(Justin Sullivan/Getty Images)

Gov. Jerry Brown’s revised budget plan is a mixed bag for health advocates and some county officials.

Brown said the state would take the lead on a key provision of the federal health law — expanding Medi-Cal to more than one million Californians. Brown scrapped earlier plans to consider a more complicated, county-based system.

But Brown anticipates recouping more than $300 million from the counties next fiscal year – money that pays for public health programs and care for the uninsured. Brown’s rationale? With the full implementation of federal health reform next year, more people will enroll in Medi-Cal and fewer people will show up to county emergency rooms.

Farrah McDaid Ting with the California State Association of Counties says Brown’s proposal makes no sense. She says plenty of people will still rely on county services in 2014.

They are “people who qualify for Medi-Cal but don’t sign up, people who have a hard time signing up or staying on programs, the undocumented in our communities and those who are in between private health plans,” McDaid Ting said. “We need to retain enough funds to serve those people.”

That could be 3 to 4 million Californians who remain uninsured even after federal health reform is fully implemented, according to projections from UC Berkeley and UCLA. Brown and state health officials say they are developing a “mechanism” that will determine county savings based on real data.

Advocates fanned out across California Tuesday holding five statewide rallies, including one in front of state offices in Oakland, where they called for a rollback of cuts to adult dental care, children’s nutrition programs and other social services.         

“I think the most important number to remember is that one in four children in California are in poverty now,” Jamila Edwards Harris with the Children’s Defense Fund said. “And that number has only risen since budget cuts over the last five years.”

Brown’s budget also continues pending cuts to Medi-Cal providers, a plan that has been tied up in federal court since it passed in 2011.

(Fred/Flickr)

For you wonks out there, Kaiser Health News has a fascinating Friday afternoon read for you.

In a piece titled “Bloggers See Own Reflections in Oregon Medicaid Study,” reporter Jordan Rau describes how this week’s news about Oregon’s Medicaid Experiment quickly became “a Rorschach test for how partisans and health policy wonks view the health care law.”

To quickly recap, in a New England Journal of Medicine study researchers analyzed how 10,000 people who won Medicaid coverage have fared since they gained insurance. The highlights were: no apparent affect on physical health; rates of depression 30 percent lower than those without coverage; catastrophic out-of-pocket medical expenses essentially eliminated.

In his piece, Rau publishes excerpts from seven blogs, each with a different take on the study’s highly nuanced results. But he closes with something I hadn’t seen elsewhere: a view of the experiment by someone who says he was one of the winners of the Medicaid coverage. Rau found the post on the blog Robert’s Stochastic thoughts.

Here’s the post in its entirety:

I am one of the winners in the Oregon lottery [winners could get Medicaid]. Going from no insurance to insurance is very confusing. When you have no money every health question starts with “would I rather live with this problem and have electricity, or treat this problem and keep my milk in a cooler for a month or so?” Stepping back into healthcare was like hopping on a merry-go-round. The doctor wanted to do test after test to come up with baselines for me, and I had a hard time showing up at the lab, I hadn’t been going to the doctor to find out new things about what was wrong with me. A huge part of living without insurance is not thinking about your high blood pressure damaging your kidneys. It takes a while to change that. It took me 6 months to change my level of co-operation with my doctor, and she said I was faster than many. Most people got into the groove about their 2nd physical. Then we had year-to-year values for blood tests and weight and blood pressure. Those numbers getting better helped. I lost 40 pounds the first year, regained 15, and lost another 10 the next year. Now my doctor wants me to try for another 10 pound loss. I have gone from 3 blood pressure medicines to 1, and that’s at a half dose. This whole time my blood pressure stayed the same, but dropping 2 pills and keeping the same score is a health upgrade. My blood sugar is still pre-diabetic, but diabetes is a progressive disease. If you keep your blood sugar at the same level for 2 years, you are making progress with managing diabetes. The study would have found me to make no progress, but my doctor thinks I have improved.

The last point is that diabetes and cholesterol are both food-based diseases. The Oregon Medicaid project enrolled very poor adults, I think the income cutoff was much lower than the SNAP benefit limit. So none of us have access to unlimited fresh fruit and low fat meat. We still eat nothing but carbs for most meals.

The mental health benefits are enormous. Changing how you eat and exercise is hard for everyone, but most people can throw a bit of money at the problem and grease their way. With no money for better food, no money for good shoes to go on walks, no rain gear, no walkman for listening to music as a distraction while walking, change is harder.

