October 2012October 2012

The Federal Health The Federal Health Law and California:Law and California:What’s New, What’s Next, What’s New, What’s Next,

and What Do We Need to Do?and What Do We Need to Do?

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Why CA Needed ReformWhy CA Needed Reform Californians have suffered disproportionately as a result Californians have suffered disproportionately as a result

of their coverage not being there when they needed it.of their coverage not being there when they needed it.

– Californians are more likely to be uninsured than most Californians are more likely to be uninsured than most Americans: 8 million Californians are uninsured this year, Americans: 8 million Californians are uninsured this year, and live sicker, die younger, and are one emergency away and live sicker, die younger, and are one emergency away from financial ruin.from financial ruin.

– Californians are less likely to get coverage from an employer, Californians are less likely to get coverage from an employer, and such coverage is eroding.and such coverage is eroding.

– Californians are more likely, as a result, to have to buy Californians are more likely, as a result, to have to buy coverage as individuals, and thus more Californians have a coverage as individuals, and thus more Californians have a lack of affordable coverage options, and more can not get lack of affordable coverage options, and more can not get coverage at any price, due to pre-existing conditions.coverage at any price, due to pre-existing conditions.

– California has a high cost-of-living, and a greater percentage California has a high cost-of-living, and a greater percentage of lower-wage workers, meaning more Californians need help of lower-wage workers, meaning more Californians need help to afford coverage to afford coverage

– Californians rely on public health insurance programs and the Californians rely on public health insurance programs and the health care safety net, but state budget cuts are making this health care safety net, but state budget cuts are making this challenging.challenging.

– Californians need protection from inadequate coverage and Californians need protection from inadequate coverage and discriminatory practices by insurers and employers.discriminatory practices by insurers and employers.

The Biggest Reforms The Biggest Reforms of Our of Our EraEra

The health reform law doesn’t do all that is needed,The health reform law doesn’t do all that is needed,

but it is historic Congressional action in three areas of focus:but it is historic Congressional action in three areas of focus:

1)1) Provides new consumer protections Provides new consumer protections to prevent the to prevent the worst insurance industry abusesworst insurance industry abuses• Biggest reform of insurance practices ever: no denials for pre-Biggest reform of insurance practices ever: no denials for pre-

existing conditions; no rescissions; no lifetime/annual caps on existing conditions; no rescissions; no lifetime/annual caps on coverage; etccoverage; etc

2) Ensures security 2) Ensures security for those with coverage, andfor those with coverage, and new and new and affordable options affordable options for those without coveragefor those without coverage• Biggest expansion of coverage in 45 years; Would bring US from Biggest expansion of coverage in 45 years; Would bring US from

85% to 95% coverage.85% to 95% coverage.• Expansion of Medicaid and a new exchange, with affordability Expansion of Medicaid and a new exchange, with affordability

tax credits so premiums are tied to income, not how sick we tax credits so premiums are tied to income, not how sick we are.are.

3) Begins to control health care costs3) Begins to control health care costs, for our families and , for our families and our government.our government.• Multiple efforts to ensure quality & reduce costMultiple efforts to ensure quality & reduce cost• Biggest deficit reduction measure in a generation.Biggest deficit reduction measure in a generation.• Big investments in prevention, with unbooked savingsBig investments in prevention, with unbooked savings

What’s What’s Already in Place: IAlready in Place: I

Several provisions of the Patient Protection and Several provisions of the Patient Protection and Affordable Care Act (ACA) are already in Affordable Care Act (ACA) are already in effect:effect:

Instilling Confidence in CoverageInstilling Confidence in Coverage Ending rescissionsEnding rescissions Banning lifetime and annual caps on Banning lifetime and annual caps on

coveragecoverage

Access to Coverage Regardless of Health Access to Coverage Regardless of Health StatusStatus

Ending discrimination against children with Ending discrimination against children with pre-existing conditionspre-existing conditions

New, expanded option for adults denied for New, expanded option for adults denied for pre-existing conditions (PCIP)pre-existing conditions (PCIP)

What’s What’s Already in Place: IIAlready in Place: IISeveral provisions of the Patient Protection and Several provisions of the Patient Protection and

Affordable Care Act (ACA) are already in effect:Affordable Care Act (ACA) are already in effect:

Securing and Expanding Coverage OptionsSecuring and Expanding Coverage Options Young adults can stay on their parent’s Young adults can stay on their parent’s

coverage through age 26coverage through age 26 More security for the 7 million Californians on More security for the 7 million Californians on

Medi-Cal and Healthy FamiliesMedi-Cal and Healthy Families More resources for community clinics, More resources for community clinics,

prevention efforts, and workforce developmentprevention efforts, and workforce development Better information on health options: Better information on health options:

www.healthcare.govwww.healthcare.gov

What’s What’s Already in Place: IIIAlready in Place: III

Several provisions of the Patient Protection and Several provisions of the Patient Protection and Affordable Care Act (ACA) are already in Affordable Care Act (ACA) are already in effect:effect:

Making Health Care More AffordableMaking Health Care More Affordable Help ($250 rebate/50% discount) for many Help ($250 rebate/50% discount) for many

seniors to afford prescription drugs, as a first seniors to afford prescription drugs, as a first step to closing the Medicare Part D “donut step to closing the Medicare Part D “donut hole”hole”

Subsidies for early retiree coverageSubsidies for early retiree coverage Free preventative care (with no-copayments) Free preventative care (with no-copayments)

for those in Medicare & private insurancefor those in Medicare & private insurance Small business tax credit to help pay for Small business tax credit to help pay for

workers’ coverageworkers’ coverage More review of insurance ratesMore review of insurance rates

How 38 Million How 38 Million Californians Get Californians Get Coverage NowCoverage Now

Employer-Based CoverageEmployer-Based CoverageAround Half, 18-19 MillionAround Half, 18-19 Million

