Covered California

California Doesn’t Have a Budget Surplus

November 25, 2018 By Todd Royal 5 Comments

It’s become common folklore that California is booming and incoming Gov. Gavin Newsom and the Democratic supermajority have more taxpayer money than they will know how to spend, save or invest. Nothing could be further from the truth; and it’s the California voters and taxpayers who will continue to be pay for this mistake. We literally owe trillions that isn’t being discussed. Just the estimated payments on public employee pensions in California will increase from $31 billion in today’s dollars to $59 billion in 2024; and this number is based on non-recessionary conditions or a major correction in the stock market. And California immediately needs $800 billion to over $1 trillion worth of infrastructure repairs, upgrades and new construction.

A conservative estimate of California’s total debt by the California Policy Center in a 2017 study – before new tax and bond obligations recently voted in were factored – puts California’s total local and state debt at $1.3 trillion. The Stanford University Pension Institute (www.pensiontracker.org) in 2017 calculated California’s unfunded liability at $1.4 trillion and CalPERS also with an unfunded liability of $1.4 trillion, with CalSTRS billions underwater as well to give, “real state debt of $2.8 trillion.”

Whichever calculation is used California owes trillions and doesn’t have a plan in place to address this issue. What should be clear is that California does not have a surplus or anything near a surplus factoring in total debt and infrastructure for a basic, functioning society California citizens and non-citizens expect. This figure also doesn’t factor in health care costs rising under Covered California, Medi-Cal or possibly expanding Medicare to include all Californians living in-state.

These financial and societal facts will affect overall fiscal health and the ability to pay back debts accruing interest or fall under the category of a future obligation. Government services at the state, county and local level are at risk if a recent announcement by the CalPERS board is taken into consideration titled, “Risks Report,” highlighted, “The greatest risk to the system continues to be the ability of employers to make their required contributions.”

Taxpayers will have to make up the shortfall through additional taxes – like eliminating Prop. 13, voting in a VAT or services tax or some combination thereof – otherwise first responder response times, social services for the poor and needy, and environmental standard protocols will erode.

There are other factors California will need to overcome to pay back their debt and realize we do not have a budget surplus. California’s unemployment rate rate is 33^rd in the nation at 4.1%. The national unemployment rate is 3.7%. We have the highest taxes in the nation when the variables of the gas tax, state income tax, and sales tax are put into the equation. Additionally, California has the highest housing and rents in the nation per amount of residents. The median home price in California is roughly $544,900 whereas the remainder of the United States is estimated at $220,000. We artificially suppress housing supply (particularly, single-family-home) – though demand hasn’t diminished – driving up prices. Our stringent environmental standards evidenced by CEQA, SB 375, AB 32, SB 100 and CARB is hurting job growth and economic sustainability.

High taxes and regulations; and a tough business environment are some of the reasons why Toyota, Occidental Petroleum, and Nestle USA food conglomerate left California. Now the second largest firm in California – McKesson Pharmaceuticals is seriously contemplating leaving for Texas – according to a report by the San Francisco Business Times. The issue isn’t whether or not these companies leave; instead it’s the high paying jobs with benefits across all income spectrums being driven out of California. Moreover, we need successful firms to assist tackling the trillions we owe in pensions, bond obligations and infrastructure requirements.

After this recent election where it has become proper to bash Republicans – especially California Republicans – many will postulate there is no difference between Republicans and Democrats. When there is nothing farther from the truth. I’m not speaking about politics, which is essentially the means for winning elections and building coalitions for governance, I’m speaking about actual policies. How do you allocate taxpayer money? Do you want to tackle California’s debt or speak about a surplus instead? Do you believe in abortion, gay marriage, some form of socialism? Do you build a larger navy to confront global problems? Do you believe in fracking?

Those are policy decisions that have wide ramifications for California policymakers and voters. The California Democratic Party currently believes in spending more than it takes in by amounts it will never be able to recover; though incoming Governor Newsom showed variables of fiscal restraint as mayor of San Francisco. Of course there are establishment cronies and swamp-dwellers in both parties; but if you only take environmental policy using Tom Steyer as an example there has never been a more powerful oligarch in recent memory.

The planet and California isn’t better off for the policies Mr. Steyer advocates for and our poverty and homelessness continues being the worst in the nation. These are examples of policy decisions similar to believing there is a budget surplus that have long-term, negative ramifications.

What the surplus doesn’t take into account is California’s real poverty rate that the Census Bureau standard now has at 19% and 43.9% higher than the remainder of the US. Disenchantment and disillusionment with both parties is en vogue, but there is to much at stake in our financial future to allow the Democratic supermajority be let off the hook by continuing to spout the mantra of budget surplus.

