Author: Christina Vane


EHB FAQs

HHS released a list of FAQs as a follow-up to the Bulletin on rulemaking Essential Health Benefits (EHBs) released in December. The FAQs are intended to provide additional guidance on HHS’s intended approach on EHB defining.

Some main points:

  • States are not permitted to adopt different benchmark plans for its individual and small group markets. A state would select only one of the benchmark options as the applicable EHB benchmark plan across its individual and small group markets both inside and outside of the Exchange.
  • A process for updating EHB in future rulemaking will be proposed by HHS. Under the intended approach, the specific set of benchmark benefits selected in 2012 would apply for plan years 2012 and 2012.
  • If a benchmark plan is missing coverage in one or more of the ten statutory categories, the State must supplement the benchmark by reference to another benchmark plan that includes coverage of services in the missing category. For example, if a benchmark plan covers newborn care but not maternity services, the State must supplement the benchmark to ensure coverage for maternity services.
  • Under the ACA, self-insured group health plans, large group market health plans, and grandfathered health plans are not required to offer EHB. However, the prohibition in PHS Act section 2711 on imposing annual and lifetime dollar limits on EHB does apply to self-insured group health plans, large group market health plans, and grandfathered group market health plans.
  • HHS anticipates that selection of the benchmark plan for 2014 and 2015 would need to take place in the third quarter of 2012 in order to provide each State’s EHB package, which includes the benchmark plan, any State-supplemented benefits to ensure coverage in all statutory categories, and any adjustments to include coverage for applicable State mandates enacted before December 31, 2011.

Click here to read the rest of the FAQS.

UCLA: Findings from the 2009 California Health Interview Survey

The UCLA Center for Health Policy Research’s new report, The State of Health Insurance in California: Findings from the 2009 California Health Interview Survey, sheds light on the effects of the recession on insurance coverage and access to care to millions of Californians.

The study finds that 7.1 million Californians were uninsured in 2009, amounting to 21.1% of nonelderly Californians who had no health insurance coverage for all or some of 2009. This is up nearly 2 percentage points from 2007. The loss of employment-sponsored insurance increased uninsurance, which fell 3.5 percentage points from 2007, when 55.6% had coverage from their own or a family member’s job, to 52.1% in 2009.

The fall in employment-sponsored insurance, driven largely by rising unemployment, has left California with an uninsured rate about 3 percentage points higher than the U.S. average.

The impact of declining health insurance coverage and incomes leave low-income children and adults, populations of color, and immigrants disproportionately worse off and stand to only further exacerbate disparities in health outcomes.

In light of painting a seemingly bleak picture for the uninsured in California, the authors bring balance by highlighting the ACA’s potential ability to expand coverage and access to care for millions.

In total, there are five chapters to this report. Listed here are some key findings from each.

Chapter 1: The Effects of the Great Recession on Health Insurance in California

  • Those with employment-based coverage remained in the majority in 2009, at 52% of the population.
  • Public coverage climbed to insure 31.8% of all children in the state. Uninsurance among children dropped to 9.8%, continuing the declining trend from the past decade.
  • When the ACA is fully implemented in 2014, 42.9% of nonelderly uninsured Californians will be eligible to enroll in Medi-Cal under the expanded household income requirements
  • Los Angeles County has the largest proportion of uninsured who will be ineligible to either purchase coverage in the Exchange or enroll in Medi-Cal due to their citizenship and immigration status, with one-fifth of this group being ineligible for both (20.7%)

Chapter 2: Racial/Ethnic Group and Citizenship Disparities in Health Insurance Persist

  • In 2001, the uninsurance rate among nonelderly Latinos was at its height, at 34.6%. That dropped to 28.6% by 2007, but rose again with the 2009 recession, to 30.1%. Nonelderly Latinos continued to have the lowest rates of job-based insurance, with the recession erasing prior gains and dropping the rate to a decade low of 36%.
  • About four in ten of the uninsured non-Latino White population will be eligible to gain coverage through expanded Medi-Cal program under ACA (39.5%). Another one-third will be eligible for federal subsidies to purchase insurance through the new Exchange (31.4%), and nearly all of the rest will be able to buy in the Exchange with their own funds (28.5%).
  • African Americans will have among the highest rates of eligibility for the Medi-Cal expansion (49.5%), and the rest of these populations will be eligible for the Exchange, either with or without subsidies.

