring to the persistent deficits of recent years.

Democrats used their majority to push a spending plan through the Legislature on June 15 without a single Republican vote, allowing lawmakers to meet their constitutional deadline and continue collecting their pay. But negotiations continued on lingering issues, and the budget details approved Wednesday make wide-ranging policy changes in welfare, college scholarships and healthcare.

“We went very far out of our comfort zone to satisfy [Brown’s] vision,” said Assembly Budget Chairman Bob Blumenfield (D-Woodland Hills).

Lawmakers tightened work requirements for parents receiving benefits from CalWORKs, the main state welfare program, saving an estimated $469 million. However, counties will be able to grant exemptions — for recipients who are close to finishing job training, for example.

In another change, the state will reduce scholarships for students attending private colleges starting in the 2013-14 academic year. And students won’t be able to use the scholarships, known as Cal Grants, at colleges with low graduation rates.

The budget includes more than $1 billion in cuts from Medi-Cal, the insurance program for the poor, and other health programs. About two-thirds of that savings comes from a plan to move 1.4 million seniors and people with disabilities who receive benefits from both Medicare and Medi-Cal into managed care.

In one of the most controversial moves, lawmakers are eliminating the Healthy Families program, shifting the nearly 900,000 poor children it covers into Medi-Cal over the course of a year. The decision is expected to save $13 million in the new fiscal year, with savings increasing to $73 million two years from now.

The Brown administration has insisted there won’t be gaps in children’s healthcare coverage. But activists are concerned that medical care will be harder to find because doctors get less money for care they provide under Medi-Cal.

Republicans, who have generally championed budget cuts, opposed the elimination of Healthy Families and threatened to withhold votes needed to extend a healthcare provider fee that would generate $183 million for state coffers. A vote on the fee is expected later this year.

“Children’s lives are at stake,” Sen. Anthony Cannella (R-Ceres) said during a debate on the Senate floor Wednesday.

Steinberg accused the Republicans of “selective outrage,” noting that they’ve blocked tax increases that could have avoided some of the healthcare and social-service reductions.

There were more disagreements over property tax revenue that once funded redevelopment agencies, which are being dissolved this year. The state wants $3.1 billion that formerly went to those agencies to help balance the budget, and lawmakers approved a tough new law allowing the seizure of local tax money if cities don’t turn over enough of the redevelopment money on schedule.

Chris McKenzie, executive director of the League of California Cities, called state leaders’ “extreme tactics” unconstitutional and predicted that local governments will end up fighting them in court. Democrats barely scraped together enough votes to pass the bill in the state Senate, though Steinberg defended it as necessary to ensure the state can pay its bills.

The budget could lead to a freeze on college tuition. The state is offering each of the two public university systems $125 million in the 2013-14 fiscal year if they don’t raise tuition in the 2012-13 academic year.

The budget leaves a reserve of $788 million.
Copyright © 2012, Los Angeles Times

The Los Angeles Times: California to lose big if Supreme Court scraps U.S. healthcare law

The state, one of the biggest beneficiaries of the Affordable Care Act, would lose out on as much as $15 billion annually in new federal money slated to come its way.,0,1852327.story

By Chad Terhune, Anna Gorman and Erin Loury
June 20, 2012

If the Supreme Court scraps the Affordable Care Act in the coming days, California will lose out on as much as $15 billion annually in new federal money slated to come its way, dealing what state officials say would be a critical blow to efforts to expand coverage to the poor and uninsured.

The state is one of the biggest beneficiaries of the federal healthcare law because of its large number of uninsured residents — about 7 million people, or nearly 20% of California’s population.

The cost of treating the uninsured here currently is borne by taxpayers, as well as consumers and employers who pay higher insurance premiums to subsidize their care. California families pay an extra $1,400 each in annual premiums, on average, to cover medical bills of the uninsured, according to the California Endowment, a private health foundation.

The healthcare law that passed Congress in 2010 was designed to ease that burden by pumping in money from the federal government. California could receive as much as $9 billion a year to expand Medi-Cal, the government program for the poor and disabled, according to estimates from the Kaiser Family Foundation.

An additional $6 billion a year would go directly to low- and middle-income people who buy subsidized policies through a state-run exchange that would open in 2014, according to calculations from the Urban Institute.

A Supreme Court decision to toss out the law would turn off that federal spigot.

“California would be a net loser if the court overturns the law, because it stands to receive such a big flow of money for the uninsured,” said John Holahan, director of health policy at the Urban Institute, a Washington think tank.