Public Programs: About a Third (10-11 Public Programs: About a Third (10-11 million)million)

Medicare: 4 millionMedicare: 4 million

Medi-Cal: 7.7 millionMedi-Cal: 7.7 million• Healthy Families: Nearly 1 millionHealthy Families: Nearly 1 million

Individual Insurance MarketIndividual Insurance MarketAbout 5% (around 2 million) About 5% (around 2 million)

Uninsured: Around 7 millionUninsured: Around 7 million

Ensuring Affordable Ensuring Affordable Coverage Coverage

& & EEssential Benefitsssential BenefitsIn each of the ways people get coverage today, throughIn each of the ways people get coverage today, through

1)1)an employeran employer2)2)a public program, ora public program, or3)3)buying it as an individualbuying it as an individual

new protections will ensure that coverage includes: new protections will ensure that coverage includes:

AffordabilityAffordability– Premiums not to exceed a percentage of income—sliding scale up to 9.5% Premiums not to exceed a percentage of income—sliding scale up to 9.5%

of income.of income.– No lifetime limits, no annual limitsNo lifetime limits, no annual limits– Cap on out-of-pocket costs (co-pays, deductibles) of Cap on out-of-pocket costs (co-pays, deductibles) of $5,950 $5,950

individual/$11,900 family (2010 dollars)individual/$11,900 family (2010 dollars)– No co-pays for preventive services like mammograms and prostate cancer No co-pays for preventive services like mammograms and prostate cancer

screening.screening. Basic BenefitsBasic Benefits

– Covers doctors, hospitals, prescription drugs, mental health parity.Covers doctors, hospitals, prescription drugs, mental health parity.– Comparable to most large employers now. (Knox/Keene+Rx)Comparable to most large employers now. (Knox/Keene+Rx)

Purchasing Power of Group CoveragePurchasing Power of Group Coverage Consumer ProtectionsConsumer Protections

– Example: Medical Loss Ratio: 85 cents of premiums must be spent on careExample: Medical Loss Ratio: 85 cents of premiums must be spent on care

Securing OnSecuring On-the--the-Job Job Coverage:Coverage:

Subsidies and StandardsSubsidies and Standards Around half of all Californians (18 million) already Around half of all Californians (18 million) already have coverage through their employer, andhave coverage through their employer, and reform reform will make on-the-job coverage more secure and will make on-the-job coverage more secure and reliablereliable

Many small employers of low-wage workers will Many small employers of low-wage workers will receive significant subsidiesreceive significant subsidies (tax credits up to (tax credits up to 35% of premiums) to help pay for coverage.35% of premiums) to help pay for coverage.

Larger employers (over 50 FTEs) will either cover their Larger employers (over 50 FTEs) will either cover their workers, or may have to contribute to their care—workers, or may have to contribute to their care—setting a standard much like the minimum wage does setting a standard much like the minimum wage does for pay:for pay:– Provide Health Benefits for Full-Time, Non-Seasonal workers Provide Health Benefits for Full-Time, Non-Seasonal workers

OROR– Pay a penalty for Full-Time, Non-Seasonal worker in exchange Pay a penalty for Full-Time, Non-Seasonal worker in exchange

($2,000/$3,000 depending on coverage offer)($2,000/$3,000 depending on coverage offer)– Full-Time and Non-Seasonal Defined:Full-Time and Non-Seasonal Defined:

Full-Time=Average 30 hours per week in monthFull-Time=Average 30 hours per week in month Non-Seasonal=120 days for one employer in a yearNon-Seasonal=120 days for one employer in a year

Securing On-Securing On-tthe-Job he-Job Coverage: A New FloorCoverage: A New Floor

Employers that offer coverage must:Employers that offer coverage must:– Cover 60% of the cost of covered benefitsCover 60% of the cost of covered benefits– Require an employee contribution of less than Require an employee contribution of less than

9.5% of taxable income for household9.5% of taxable income for household– Have benefits that satisfy individual mandateHave benefits that satisfy individual mandate

If an employer covers less than 60% of cost If an employer covers less than 60% of cost or requires employee to pay more than 9.5% or requires employee to pay more than 9.5% of income, then the employee is eligible for of income, then the employee is eligible for the exchange and the employer pays the feethe exchange and the employer pays the fee

Waiting periods of more than 90 days are Waiting periods of more than 90 days are bannedbanned

Small employers have other requirements Small employers have other requirements and self-insured plans largely exemptand self-insured plans largely exempt

Existing employer plans grandfathered inExisting employer plans grandfathered in

Improving Public Programs: Improving Public Programs: MedicareMedicare

Nearly a third of Californians (10 million+) get Nearly a third of Californians (10 million+) get coverage thru Medicare, Medicaid, SCHIP, etc.coverage thru Medicare, Medicaid, SCHIP, etc.

For seniors,For seniors, Medicare Medicare will remain intact and will remain intact and be strengthened so it is more stablebe strengthened so it is more stable– No reductions in Medicare benefit package; some No reductions in Medicare benefit package; some

improvements:improvements:– Closes “donut hole” gap in prescription drug coverageCloses “donut hole” gap in prescription drug coverage

Right now, coverage runs out at around $2,830/year; doesn’t kick Right now, coverage runs out at around $2,830/year; doesn’t kick back in until over $4,550.back in until over $4,550.