Filed Under: Top Stories Tagged With: budget, CalPERS, CalSTRS, Covered California, Gavin Newsom, Medi-Cal

Covered California to Guarantee Health Insurers’ Profits to Save Obamacare Exchange

August 16, 2017 By Chriss W. Street 4 Comments

Covered California is so desperate to keep insurance companies on its Obamacare exchange that the state plans to guarantee profits to the giant corporations.

Breitbart News reported early this month that despite the annual inflation rate of only 1.6 percent, Covered California is granting healthcare insurers average premium increases of 12.5 percent. But that appears to not be enough to lure insurers to stay on the exchange, if President Trump ends U.S. Treasury “cost-sharing” side payments to insurers that the courts have ruled are illegal.

According to the a study by the non-partisan Congressional Budget Office (CBO), titled “The Effects of Terminating Payments for Cost-Sharing Reductions,” Obamacare exchange insurance premiums will spike by another 20 percent in 2018. Given that 75 percent of Obamacare enrollees received free insurance through Medicaid, the CBO estimates that the U.S. deficit will jump by another $194 billion between 2017 and 2026 as a result.

Obamacare was sold to voters on a promise to slash healthcare insurance premiums by up to $2,500 per family. But new mandatory rules caused insurance premiums to spike by 68 percent between 2010 and 2015, according to the National Association of State Legislatures.

The national average cost of healthcare for a family of four in the United States is now $17,322. But in highly-regulated California, the average family healthcare premium is even worse, at $18,045.

With the tsunami of cash flooding into the health insurance industry since 2010, profits have more than doubled, and the healthcare stock index is up by 251 percent. The industry’s biggest Obamacare winner has been America’s largest health insurer, United Healthcare. With profits more than tripling since Obamacare passed, United Healthcare’s stock is up a stunning 592 percent.

But with concerns that President Trump or the courts will stop making illegal cost-sharing payments, big insurers like Anthem Blue Cross, Aetna and Humana are duping Obamacare coverage for 2018. One of the reasons that United Healthcare’s stock has been hitting a series of new all-time-highs this month is that the company is cutting its Obamacare coverage from 34 states in 2016 to 3 states in 2017, and possibly leaving Obamacare completely in 2018.

With many of the top health insurance industry players jumping ship on Obamacare, Southern California Public Radio reported that the board of Covered California will consider a plan on August 17 that would incentivize health insurers to offer coverage by guaranteeing that for any lack of profit or losses they suffer in 2018, California will guarantee them the right to jack up profits with higher premium increases in each of the following three years.

Covered California is referring the to the plan as an initiative to address market uncertainty over the actions that might be taken by the Trump administration and the courts.

But “[a]n economic system characterized by close, mutually advantageous relationships between business leaders and government officials” is the Oxford Dictionary’s definition of crony capitalism.

This article was originally published by Breitbart.com/California

Filed Under: Top Stories Tagged With: Covered California, Health care, Obamacare

“Honeymoon” Period is Over For Government Run Health Care

July 24, 2016 By David Kersten 12 Comments

The announcement yesterday by Covered California that the statewide premium increase for Obamacare will be 13.2%, up from approximately four percent in each of the last two years, signals that the “honeymoon” period is over for government run health care in California and elsewhere.

The State of California and its taxpayers needs to brace itself for another major threat to its long-term fiscal sustainability because things could get ugly pretty quickly depending on many variables that determine California’s extraordinary level of government run health care spending.

The precise impact of the fiscal hit posed by the premium increases is difficult to pinpoint at this early stage, but there is no question that the state’s exposure to significant increases in Obamacare-driven health care expenditures will increase dramatically over the next few years.

Total costs for Obamacare in California are staggering, which means that any tweak to the program by the federal government could immediately expose the state to billions, or even tens of billions of dollars in increased costs unless corrective action is taken.

This fact is particularly troubling given the extremely poor track record of the California Democrat Legislature in being proactive on fiscal issues such as the state budget and the pension issue.

For example, Republican Presidential nominee Donald Trump says he plans to completely repeal Obamacare, which would blow a hole in California’s budget of tens of billions of dollars, unless coverage is dropped for millions of Medi-Cal recipients.

A few sets of summary figures paint a good picture the state’s total exposure in the event that federal government shifts more responsibility for the financing of Obamacare to the states, or decides to pull back all together.

According to the state’s approved 2016-17 budget, total state spending for Health and Human Services totaled $54 billion for 2016-17, which even now surpasses K-12 Education as the biggest category of state spending, which received $51.5 billion in 2016-17.

California State spending for Health and Human Services, primarily Medi-Cal, has increased by 46% since 2011-12, jumping from only $37 billion in 2011-12 to the $54 billion for 2016-17 noted above.

But if you add federal spending to the equation, the California Department of Health Care Services received a total $93 billion in 2016-17, nearly double the $47 billion received in 2011-12, according to the California Department of Finance.

The state’s Medi-Cal caseload has exploded in the past few years, increasing from 8 million in 2012-13 to a projected 14 million in 2016-17, covering over a third of the state’s population, according to the Governor’s May Revise.