What I would like to see is a study that shows the changes in these measurements over a 2 year period for people who have insurance. People with insurance for the last 20 years are not always improving their health, either.

So much in this post touches on the tough policy issues we’re facing today: health is about so much more than health care; it’s really hard to change habits and even harder if you’re poor; how mental health affects health. But that last line is really a zinger.

By Kelley Weiss, CHCF Center for Health Reporting

Tax credits for small businesses offering health insurance have been available since the health law was passed in 2010. (Photo/Getty Images)

With less than a year to go before the full rollout of Obamacare, many business owners are still scratching their heads over what it will mean for them.

In fact, most still wrongly believe they’ll have to offer health insurance to their employees, according to a recent eHealth survey. While businesses with 50 or more full time employees will have to pay a $2,000 penalty per worker if they do not offer health insurance, there is no penalty for smaller businesses.

Another commonly misunderstood part of the health care law is the role of the tax code. John Gonzales [also with the Center for Health Reporting] has more details about how paying your taxes and Obamacare works. It’s the bedrock of enforcing the law and subsidizing premiums for people to buy insurance.

At an event about taxes and Obamacare, UCLA health care economist Dylan Roby gave a somewhat grim picture. He says widespread ignorance and varying degrees of hostility towards the health care law persist among business owners.

“Many of these employers, especially on the smaller level, are not that great about maintaining a relationship with the government,” Roby says.

Take, for example, the small business tax credits that have been available since 2010, when Obamacare passed. The U.S. Government Accountability Office last year estimated that less than 5 percent of eligible businesses have claimed the credit. This isn’t a big surprise to Larry Levitt of the Kaiser Family Foundation.

“It’s about as exciting as picking health insurance and doing your taxes and that’s what we’re combining here,” Levitt says.

These business owners are potentially leaving money on the table. If you’re a small business owner who has been offering health insurance at any point since 2010, you may qualify for a tax credit. You can file a revised tax return to collect it.

Another break for businesses trying to purchase health insurance for their workers could come from the new “marketplace” called Covered California.

This state-run exchange is supposed to even the playing field for small businesses that can pay almost 20 percent more than larger ones for health insurance. Currently a little under half of California’s small businesses offer health insurance to their employees.

On the flip side, those $2,000-per-employee penalties for large businesses that don’t offer health insurance start next year. But this will affect less than 5 percent of businesses. That’s because in California, and nationally, most businesses are considered small, meaning they have fewer than 50 employees.

Allan Zaremberg, head of the California Chamber of Commerce, says it’s a daunting task for businesses to keep the carrot and stick aspects of Obamacare straight.

“There is a heck of a lot of confusion about tax credits and costs and do I put him in the exchange or take the penalties,” Zaremberg says.

Allan says he’s not convinced the stick approach will work with businesses. He says they’ll be weighing if taking a couple thousand-dollar penalty per employee for not offering coverage would actually be cheaper.

“I’m not always sure that you can scare them with a monetary penalty. And certainly for a small employer there is none,” Zaremberg says.

Now the push is on to educate businesses about the potential benefits of Obamacare. USA Today and Kaiser Health News report that California has budgeted about $250 million to help consumers, including small businesses. But few experts are saying it’ll be easy.

The health care overhaul is “a big complicated piece of business,” President Obama told reporters during Tuesday’s news conference. (Alex Wong/Getty Images)

If you’re one of the millions of people confused about Obamacare, the president took a few minutes on Tuesday to reiterate his main messages about the federal health law.

“For the 85 to 90 percent of Americans who already have health insurance, they’re already experiencing most of the benefits of the Affordable Care Act even if they don’t know it,” the president said.

He called insurance “stronger, better, more secure,” for people than before the law’s passage. ”Full stop. That’s it. Now they don’t have to worry about anything else.”

President Obama specifically mentioned three benefits of the ACA already in place:

• Children can stay on their parents’ plan until age 26
• Your insurance company cannot drop you if you get sick
• You get free preventive care with no co-pay and no deductible (including many cancer screening tests)

The law also has banned lifetime caps on coverage. For people who have employer-based insurance or Medicare, most of the changes required by the law are already in place.

For people who do not have insurance — or who buy insurance for themselves or their families — “implementation issues” remain, the president said.