In 2010, impacted seniors will get $250 rebateIn 2010, impacted seniors will get $250 rebate Annual improvements until drug coverage becomes completeAnnual improvements until drug coverage becomes complete

– No cost-sharing for preventative screenings & careNo cost-sharing for preventative screenings & care– Roots out waste, fraud, and abuse, especially overpayments Roots out waste, fraud, and abuse, especially overpayments

to insurance companies in Medicare Advantage.to insurance companies in Medicare Advantage.– Extends solvency of Medicare for nearly a decadeExtends solvency of Medicare for nearly a decade

Improving Public Programs: Improving Public Programs: MedicaMedicaidid

MedicaidMedicaid (Medi-Cal in CA) will be (Medi-Cal in CA) will be expanded to cover lowest-income families, expanded to cover lowest-income families, including adults without dependent childrenincluding adults without dependent children– Expands Medicaid for all under 133% of the federal Expands Medicaid for all under 133% of the federal

poverty level (excluding undocumented immigrants)poverty level (excluding undocumented immigrants)– Before reform, adults without kids at home excludedBefore reform, adults without kids at home excluded– Up to two million additional Californians on Medi-CalUp to two million additional Californians on Medi-Cal– For newly-eligible population, federal government will For newly-eligible population, federal government will

pay 100% of costs for 2014-2016; By 2020, will pay up pay 100% of costs for 2014-2016; By 2020, will pay up to 90% of costto 90% of cost

– Reduces paperwork and eligibility barriersReduces paperwork and eligibility barriers Example: Removes complicated “asset test” that is barrier Example: Removes complicated “asset test” that is barrier

to enrollment, and that prevents poor families from savingto enrollment, and that prevents poor families from saving

– SCHIP (Healthy Families in CA) intactSCHIP (Healthy Families in CA) intact

HeHelp for Individual Purchasers:lp for Individual Purchasers:New Rules for InsurersNew Rules for Insurers

Unlike current individual market, Unlike current individual market, no denials or different no denials or different premiums for pre-existing conditions.premiums for pre-existing conditions.– Modified community ratingModified community rating

No premium difference for health stNo premium difference for health statusatus Age: 3:1 rate band between young and oldAge: 3:1 rate band between young and old Family sizeFamily size Tobacco use: 1.5:1 Tobacco use: 1.5:1 Geographic RegionGeographic Region

Minimum essential benefits:Minimum essential benefits:– Doctors, hospitals, prescription drugs, mental health and Doctors, hospitals, prescription drugs, mental health and

substance abuse paritysubstance abuse parity Minimum actuarial value: 60%Minimum actuarial value: 60% Maximum out of pocket costs: $5,950 Maximum out of pocket costs: $5,950

individual/$11,900 familyindividual/$11,900 family No lifetime limits, no annual limitsNo lifetime limits, no annual limits Individuals must have coverage, but availability Individuals must have coverage, but availability

ensured; affordability subsidies and/or exemptions ensured; affordability subsidies and/or exemptions availableavailable

ThThe Exchange: e Exchange: ProviProviding ding New, New, Affordable ChoicesAffordable Choices

For those who still must buy coverage as individuals For those who still must buy coverage as individuals (over 2 million Californians currently) and are now left (over 2 million Californians currently) and are now left all alone at mercy of big insurers:all alone at mercy of big insurers:

A newA new Health Insurance Exchange Health Insurance Exchange that will offer a that will offer a number of affordable coverage options.number of affordable coverage options.– Affordability credits Affordability credits will be provided for coverage will be provided for coverage

purchased in the Exchange for families earning up to purchased in the Exchange for families earning up to 400% FPL (~$73K for family of 3).400% FPL (~$73K for family of 3).

– TheThe Exchange will make it Exchange will make it easier to understandeasier to understand and and get a quality, affordable health plan, offering a range get a quality, affordable health plan, offering a range of easy-to-compare insurance products, with basic of easy-to-compare insurance products, with basic benefits. benefits.

– The Exchange can use its The Exchange can use its bargaining power to bargaining power to provide the “group rate”provide the “group rate” for individuals and small for individuals and small businesses, to get the best possible price.businesses, to get the best possible price.

Sliding Scale SubsidiesSliding Scale Subsidies

ThThe Exchange in CAe Exchange in CACalifornia’s first-in-the-nation legislation to establish California’s first-in-the-nation legislation to establish

an Exchange post-reform:an Exchange post-reform:Provides for Provides for “selective contracting,”“selective contracting,” so it can so it can negotiate for individuals and small businesses, who negotiate for individuals and small businesses, who otherwise are left all alone at the mercy of the otherwise are left all alone at the mercy of the insurers.insurers.Can serve as the Can serve as the HR department for CAHR department for CA, getting a , getting a better deal, vetting products, providing neutral and better deal, vetting products, providing neutral and credible information, standardizing benefits, and credible information, standardizing benefits, and fixing issues that come up.fixing issues that come up.

Five board members appointed: HHS Secretary Diana Five board members appointed: HHS Secretary Diana Dooley (Gov. Brown); Kim Belshe and Susan Kennedy Dooley (Gov. Brown); Kim Belshe and Susan Kennedy (Gov. Schwarzenegger); Paul Fearer (Speaker Perez) ; (Gov. Schwarzenegger); Paul Fearer (Speaker Perez) ; Dr. Bob Ross (Senate President Steinberg).Dr. Bob Ross (Senate President Steinberg).

Initial work: Hired an Executive Director, Peter Lee, and Initial work: Hired an Executive Director, Peter Lee, and staff; created business plan; Sought and got $39 staff; created business plan; Sought and got $39 million in federal funds through 2012; Start work on million in federal funds through 2012; Start work on eligibility and enrollment systems; IT systems; eligibility and enrollment systems; IT systems; navigation; stakeholder process; public education and navigation; stakeholder process; public education and outreach; etc. outreach; etc.