For 2016-17 the state’s share of the Medi-Cal expansion under Obamacare is $16.2 billion ($819.5 million General Fund). But this only assumes a 5% share of the cost for the State of California. By 2020-21, the state share will double to 10%, while the federal government is supposed to continue to pick up 90% of the costs.

I don’t believe it’s reasonable to assume that these formulas will stay so one-sided for long, particularly in light of increased premium pressures as well as fiscal pressures on the federal budget.

Absent changes to current federal and state law, my preliminary analysis suggests that the state’s annual cost increases related to Obamacare could easily reach into the billions of dollars per year in the very near future, and significantly higher if the federal government decides to further shift its costs to the states, which is inevitable.

Future double-digit annual premium increases will only serve to exacerbate state costs and encourage more cost shifting by the federal government.

It is important to note that health care premium inflation is not something that will subside anytime soon, and the trend is only likely to increase for the foreseeable future.

The low-premium increases over the last two years of 4%, was a complete anomaly based on the historical 20-year averages.

Public agencies in California commonly assume an average of 10% annual increases in employer health care premiums. According to the California Health Care Foundation, individual premium increases rose by 15% in 2014, 9% in 2013, 8.2% in 2012, and 10% in 2011—roughly an average of 8.75% per year.

“The key drivers of health care premium increases are advances in medical technology and subsequent increases in utilization, excel price inflation for medical services, cost-shifting, the high cost of regulatory compliance, and patient lifestyles (e.g. physical inactivity and increases in obesity),” according to a study by the Wellpoint Institute of Health Care Knowledge.

To sum up, the federal government’s future commitment to Obamacare financing is shaky at best, and any major changes could spell financial catastrophe for the State of California unless bold political leadership is exercised in Sacramento—something that has been in extremely short supply on the Democratic side of the aisle in Sacramento for quite some time.

David Kersten is executive director of the Kersten Institute for Governance and Public Policy (www.kersteninsitute.org) . He is an expert on fiscal issues and teaches a masters’ course on public budgeting for the University of San Francisco.

Filed Under: Top Stories Tagged With: Covered California, Donald Trump, Health care, Medi-Cal, Obamacare

Covered California Is No Model for Obamacare Reform

July 6, 2016 By John R. Graham 1 Comment

With the recent announcement of UnitedHealth Care’s abandoning Covered California and most other Obamacare exchanges around the country, its beneficiaries will have fewer plans to choose from in 2017. We can expect this shrinking number of health plans to take advantage of market power to increase premiums. Obamacare’s supporters believe the solution is to give state-based exchanges the power to act as “active purchasers” limiting consumers’ choices like Covered California does today.

Under Obamacare, consolidation is widespread. Hospital mergers increased 44 percent from 2010 to 2014. As for physicians, Marcus Welby, MD is an artifact of history. In 2014, 39 percent of physicians worked in practices with at least eleven physicians, versus fewer than one quarter three decades ago. The five largest national health insurers are merging into three, assuming the federal Department of Justice approves the consolidations.

Admitting Obamacare is leading to shrinking choices, its supporters now argue less competition among health plans is just fine, as long as the exchanges are granted even more power over the plans insurers offer.

California is one of only four states where the Obamacare exchange, called Covered California, has the statutory authority to act as an “active purchaser.” Covered California defines just one benefit design in each “metal” tier. It dictates, for example, a primary-care visit has a $45 co-pay for those with Silver plans; or that a family deductible is $4,500. According to Peter Lee, Executive Director of Covered California, consumers do not really value being able to choose plans with different deductibles or copays. “What’s the difference between them? Tweaks on co-insurance and insurance babble that most consumers don’t understand.”

In order to cut out this “babble”, Covered California only accepted 12 of 32 insurers which initially showed interest in participating in 2014. Some rating regions have more insurers competing than others. Obamacare’s supporters were relieved when Professor Richard Scheffler of the University of California, Berkeley, and colleagues published research concluding rating regions with fewer insurers (such as Santa Clara County) had lower premium hikes in 2015 than those (such as San Francisco) with more. The authors credited Covered California’s active purchasing power for this counter-intuitive result.

Examining Silver plans, the researchers concluded the average statewide premium for a 40-year old increased 3.3 percent in 2015; and a 10 percent decrease in insurer competition in a rating region was associated with a reduction in the premium hike to 3.0 percent. In New York, where the exchange is not an active purchaser, the relationship went in the direction one would expect in a normal market.

The average statewide premium increased 2.1 percent; and a 10 percent decrease in competition in a rating region was associated with an increase in the expected growth rate to 3.0 percent.

Explaining California’s counter-intuitive result, Professor Scheffler and colleagues suggest health plans in rating regions where there are fewer competitors can negotiate excessively profitable contracts with hospitals and doctors; and this gives them more room to yield when negotiating rate hikes with Covered California. Another way to put it might be that uncompetitive insurance markets allow insurers to gouge providers, then Covered California gouges back from insurers.

