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CMA Capitol Insight: Are We Talking About the Same California?



November 25, 2013
Area(s) of Interest: Advocacy Health Care Reform Licensing & Regulatory Issues 

CMA Capitol Insight is a biweekly column by veteran journalist Greg Lucas, reporting on the inner workings of the state Legislature.




Are We Talking About the Same California?


The Legislative Analyst predicts the Golden State will enjoy a $5.6 billion surplus by June 30, 2015. That’s right, a surplus. Not a deficit. The analyst offers the most optimistic revenue estimate the state has seen in a decade. But there are caveats. A key reason for the extra cash, which the analyst says will balloon to $8.3 billion during the fiscal year that begins July 1, 2016, is the temporary tax increases of Proposition 30, approved by voters in 2012. Proposition 30 boosts state taxes on Californians earning more than $250,000 through the 2018 tax year. But when the taxes expire, the extra cash begins to shrink. Gov. Jerry Brown and the analyst caution that an economic downturn could drive the state back into the red, temporary taxes notwithstanding. Both the analyst and the Democratic governor urge spending restraint, although expect to see both Brown and the Democratic majority legislature open their wallets a bit wider in the 2014 election year, particularly in support of programs important to their political supporters.


A King-Size Mattress of Strange Bedfellows


Legislative Democrats and health insurers – let alone President Obama and California’s Assembly Republicans – don’t agree on much except that the Russian Revolution was a Communist plot. But every now and again, folks who are normally political adversaries find something to agree on – even if for different reasons. In this case, that something is the decision by the Covered California board to allow the cancellation at the end of this year of over 1 million health insurance policies that don’t comply with the Affordable Care Act. President Obama said a couple weeks ago that states could extend such policies for another year – after the Democratic president was pilloried by the media for reneging on his oft-repeated pledge that the Affordable Care Act allows Americans to keep their existing coverage, if they want. To paraphrase, the Covered California board said a postponement for any length of time would undercut the new marketplace of coverage created under the act. While acknowledging their move was certainly discombobulating – the cancellations occurring during the holidays being a key discombobulator – the board insisted that shifting to new policies would save consumers money in the long term despite costing some policyholders more in the near term. Some 590,000 Californians with cancelled coverage could pay more, according to one estimate. To ease confusion and worry, deadlines to buy coverage that takes effect January 1 were extended by the board, as were payment due dates. The Sacramento Bee notes in its coverage that the cancellations affect only policies purchased after the Affordable Care Act was approved in March 2010.


The Strange Bedfellowing Begins


After the board’s unanimous vote, Assembly Republicans announced they would introduce legislation to do what President Obama wants – let policyholders hang onto what they’ve got for another year. That’s nice but none of the legislation will go very far since Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, and Assembly Speaker John Perez, a Los Angeles Democrat, say they and the Democratic majorities they lead in both houses of the Legislature believe Covered California made the right call. The plucky board members are “bucking political pressure,” Perez says, in “staying the course,” which is the “smartest way to keep health insurance costs down and maintain…consumer protections.” The same sentiment is echoed by the California Association of Health Plans, whose CEO, Patrick Johnston, says: “Covered California made the best decision for consumers by supporting the success of our new health insurance marketplace.” Steinberg, although ignoring the President and agreeing with Perez and the health insurance industry, is a bit less glowing. He describes the board’s action as the “appropriate decision.” Health insurers don’t object to the new marketplace since it allows higher premiums and deductibles to provide existing customers with the expanded coverage mandated under the Affordable Care Act. Democratic lawmakers, in part, fear any changes to the act could open the door to overhaul or potential repeal. The board’s maintaining of the status quo fits right in with that mindset. And, if there’s going to be angst and anger among cancelled policyholders who also happen to be voters, better it occur now than next fall during election season.


For the Record


Insurance Commissioner Dave Jones, a Democrat, objected to Covered California’s decision. “Allowing existing policyholders to keep their health insurance for the duration of 2014 will not undermine the implementation of the Affordable Care Act but rather will give consumers more time to figure out what makes sense for their families.” 


Don’t Look Now But It’s Sorta, Kinda Working


A chief reason cited by those backing the board’s move is that Covered California is selling new policies – almost 80,000 since it started on October 1. That's a sharp contrast to the tepid signups elsewhere around the country. The pace is also accelerating. Covered California reports nearly 31,000 enrollees in October, reaching 79,891 on November 19. Of those enrolled so far, 56 percent are 45 to 64 years old, and 23 percent are 18 to 34 years old. For the Affordable Care Act to pencil out, there needs to be premium payments from younger and healthier policy holders to offset the higher costs of older, sicker patients. That said, it’s early in the ballgame and older people tend to plan ahead so those enrollment ratios will likely change as the signup deadline approaches. Although it’s sure hard to find a 22-year-old that doesn’t feel invincible.


Where Are They Now?


Former GOP Gov. George Deukmejian, who left public office in 1990, is happily retired in Long Beach, the city he’s lived in since 1958. California’s 35th governor was just in the news speaking at the November 21 dedication of the sparkling 513,000-square-foot, block-long “Governor George Deukmejian Courthouse” on Magnolia and Broadway near Long Beach’s Civic Center. Deukmejian, who turned 85 in June, got a major laugh from the crowd of 500 when he read a card from his son, George Jr., who is in Sydney Australia: “Congratulations on getting your name – and not in graffiti – on a public building,” his son wrote. Deukmejian the Elder noted that Gloria, his wife of 56 years, told him at breakfast it was the 150th anniversary of the Gettysburg Address, stressing that Lincoln’s speech was just two minutes in length. Deukmejian said that his achieving either Lincoln’s eloquence or brevity was “unattainable.” More than once during his remarks Deukmejian was overcome with emotion. At a private reunion of Deukmejian staff later in the day, he said: “It was hard for me there at the dedication. There were so many people who came together. I wanted to mention virtually everybody. So many people help you in significant ways. You can say thanks but it doesn’t fully express how I feel about the role they played in my life.” To reinforce the point, Deukmejian jokingly offered proof to the reunion audience of how important their show of support and friendship meant to him. “This is a big deal for me. Bigger than you realize. I’m retired. Some days I declare a pajama day. I just lounge around the house bothering Gloria. I do act as her secretary, taking her messages. [But today] I’m wearing the most expensive suit in my entire life. Number two, I got a haircut for this occasion and, number three, I got my shoes polished.” Deukmejian’s campaign slogan during his 1986 re-election campaign was: “Great State. Great Governor.” ‘Nuf said.

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