Financing Health ReformFinancing Health Reform Health reform will cost money upfront, but is Health reform will cost money upfront, but is an an

investment to achieve savings in the long runinvestment to achieve savings in the long run.. Cost is half Cost is half Medicaid expansion Medicaid expansion and half and half affordability affordability

subsidiessubsidies for low- and moderate-income families. for low- and moderate-income families. Congressional Budget Office estimates that reform will Congressional Budget Office estimates that reform will

cost $950 billion over 10 years. CBO says cost $950 billion over 10 years. CBO says it will be paid it will be paid forfor, and actually , and actually reduce the deficitreduce the deficit by $150 billion in by $150 billion in the first ten years, and by a trillion in the 2the first ten years, and by a trillion in the 2ndnd ten years. ten years.

Over half of the financing is Over half of the financing is savings in the existing savings in the existing health systemhealth system (e.g., reducing the overpayments to (e.g., reducing the overpayments to insurers in Medicare Advantage program).insurers in Medicare Advantage program).

Based on Based on “shared responsibility” “shared responsibility” mandates, sliding-mandates, sliding-scale contributions for individuals, and an employer scale contributions for individuals, and an employer requirement.requirement.

Additional financingAdditional financing for health reform include: upper- for health reform include: upper-income Medicare tax; an excise tax on high-cost income Medicare tax; an excise tax on high-cost insurance products; and other revenue sources (e.g., a insurance products; and other revenue sources (e.g., a 10% tanning salon tax).10% tanning salon tax).

ACA Impacts on CoverageACA Impacts on Coverage Employer-Based CoverageEmployer-Based Coverage

– Roughly the same (potentially stabilize long-term erosion, some Roughly the same (potentially stabilize long-term erosion, some small businesses may join the SHOP Exchange)small businesses may join the SHOP Exchange)

Medi-CalMedi-Cal– Increases potentially by 2-3 million—for a total of 9-10 millionIncreases potentially by 2-3 million—for a total of 9-10 million– Newly-eligible get much higher than 50-50 matching rateNewly-eligible get much higher than 50-50 matching rate

2014-16: 100% Federally funded2014-16: 100% Federally funded 2017: 95%; 2018: 94%; 2019: 93%2017: 95%; 2018: 94%; 2019: 93% 2020 and beyond: 90% (still a 9:1 match)2020 and beyond: 90% (still a 9:1 match)

Individual Market and the ExchangeIndividual Market and the Exchange– Individual market doubles to potentially 4-5 million.Individual market doubles to potentially 4-5 million.– Up to 4 million getting subsidies in the ExchangeUp to 4 million getting subsidies in the Exchange– Half (1.7 million) would be newly insured; the rest were getting Half (1.7 million) would be newly insured; the rest were getting

coverage in the individual market but now getting help to pay for coverage in the individual market but now getting help to pay for expensive coverage.expensive coverage.

– Exchange Demographics: over half low/moderate-income families Exchange Demographics: over half low/moderate-income families of colorof color

UninsuredUninsured– 4.7 million (2/3 of the uninsured) are eligible for subsidized 4.7 million (2/3 of the uninsured) are eligible for subsidized

coverage; more could become coveredcoverage; more could become covered– Some won’t be signed up; some will not qualify for help due to Some won’t be signed up; some will not qualify for help due to

income or immigration status; there will be residual populationincome or immigration status; there will be residual population

SecuriSecuring the Safety-Netng the Safety-NetThe Need for TransformationThe Need for Transformation

– For hospitals, community clinics, and others, this a challenge and For hospitals, community clinics, and others, this a challenge and opportunityopportunity

– Potential new resources: Direct funds for clinics, newly insured Potential new resources: Direct funds for clinics, newly insured consumers with dollars attached to them.consumers with dollars attached to them.

– Will their consumers stay with them, or go to other providers? Are Will their consumers stay with them, or go to other providers? Are they ready to compete?they ready to compete?

– What is the business plan for safety-net providers?What is the business plan for safety-net providers?– Goal: Not Just Surviving, but ThrivingGoal: Not Just Surviving, but Thriving

Assessing the Entire Community’s CapacityAssessing the Entire Community’s Capacity– With many more insured, we need the capacity of the existing With many more insured, we need the capacity of the existing

safety-net to provide the care.safety-net to provide the care.– The newly-insured will have specific needs, such as language The newly-insured will have specific needs, such as language

accessaccess– The safety-net will still need strategy and support to provide care to The safety-net will still need strategy and support to provide care to

the remaining uninsured.the remaining uninsured.– How can we provide care better, and more cost-effective? How can How can we provide care better, and more cost-effective? How can

a county’s health system-public & private-be ready in 2014?a county’s health system-public & private-be ready in 2014?– Overall reforms of delivery systems…Overall reforms of delivery systems…

Cost ContainmentCost Containment PreventionPrevention: Major investments in prevention and public health; : Major investments in prevention and public health;

Change delivery system to promote primary and preventative care; Change delivery system to promote primary and preventative care; no cost-sharing for preventative care to encourage use; other no cost-sharing for preventative care to encourage use; other efforts like menu labeling.efforts like menu labeling.

Bulk PurchasingBulk Purchasing through group coverage, and a new exchange, to through group coverage, and a new exchange, to bargain for better rates.bargain for better rates.

Abolishing UnderwritingAbolishing Underwriting and its expense and incentives, getting and its expense and incentives, getting insurers to compete on cost & quality rather than risk selection.insurers to compete on cost & quality rather than risk selection.

Information TechnologyInformation Technology to foster electronic records, reduce to foster electronic records, reduce bureaucracy, get better data on cost & qualitybureaucracy, get better data on cost & quality

Better Research from Transparency EffortsBetter Research from Transparency Efforts on prices and on prices and health outcomes; and on health outcomes; and on comparative effectivenesscomparative effectiveness of key of key treatments.treatments.

Patient SafetyPatient Safety measures to reduce hospital-acquired infections, measures to reduce hospital-acquired infections, reduce hospital re-admissions, etc. reduce hospital re-admissions, etc.