A policy to give that power to other states’ exchanges ignores the bigger picture. Comparing two states’ Obamacare exchanges is like comparing the taste of two rotten lemons. Health plans in exchanges in both California and New York are “highly concentrated” as defined by the Department of Justice and Federal Trade Commission. In other words, they would be closely investigated for antitrust violations if they operated in a normal market.

Nevertheless, the average premium hike in California in 2015 was 3.3 percent and in New York it was only 2.1 percent. By 2015, we already had one full year of Obamacare behind us. Everything turned upside down a year earlier. According to the Manhattan Institute, a 40-year old man’s premium went up by 33 percent in California in 2014, versus declining 45 percent in New York.

And there is the problem of network adequacy. Professor Simon F. Haeder of the University of Wisconsin – Madison, and colleagues, found hospital networks were smaller in insurers’ Covered California plans than in their commercial plans in two-thirds of cases. Networks in their Covered California plans were 17 percent smaller (measured by hospital beds) than in commercial plans. Insurers are not limiting premium hikes by yielding excess profits to Covered California, but by reducing access to hospitals and doctors.

Rather than giving other state exchanges Covered California’s power to limit consumers’ choice of health plans with narrow networks, other states should be demanding more freedom from Obamacare’s federal regulations and passing that freedom on to consumers.

John R. Graham is a senior fellow at the Pacific Research Institute and a Senior Fellow at the National Center for Policy Analysis.

This piece was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: ACA, Covered California, Health care, Obamacare

Bill Would Allow Illegal Immigrants Access to Obamacare in CA

June 12, 2016 By James Poulos 11 Comments

State Democrats forged ahead with legislation designed to fill out Covered California’s enrollment ranks with unlawful and undocumented immigrants.

Following the state Senate, the Assembly has “passed a measure that would remove a critical barrier to Covered California and allow all Californians to access the state health insurance marketplace, regardless of immigration status,” as State of Reform noted. The legislation, introduced as Senate Bill 10 by state Sen. Ricardo Lara, D-Bell Gardens, “would authorize the state to apply for a federal waiver that would allow undocumented immigrants to buy unsubsidized health coverage through Covered California.”

“Currently, undocumented immigrants are barred from using the state marketplace under the Affordable Care Act even when using their own money and instead must go directly to a broker or health plan to purchase health insurance. During its April board meeting, a Covered California staff report gave the green light to pursue this waiver from the federal government, and is now awaiting direction from the Legislature and governor.”

Republican rollover

Despite massive Republican resistance to the implementation of Obamacare, with a “repeal and replace” approach adopted by elected officials at the state and federal level, California’s GOP quietly folded in the face of the expansion plan. SB10 sailed through both houses of the Legislature with bipartisan support, as the San Jose Mercury News recalled.

Prior to the vote, key Republicans tried to keep a low profile. Leaders “in both legislative chambers declined to comment on whether the bill has enough support to pass,” according to CALmatters. “But a Republican strategist said the California GOP might be more likely to support the measure than its national counterpart, to avoid ceding the state’s Latino vote to the Democrats.”

The ins and outs of the complex Affordable Care Act have lent some circumstantial evidence to the notion that, despite President Obama’s claims to the contrary, at least some enrollment by the undocumented was envisioned or prepared for. An ACA provision “called the ‘innovation waiver’ allows states like California to change portions of the law as long as the state makes coverage available to more people and as long as the federal government doesn’t get stuck footing the bill,” reported Fox News. And though the impact of that population on Covered California has not been fully estimated, it would be significant: Lara suggested nearly 400,000 unlawful immigrants “would be eligible to receive health insurance,” according to the channel.

Federal hurdles

But the political landscape has become uncertain enough at the federal level to create an extra layer of difficulty — and urgency — for Lara and his allies. “The proposal needs federal approval, an involved bureaucratic process that could be thwarted under a new presidency. So California advocates are acting swiftly to get their application to President Obama before he leaves office, and to do so must win support from at least a few California Republican lawmakers,” Capital Public Radio noted. “Lara put an urgency clause on the bill, which requires a two-thirds majority vote to pass the Legislature. At least one Republican state senator has indicated his support” — Andy Vidak, R-Hanford — “a cherry grower in the Central Valley’s Kings County, which has a 53 percent Latino population.”

Even with adequate Republican support for urgency, however, SB10 could be stymied inside the Beltway. Public comment review requirements left some analysts skeptical that the new rules could be approved before a change in administrations, CALmatters reported. “And even if the proposal works its way through that maze and is reviewed by the Obama administration, he said, it may not be approved because of current federal guidelines. The U.S. Department of Health and Human Services has strict rules for modifying the Affordable Care Act marketplaces. They might have been put in place to avoid creating a precedent that opens the door to future changes the current administration would deem” problematic.

