ALLIANCE FOR HEALTH REFORM, STATE COVERAGE INITIATIVES BRIEFING, WASHINGTON, D.C., OCTOBER 26, 2007.
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ALLIANCE FOR HEALTH REFORM, STATE COVERAGE INITIATIVES BRIEFING, WASHINGTON, D.C., OCTOBER 26, 2007. NEW AMERICA FOUNDATION AND CA HEALTH CARE REFORM. D.C. and California-based nonprofit and nonpartisan think tank

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NEW AMERICA FOUNDATION AND CA HEALTH CARE REFORM

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ALLIANCE FOR HEALTH REFORM, STATE COVERAGE INITIATIVES BRIEFING, WASHINGTON, D.C., OCTOBER 26, 2007.


NEW AMERICA FOUNDATION AND CA HEALTH CARE REFORM

  • D.C. and California-based nonprofit and nonpartisan

    think tank

  • Met with and advised Governor Arnold Schwarzenegger and his staff from outset

  • Concepts and research on individual mandate, “hidden tax” on the insured (Len Nichols and Peter Harbage), and shared responsibility used by administration and credited to NAF.


UNIVERSAL COVERAGE: CALIFORNIA’S ADVANTAGES

  • Strong citizen support for health care reform (77% concerned they can’t pay for cost of major illness; 70% percent think system needs major change; 72% back Governor’s plan; 61% in favor of Democrats’ pay-or-play bill (A.B. 8/ Nunez-Perata)

  • Support or interest in comprehensive reform from labor, big business (Silicon Valley Leadership Group), small business (67% of owners polled feel employers should contribute), insurers, and hospitals (CA Hospital Assn. supports Governor’s plan)

  • High-profile and activist governor negotiating with powerful unions and health advocacy groups


UNIVERSAL COVERAGE:CALIFORNIA’S CHALLENGES

  • High rates of uninsured; relatively low rates of existing employer-based coverage

    4.9 million without insurance; 6.5 million, or over 20% of population, without coverage during year; CA employer coverage dropped from 64 to 54% from 1987 to 2005.

  • Political structure: undemocratic and archaic two-thirds rule needed for legislature to pass budget and any bills that raise taxes.

    52-day Republican holdout over passing budget stalled momentum for health reform

  • Additional federal funding needed to finance reform, rather than MA “use it or lose it”; ERISA issues

  • Friction between Governor, G.O.P. minority in legislature, and labor over different health care proposals, notably affordability and business contribution


PROPORTION OF TOTAL FAMILY INCOME SPENT ON PREMIUM AND OUT-OF POCKET COSTS, NON-EMPLOYMENT BASED, 2007.

For middle income, affordability involves both what one “can” and “should” pay

AFFORDABILITY IS CRITICAL

“Health Care Expansion in California: What Can Consumers Afford to Spend?” U.C. Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research, September 2007


THE MISUNDERSTOOD MANDATE?

  • Opposition to individual mandate in Governor’s plan a sticking point

  • Mandates and regulations will begin to reform individual insurance market away from risk selection in direction of competition on value

  • Guaranteed issue by insurers relies on mandates

  • Leaving out mandate compromises universality

  • Affordable benefit package must be available before individual mandate is enforced

  • Sensible and feasible outreach strategies and auto-enrollment will make enforcement, penalties rare


HOW THINGS STAND NOW

  • Special legislative session on health and water policy convened mid-September; Governor’s proposal put in legislative language early October: too little, too late?

  • California Labor Federation (state AFL-CIO) opposing Governor’s plan outright; Democrats and labor lukewarm at best

  • Assembly hearing scheduled 10/31/07


WHERE DOES CALIFORNIA GO FROM HERE?

  • One ballot initiative, none, or several?

  • Financing: lottery, sales tax, property tax reform, cost containment, or what?

  • Subsidies and the employer payroll tax: Splitting the difference?

  • “Nixon to China”? A deal can be cut: will leaders compromise and risk antagonizing their bases?


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