Payment ReformsPayment Reforms to reward quality & better health outcomes, to reward quality & better health outcomes, including better care coordination and disease management; including better care coordination and disease management;

Coverage for allCoverage for all both directly (prevention, reduces cost-shift) both directly (prevention, reduces cost-shift) reduces costs and helps provides policy tools for further efforts.reduces costs and helps provides policy tools for further efforts.

PreventionPrevention Outside the health systemOutside the health system

– Beyond no cost-sharing for preventative care, Beyond no cost-sharing for preventative care, and other delivery system reformsand other delivery system reforms

Health In All PoliciesHealth In All Policies– Housing, Zoning, Education, Environmental, Housing, Zoning, Education, Environmental,

Transportation, Food Security, Public Safety, and Transportation, Food Security, Public Safety, and other services all vital.other services all vital.

– Place matters: Major opportunity for county-Place matters: Major opportunity for county-based policy interventionsbased policy interventions

Major Investments in Public HealthMajor Investments in Public Health Community Transformation GrantsCommunity Transformation Grants Other PoliciesOther Policies

– Menu labeling, etc.Menu labeling, etc.

Health Reform and YouHealth Reform and You

IF YOU ARE INSUREDIF YOU ARE INSURED, nothing requires you to , nothing requires you to change your coverage; but your coverage will be change your coverage; but your coverage will be more secure and stable:more secure and stable:

– Makes it more likely your employer continues to offer Makes it more likely your employer continues to offer coverage, set minimum standards for such coverage.coverage, set minimum standards for such coverage.

– Improves Medicare and expands Medicaid.Improves Medicare and expands Medicaid.

– Fixes the “individual market” of coverage in multiple Fixes the “individual market” of coverage in multiple ways.ways.

– Ensures that even if your life situation changes (job Ensures that even if your life situation changes (job change, divorce, graduation), you have access to change, divorce, graduation), you have access to affordable coverage.affordable coverage.

– Provides the foundation to bring down the overall costs Provides the foundation to bring down the overall costs of health careof health care

Health Reform and YouHealth Reform and You IF YOU ARE UNINSUREDIF YOU ARE UNINSURED, , you will need to get coverage, you will need to get coverage,

but there will be new help and new options to ensure but there will be new help and new options to ensure coverage is:coverage is:

– AVAILABLE:AVAILABLE: No denials or different rates for pre-existing No denials or different rates for pre-existing conditions.conditions.

– AFFORDABLE:AFFORDABLE: Subsidies/affordability credits for low & mid Subsidies/affordability credits for low & mid income families to limit out of pocket costs to a certain income families to limit out of pocket costs to a certain percentage of income, plus other efforts to bring down costs.percentage of income, plus other efforts to bring down costs.

– ADEQUATEADEQUATE: Minimum benefit standards and a cap on out-of-: Minimum benefit standards and a cap on out-of-pocket costs, so no one goes into significant debt or bankruptcy.pocket costs, so no one goes into significant debt or bankruptcy.

– ADMINISTRATIVELY SIMPLE:ADMINISTRATIVELY SIMPLE: The Exchange provides choice The Exchange provides choice and convenience, making it easy to compare and sign up for and convenience, making it easy to compare and sign up for plans.plans.

– Note that the individual mandate includes Note that the individual mandate includes exemptionsexemptions for for affordability and hardship.affordability and hardship.

HEALTH REFORM:HEALTH REFORM:Next StepsNext Steps

The BenefiThe Benefits ofts of Health Health ReformReform

1.1. Near-universal coverage for all, Near-universal coverage for all, with expansions of group with expansions of group coverage, both public and private.coverage, both public and private.

2.2. New consumer protectionsNew consumer protections: New rules and oversight on : New rules and oversight on insurers that include the abolition of underwriting and limits insurers that include the abolition of underwriting and limits on age-based rates and on premiums dollars going to on age-based rates and on premiums dollars going to administration and profit.administration and profit.

3.3. The biggest expansion of MedicaidThe biggest expansion of Medicaid since its creation 40 since its creation 40 years ago.years ago.

4.4. Sliding scale subsidies tied to incomeSliding scale subsidies tied to income: Consumers will pay : Consumers will pay for coverage not based on how sick they are, but what they for coverage not based on how sick they are, but what they can afford.can afford.

5.5. The end of most junk insuranceThe end of most junk insurance and bankruptcies due to and bankruptcies due to medical bills, with a cap on out-of-pocket costs.medical bills, with a cap on out-of-pocket costs.

6.6. Fair share financingFair share financing, including an employer assessment as , including an employer assessment as important in concept as the minimum wage.important in concept as the minimum wage.

7.7. Assistance for small business Assistance for small business and their workersand their workers to be able to be able to afford coverage.to afford coverage.

8.8. Improvements for existing public programsImprovements for existing public programs, such as , such as filling donut hole in Medicare & simplifying Medicaid.filling donut hole in Medicare & simplifying Medicaid.

9.9. The tools for cost containment and quality The tools for cost containment and quality improvementimprovement in health care generally, from prevention to IT in health care generally, from prevention to IT to bulk purchasing.to bulk purchasing.

10.10. Momentum to do moreMomentum to do more in the future, politically and policy- in the future, politically and policy-wise, in health care and beyondwise, in health care and beyond

Fulfilling the Promise: A Fulfilling the Promise: A New Federal/State New Federal/State

PartnershipPartnership The work continues:The work continues:– To implement and to improveTo implement and to improve

– Policy and political; defense and offensePolicy and political; defense and offense

– State and federalState and federal

– Legislative and regulatoryLegislative and regulatory

Many decisions will be made at the state level with Many decisions will be made at the state level with respect to implementing federal health reform respect to implementing federal health reform provisions. California will determine the outcome of provisions. California will determine the outcome of 1/71/7thth of national health reform. of national health reform.

