New Data Underscore Impact of Health Care Reform for California

When talking about health care reform, it’s easy to get lost in the data, and that got a lot easier in recent days.

Part of the wave of new data came from the White House Council of Economic Advisers in the form of a report projecting the effect of Democratic health care reform proposals on state and local governments. 

Drilling down to the numbers for California, President Obama’s advisers concluded that health care reform would save the state more than the $2.14 billion state and local governments currently spend treating the uninsured. 

The report also projects that expanding Medi-Cal — California’s Medicaid program — to cover an additional 1.7 million state residents whose annual incomes don’t exceed 133% of the federal poverty level would cost $1.95 billion annually.  Current proposals call for the federal government to cover the entire cost of the expansion initially and then 90% of the cost down the road, leaving California to pay $195 million annually.

That might sound like a bargain, but look at the number in the context of California’s budget situation.  In July, the Legislature and Gov. Arnold Schwarzenegger (R) approved a budget revision package that cut $1.3 billion in spending from Medi-Cal, just months after provisions of an earlier budget agreement eliminated coverage for dental care, optometry and a number of other services for adult Medi-Cal beneficiaries.

The Legislative Analyst’s Office expects California to see major budget deficits through at least fiscal year 2013-2014, about the same time some elements of the Democratic health care reform proposal would take effect.

Other recent data highlight the wide variations in health insurance coverage throughout California.  According to an NPR analysis of data from the U.S. Census Bureau, more than 20% of adults under age 65 are uninsured in 11 of California’s 53 congressional districts. 

At 28.2%, Rep. Jim Costa’s (D) District 20 in the Central Valley had the highest percentage of uninsured adult residents younger than age 65.  Neighboring District 21, home of Rep. Devin Nunes (R), had the highest percentage of uninsured kids in California at 16%.

Taking a closer look at the positions on health care reform taken by Reps. Costa and Nunes shows that health care reform is encountering resistance on all sides.  Costa, a member of the fiscally conservative Blue Dog Democrats, has questioned elements of the House health care reform proposal and called for changes to the system to be rolled out gradually.

Conversely, Nunes asserts that the Democratic proposals in Congress are misguided and instead advocates legislation that would offer tax credits to individuals and create state health insurance exchanges as part of an effort to help more Americans buy coverage.

As the debate plays out, here’s a look back at what happened last week. 

Administration Message

• On Sept. 21, President Obama taped an appearance on CBS’ “Late Show With David Letterman,” where he answered a question about whether at least some of the negative reactions to his health reform proposals are because of racism. Obama joked that he “was actually black before the election” (Shear, Washington Post, 9/22). Obama then took a more serious tone, explaining that anger over his reform attempts is “misplaced” but not surprising. He said, “Whenever a president tries to bring about significant change, … there is a certain segment of the population that gets very riled up” (Ward, Washington Times, 9/22).
• White House officials have used clips from the address Obama gave to a joint session of Congress for a four-minute video that synthesizes the president’s health care reform goals, Roll Call reports.  In an e-mail to subscribers to the White House Web site, senior adviser David Axelrod said that four minutes is “all you need to learn just what you get from health insurance reform” (Koffler, Roll Call, 9/21).

