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Bill To Create Basic Health Program Delayed

The two biggest health care bills this year will have to wait till next year.

First it was AB 52, the bill to regulate health insurance rate hikes, that did not make it out of appropriations committee, and will wait till 2012 to be heard again. And now it’s SB 703 by Ed Hernandez (D-West Covina), which would establish a Basic Health Program in California.

“It’s official now, it is a two-year bill,” according to John Ramey, executive director of Local Health Plans of California.

Ramey said the extra time is necessary to get people to understand just what the Basic Health Program would do — and what it won’t do, he said.

“There are things about it that need to be worked out with the administration,” Ramey said. “They wanted to know where it would be, exactly, for implementation, and how it would or should be handled if it looked like it might somehow impact the general fund.”

The BHP would insure as many as one million low-income Californians, for about one-fifth the price they may have to pay in the California Health Benefit Exchange, Ramey said. The exchange is slated to start in 2014.

“It’s clear that, ultimately, it would be much less expensive and provide better benefits,” Ramey said. The medical providers would end up getting lower reimbursement rates than under the exchange, he said, though estimates currently are that they’d get reimbursed approximately at Medicare levels, which is still much higher than Medi-Cal rate reimbursement.

“I think people may need some time to get used to the idea,” Ramey said. “It will take time to convince policymakers.”

The Health Benefit Exchange board pushed for SB 703 to become a two-year bill.

Micah Weinberg of the Bay Area Council doesn’t need more time. He knows exactly how he feels about it right now.

“I’m really glad this isn’t happening this year,” Weinberg said. “We have to decide whether this program is consistent with what we want to achieve with federal health care reform. And whether you talk about access or cost or quality improvement, for me it always gets back to one thing that has to be fixed — the ridiculous, mind-bending complexity of our system.”

The BHP, he said, will only add to the complexity, and it could get in the way of the basic job of the exchange.

“This new program creates two cut points, where you enter the BHP and when you exit the BHP. This is the creation of a new health care program, with an entirely separate set of contracts.”

So not only would the exchange lose out on the bargaining power inherent in those 800,000 to 1 million people, but having a separate program invites churning between the two entities, Weinberg said.

“This is how we’ve made decisions in the past, we define a need for a narrow set of people and try to pass it. That’s how we created this [fragmented] system in the first place. If we keep doing what we’ve been doing, we’ll end up with what we have now.”

According to Ramey, the lower cost will allow people to get coverage who wouldn’t be able to afford coverage in the exchange. In that way, it’s actually not poaching clients from the exchange, he said.

All of this will become clear once the discussion takes place over time, and people understand the BHP, Ramey said — particularly lawmakers and officials in the Department of Finance.

“They haven’t been in a position to get an official administration position of support,” Ramey said. “We hope to have a better understanding amongst policymakers, over time, about what the impact will be.”

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