Still, several of the federal law’s more popular insurance provisions, such as guaranteed coverage for children and allowing young adults up to age 26 to stay on parents’ policies, will remain in place because they are required by state law now. And some of the nation’s biggest insurers have already agreed to continue other benefits such as mammograms, diabetes screenings and other preventive care at no cost.

But without the federal law, insurers could still deny coverage to Californians because of their medical histories or exclude pre-existing conditions from their policies.

Mikail Barron, 43, said she has been uninsured since 2004 and unable to find coverage because she has diabetes and arthritis.

“Getting insurance would mean everything to me,” said Barron, who is studying to be a medical assistant at Cabrillo College near Santa Cruz and worries about medical bills wiping her out financially.

The Affordable Care Act requires nearly all Americans to have health insurance or pay a penalty, a provision that was challenged as unconstitutional by 26 states and a small-business group. The high court is expected to rule on that challenge as early as this week.

Critics say that the law fails to control ballooning healthcare costs and that it requires California to spend up to $6 billion from 2014 to 2019 to extend Medi-Cal.

“Californians don’t have any confidence government is responsible when it comes to spending this money,” said John Kabateck, state director of the National Federation of Independent Business.

The most controversial provision is the so-called individual mandate that requires nearly everyone to buy health insurance. Many believe the state could pass such a law on its own if the Supreme Court justices throw out only that provision. California nearly approved a mandate in 2008 under then-Gov. Arnold Schwarzenegger, a Republican.

“We’ve been on a long path to reform healthcare in California, and that is still our goal,” said Diana Dooley, Gov. Jerry Brown’s secretary of health and human services. “We have to take a breath after the decision comes down and see how far does it go and what are the implications.”

The lack of federal healthcare money, however, would be harder to remedy, according to state Sen. Ed Hernandez (D-West Covina), chairman of the Senate health committee.

“Federal subsidies are key to making this work,” he said. “We don’t have the resources to put together a robust health package.”

Last week, state lawmakers approved a budget with more than $1 billion in health-related cuts to help close an estimated $15.7-billion spending gap.

“Without the law, we’re back to this chaotic political mess of solving healthcare in a state that is broke, essentially,” said Robert Margolis, a physician and chief executive of HealthCare Partners, a large medical group that treats more than 500,000 patients across Southern California.

If the Supreme Court upholds the law, nearly 4 million Californians are expected to obtain new or improved coverage by 2019. Of the remaining uninsured, more than 1 million are expected to be ineligible because of their immigration status, and 2 million others are considered unlikely to participate even though they would be eligible, according to research by UCLA and UC Berkeley.

The newly insured residents would be covered either under an expansion of the state’s Medi-Cal program or would buy insurance themselves with federal subsidies earmarked for families earning about $92,000 or less annually.

Gerald Kominski, director of the UCLA Center for Health Policy Research, said: “It’s really a bleak forecast for the future if they overturn the law because you haven’t addressed the underlying forces driving the healthcare system toward a cliff. The state returns to a system that’s unsustainable.”

At the national level, insurers were willing to support guaranteed coverage for all applicants as long as everyone is mandated to join the insurance pool. Insurers have warned policymakers that proceeding with guaranteed coverage alone would make premiums soar because older, sicker customers would join without healthier applicants to balance them out.

George Halvorson, chief executive of Kaiser Permanente, the state’s largest nonprofit health plan with 6.6 million customers, said the loss of the mandate and related insurance provisions such as guaranteed coverage would require a “major reboot” at the state level. He said California could try to replicate the mandate enacted in Massachusetts or borrow ideas from European countries with universal coverage.

Taxpayers currently cover only a portion of the costs for the uninsured. Hospitals and doctors make up some of the difference by charging higher rates to insured patients, which leads to bigger premiums for employers and consumers.

“We know we are bearing the cost of the uninsured in our rates,” said Ann Boynton, deputy executive officer for benefits at the California Public Employees’ Retirement System, which just approved a 9.6% premium increase for its 1.3 million members next year. “We remain hopeful the Supreme Court upholds the individual mandate because we really do see that as important to reducing the cost burden on our members.”

As part of the Medicaid expansion, the federal government agreed to raise reimbursements for primary-care doctors who treat those patients. If the federal law goes into effect, that could yield an additional $700 million annually for California physicians and help alleviate the shortage of doctors willing to see the poorest patients.