This piece was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: ACA, Covered CA, Covered California, Health care, Immigration, Obamacare

Report: Inaccuracies in Covered CA Doctor Lists

December 25, 2014 By Dave Roberts 3 Comments

What good is medical insurance if you can’t find a doctor?

A recent investigation by the California Department of Managed Health Care found a quarter of the doctors listed in the provider directories for two of California’s top Affordable Care Act insurance plans either refuse to accept patients in the Covered California exchange, the state’s ACA implementation, or the doctors can’t be located.

“The inquiry was in response to numerous complaints the Department received from consumers who were having difficulty finding in-network physicians,” said the DMHC. “When contacted by the Department, a significant number of these physicians listed in the Plan’s network as participating providers indicated they did not accept Covered California enrollees.”

Nearly 13 percent of the physicians listed by Anthem Blue Cross as Covered California providers were not willing to accept patients enrolled in Anthem’s Covered California plans, according to a DMHC phone survey of 3,272 providers. Another 12.5 percent were not at the location listed in the provider directory.

Similar results were found with Blue Shield in another DMHC report: 8.8 percent of providers were unwilling to accept patients enrolled in Blue Shield’s Covered California products, despite being listed on the website as doing so. And 18.2 percent of the physicians were not at the directory’s listed location.

Some Californians have it worse than others. In 13 counties, fewer than half of Anthem Blue Cross’ Covered California providers said they accept Covered California patients, according to DMHC. That was the case for Blue Shield providers in 12 counties. The worst was Modoc County, where only 20 percent accept Blue Shield’s Covered California patients.

Making the situation even worse for those seeking affordable health care, 6 percent of the physicians who do participate in Anthem Blue Cross and Blue Shield Covered California plans are not accepting new patients, according to the DMHC.

Advertising

The department accused the companies of violating California Health & Safety Code Section 1360. It states: “No plan, solicitor, solicitor firm, or representative shall use or permit the use of any advertising or solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive.”

The companies’ Covered California insurance plans were cited for four deficiencies of the Knox-Keene Health Care Service Plan Act, which regulates HMOs in California:

“The Plan operated at variance when its internet website and online Provider Directory informed enrollees that numerous physicians were participating in the Plan’s Covered California products, when they were not.
“When the Plan failed to correct inaccuracies in its online Provider Directory, the Plan used (or permitted the use of) written or printed statements or items of information that were either untrue or misleading and which were disseminated, at least in part, for the purpose of inducing persons to enroll in the Plan.
“The Plan failed to meet its statutory obligation to provide enrollees with accurate contracted provider lists, either upon request, or through provider listings set forth on the Plan’s internet website.
“The Plan failed to submit a required Amendment filing to inform the Department of a greater than 10 percent change in the list of providers and to resubmit its updated provider list for re-review and approval.”

The first three deficiencies remain uncorrected, according to the DMHC report, and “have been referred to the Office of Enforcement for additional corrective action and other remedies as needed.”

Responses

The companies filed responses with DMHC, arguing the findings are flawed, overblown and based on inaccurate phone surveys. Their contracted physicians are responsible for inaccuracies in the directory if they don’t notify that they’ve moved to another location. And the companies said that any problems have been corrected.

“The Final Report drew several inaccurate conclusions based on unsupported assumptions and a fundamentally flawed research methodology,” argued Blue Cross in its response. “Most concerning is that even after being advised of the obvious problems with the survey’s findings, DMHC forged ahead with publishing its Final report.

“The unfortunate result is that the final report is likely to confuse and mislead consumers at a time when they are in need of accurate information in making their health care decisions.”

The company argued phone surveys have a “penchant for inaccuracy.” To ensure accuracy, the surveyor must first test a small sample and make adjustments before launching the full campaign. And it should include a subsample interviewed by a different interviewer to double-check the responses.

“Importantly, the interviewer should make every effort to speak with the person most likely to have the information sought, and record the title or role of the person interviewed,” Blue Cross said. “There is no indication in the Final Report that any of these basic protocols were followed.”

The company said it followed up with the physicians contacted by DMHC. Nearly half had “no recollection of any call from DMHC or its surveyors, with many saying such a call would have been referred to the individual with whom Anthem spoke, and that the provider’s office fully understands it is an Anthem provider.”

Blue Cross also charged the DMHC report is misleading because it assumed physicians who had not updated their address information or did not respond to the survey or were uncertain whether they were in the Anthem plan “were by implication not Anthem providers. … [I]t appears the Final Report was written to confirm DMHC’s erroneous initial bias that Anthem’s Provider Directory had significant inaccuracies.”

Defense

Blue Shield’s response, while not as confrontational, made similar arguments in its defense:

“Blue Shield of California acknowledges and shares the Department of Managed Health Care’s concern about the network confusion that Individual and Family Plan members and our network providers experienced in 2014, due in large part to the implementation of the Affordable Care Act.