“… What we’re doing is we’re setting up a pool so that they can all pool together and get a better deal from insurance companies,” the president said. “And those who can’t afford it, we’re going to provide them with some subsidies. That’s it. I mean, that’s what’s left to implement because the other stuff’s been implemented, and it’s working fine.”

But the challenge in setting up that system is “still a big complicated piece of business,” he acknowledged.

A big complicated piece of business indeed.

It’s been three years since California became the first state in the country to pass legislation to set up a marketplace, now called Covered California. Covered California has been moving full steam ahead, but  the clock is ticking down rapidly to Oct.1 when the online marketplace must open for people to begin shopping for insurance. Coverage will start on Jan. 1, 2014.

“Glitches and bumps” ahead

The president was clear there’s still a long ahead. “And the last point I’ll make,” he said, “even if we do everything perfectly, there’ll still be, you know, glitches and bumps, and there’ll be stories that can be written that says, oh, look, this thing’s, you know, not working the way it’s supposed to, and this happened and that happened. And that’s pretty much true of every government program that’s ever been set up.”

The president’s remarks came on the same day that a new poll showed some troubling gaps in the public’s understanding of the law.

More than 40 percent of Americans are unaware that the ACA is still the “law of the land,” according to the poll conducted by the non-partisan Kaiser Family Foundation. And just under half of Americans say they so not understand how the law will affect themselves or their families.

(Dale M. Moore/Flickr)

Perhaps the most popular provision of President Obama’s federal health law is that people cannot be turned down or charged a lot more because they are sick. Obamacare also reduces how much more older people can be charged for insurance.

But the president’s health law permits one group to be charged more — a lot more: smokers. States can allow health plans to charge tobacco users up to 50 percent more for their health insurance premiums.

The provision allowing for a “tobacco surcharge” was designed in part to encourage smokers to quit a habit that often leads to major illness.

The Centers for Disease Control puts the nation’s annual price tag for smoking at more than $190 billion in both medical care and lost productivity.

It’s that price tag that prompts some to support higher health care premiums for smokers. Micah Weinberg is a senior fellow with the Bay Area Council, which researches public policy issues that affect businesses and the local economy. While he says caution is needed to avoid premiums so high that they are unaffordable to smokers, ”I think that we need to make sure that there is a strong financial disincentive for people to smoke.”

But critics say the smokers’ surcharge is discriminatory and goes against the spirit of federal health reform.

It can also negate the benefits of subsidies offered under the federal health care law, says Karen Pollitz, a senior fellow with the Kaiser Family Foundation .

For example, a low-income person buying a $6,000 policy who qualified for a subsidy might see the price of the annual policy drop to $3,000, Pollitz says. But “the tobacco surcharge would knock it back up to $6,000 again.”

That was the finding of a study published last summer by the Institute for Health Policy Solutions in Washington, D.C. Smoking rates both in California and nationally are highest among lower-income people –- who often must juggle several jobs to support themselves and their families. The resulting stress, Rick Curtis, president of IHPS says, makes breaking the tobacco addiction even harder.

“For somebody who is totally hooked after many years, and older – and those kinds of people often do need more medical care, they have emphysema and so forth – they have two bad choices: go without health insurance and be impoverished that way, or get health insurance and be impoverished,” he said.

That argument resonates in Sacramento where Assemblyman Richard Pan (D-Sacramento) has written legislation that would make California among the first states to ban higher premiums for smokers under the Affordable Care Act. He believes providing smokers with affordable health insurance is a better way to help them kick the habit.

“It does not make sense to have smokers being uninsured,” says Pan, who is also a practicing pediatrician. ”We want smokers to actually have health care coverage. … [T]hrough having health care coverage they’ll have access to smoking cessation treatment” as well as health care in general.

Weinberg calls effort by California to ban higher premiums for smokers misguided, especially when based on findings that those smokers are disproportionately poor.

“We have this very paternalistic attitude about lower-income folks that I think is inappropriate and particularly inappropriate in this context,” he says. “Because if we eliminate the financial incentive not to smoke we’re going to create an environment in which more people do smoke.“

Weinberg’s concerns aside, Pan’s bill faces little opposition –- not from cigarette companies, anti-smoking groups or anti-cancer advocates.

Officials at the American Lung Association’s California branch said in a statement that because smoking is so hard to quit, it’s essential to provide tobacco users with affordable health insurance, rather than make them pay more for it.