Chapter 3: Job-Based Coverage and the Individual Market

  • The share of nonelderly adults with employment-based coverage fell by 670,000 between 2007 and 2009. The main source of the decline was the loss of full-time work in the state. The number of adults with full-time employment fell by 1.4 million between 2007 and 2009.
  • The share of nonelderly Californians with employment-based coverage ranged from a low of 36% in Kings County to a high of 73.6% in San Mateo County.
  • Workers in low-income families (i.e., under 200% FPL) were only one-third as likely to have employment-based coverage as workers in higher-income families (above 400% FPL).
  • Individuals who are uninsured and would be eligible for subsidies under the ACA are younger on average than those currently in the individual market, but they are more likely to report fair or poor health status.

Chapter 4: Medi-Cal, Healthy Families, and Medicare Play a Vital Role in Insuring Californians

  • Over one-quarter (26.7%) of children ages 0–18 had Medi-Cal coverage in 2009, compared to 24.7% in 2007, prior to the Great Recession.
  • The main source of the increase was the loss of full-time work in the state. The number of adults with full-time employment fell by 1.4 million between 2007 and 2009. While their children were able to qualify for and enroll in Medi-Cal or Healthy Families, the percentage of adults who had Medi-Cal all year actually decreased slightly (9.0% to 8.7%), while the proportion of uninsured adults increased from 23.9% to 26.6%.
  • Medi-Cal beneficiaries were primarily made up of individuals up to the age of 18 (51%), with the other large groups being younger adults (ages 19–34), representing 13.8% of all beneficiaries, and older adults ages 65 and up (13.6%). The adult population represented only 35.4% of the Medi-Cal population, despite making up 60% of California’s population.
  • Like Medi-Cal, close to three-quarters of the Healthy Families population were Latino citizens and legal permanent residents (75% of children ages 0–5 and 69.1% of those ages 6–18).

Chapter 5: The Role of Insurance in Access to Care

  • Uninsured children (41.8%) and adults (49.9%) more frequently reported not having seen a provider in the past year than their counterparts with employment-based insurance (8.3% and 13.4%, respectively). In contrast, the employment-based insured children (20.5%) and adults (26%) were more likely than uninsured children and adults to have made five or more visits to providers (4.7% and 6.2%, respectively).
  • The uninsured were also more likely than the insured to forgo or delay needed medical care due to costs or lack of insurance; 5.7% of those with employment-based insurance reported such barriers, compared to 19.5% of the uninsured.

The complete report is available online here.

An Alternative Look into the Deficit

How much has Obama added to the deficit? There are two answers: $4 trillion, or about $983 billion, only one of which is closer to being correct.

The first is calculated by subtracting $10.5 trillion, the national debt when Obama took office, from $15.2 trillion, the current debt amount. Simple subtraction yields just over the $4 trillion mentioned above ($4.7 trillion). The second deficit amount involves a more complicated calculation as it takes into account legislation that was set into motion prior to Obama taking office. For example, the Bush tax cuts already in effect and the two ongoing wars.

Ezra Klein and The Center on Budget and Policy Priorities made this graph that attempts to illustrate a more accurate figure. In total, the policies Obama has signed into law can be expected to add almost a trillion dollars to deficits. On the other hand, the Budget Control Act — the legislation that resolved August’s debt-ceiling standoff — saves more than $1 trillion. Using the same method, beginning in 2001 and ending in 2009, George W. Bush added more than $5 trillion to the deficit.

Take a look at the graph and digest the numbers for yourself!

Full post here.

Medi-Cal Simplification: Opportunities to Streamline Enrollment Processes

The Patient Protection and Affordable Care Act (PPACA) expands Medicaid coverage to 133% of the
Federal Poverty Level (FPL) starting in 2014. As a result, nearly 1.7 million Californians will be newly eligible on January 1, 2014.

In its current state, Medi-Cal operates inefficiently, bogged down by excessively complex eligibility requirements and barriers to enrollment, leaving health leaders worried that the system will not be able to handle the influx of newly eligibles once expansion is implemented. The eligibility system is lengthy, outdated, complex and replete with redundant verification standards that are a time-consuming drain on California’s already burdened budget.