“We have worked hard over the last year to ensure that all of our members have an improved and positive experience in 2015. We are committed to continuing to work with the Department on our shared mission of serving Covered California members across the state.

“At the same time, we believe that the Department’s Final Report is misleading and has the potential to further confuse members by significantly overstating the severity of the issues. The vast majority of the issues raised in the Department’s report have either been corrected by Blue Shield or were never caused by Blue Shield in the first place.”

Blue Shield said it has more than 27,000 primary care providers under contract, with 96 percent “confirming they are accepting new Covered California patients.”

DMHC response

DMHC responded to Blue Cross’ criticisms:

“While the Department understands these concerns, they do not change the fact that the significant inaccuracies contained in the Plan’s online Provider Directory resulted in a highly unacceptable consumer experience, nor do they change the fact that California consumers could not reach or did not have access to providers who were represented as being part of the Plan’s network.”

The department acknowledged that Blue Shield is making corrections, but also defended the accuracy of its report’s findings:

“[T]he disconnect between the information provided to members and the actual status of providers within the Plan’s network has real potential for creating barriers to care. The divergence between the Plan’s online directory and the survey responses by provider offices listed in the directory creates confusion and access difficulties for enrollees.”

The DMHC was backed up by the California Medical Association, which represents more than 40,000 medical professionals. In a Dec. 8 letter to Covered California, CMA Associate Director Brett Johnson said the DMHC’s findings “unfortunately were consistent with our own findings.

“We have long been concerned with the state of provider directories in some of California’s largest health plans, and have conducted numerous internal surveys and analyses to this effect, some of which involved direct testing (e.g., calling practices to verify participation status) similar to that employed by DMHC.

“Despite criticism of DMHC in the plan responses for using telephone contact as the primary means of assessing a physician’s participation status, both directories audited in the report used directory disclaimers that instructed the enrollee to call or otherwise contact the listed provider to verify participation status.

“We believe, furthermore, this emphasis on point-of-service access appropriately places the responsibility for clear communication, comprehensible administrative policies, user-friendly information updating processes, and unambiguous contracting, among other things, in the hands of those best equipped to do something about it, the health plans, as opposed to relying primarily on DMHC to have the capacity required to effectively police the vast documentation this entails.”

However, the CMA did agree with the companies “that miscommunications and misunderstandings were the likely cause of a significant percentage of DMHC’s reported inaccuracies and failures to verify participation, and we further agree that, in such instances, physicians have a role in confirming participation status and ensuring that demographic data remains current.”

Recommendations

Johnson’s letter submitted three recommendations for Covered California’s consideration:

“Foster improved collaboration among providers and health plans to improve communication, the contracting process, and the means by which demographic information is verified and updated.
“Using Covered California’s authority as an active purchaser, require that providers’ participation in reduced networks be only obtained via a separate, affirmative assent.
“To achieve greater network transparency and improved directory reliability, continue encouraging and pursuing consumer-friendly technological improvements, such as creating an interface between health plan network management systems and a Covered California cross-plan directory.”

At the Dec. 15 Covered California board meeting, Executive Director Peter Lee said, “I applaud and appreciate CMA’s approach and recommendations. Getting directories right is a problem and challenge for both doctors and health plans. We will address that issue.”

This article was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: ACA, Covered California, Health care, Insurance, Obamacare

Open-enrollment headache again strikes Covered CA

November 14, 2014 By Dave Roberts 1 Comment

If you thought the rollout of Obamacare was problematic last year, this year could be worse — including its implementation here, called Covered California.

State officials are still struggling to clear a huge backlog of Medi-Cal applications from the past year, while legislators field numerous complaints from frustrated constituents, insurance premiums are increasing and Medi-Cal renewals are down. The open enrollment period for 2015 begins Nov. 15.

“As much as the first year of enrollment was big and rocky, on some levels the second year is going to be harder,” said Covered California Executive Director Peter Lee at a recent Senate Health Committee informational hearing.

Both Lee and Department of Health Care Services Director Toby Douglas are proud of their progress in implementing Obamacare in California.

“We reduced the number of uninsured by 3.4 million people in this state, from 22 to 11 percent,” said Lee. “That’s the largest reduction by percentage in the entire nation. We can feel proud of California serving as an example for the nation how to do this right.”

“[We] have had tremendous success with the implementation of the Affordable Care Act,” agreed Douglas. “We have within our Medi-Cal program dramatically changed the perception. The perception overall is positive and it gets high marks.

“That being said, we’ve had challenges, many challenges with the process. We know our implementation has not been without problems. We have to continue to learn from those challenges, continue to improve it and make it a better experience for all of those, whether applying for Covered California or enrolling into our Medi-Cal program.”

Backlog

One of DHCS’s biggest challenges has been clearing the Medi-Cal application backlog. It had reached 487,000 pending applications in July, which were whittled down to 171,681 by Oct. 15. Nearly 1,400 applicants have been waiting a year to find out whether they’ll receive coverage.