This creates a responsibility for Californians, but also This creates a responsibility for Californians, but also an opportunity to lead, to improve health reform…an opportunity to lead, to improve health reform…

A legislative agenda that implements; goes early; A legislative agenda that implements; goes early; goes beyondgoes beyond

Fulfilling the Promise:Fulfilling the Promise:California 2010 LegislationCalifornia 2010 Legislation– Created an Exchange Created an Exchange that is transparent, consumer-that is transparent, consumer-

friendly, easy-to-use, fairly governed, and that friendly, easy-to-use, fairly governed, and that negotiates with the insurers to provide the best value to negotiates with the insurers to provide the best value to consumers: AB1602 (Perez) & SB900 (Alquist/Steinberg)consumers: AB1602 (Perez) & SB900 (Alquist/Steinberg)

– Ensured availability of child-only plans, prohibited Ensured availability of child-only plans, prohibited children with pre-existing conditions to be denied children with pre-existing conditions to be denied coverage, and limited higher rates:coverage, and limited higher rates: AB2244 (Feuer) AB2244 (Feuer)

– Made rate hikes (& justifications) public:Made rate hikes (& justifications) public: SB1163 SB1163 (Leno)(Leno)

– Conformed state lawConformed state law to many new federal consumer to many new federal consumer protections, including rescissions, dependent coverage protections, including rescissions, dependent coverage up to age 26, no cost-sharing for preventative care, etc.up to age 26, no cost-sharing for preventative care, etc.

Fulfilling the Promise:Fulfilling the Promise:California 2011 LegislationCalifornia 2011 Legislation– Reformed key systems to help consumers get Reformed key systems to help consumers get

coverage and care, to be ready ramping up to 2014:coverage and care, to be ready ramping up to 2014: Eligibility and Enrollment:Eligibility and Enrollment: AB1296(Bonilla) outlines a “no AB1296(Bonilla) outlines a “no

wrong door” philosophy for signing up Californians for coverage.wrong door” philosophy for signing up Californians for coverage.

Consumer Assistance:Consumer Assistance: AB922(Monning) enhances & expands AB922(Monning) enhances & expands the Office of Patient Advocates as a triage center for questions the Office of Patient Advocates as a triage center for questions and complaints about coverage and care.and complaints about coverage and care.

– Instituted new consumer protections and insurance Instituted new consumer protections and insurance oversight, to align with federal law:oversight, to align with federal law:

Medical Loss Ratio: Medical Loss Ratio: SB51(Alquist) would allow state SB51(Alquist) would allow state regulators to enforce new federal standards to ensuring regulators to enforce new federal standards to ensuring premiums dollars go to patient care, not administration and premiums dollars go to patient care, not administration and profit.profit.

Maternity Care:Maternity Care: AB210(Hernandez)/SB222(Evans) mandates AB210(Hernandez)/SB222(Evans) mandates maternity services as a basic benefit by July 2012.maternity services as a basic benefit by July 2012.

Fulfilling the Promise:Fulfilling the Promise:California 2012 LegislationCalifornia 2012 Legislation– Instituted new consumer protections and Instituted new consumer protections and

insurance oversight, to align with federal law:insurance oversight, to align with federal law: ESSENTIAL HEALTH BENEFITS: AB1453 (Monning) / SB951 ESSENTIAL HEALTH BENEFITS: AB1453 (Monning) / SB951

(Hernandez)—set a minimum standard for health plans (Hernandez)—set a minimum standard for health plans (equivalent to a Kaiser small group HMO), so consumers (equivalent to a Kaiser small group HMO), so consumers have more confidence that their coverage is have more confidence that their coverage is comprehensive.comprehensive.

SMALL GROUP MARKET REFORM: AB1083 SMALL GROUP MARKET REFORM: AB1083 (Monning) prevents small businesses from seeing spikes in (Monning) prevents small businesses from seeing spikes in insurance premiums if their workers get sick.insurance premiums if their workers get sick.

Also:Also: NOTICE OF COVERAGE OPTION DURING LIFE CHANGES: NOTICE OF COVERAGE OPTION DURING LIFE CHANGES:

AB792(Bonilla) requires that consumers are informed of AB792(Bonilla) requires that consumers are informed of their coverage options in the new Exchange when losing their coverage options in the new Exchange when losing coverage--such as during a job change, divorce, adoption, coverage--such as during a job change, divorce, adoption, and other circumstances. and other circumstances.

Fulfilling the Promise:Fulfilling the Promise:The Medi-Cal WaiverThe Medi-Cal Waiver

California’s “Medicaid waiver” is being negotiated California’s “Medicaid waiver” is being negotiated this year, to determine the next five years of the this year, to determine the next five years of the program, which covers 7 million Californians. Some program, which covers 7 million Californians. Some shared goals include:shared goals include:

– Be ready for health reform: through early Be ready for health reform: through early enrollment and other efforts, have over one enrollment and other efforts, have over one million in Medi-Cal on Day 1: January 1, 2014million in Medi-Cal on Day 1: January 1, 2014

– Help bring in additional federal funds to Help bring in additional federal funds to California, for the state budget and for our California, for the state budget and for our safety-net institutions, especially public safety-net institutions, especially public hospitalshospitals

– Incorporate other delivery system reforms, Incorporate other delivery system reforms, around coordinated carearound coordinated care

– Ensure key consumer protections for seniors Ensure key consumer protections for seniors and people with disabilities, before any patient and people with disabilities, before any patient is mandatorily shiftedis mandatorily shifted

Fulfilling the Promise: Fulfilling the Promise: (LIHP)(LIHP)

Low Income Health ProgramLow Income Health ProgramA win for the county, the uninsured, and the health system:A win for the county, the uninsured, and the health system:

– County gets County gets new federal matching fundsnew federal matching funds, for dollars they , for dollars they already largely already spend on indigent care, helping their already largely already spend on indigent care, helping their health system and their local economy.health system and their local economy.