While health reform expands Medicaid eligibility to millions of adults, the likelihood that they will enroll hinges partly on the Medicaid enrollment process. ACA provides an opportunity for states to simplify the enrollment process in order to fully embrace a new “Culture of Coverage.” Information technology is one way that a seamless enrollment link can be made between Medi-Cal, the newly formed California Health Benefit Exchange and other public programs. Ease of enrollment and transitions between programs will cut high administrative costs and reduce gaps in coverage. These systems must be in place prior to 2014 to ensure that the newly eligible have coverage.

With just over two years until expansion takes effect the time to implement change is now. This paper outlines steps that ACA and California have implemented in anticipation of expansion and further suggestions for enrollment reform implementation in California in preparation of 2014.

Medi-Cal Simplification Draft Medi-Cal Simplification Draft.pdf
Medi-Cal Aid Codes Medi-Cal Aid Codes.pdf

Mental Health Patients on the Rise as Hospitals Face Budget Cuts

Hospitals are experiencing an increase in demand to provide care for individuals with mental health conditions. However, the influx of psychiatric patients coupled with budget cuts are further exacerbating already inundated emergency rooms. This further limits the number of hospital beds available to the public and places additional stress on hospital staff and administration as they care for their patients, the majority of which are uninsured. California currently has about 6,400 psychiatric beds, down from about 8,500 in 1996 according to the California Hospital Association. Additionally, state funding for mental health conditions fell by 16%, or nearly $587 million, between 2009 and 2011, according to the National Alliance on Mental Illness.

Currently, in L.A. County if hospitals do not have psychiatric services to treat patients, physicians will request that the County Mental Health Department send an evaluation team to transfer patients to psychiatric facilities. As of August 1, the evaluation teams respond to emergency department requests only when not needed by homes, schools, or in the community since the county is under no legal obligation to dispatch evaluation teams to hospitals. Hospitals have the option of hiring psychiatrists and contracting with private facilities to evaluate and transfer patients, but since most are uninsured or on Medi-Cal, contracts with private institutions would be highly expensive and an unlikely option.

Additional Information available here.

Budget News: Revenue Shortfalls May Result in Deeper Cuts

Preliminary numbers show that Brown’s budget plan, which relied on an assumption of $4B in extra revenue, has fallen quite short of that. Revenue last month came in at 9.2% or $541M below estimates needed to prevent further cuts in FY 2012. Reductions to public programs would be far-reaching and perhaps felt deepest by the higher education system and in-home supportive services for the elderly and disabled.

The state says it’s too early to raise concerns over this estimation since the bulk of revenue will be generated during the latter part of the year between December and June when income tax and corporate tax payments trickle in. They remain hopeful that the $1B revenue needed to prevent the triggered cuts will be reached.

The November and December LAO report will determine whether further cuts will be needed.

Additional information available here.

HHS Releases FOA for CO-OPs

Consumer Operated and Oriented Plans (CO-OPs) are private non-profit, consumer-governed health plans that will help increase choice for consumers and small businesses participating in Insurance Exchanges starting in 2014. CO-OPs are designed to empower consumers and small businesses to take control of their own health insurance since they will be directed by their customers and offer more affordable, high quality health insurance options.  CO-OPs are required to use their profits to lower premiums, improve health benefits, improve the quality of health care, expand enrollment, or otherwise contribute to the stability of coverage for members. In addition to improving consumer choice and plan accountability, the CO-OP program also seeks to promote integrated models of care and enhance competition in the Affordable Insurance Exchanges.

Last week, HHS officials announced that loans would be available for those interested in operating a CO-OP. To be eligible for a loan, an applicant must be a private nonprofit member organization and must intend to become a CO-OP. The deadline to apply for the first round of loans is October 17, 2011. The anticipated loan award date for those is January 12, 2012. Subsequent applications will be accepted quarterly up to and including December 31, 2012. Loan awards or a response to the application will be provided approximately 75 days after each applicant receives notice that its application is complete.

An applicant may apply in this announcement for (1) joint Start-up and Solvency Loans or (2) only a Solvency Loan. The first option provides the recipient with both a Start-up Loan and a Solvency Loan issued through a single application. Start-up Loans are intended to assist applicants with the many start-up costs associated with establishing a new health insurance issuer. Solvency Loans are intended to assist applicants with meeting the solvency requirements of States in which the applicant seeks to be licensed to issue CO-OP qualified health plans.