(Vic: Flickr)

Federal tax credits designed to make health insurance more affordable, starting next year, will help nearly 3 million Californians buy health insurance, according to a study issued Tuesday.

The report commissioned by Families USA – a supporter of President Obama’s health care reforms — says that more than 85 percent of all Californians who qualify for the federal tax credits live in families with at least one full- or part-time worker who doesn’t receive employer-sponsored health insurance.

It also finds that 52 percent of Californians expected to qualify for the sliding-scale tax credits will come from middle-class families who earn up to $95,000 a year.

The biggest block of recipients — about a million people — live in Los Angeles County. About 100,000 people in Santa Clara County are expected to receive subsidies and about 75,000 people in Fresno County. (You can look up other counties in the report, on page 7. [PDF])

The report estimates that Latinos will make up half the eligible Californians; whites will make up about 30 percent; blacks about 5 percent, with the remainder comprising mostly Asians and Pacific Islanders.

The tax credits will be “advanceable,” meaning they will be applied as an upfront discount at the time enrollment in California’s new health insurance marketplace, called ”Covered California.”

“People won’t have to … pay the full premium and then try to get a reimbursement for it,” said Rep. Henry A. Waxman (D-CA) in a Tuesday morning conference call with reporters after the report’s release. “They’ll simply enter their income information, shop for coverage and then get an automatic discount of hundreds or even thousands of dollars.”

California’s health insurance marketplace is scheduled to open for enrollment this October, with coverage beginning on Jan. 1, 2014.

Covered California has a subsidy calculator where consumers can quickly get an estimate.

Vermont may not see rate shock, but its insurance market is strikingly different from that in California. (herzog/Flickr)

After years of anticipation, Vermont became the first state Monday to publish proposed 2014 individual health insurance rates under the federal health law. Despite Republican and insurers’ predictions, there was no “rate shock” in the new premiums, according to the Vermont governor’s office and insurance representatives.

That state may not be the best barometer of the impact of the heath overhaul on premiums, however, because it already prohibits insurers from using health status to determine an individual’s premiums. It is one of only seven states in the country which have so-called community rating regulations.

Vermont also requires prices to be the same regardless of person’s age. Two of the health law’s biggest changes include prohibiting insurers from using health status to determine premiums and prohibiting insurers from charging older people more than three times the rates of younger people.

California is expected to implement both these provisions.

Blue Cross and Blue Shield of Vermont and MVP Health Care submitted plans to state regulators with monthly premiums that range from an average of $265 for catastrophic coverage for young adults to $609 for platinum coverage, which has the lowest cost-sharing among four categories of plans.

“We think this is a positive development for folks who were worried about what rates would look like in 2014,” said Kevin Goddard, spokesman for Blue Cross and Blue Shield of Vermont, which is the state’s dominant commercial carrier, controlling about two-thirds of the market. He confirmed rates are similar to what the company now offers.

“These rates are comparable to what’s on the market today and that’s good news,” said Robin Lunge, director of health reform in the Vermont governor’s office. She said it’s difficult to do an apples-to-apples comparison because of the many benefit changes required under President Barack Obama’s health overhaul.  These changes, which take effect Jan. 1, include an end to annual lifetime limits in policies and a prohibition on denying coverage to people with medical problems.

Insurance industry predictions of rate shock are more likely in the majority of states that currently allow insurers to set premiums based on an individual’s health status, Goddard said.

Starting Oct. 1, individual and small group coverage in the state will be sold on a new online health insurance marketplace as required under the Affordable Care Act. Health insurers nationwide have just begun submitting their pricing and benefit information to states and the federal government for policies which will be sold in the marketplaces, or exchanges. Most people who buy on the new marketplaces are expected to be eligible for government subsidies.

Vermont insurance regulators still must approve the insurers’ proposed rates. In January 2013, the state approved about a 10 percent rate increase on the individual market after carriers asked for about a 13 percent increase, Lunge said.

All the health plans in the new marketplaces are standardized into platinum, gold, silver and bronze categories depending on their actuarial value so consumers have an easier time comparing.

The Vermont 2014 annual premiums for bronze plans range from $4,200 to $4,440, compared to a Congressional Budget Office estimate of $4,500 for an individual, according to Carolyn Pearson of consulting firm Avalere Health.