– Up to 500,000 uninsured get Up to 500,000 uninsured get coverage prior to 2014; a coverage prior to 2014; a medical homemedical home providing primary and preventative care, not providing primary and preventative care, not just care at the emergency room.just care at the emergency room.

– Since this coverage is grounded in county-based systems of Since this coverage is grounded in county-based systems of care, these new dollars go to care, these new dollars go to shore up safety-net shore up safety-net institutionsinstitutions, including public hospitals, community clinics, , including public hospitals, community clinics, and other providers.and other providers.

– This serves as This serves as a bridge to health reforma bridge to health reform, ensuring these , ensuring these patients are getting treated and in systems of care before patients are getting treated and in systems of care before 2014, and ready to get full Medi-Cal (or exchange-based) 2014, and ready to get full Medi-Cal (or exchange-based) coverage on day one, maximizing enrollment and federal coverage on day one, maximizing enrollment and federal funds for California.funds for California.

– This isn’t a long-term obligation: In fact, the more people are This isn’t a long-term obligation: In fact, the more people are enrolled in these programs, and thus quickly shifted to Medi-enrolled in these programs, and thus quickly shifted to Medi-Cal in 2014 with 100% funding by the federal government, Cal in 2014 with 100% funding by the federal government, the the more county resources can be refocused to better more county resources can be refocused to better serve the medically indigent who remain uninsured serve the medically indigent who remain uninsured after 2014.after 2014.

2013 Agenda:2013 Agenda:Consumer Protections & Insurer Consumer Protections & Insurer

OversightOversight Watchdog the federal and state government to ensure that Watchdog the federal and state government to ensure that new new

consumer protections are implemented and enforcedconsumer protections are implemented and enforced..– Focus at the Department of Managed Health Care (DMHC) Focus at the Department of Managed Health Care (DMHC)

and the Department of Insurance (DOI)and the Department of Insurance (DOI)– Continued focus on rate review has generated hundreds of Continued focus on rate review has generated hundreds of

million in savings through scaled-back and withdrawn rate million in savings through scaled-back and withdrawn rate hikes.hikes.

Ensure Ensure Californians know about their new rights and Californians know about their new rights and optionsoptions..

Start to transition from the “Wild Wild West” insurance market: Start to transition from the “Wild Wild West” insurance market: phasing in benefits, standards, and options to be ready for 2014. phasing in benefits, standards, and options to be ready for 2014. (Bill numbers from previous session)(Bill numbers from previous session)

– INDIVIDUAL MARKET REFORM: AB1462 (Monning) / SB961 INDIVIDUAL MARKET REFORM: AB1462 (Monning) / SB961 (Hernandez)(Hernandez)

– COST SHARING LIMITS: AB1800 (Ma)COST SHARING LIMITS: AB1800 (Ma)– Also: RATE REGULATION: AB52 (Feuer)Also: RATE REGULATION: AB52 (Feuer)

Fight efforts to weaken, defund, undermine, and repealFight efforts to weaken, defund, undermine, and repeal these consumer protections and the rest of reform.these consumer protections and the rest of reform.

2013 Agenda:2013 Agenda:Ensuring Californians Get Ensuring Californians Get

Coverage: The Day One ChallengeCoverage: The Day One Challenge Eligibility and enrollment legislation Eligibility and enrollment legislation (bill numbers from (bill numbers from

prior session):prior session):– THE 2014 MEDI-CAL EXPANSION: AB43 (Monning) / SB 677 THE 2014 MEDI-CAL EXPANSION: AB43 (Monning) / SB 677

(Hernandez)(Hernandez)– PRE-ENROLLMENT: AB715 (Atkins)PRE-ENROLLMENT: AB715 (Atkins)

Work to Work to implement and improve:implement and improve:– Streamline enrollment in Medicaid, Healthy Families, the Streamline enrollment in Medicaid, Healthy Families, the

Exchange and elsewhere; no wrong doors;Exchange and elsewhere; no wrong doors;– Get ready so millions of Californians get covered on Day Get ready so millions of Californians get covered on Day

One—January 1, 2014—and California gets all the federal One—January 1, 2014—and California gets all the federal help available.help available.

– Create integrated system of “navigation”—right now, Create integrated system of “navigation”—right now, patchwork of county workers, brokers/agents, community patchwork of county workers, brokers/agents, community groups, etc.groups, etc.

– Work at the Legislature and at the Exchange, DHCS, etc.Work at the Legislature and at the Exchange, DHCS, etc.

2012 Agenda:2012 Agenda:New Public OptionsNew Public Options

COUNTY-BASED PLANSCOUNTY-BASED PLANS– PUBLIC HEALTH INSURANCE OPTIONS IN THE PUBLIC HEALTH INSURANCE OPTIONS IN THE

EXCHANGE?EXCHANGE?– How can we facilitate joint ventures between county-How can we facilitate joint ventures between county-

run health plans, to provide regional provider run health plans, to provide regional provider networks and be commercially viable.networks and be commercially viable.

A BASIC HEALTH PLAN?A BASIC HEALTH PLAN?– SB 703 (Hernandez) would establish a Basic Health SB 703 (Hernandez) would establish a Basic Health

Plan, for those 133%-200% of the federal poverty Plan, for those 133%-200% of the federal poverty level. Under the ACA, it would operate with funds level. Under the ACA, it would operate with funds from 95% of Exchange subsidies, and with those from 95% of Exchange subsidies, and with those dollars possibly could provide better benefits and dollars possibly could provide better benefits and cost-sharing, and better provider payments than cost-sharing, and better provider payments than Medi-Cal. Issues include whether it diminishes Medi-Cal. Issues include whether it diminishes Exchange’s bargaining power, where it lives, etc.Exchange’s bargaining power, where it lives, etc.