There is a goal of having at least one CO-OP in each State. The statute permits the funding of multiple CO-OPs in any State, provided that there is sufficient funding to capitalize at least one CO-OP in each State. Congress provided budget authority of $3.8 billion for the program. The statute directs the Secretary to give priority to applicants that will offer CO-OP qualified health plans on a Statewide basis, will use integrated care models, and have significant private support. The statute also directs the Secretary to take into account the recommendations of the CO-OP Program Advisory Board.

It should be noted, however, that the statue allows CMS to fund more than one qualified nonprofit health insurance issuer in any State if the funding is sufficient to do so. If there is no applicant from a State, CMS may award loans to encourage the expansion of a qualified nonprofit health insurance issuer from another State to that State. Additionally, an applicant may apply for loans to establish a CO-OP in more than one State.

Application materials are available for download at http://www.grants.gov.To read the full announcement, search keyword “CO-OP.”

Study Finds Medicaid a Plus for the Poor

It has long been debated whether or not state Medicaid programs had any effect on the health of the low-income population that it serves. The differences between Medicaid beneficiaries and the indigent populations have made it difficult to compare the two groups. A new study by the National Bureau of Economic Research titled, “The Oregon Health Insurance Experiment: Evidence from the First Year,” is the first of its kind to provide researchers with some answers.

In 2008, Oregon’s Medicaid program afforded researchers a unique opportunity when the state was looking to expand its public insurance program by 10,000 people. Nearly 90,000 potential enrollees applied and a lottery was held to determine who would be chosen. This situation provided researchers with an avenue to segment this population into a study group (those who applied and were chosen to enroll), and a comparison group (those who applied and were not chosen to enroll) to see if Medicaid coverage correlated with better health outcomes and less financial burden.

Some interesting results of Medicaid recipients in comparison to those un-enrolled include:
- 35% increase in likelihood of seeking outpatient care
- 15% increase in prescription drugs
- 25% more likely to report good/excellent health
- 40% less likely to say health had worsened in the past year than those without insurance
- Higher rates of preventive screening, having a regular primary care office or clinic, and having a regular physician
- 25% increase in health care expenditures

This study shows that public insurance does play a role in improving the health of its beneficiaries. With Medicaid expansion quickly approaching in 2014, can California mirror Oregon’s successes in spite of a limited budget? How will the state handle the new influx of enrollees? What role will safety net providers play with expansion?

Brown Signs the Budget

Last Thursday, Governor Jerry Brown signed California’s budget into law. The package of bills assumes larger-than-expected tax revenues and triggers additional cuts if those revenues are not generated. Brown exercised his right to impose line-veto cuts of an extra $270 million to state spending. Noteworthy cuts include: $623 million in Medicaid reimbursement and $582 million over 2 years for programs that serve people with developmental disabilities.

Read more here.

Budget Update

Yesterday, Governor Brown and Democratic lawmakers agreed on a budget plan that does not include a special election on taxes, but rather relies on assumed tax revenues. After having their initial proposal vetoed by Brown, legislators have refocused to find common ground in order to close the remaining $9.8 billion deficit.

The new bill assumes the state will generate $4 billion in additional revenue for FY2011-2012 based on stronger than expected tax receipts in May and June of this year. However, if this anticipated revenue does not materialize by early 2012, automatic triggers will be set into place, implementing an additional $2.5 billion in further cuts. For instance, the UC and Cal-state system will see $150 million in further reductions, totaling $650 million each. If increased revenues are not met, this will trigger another $100 million in cuts for higher education.

Comparisons of the vetoed bill and proposed budget plan:

How it differs: assumed $4 billion in tax revenue, 1.06% sales tax increase swap redirects money to the local government for “realignment” rather than state.

What stays the same: $200 million in Amazon online tax enforcement, $300 million from increase of $12 per vehicle DMV registration fee, $2.8 billion deferral to K-12 and community colleges.

What is eliminated: $1 billion in revenue from First 5 commissions, $700 million in federal funds for Medi-Cal errors.

Both the Senate and Assembly are expected to vote this afternoon. If the budget passes and is deemed balanced by the Department of Finance, legislators will be paid and the state will have a budget for the new fiscal year. Brown’s Department of Finance Director Ana Matosantos will decide in January whether revenues and the economy are strong enough to resist further cuts.

Read more from the Sacramento Bee and the Los Angeles Times.