This has not only been an embarrassment for state health officials, but it’s also illegal. State law requires that health insurance applications either be accepted or denied within 90 days. Several social advocacy organizations have filed a lawsuit to get the state to abide by its own law.

“There has been an increase recently,” acknowledged Douglas. “Covered California has been going through administrative renewals, and that has pushed populations over to Medi-Cal. And we know that there’s at least 40,000 that are duplicates that need to be denied within the system of 171,000. And there’s 20,000 where we’re looking at our administrative strategies that are eligible.

“We have been going through a lot of different enhancements to try to reduce the pending cases and bring it down. Our ultimate goal is we want all applications determined eligible in the required time frame. And we might still always have pending cases, because counties might be waiting for verification information. But we want to make sure that there is no one out there stuck and pending because of system problems.”

Renewal

Another challenge for Douglas is getting Medi-Cal recipients to renew their coverage. The renewal rate in 2013 was 60-70 percent in many of the state’s larger counties. But that range has dropped to 50-70 percent in 2014, with some counties below 50 percent.

That decrease concerns Sen. Holly Mitchell, D-Los Angeles. “This is deeply troubling,” she said. “We spend all this energy talking about congratulating ourselves about our enrollment numbers and that number will be a moment in time because we get to re-enrollment and we lose them.

“And the Legislature will have kneejerk reactions like, ‘Get rid of the status reports, get rid of this, get rid of that’ to try to fix that number. That’s why I ask what the problem is so we can be a partner rather than kneejerk to try to plug this hemorrhage – because that’s huge and a problem.”

Douglas responded, “We’re not sure. We delayed the actual disenrollments to get more outreach. We would have thought it would be the same. This is not what we wanted. We think it’s because it’s a new process. There’s been concern from community groups that … thought it was confusing. It’s going to take a lot of grass roots work to break down and understand this new process and why it’s different.”

Mitchell said the confusion is inherent in the way government does things.

“Government does a horrible job in communicating,” she said. “At first I thought it’s because we really don’t want to enroll people. And I don’t think that’s the case. We are bitten by the IRS bug. Every form we create we have to make it as complicated, use as many words and make it look as academic and unfriendly as possible. It’s not just you, it’s government across the board. I’m not sure why that is. We have a bad habit of making the process as difficult and complicated unnecessarily as possible.”

Lee disagreed: “We certainly don’t, as either a matter of habit or purpose, try to make things complex, as you know.”

That prompted Mitchell to laugh, saying, “It’s government – we can’t help ourselves.”

Outreach

She also criticized the state’s education and outreach efforts to blacks.

“The effort in the first go around was lackluster,” she said. “And we need to have a clear conversation and commitment around who is engaged and contracted to do the advertising and outreach to this very specific and targeted community.

“I sponsored a [Covered California] storefront [in the Crenshaw mall] because I happened to think it was a great idea when I was approached by community-based organizations. But I have to say, I was quite disappointed at the outcome. We had five kazillion touches, but our enrollment numbers were nowhere near what I anticipated.”

Lee responded, “The Crenshaw mall enrolled not as many people as you thought it would and we thought it would. But a lot of people came and asked questions. And one of the things we learned is that it’s not a one-touch-and-done enrollment process. So the fact of having a storefront where people can come in, ask questions, take material home, come in again and then maybe go enroll with an insurance agent at that storefront we say, ‘Hallelujah, wherever you are enrolling is OK.’”

Calls

Committee Chairman Sen. Ed Hernandez, D-West Covina, voiced a complaint made by legislators at an Assembly Health Committee hearing on Obamacare in September.

“My office on a regular basis is getting calls,” he said. “They get funneled up to Sacramento. These are people who are in support of the Affordable Care Act. And they are just really upset. It can be anything from [a lack of] network adequacy to call time to wait time to length of time in Medi-Cal to get enrolled.

“So I want to make sure that not only California continues to be the leader, but absolutely most important that we address as many if not all of the concerns that the consumers of the state of California have.”

Sen. Bill Monning, D-Monterey, has also received numerous complaints from constituents.

“I represent rural areas where in much of my district there is no competition” among health insurance providers, he said. “Our phones are ringing off the hook with people who have coverage and can’t find a [health care] provider who will accept that coverage. So, coverage without access is not real coverage.

“We have a health care plan in Monterey County advising providers at a local hospital that diabetes prevention is not covered. It’s wrong. They are giving disinformation, turning people away. A major health plan that is our only health plan in the region of Monterey County is advising providers it will not cover preventing for diabetes.”

Lee said preventive care is covered, and insurance companies are reviewed annually to make sure they are providing adequate coverage.