Mary Eversole, executive director of the Vermont Insurance Agents Association, said she was surprised the rate increases were not higher. At first blush, she said the 2014 proposed rates appear to be about 10 percent higher than this year. Premiums for the gold and platinum  policies appear lower than similar products, but silver and bronze policies are higher.

Officials from MVP were not available for immediate comment.

Learn more:

The Confused Debate Over Obamacare and Insurance Premiums (Ezra Klein, Washington Post)

(Caroline_1: Flickr)

A major new analysis shows that hundreds of thousands of Californians will see their monthly insurance premiums fall an average 47 percent under President Obama’s health care overhaul, in large part due to tax credits and subsidies. It is the first detailed look at how health insurance premiums could change under President Obama’s Affordable Care Act, which goes into effect on Jan. 1, 2014.

Covered California, the agency charged with creating the state’s new health insurance marketplace, commissioned the analysis. The report looked at the individual market only and did not examine the small or large group market.

Under the ACA people with incomes up to four times the federal poverty level (about $94,000 for a family of four; $46,000 for an individual) will be eligible for subsidies from the federal government. That’s about 570,000 people, Covered California said.

Major findings from the study include:

• Individuals with incomes less than four times the poverty level are “likely to pay” 47 to 84 percent less for their monthly premium compared to this year
• Premiums would have increased 9 percent in 2014 because of health care inflation, even without the ACA

The analysis was conducted by Milliman, a large actuarial firm.

According to the non-partisan Kaiser Family Foundation, just over 2 million Californians buy insurance on the individual market. About 85 percent of Californians get insurance from their employer. Larry Levitt, senior vice president of the foundation, called the report a “complete and well done analysis.”

“Probably the most important thing this analysis did,” Levitt said, “was to help people understand that not everyone is going to be faced with higher premiums as a result of the Affordable Care Act.”

Still, some people will see higher premiums, in particular, people with incomes above 400 percent of the poverty level. More than a million of these middle and upper-income earners will likely experience an increase of 20 percent, the report found.

The Milliman analysis comes on the heels of another actuarial review completed this week. That one, from the Society of Actuaries, concluded costs would go up 32 percent under the ACA. But Levitt said that report was flawed, in part because it did not look across the ACA as a whole — or at the two primary ways people pay for health care: through premiums and through direct out-or-pocket costs such as deductibles and co-pays.

The Milliman report looked at both these fees to consumers. Because of anticipated benefits of the ACA, increased premium rates that some will pay could be partially offset by reduced out-of-pocket costs for health care, the study found.

In a release, Covered California Executive Director Peter Lee called the study “an important step in determining strategies to help protect” individuals from cost increases.

In California, people buying insurance on the individual market have experienced dramatic premium rate hikes over the last several years.

“Our top priority is to provide Californians with affordable health insurance options,” Lee said. “We are pleased that most individuals will pay lower rates and receive better coverage.”

The report also found that people in their 20s are likely to experience the biggest increase in monthly premiums (roughly 25 percent higher than the average increase for all ages), but in its release Covered California said many of these younger Californians are likely to be eligible for subsidies.

Levitt credited the study for estimating cost reductions due to competition expected under the Affordable Care Act. Right now on the individual market in California, it is very difficult for consumers to comparison shop. Often they cannot even find out what their premium will be until they fill out a detailed health questionnaire, Levitt said. The goal of the new insurance marketplace is to allow a more straightforward comparison of health insurance plans.

“Insurers will respond to that price competition by changing their cost structure,” Levitt said. The analysis found that this competition should bring costs down an average 6 percent.

The California Association of Health Plans reiterated the group’s overall support for the Affordable Care Act, but acknowledged the new competitive marketplace coming.

“These are completely different products in the individual market than what is sold today,” said Charles Bacchi, vice president of the group told KQED’s Mina Kim. “Health plans are going through the process of changing the way they provide coverage to this portion of the population, all on top of trying to price the products, deal with underlying health care costs and still remain competitive in the marketplace.”

Insurance companies are expected to submit plans to Covered California next month, to determine eligibility for the marketplace. Plans — and premiums — will be announced this summer. But this study is well-timed, Levitt said.

“People are forming impressions now about how this law will work and what it means to them,” he said. “So having accurate information out there about how people may be affected is really important.”

The new health insurance marketplace is scheduled to open to consumers on Oct. 1. Individuals will be able to shop for insurance that will take effect Jan. 1, 2014.