Provision Won’t Give California Extra Help on Medicaid Expansion

Data the Department of Labor released in mid-September found that California’s unemployment rate was 12.2% in August.

High, but still lower than Nevada, Oregon, Michigan and Rhode Island, the four states that meet criteria laid out in the Senate Finance Committee’s health care reform bill that would have the federal government cover the entire cost of expanding Medicaid in select states for five years. The criteria take into account states’ unemployment rates and the projected increase in Medicaid enrollment under the committee’s bill.

Senate Finance Committee Chair Max Baucus (D-Mont.) included the provision in a series of changes he announced on Sept. 22, but don’t expect the tweak to win applause from California, Florida, Illinois and other states with large Medicaid populations that won’t see the federal government pick up the whole tab for their Medicaid expansions.

Data the White House released earlier in September projected the cost of expanding Medi-Cal — California’s Medicaid program — at $1.95 billion annually.  Current proposals call for the federal government to cover the entire cost of the Medi-Cal expansion initially and then 90% of the cost down the road, leaving California to pay $195 million annually.

Hoping to rally support for the Senate Finance Committee proposal, the panel’s Democratic staff released an analysis indicating that from 2010 to 2012, all states would spend less on Medicaid than current levels and that from 2010 to 2019, states’ Medicaid spending would increase by 1.3% compared with baseline spending.

The Democrats’ analysis also indicated that expanding Medicaid to all Americans whose incomes don’t exceed 133% of the federal poverty level would lead to 11 million to 12 million people getting health care coverage.  The White House estimated that 1.7 million of those people would be Californians. 

If economic trends continue, that number could increase.

Data the Census Bureau released on Sept. 28 showed that in 2008 California’s poverty rate increased by 0.2% to 13.3%, and analysts say the poverty rates likely have increased even more in 2009.

If the number of Californians below the poverty level increased, it’s entirely possible that the number of households eligible for an expanded Medi-Cal also would increase.  And that could translate to higher costs for California.

State officials will be keeping tabs on the shifting cost projections.  In the meantime, here’s a rundown on the week’s health care reform news.

Administration Message

• In his address at the Congressional Black Caucus‘ annual dinner Sept. 26, President Obama said that the U.S. “cannot wait any longer” to accomplish health reform and promised that his plans would not affect people who already have insurance coverage and are satisfied with their benefits, the AP/Houston Chronicle reports (Superville, AP/Houston Chronicle, 9/26).

What’s in the Bill

• The current version of the Senate Finance Committee‘s reform bill would give the National Association of Insurance Commissioners the authority to draft the rules governing how insurers can issue and market their coverage plans to U.S. residents, prompting consumer advocates to raise concerns over what they consider to be close ties to the insurance industry, the Los Angeles Times reports. The bill states that NAIC — which has 56 elected or appointed chief insurance regulators who represent all 50 states, the District of Columbia and five U.S. territories — would develop a model rule on the issuance and marketing of health plans that would become “the new federal minimum standard without any further congressional action” (Zajac, Los Angeles Times, 9/28).
• Abortion-rights opponents in the House and Senate are continuing to advocate restricting those eligible for federal subsidies under the health reform bill from buying plans that cover abortion — even if federal funds are not used to finance such services, the New York Times reports. According to abortion-rights proponents, such prohibitions would likely lead private insurers to stop offering plans that cover abortion.  Abortion-rights supporters say that health reform proposals would uphold the current ban on federal funding for abortion services because the proposals require insurers to maintain separate accounts for public funding and private premiums, with insurers using only the private money to fund abortion services.  However, abortion-rights opponents say that it is not enough to prevent federal money from being spent on abortion services (Kirkpatrick, New York Times, 9/29).
• Puerto Rico Gov. Luis Fortuno (R) is pushing Congress to include Puerto Rico in any final health reform bill, the Washington Times reports. Some Senate Finance Committee Democrats have proposed amendments that would extend health coverage to residents of U.S. territories, but they have been put on hold until the Congressional Budget Office can score such a proposal (Dinan, Washington Times, 9/29).