Senate

• On Thursday, Senate Finance Committee Chair Max Baucus (D-Mont.) privately met with all members of the panel to discuss the draft health reform bill that he released on Wednesday, in part to hear their concerns with the proposal and generate more support for it ahead of the markup, Roll Call reports (Drucker [1], Roll Call, 9/17). Baucus insisted that the cost of the bill will not increase significantly beyond the initial estimate (CQ Today, 9/17).
• After the full Senate Finance Committee meeting on Thursday, Republican panel members met with Senate Minority Leader Mitch McConnell (R-Ky.) to develop their strategy for next week’s markup, Politico reports. The meeting included the three Republicans on the Finance Committee’s “Gang of Six” bipartisan negotiating group, who had worked for months to craft the bill with Baucus and two other Democrats.  Many Republicans expressed concern with provisions that address federal funding for abortion services, the coverage of undocumented immigrants and medical malpractice laws (Budoff Brown, Politico, 9/17).
• In a separate meeting on Thursday, Senate Democrats met with Baucus and Senate Democratic Conference Vice-Chair Charles Schumer (D-N.Y.), Politico reports (Politico, 9/17). Schumer said that Finance Committee Democrats are developing a strategy that would ensure that party members are in agreement on the bill and that it has the potential to attract votes of moderate Republicans like Sen. Olympia Snowe (Maine) (Drucker [2], Roll Call, 9/17).
• On Sept. 17, Baucus received a boost of support for the draft bill from four Senate moderates — Sens. Ben Nelson (D-Neb.), Claire McCaskill (D-Mo.), Joseph Lieberman (I-Conn.) and Olympia Snowe (R-Maine) — who issued a statement praising Baucus for his efforts to craft a bipartisan bill, CQ Today reports (CQ Today, 9/17).  Although the four lawmakers did not endorse all elements of the measure, they said that it “has the potential to gain broad bipartisan support” (Pierce, Roll Call, 9/17).

House

• On Sept. 21, House Speaker Nancy Pelosi (D-Calif.) said she is confident that the House will approve a health reform bill with a public plan within a matter of weeks, the Philadelphia Inquirer reports. During an appearance in Philadelphia with House members from the area, Pelosi said a public plan is needed to “hold the insurance companies to the reforms we have in the bill” (Fitzgerald, Philadelphia Inquirer, 9/22). Blue Dog Democrats currently have decided against introducing an amendment that would have stripped the public option from the House bill (HR 3200), Roll Call reports (Newmyer, Roll Call, 9/22).
• House Energy and Commerce Committee Chair Henry Waxman (D-Calif.) said recently that the panel will begin a second markup of its version of the House reform bill on Sept. 23. The committee’s first markup was cut short by the August recess, and House members agreed to bundle the remaining 55 amendments and act on them at a later date (CongressDaily, 9/18).
• On Sept. 16, the fiscally conservative Democratic Blue Dogs sent a letter to the White House praising President Obama‘s comments that he is open to alternatives to the public plan option (Soraghan, The Hill, 9/17).
• On Sept. 16, 54 House Republicans sent a letter to congressional leaders seeking strict measures to ensure that undocumented immigrants do not receive any health care benefits through the chamber’s health care reform legislation, Roll Call reports. The problem can be “easily addressed” by adding a provision requiring citizenship verification in order to receive affordability benefits, according to the letter (Bendery, Roll Call, 9/16).

Republican Opposition

• During the GOP’s weekly radio and Internet address on Sept. 19, Rep. Sue Myrick (R-N.C.) cautioned against current health reform proposals, the AP/USA Today reports. In the address, Myrick recalled that it “took six doctors, three mammograms and one ultrasound” but “only a few weeks” before physicians discovered her breast cancer. Myrick also criticized a proposed public plan and not-for-profit health insurance cooperatives as “gateways to government-run health care,” which would include higher taxes for small-business owners and large cuts to Medicare (AP/USA Today, 9/21).
• On Sept. 17, five Republican representatives sent a letter to President Obama requesting a group meeting to discuss their concerns about health care reform, The Hill reports. The letter — signed by Reps. Bill Cassidy (La.), Jason Chaffetz (Utah), Tom Price (Ga.), David Roe (Tenn.) and Steve Scalise (La.) — comes as administration officials have refused to schedule one-on-one meetings between the president and GOP lawmakers, despite Obama’s promise to sit down with any member of Congress to discuss health reform (Hooper, The Hill, 9/20).
• On Sept. 17, Sen. Chuck Grassley (R-Iowa) suggested that comments by Obama might have had a negative effect on bipartisanship, The Hill reports. In particular, Grassley was upset that Obama and senior adviser David Axelrod had implied that Grassley’s efforts to reach a bipartisan agreement were not sincere. Grassley said that Obama “gave some speeches during August in which he was associating me with efforts to make this a political document.” He added that Republicans have been “accused by Axelrod of making political things and maybe not being serious in our negotiations. You know, that’s not a very good environment to carry on a conversation with the White House” (Young, The Hill, 9/17).
• On Sept. 17, several Senate Republicans and Republican governors criticized a proposal in the Senate Finance Committee‘s draft bill to expand the Medicaid program, which they believe would create a “massive” unfunded mandate on their states, Roll Call reports. Mississippi Gov. Haley Barbour (R), chair of the Republican Governors Association, said that “every governor in the country is very concerned that this bill is very bad for our states,” adding, “We are concerned this is a huge unfunded mandate … that will come to the American people as a state tax increase” (Stanton, Roll Call, 9/17).

