California Safety Net Health Coverage Out of Reach for Many
Enrollment in the California Major Risk Medical Insurance Program has decreased by about one-third during Gov. Arnold Schwarzenegger's (R) tenure as governor, and the program's viability is drawing questions because of its funding mechanism, premium structure and benefit caps, the Los Angeles Times reports.
The program covers people who are rejected by commercial health insurance companies because of pre-existing health conditions. About 2% of the state's medically uninsurable residents, or about 13,000 Californians, currently are enrolled in MRMIP.
The state covers about one-third of the program's costs, drawing funds exclusively from the state tobacco tax.Â Other states with similar programs use tax funds or assessments on insurers to subsidize their programs.
Program subscribers contribute about two-thirds of the program's costs, paying premiums that are capped at 125% of commercial insurance rates, out of reach for many Californians.Â More than one-third of MRMIP members who opted out of the program this year cited premium costs as the reason.
Overall, lawmakers have kept funding for the program below $40 million annually, prompting MRMIP administrators to cap enrollment.Â There is a wait list of hundreds of people interested in enrolling in the program.
To combat the wait list, Schwarzenegger and the Legislature approved a one-time $10 million appropriation to expand the program this year.Â The funds came from fines on health insurers.
In addition, MRMIP caps benefits at $75,000 per year, making the program of limited use to people with high medical costs.Â The state forgoes between $4 million and $8 million in federal funds because of the program's benefit cap, according to a legislative estimate.
Expansion Effort Vetoed
This year, the governor vetoed a measure (AB 2) that sought to expand MRMIP by assessing a $1 per member per month fee on health insurers that sell individual health plans.In his veto message, Schwarzenegger maintained that the fee would be pushed on to customers and only "exacerbate their burden" (Rau, Los Angeles Times, 10/28). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.