Also: Also: SB810 (Leno)SB810 (Leno) continues as a vehicle for a single- continues as a vehicle for a single-payer system.payer system.

Fulfilling the Promise:Fulfilling the Promise:What a Community Can DoWhat a Community Can Do

EducateEducate the Community about Their New Rights, Options, the Community about Their New Rights, Options, Benefits, and Consumer ProtectionsBenefits, and Consumer Protections

EngageEngage Communities and Consumers Every Step of the Way Communities and Consumers Every Step of the Way Maximize Federal DollarsMaximize Federal Dollars for County and Community for County and Community

– Grant opportunitiesGrant opportunities– Matching Dollars for Medi-Cal, Healthy Families, LIHP, etc.Matching Dollars for Medi-Cal, Healthy Families, LIHP, etc.

Aggressively Implement the Low-Income Health ProgramAggressively Implement the Low-Income Health Program Be ReadyBe Ready So Community Residents Get So Community Residents Get Coverage on Day OneCoverage on Day One

– Set a Goal and Date; Work backwards to Meet That GoalSet a Goal and Date; Work backwards to Meet That Goal– Systems in place for easy enrollment through no wrong doorSystems in place for easy enrollment through no wrong door

Transform the Safety-NetTransform the Safety-Net to Survive and Thrive to Survive and Thrive– A Business Plan for Safety-net institutionsA Business Plan for Safety-net institutions– An Assessment and Augmentation of County-wide CapacityAn Assessment and Augmentation of County-wide Capacity

Use the New Tools in the LawUse the New Tools in the Law– To focus on delivery system reform for To focus on delivery system reform for cost, quality, safety & equitycost, quality, safety & equity – To build To build health in all policieshealth in all policies, with place-based policy interventions, with place-based policy interventions

What it MeaWhat it Means to Repeal in ns to Repeal in CACA

LEAVE CONSUMERS AT THE MERCY OF INSURER ABUSES. LEAVE CONSUMERS AT THE MERCY OF INSURER ABUSES. allowing insurers to:allowing insurers to:

deny almost 400,000 Californians deny almost 400,000 Californians for “pre-existing conditions”;for “pre-existing conditions”; impose arbitrary annual and lifetime capsimpose arbitrary annual and lifetime caps on coverage, leaving on coverage, leaving insuredinsured patients patients

at risk of medical debt and bankruptcy; andat risk of medical debt and bankruptcy; and sell “junk” coveragesell “junk” coverage that does not provide basic benefits. that does not provide basic benefits.

DENY MILLIONS HELP WITH HEALTH CAREDENY MILLIONS HELP WITH HEALTH CARE Deny Deny 2 million 2 million uninsured Californians access to coverage through Medicaid;uninsured Californians access to coverage through Medicaid; Deny Deny 3.8 million 3.8 million uninsured Californians access to new coverage through individual uninsured Californians access to new coverage through individual

health insurance and prevent improvements to coverage for health insurance and prevent improvements to coverage for 21 million 21 million Californians Californians with employer or individual plans.with employer or individual plans.

Condemn Condemn 66,000 66,000 more California families a year to bankruptcy due to health care more California families a year to bankruptcy due to health care costs.costs.

Prevent Prevent 3.2 million 3.2 million young adults in California (under age 26) to obtain coverage on young adults in California (under age 26) to obtain coverage on their parents’ insurance plans.their parents’ insurance plans.

Deny all Deny all 4.5 million4.5 million California seniors with free preventive services California seniors with free preventive services

REJECT RESOURCES AND FEDERAL FUNDS FOR CALIFORNIANSREJECT RESOURCES AND FEDERAL FUNDS FOR CALIFORNIANS Deny Californians access to Deny Californians access to $106 billion $106 billion in tax credits would mean in tax credits would mean increased increased

health insurance premium costs for millions of California familieshealth insurance premium costs for millions of California families Increase taxes on up to 392,000 California small businesses by $4.3 billion, Increase taxes on up to 392,000 California small businesses by $4.3 billion,

by stopping small business tax credit.by stopping small business tax credit. Increase prescription drug costs for 794,000 California seniors by $9.3 Increase prescription drug costs for 794,000 California seniors by $9.3

billion,billion, by leaving the Medicare Donut Hole unfilled. by leaving the Medicare Donut Hole unfilled. Eliminate $1.4 billion in new funding to California community health Eliminate $1.4 billion in new funding to California community health

centerscenters..

So Much More So Much More TTo Do:o Do:What Can What Can YouYou Do? Do?

1.1. Thank your member of Congress/Tell them not Thank your member of Congress/Tell them not to repeal it:to repeal it: C Call, write, or visit your Congressional all, write, or visit your Congressional Representative and thank them for their yes vote – or Representative and thank them for their yes vote – or attend a public event to thank them!attend a public event to thank them!

2.2. Share your story Share your story personal stories help others learn personal stories help others learn how they can benefit from reform – and they are a how they can benefit from reform – and they are a compelling advocacy tool!compelling advocacy tool!

3.3. Support state efforts to implement and improve Support state efforts to implement and improve reform reform let your local representatives know that you let your local representatives know that you support robust implementation and improvement of support robust implementation and improvement of reform.reform.

4.4. Write a letter to the editorWrite a letter to the editor in support of reform in support of reform and all its benefits. and all its benefits.

5.5. Join our mailing list Join our mailing list to keep up to date on to keep up to date on legislative development and get important action legislative development and get important action alerts! alerts!

– Sign up at Sign up at www.health-access.orgwww.health-access.org for E-mail updates for E-mail updates– Check out our daily blog, at Check out our daily blog, at blog.health-access.org blog.health-access.org – Check out our Check out our FacebookFacebook and and TwitterTwitter feeds feeds

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