What’s in the Bill: Cancer Centers

• A provision in the Senate Finance Committee‘s reform bill would grant four cancer centers beneficial Medicare payment rates, the New York Times reports. The centers are the Nevada Cancer Institute, Karmanos Cancer Center in Detroit, University Hospitals in Cleveland and the Cancer Institute of New Jersey (Kirkpatrick, New York Times, 9/22).

Shaping the Debate

• About 400 health care analysts and policy advisers from across the political spectrum have sent an open letter to Congress, warning that the “current health system is in crisis and is not sustainable in the future.” The letter also implores lawmakers to get past political bickering and pass health reform, CQ HealthBeat reports. Letter signers include Princeton economist Uwe Reinhardt; William Roper, who had various health care posts under the Reagan and George H.W. Bush administrations; and Brandeis University economist Stuart Altman (Reichard, CQ HealthBeat, 9/17).
• Total ad spending in 2009 dedicated to health reform will reach $100 million in the next few days, which some advertising experts believe could be the costliest campaign dedicated to a single topic in history, the Washington Post‘s “44” reports. Experts say the spending is increasing at a faster rate, with the first $50 million of the year spent over about seven months and the second in roughly the last six weeks (Pershing, “44,” Washington Post, 9/17).
• CMS is investigating Humana after the company sent letters to beneficiaries warning of cuts to Medicare benefits if major health reform is enacted. The mailings stated that “millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.” CMS sent a letter to Humana last Friday and ordered the company to cease the mailings and remove related information from its Web site (Hunt, CongressDaily, 9/21).  Humana spokesperson Tom Noland said that the company is cooperating with the investigation and stopped mailing the information earlier this month (Alonso-Zaldivar, AP/USA Today, 9/22).
• The Main Street Alliance, which represents small-business organizations in 15 states, has been lobbying for a public option, the opposite tactic of the National Federation of Independent Business, which has been working to kill such a proposal, CongressDaily reports (Dann, CongressDaily, 9/17).
• AARP is releasing another phase of its multimillion-dollar advertising campaign, focusing on protecting Medicare benefits and eliminating insurers’ ability to deny coverage based on pre-existing conditions, Roll Call reports. The campaign involves television, online, radio and newspaper ads (Palmer, Roll Call, 9/16).
• The “Gang of Six” senators who negotiated the Senate Finance Committee’s health reform bill have received $10.7 million in campaign donations since 1989 from “industries and people with the most stake financially in the overhaul effort,” the AP/Atlanta Journal-Constitution reports. Finance Committee Chair Max Baucus (D-Mont.) has received $3.9 million in such donations in the same time period, according to data from the Center for Responsive Politics, which only included some donations from health insurers in the totals (Fram, AP/Atlanta Journal-Constitution, 9/16).
• On Sept. 15, Health Care for America Now said it will spend $1.2 million on a two-week television advertising campaign, along with a three-day print run, in support of a public option, the Post‘s “44” reports. The TV ad, titled “How To Get Rich,” also attacks health insurance companies (Pershing, “44,” Washington Post, 9/15).

Studies

• Employers could experience a 160% increase in health care costs over the next 10 years if the health care system remains unaltered, according to a report released Sept. 15 by the Business Roundtable, a group comprised of some of the nation’s top CEOs, CongressDaily reports. The cost of insuring one employee will rise from its current level of $11,000 to $28,000 or more by 2019 unless action is taken to curb rapid growth of health care costs, the report found (Dann, CongressDaily, 9/15).