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CMA Capitol Insight: Sooner Rather Than Later...



February 19, 2013
Area(s) of Interest: Advocacy Health Care Reform 

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


Sooner Rather Than Later...

…Is when the Affordable Care Act (ACA) kicks in. Back in 2010, 2014 seemed a long time away. Now, not so much. It’s still only February 2013, but the former California Health Benefit Exchange, now Covered California, has already premiered its four standard plans and estimated premium costs, co-pays and deductibles. The website, www.coveredca.com, offers a “cost-estimate calculator.” All of which is subject to potentially significant change between now and June since nothing has been finalized with the various plans negotiating to be part of the exchange’s smorgasbord of offerings. Even if the price points change – and they almost certainly will – it’s good to get the nearly 1 million consumers that Covered California expects to shop its website comfortable with the idea of an online marketplace. The sooner the better since if the state meets its timetable, Californians will be able to get coverage there starting in October. And for those not keeping score at home, near the center of Covered California’s website is a clock that shows the days, hours and minutes until the ACA’s January 1 implementation.


A Brief Stomp Around Familiar Territory

The basic package of benefits under each plan – platinum, gold, silver and bronze – is a concept created by the federal government. Each package is the same – only the price of the premium and co-pay differ. California passed legislation to make the state minimum coverage that of Kaiser Permanente’s HMO plan for small businesses. Bronze, for example, has the lowest premium but a 40 percent co-pay. Platinum is the opposite, with just 10 percent co-pay. By offering the detail it does, California goes beyond federal requirements. More of that detail: Neither the platinum nor the gold plan has an annual deductible. A doctor’s office visit carries an out-of-pocket cost of $25 under the platinum plan and $45 under the gold. The silver plan has a $2,000 annual deductible, a $45 doctor’s visit co-pay and another $500 deductible for medications. Here’s the comparison chart Covered California unveiled recently.


Good News


What hasn’t been mentioned much is that if benefits are the same across Covered California’s plans and the financial impact to the purchaser easily determined, other factors will have a stronger influence in deciding what plan to purchase. If Covered California’s customers are anything like many, if not most, Californians with health coverage, the driving factor will be their doctor and the quality of care they receive. Just as it should be.


Less Good News


In his budget proposal, Gov. Brown said costs of coverage likely would increase in 2014. The California Association of Health Plans echoed that theme in a press release reacting to Covered California’s benefit unveiling. “By requiring the same benefits and deductibles for each category of coverage, Covered California may reduce confusion among consumers about the differences in pricing among plans but may also increase premiums,” the association said. “New taxes, limits on geography-based pricing and age rating restrictions are all part of the Affordable Care Act that will drive up the cost of coverage for millions of consumers and employers. We will see in the coming months whether the standardized benefit designs adversely impact premiums or not.” The association is right about added costs. Covering persons with pre-existing medical conditions adds expense, but paying a federal government mandated 3 percent tax on every premium, which begins January 2014, has a guaranteed impact on the bottom-line and will inevitably be passed on, in some way, to the consumer. Additionally, the federal government picks up the tab for the operations of Covered California through the end of 2014. But that arrangement ends starting in 2015. Covered California thinks, depending on sales volume, that an assessment of 3 percent on participating plans ought to do the trick but no final decision has been made. Plans already pay an assessment to the Department of Managed Health Care for the privilege of being regulated by them – and a tax if they’re licensed by the Department of Insurance. The federal government also pays for Medi-Cal eligibility expansion expenses – temporarily. Within a couple years, the state will start picking up 10 percent of the nut. Money to cover that new obligation has to come from somewhere.


Two Powerful Democrats Running for Lieutenant Governor – In 2018?


Sure it pays to plan ahead, but in politics, six years is a lifetime – or a U.S. Senate term, which can seem like a lifetime depending on who is sitting in that particular seat. Just because he recently held an up-to-$13,600-a-head fundraiser, Assembly Speaker John Perez isn’t necessarily going to spend the next six years campaigning – let alone being a candidate – for lieutenant governor, which is ostensibly what the money was raised for. Senate President Pro Tempore Darrell Steinberg of Sacramento has also created a campaign committee for a 2018 run for lieutenant governor. Neither he nor Perez apparently want to run against the Democratic incumbent, Gavin Newsom, who is eligible for a second four-year term if he runs for re-election in 2014. Here’s what’s really going on – and it’s happened before. Former Senate Democratic Leader John Burton, now chair of the state Democratic Party, wrote the ballot measure that governs campaign finance in California. It says if a lawmaker is blocked by term limits from running for re-election, they can’t solicit campaign contributions unless they seek another office. During his last term in the Senate, Burton created a committee to run for State Superintendent of Public Instruction. His successor, Don Perata, created a committee saying he was a candidate for Board of Equalization. There are plenty of other examples of stated political ambitions that, in truth, are merely excuses to continue fundraising. Not that either Perez or Steinberg couldn’t shoulder the awesome responsibilities of California’s lieutenant governor.


Not Exactly a Shocker


Almost two-thirds of the 244,000 18 to 24-year-olds who registered to vote in 2012 did so online in the month before the November election, a study by the University of California at Davis Center for Regional Change and the California Civic Engagement Project. The 155,000 of these young voters who registered online broke two to one Democrat over Republican. Overall, 38.5 percent of those voters went Democrat, 20 percent chose no party preference and 21 percent registered Republican. A majority of California’s 3.7 million decline-to-state voters tend to lean Democratic. Voters aged 18 to 24 now represent 11 percent of the state’s electorate.


Even Less Unexpected


The less someone is paid the higher their hypertension risk, according to University of California at Davis researchers. The risk is highest among persons aged 25 to 44 and women. While those who conducted the study don’t claim it’s a big shock that having less money in the bank generates more tension, they do note that traditional hypertension is associated with older persons and males. Doubling the hourly wage lowered the high blood pressure risks by 16 percent. Again, not surprisingly, those most at risk of high blood pressure in the study because of low wages showed the largest fall in risk – between 25 percent and 35 percent – when their wages were raised. The bad news for employers: “If there were 110 million persons employed in the United States between the ages of 25 and 65 per year during the entire timeframe of the study – from 1999 until 2005 – then a 10 percent increase in everyone’s wages would have resulted in 132,000 fewer cases of hypertension each year,” said J. Paul Leigh, a public health professor who was lead writer of the study. Everyone knows eating greens is healthy. Apparently pocketing them is too.

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