“There is no place that benefits more than California because we have the lowest rates and the most Medicaid recipients,” said Howard Kahn, chief executive of L.A. Care Health Plan, which covers more than 1 million lower-income people.

Meantime, California hospitals are concerned about a split decision that voids the mandate and the prospect of more insured patients but keeps intact about $17 billion in federal cuts over 10 years for the state’s 430 hospitals.

“We are feeling extremely vulnerable,” said Anne McLeod, a senior vice president at the California Hospital Assn.

Los Angeles Times: 6.6 million young adults on parents’ health plans, survey says

The number, topping earlier estimates, shows the popularity of a provision of President Obama’s healthcare law requiring health insurers to let parents enroll children under 26 on their plans.,0,6431876,print.story

By Noam Levey, Washington Bureau
5:05 AM PDT, June 8, 2012

WASHINGTON — President Obama’s healthcare law helped as many as 6.6 million young adults stay on or get on their parents’ health plans in the first year and a half after the law was signed, a new survey indicates.

That number, found in the survey by the nonprofit Commonwealth Fund, is far higher than earlier estimates. And at a time when public wariness about the Affordable Care Act remains high, it underscores the popularity of a provision that requires insurers to allow parents to enroll their children up to age 26 on their own plans.

Earlier surveys by the federal government found that the number of people ages 19 to 25 without insurance declined after the law was signed, reversing years of erosion in health coverage for young adults.

But, although the government research indicated that 2.5 million more young adults had health insurance in 2011 than in 2010, it was unclear how many people were benefiting from the law.

The Affordable Care Act is under review by the U.S. Supreme Court, and a decision is expected by the end of June. If the court strikes down the entire federal healthcare law, the requirement that young adults be allowed to sign on to their parents’ plans would die. Some insurers have indicated that they might embrace the provision voluntarily, citing its popularity.

In California, state law provides that this provision must remain in effect, regardless of the court’s ruling.

Not all of the estimated 6.6 million young adults who joined or stayed on their parents’ plans would have otherwise been uninsured, according to officials at the Commonwealth Fund, which is a leading source of healthcare research. At least some probably moved to their parents’ plans from other health insurance plans because the family plans were less costly or more comprehensive.

But, Commonwealth Fund President Karen Davis said, the survey was a hopeful indicator at a time when millions of Americans are struggling to get needed healthcare. “The new report … shows that implementation of the law has already begun to make a difference for young adults, their families and other Americans,” she said.
The survey of more than 1,800 young adults nationwide measured how young people got insurance between November 2010 and November 2011.

The expansion in coverage for young adults has been a rare bright spot for the Obama administration and other backers of the healthcare law who have been laboring since 2010 to highlight the benefits of the law, most of which will not be evident for years. Under the law, all Americans will be guaranteed access to health coverage for the first time starting in 2014.

Allowing young adults, most of whom are healthy, to remain on their parents’ health plans is not as expensive as expanding coverage to populations with higher medical costs, although independent analyses estimate the expansion could boost premiums 1% to 2%.

Congressional Republicans are working to dismantle the law, and former Massachusetts Gov. Mitt Romney, the presumptive GOP presidential nominee, has promised to repeal it if elected in November.

House Republicans continued their campaign Thursday, voting to scrap a 2.3% tax on medical devices sold in America that was included in the law to help raise money to provide health coverage to an estimated 32 million people. The largely symbolic measure, cheered by business groups, is not expected to succeed in the Democratic Senate.

House Republicans also voted to rescind new restrictions on the use of tax-free health accounts; these were also included in the new healthcare law. So far, however, GOP lawmakers have not advanced any alternatives to the law.

The Commonwealth Fund survey suggests that simply repealing the law would have a substantial effect on young people, many of whom are still struggling to pay their medical bills and to get health insurance.

Nearly 2 in 5 young adults ages 19 to 29 reported a gap in health insurance in 2011, according to the survey. And 41% delayed getting needed medical care.

Millions of young adults are also struggling with debt they incurred to get medical care, with one-fifth reporting they are having to pay off medical bills over time.

That burden is falling most heavily on young people without insurance, with more than one-quarter reporting they had been contacted by a collection agency over unpaid medical bills.

Those without insurance are also disproportionately low income, with 70% of young people who make less than $29,726 a year — 133% of the federal poverty level — reporting that they had lacked insurance at some point in the previous year.

These Americans are also the least likely to join a parent’s health plan. While 69% of young adults in families making more than four times the poverty level stayed on or joined their parents’ health plans, just 17% from families making less than 133% of the poverty line did so, the survey found.