Dollars and Cents

• On Sept. 24, House leaders released Congressional Budget Office estimates that found a public plan option with payment rates linked to Medicare rates would produce $85 billion in additional savings compared with a version of the plan proffered by Blue Dogs, CongressDaily reports. The House Energy and Commerce Committee accepted to its version of reform legislation an amendment by Blue Dogs that would require HHS to negotiate rates with providers, which CBO estimated would reduce health spending by $25 billion over 10 years. However, CBO found that a public plan with rates based on Medicare payments would reduce spending by $110 billion over 10 years (Hunt/House, CongressDaily, 9/25).
• White House officials and members of Congress have been meeting with officials at Silicon Valley-based eHealth, which is competing to establish the countrywide health insurance exchange called for in current health reform legislation, The Hill reports. The company has set up an exchange in Utah and also operates two private exchanges in Massachusetts. Lawmakers have learned from meetings with the company that making insurance applications available through the Internet will ease the process of buying policies but likely will not reduce costs as significantly as some Democrats have claimed (Bolton, The Hill, 9/27).

House

• On Sept. 24, House Speaker Nancy Pelosi (D-Calif.) rejected the idea of a “trigger” within health reform legislation, which would enact a public plan if other reforms failed to make health care more accessible, The Hill reports. A trigger is favored by certain lawmakers in the Senate as a compromise to an outright public plan (Soraghan, The Hill, 9/24). A number of moderate Democrats, including some members of the fiscally conservative Blue Dog Coalition, took exception with Pelosi’s stance on including a public plan, Roll Call reports. The moderates also questioned several other initiatives, including a surtax on high-income individuals, and said the disagreements could jeopardize passage of a final reform bill (Newmyer/Dennis, Roll Call, 9/24).

Shaping the Debate

• On Sept. 28, the Democratic National Committee sent a blast e-mail criticizing House Minority Leader John Boehner (R-Ohio) for not taking a bipartisan approach to health reform, the Boston Globe‘s “Political Intelligence” reports. The e-mail is the second message in DNC’s “Call ’em out” campaign, which seeks to target opponents of health reform legislation for alleged “falsehoods.” In response, Boehner sent an e-mail accusing Democrats of having a “credibility problem” (Rhee, “Political Intelligence,” Boston Globe, 9/28).
• On Sept. 28, Republican leaders and conservative groups launched a new advertising campaign opposing eight new tax proposals in the Finance Committee bill aimed at funding the health care overhaul, CongressDaily reports. In addition, Republican National Committee Chair Michael Steele was scheduled to host a conference call on Sept. 29 with the media to criticize the tax proposals (Edney, CongressDaily, 9/29).
• While Republicans focus this year on defeating “ObamaCare,” they must present a “positive prescription” next year that includes their own ideas on how to reform the health care system, according to Karl Rove, a former adviser to President George W. Bush, the AP/Atlanta Journal-Constitution reports. Rove said that a conservative plan should include tax deductions and credits, efforts to computerize health records and reforms to protect physicians from having to worry about large malpractice lawsuits (Garcia, AP/Atlanta Journal-Constitution, 9/24).
• Senate Republican leaders say they will filibuster HHS leadership appointments unless the agency allows health insurers to resume criticizing Democrats’ health reform proposals, Roll Call reports.  Republicans have called HHS’ request a “gag order” and accused Democrats of stifling debate about their health reform proposals (Stanton, Roll Call, 9/24). 
• During a news conference scheduled for Sept. 24, a group of black antiabortion church leaders was expected to publicly support President Obama’s health care proposals, including a public plan, the Los Angeles Times reports. The leaders’ endorsement bolsters the administration’s assurances that the health plan would not use tax dollars to fund abortion services, a claim made by many religious conservatives (Wallsten, Los Angeles Times, 9/24).

Polls

• President Obama has regained ground in the health care debate, with 47% of U.S. residents approving of the way his administration has handled health care, up by seven percentage points from August, according to a new CBS News/New York Times poll, CBS News reports. The poll also showed that 32% of U.S. residents said the president has clearly articulated his vision for reform, while 14% said “Republicans have clearly explained their plans” for health care reform. A large plurality of respondents, 46%, said that they do not know enough about the president’s proposed changes to the health care system to either support or oppose his plans, the poll found (CBS News, 9/24). Two-thirds of U.S. residents still hope that a bipartisan bill will emerge from Congress, the New York Times reports (Nagourney/Sussman, New York Times, 9/25).
• A new Wall Street Journal/NBC News poll has found that half of U.S. residents ages 18 to 34 support a public insurance option, but they are the only age group in which support for the public option exceeds opposition, the Wall Street Journal reports. In addition, 48% of respondents within the 18 to 34 age group admitted they do not understand or only somewhat understand the debate over health reform legislation (Merchant, Wall Street Journal, 9/29).