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What Will Happen With Millions of ‘Residually Uninsured’ Californians?

Kim Belshé has been working to change the health care delivery system in California for years — previously as the secretary of Health and Human Services under Gov. Arnold Schwarzenegger (R) and now as a board member of the Covered California health benefit exchange. She knows firsthand how much of a difference health care reform can make in California.

And how much different that reform still needs to be.

“There is a really challenging reality facing us and that is a recognition that near-universal coverage is, in fact, not universal,” Belshé said at a recent conference in Sacramento.

With roughly 4.6 million Californians expected to obtain health insurance through the exchange and expansion of Medi-Cal, the state will come a long way toward meeting the health care needs of its citizens — but not all the way, she said.

“Notwithstanding all the excitement over the new insurance card, and the benefits it will cover, and the delivery system to ensure access and population health improvements, we have got a really big elephant in our living room,” Belshé said. “And that is, we’re going to have a lot of people who are uninsured.”

Estimates vary, but the thumbnail breakdown is about one million undocumented immigrants will be ineligible for coverage and another three million will be citizens who, by chance or by choice, won’t receive the benefits or subsidies for which they qualify.

For lack of a better term, those four million people are referred to as the “residually uninsured.”

“We have some big questions as a state, and as a community, in terms of our commitment to the residually uninsured,” Belshé said. “Where responsibility will rest, what service models make the most sense and, all importantly, how will that care be financed.”

Most Uninsured Will Be Eligible, Experts Predict

Two drains on California’s health care system are the overuse of emergency departments and hospital admissions for health conditions that are better handled in a preventive setting. Residually uninsured Californians could continue to tax a system that is trying to change that dynamic.

That general concern emerged at an annual statewide conference last week in Sacramento by the Insure the Uninsured Project, a not-for-profit that researches, promotes and pursues health coverage for all California residents. A panel discussion featured Belshé and several other experts.

According to Kiwon Yoo, ITUP’s policy director, most people have the wrong idea about the residually uninsured in California.

“There’s a common misconception that the residually uninsured in California all will be undocumented, and that’s just not true,” Yoo said. “The large bulk of uninsured will be documented, people who don’t know about the benefits or people who choose not to use them.”

Many people, despite low exchange premiums and subsidies to make those premiums more affordable, can’t afford to absorb the cost of subsidized health care, Yoo said. Others with language barriers may not understand the benefits, or aren’t even aware of them in the first place, Yoo added.

Among some eligible Californians there’s a resistance — sometimes cultural — to the idea of insurance, she said.

“Some people would say, ‘Why pay a premium now when I’m healthy and don’t need it?'” Yoo said. “Also, there is some reliance on acute or emergency services [for all health needs], rather than just going to the emergency room for emergencies.”

According to Belshé, the residually uninsured will have the following characteristics:

  • Two-thirds will be citizens or legal residents;
  • Roughly 40% to 50% will be eligible for Medicaid or subsidies through the exchange;
  • Two-thirds will be Latino;
  • Roughly 40% will not be able to afford coverage through the exchange because premiums would consume more than 8% of their family income, even with subsidies; and
  • About 60% will have limited proficiency in English.

“And about 60% of them will have incomes less than 200% of federal poverty level — the population we know is, most likely, the users of safety-net services,” Belshé said.

Those numbers could change somewhat, depending on the success of Covered California’s outreach and enrollment effort. Under an “enhanced” prediction model, one that assumes a 75% take-up rate of coverage offered — rather than the 60% take-up rate of the “conservative” model — the number of residually uninsured could be reduced by about one million, meaning that roughly three million residents in California would remain without coverage.

“What’s the difference? It’s the difference in a million lives. So those numbers are not preordained,” Belshé said. “Our mission is maximizing enrollment, and we have a very clear business interest in doing so, because we want the largest, most diverse risk mix possible.”

Reaching people with limited English proficiency is part of the exchange’s — and the state’s — challenge, she said.

“Policy and practice can have, and will have, an impact on what that number is,” Belshé said. “The decisions we’re making now will affect how many will remain residually uninsured.”

‘What Are We Going To Do About It?’

Given the scope of the likely problem — providing health care for four million people in California without any coverage — mapping out an unfunded solution can be pretty daunting, according to panelist Mitchell Katz, director of the Los Angeles County Department of Health Services.

“The thing I believe most deeply is that you have to do something,” Katz said. “We’re not going to whine, we’re not going to complain and moan about this sad group of people, but we need to figure out what are we going to do about it?”

According to Katz, it’s not really about coming up with funding to care for the uninsured, since many are getting some form of care now. It’s more about reallocating existing resources, he said.

“We are spending money. We are spending money now,” Katz said. “We are hypocritical about the care we do provide. I mean, this is a country that won’t let someone die on the street, if we know about it. We will spend money, but we’re only willing to spend at the most inefficient, most expensive time.”

Katz laid out a scenario where someone who is lying unconscious on the sidewalk may be picked up by paramedics, taken to the emergency department for an MRI or CT scan, and then hospitalized. That’s an expensive process, he said.

“The question is, how do you take all the money being spent in a locality and use it in the best way?”

In Los Angeles, Katz said, the system has struck a “major success” with electronic consultations from specialists. “Lack of specialty care and specialty access was one of the biggest problems in LA,” he said. With expanded use of electronic consults, people are getting a higher level of care from their primary care provider.

“What is notable is only 40% of patients have required a face-to-face [meeting after an electronic consult]. That means 60% gave information to improve the care of a patient.”

Katz also said that the institution of a patient-centered clinic has been effective. “No-shows are very expensive, to book the services and not have people show up, that’s very expensive,” Katz said. “We’ve been able to drop the no-show rate from 70% to 10%.”

Belshé politely disagreed, saying that funding is central to organizing a new system of treatment for the residually uninsured. The first step, she said, is to enroll as many people as possible in the exchange. She said she hopes Covered California outreach efforts also will help enroll eligible Californians in expanded Medi-Cal coverage.

“This is something this state has never done,” Belshé said. “We tend to expand programs, and we hope people hear about it. But we have a unique opportunity here,” she said, to reach people who have never been involved in health coverage.

“We are transforming our enrollment system to be focused on the consumer,” Belshé said. “We have an opportunity to take that rhetoric of a culture of coverage and actually make it real.”

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