“When we sit down with health plans, we don’t say the first question is: What’s the cost?” he said. “The first question is: Are there adequate networks of doctors, hospitals to make sure people get the necessary care? Not all, but in a number of cases there were areas where we specifically said there appear to be shortfalls in networks. And part of what plans came in with was expanded networks of hospitals or of doctors.”

Lee and Douglas assured the committee that they are working to fix the problems and improve service, but acknowledged that will take time.

This article was originally posted on CalWatchdog.com.

Filed Under: Top Stories Tagged With: Affordable Care Act, CalWatchdog.com, Covered California, Dave Roberts, Health care, Medi-Cal, Obamacare, Peter Lee

Covered CA caught in Prop. 45 crossfire

October 21, 2014 By James Poulos 4 Comments

On Proposition 45, some Democrats are feeling as if they got a transfusion of the wrong blood type. The initiative would give the state insurance commissioner the power to approve changes in health-insurance policies, including those by Covered California, this state’s implementation of Obamacare.

Normally Democrats back more regulation, and plenty support Prop. 45. But it would affect not only private health insurance companies, but Covered California as well. Yet Covered California’s smooth success, unimpeded by state second opinions, is crucial to Obamacare’s national success.

Few have admitted it, but the roots of the conflict ultimately stretched back to the very nature of Covered California’s successful establishment. At a time when other state exchanges, such as Oregon’s, were failing in a way that imperiled Obamacare’s implementation, the success of Covered California had become all-important. Without enough signups, insurers whose products were mandated for purchase under Obamacare couldn’t deliver rates the public would accept.

As a result, Covered California became a crash effort to tap California’s substantial population for exchange signups. Enrollees without adequate paperwork or identification were provisionally allowed into the program. No-bid contracts went out to close associates of Covered California officials, who knew how to leap regulatory hurdles quietly and quickly. Once the publishable number of signups rose high enough, and Obamacare stabilized, the administrative cleanup could begin. A central part of that effort would include revisiting rates negotiated with insurers.

A political curveball

But if passed, Prop. 45 would scramble such planning. Incumbent Insurance Commissioner Dave Jones holds a strong interest in supporting Prop. 45, which would give him new powers if he’s re-elected. He’s running against Republican Ted Gaines, a state senator from Roseville. Gaines opposes Prop. 45 and has challenged Jones to a debate on it.

Embracing Prop. 45 was an apparently safe bet for Jones, who had powerful Democrats in his corner, including both of California’s Democratic U.S. senators, Dianne Feinstein and Barbara Boxer.

Insurance companies, to no one’s surprise, were opposed. The dynamic had all the makings of a predictable election-season matchup if there had been no Covered California.

The current train wreck could have been predicted by observers thinking a few steps ahead. The unsettled scope of Covered California’s regulatory authority teed up a classic bureaucratic turf war of the kind routinely on display in Washington, D.C.

For Covered California officials, it was essential to ensure they could pursue their organization’s agenda unimpeded. That meant establishing direct negotiations with insurance companies themselves — without interference by state-level bureaucrats.

Adding to the administrative jockeying were the implications of the state health exchange itself. Though nominally a market in health care merely established by California through federal law, the exchange inherently politicized the cost of health insurance.

In a free market, for insurance, rates are set by company calculations. In a state-supervised exchange, by contrast, rates become subject to price manipulation based on the imperatives of keeping the exchange economically viable and politically palatable.

Shifting battle lines

From the outset, Prop. 45 threatened to complicate the ability of Covered California officials to independently pursue those imperatives. As the Sacramento Bee reported this summer, at least some influential exchange officials explicitly argued against Prop. 45 on the basis of politics. Diana Dooley, an HHS official who also chairs the board of Covered California, warned against the measure’s provision allowing challenges to rates Covered California negotiated.

For Dooley and her allies, the nightmare scenario involved activist conservatives using the challenge system to undermine trust in Covered California and reduce its efficacy.

But objections to rate-setting without adequate insurance commission oversight have been raised most frequently by Consumer Watchdog, the frequent opponent of large corporations that sponsored Prop. 45 to begin with. Because Covered California officials failed to imagine that anti-corporate sentiment would turn Californians against their plans, they walked into an election-year morass.

The predicament has left opponents of Prop. 45 falling back on a familiar strategy: advocating for additional time before Obamacare is judged wanting. In an editorial dismissing Prop. 45, the Los Angeles Times argued, “Covered California should be given the chance to fulfill its mission to the best of its ability before the state adds another layer of complexity to an already complex process.”

For his part, Jones is remaining adamant in favoring an initiative that would increase his office’s powers. He wrote on his Facebook page, “Vote YES on Prop 45 and make health insurers justify their rates!”

But the split within his own party, combined with plentiful insurance-company ads against the measure, could thwart his wishes.

This piece was originally published on CalWatchdog.com.

Filed Under: Top Stories Tagged With: 2014 Election, CalWatchdog, Covered California, Dave Jones, Health care, James Poulos, Obamacare, Prop 45