Special Session should pass a Basic Health Plan for California
By Dr. Mitchell Katz
As director of the second largest public health care system in the nation, I see first-hand the impact of the uninsured in Los Angeles County. I treat these patients each week at one of our walk-in urgent care clinics in East Los Angeles. When I sit across from a patient my first question (in English or Spanish) is always: How can I help you? I was taught in medical school to expect to hear a physical complaint: my head hurts, I can’t stop coughing. An all too common response at my clinic is: “I lost my job. My health insurance has run out.” When they walk into my office they already know what is wrong with them: “I have diabetes and high blood pressure but I haven’t taken any medicine since my insurance ended.” When people do not have insurance their health suffers, and this often results in serious complications and ultimately higher costs for taxpayers and the insured.
Fortunately, the Affordable Care Act will increase access to health insurance. On January 1, 2014, Californians will be able to purchase health insurance through the Exchange. Insurance coverage will be subsidized so that many people who could not previously afford insurance will be able to obtain coverage for themselves and their families.
Unfortunately, even with the subsidies provided through the Exchange, coverage will still be too expensive for those who hover just above the poverty line. There are about 800,000 Californians who fall into that category, and for them, coverage through the Exchange is estimated to cost up to $123 per month. Unfortunately, for an individual earning only $1,250 a month, that equals 10 percent of his or her income, and is likely to be unaffordable.
That is why Congress purposefully included in the Affordable Care Act an option for states to create a Basic Health Plan for working people who earn salaries between 133 and 200 percent of the federal poverty level, or equal to $15,000-$21,500 per year. The goal is to create a plan that can provide quality care at a cost to the working person of less than $20 per month. States can achieve that price-point by reducing administrative costs and leveraging existing health networks with experience serving lower-income populations.
Senator Ed Hernandez has authored Senate Bill 703 to implement such a Basic Health Plan for California. In the regular legislative session, SB 703 got stuck -- held up by various interests over a variety of concerns including that provider rates would not be high enough in the Basic Health Plan, and that it would undermine the viability of the Exchange. Although it is certainly true that provider rates must be high enough to provide quality care, the reality is that without a Basic Health Plan, patients will have no benefits and providers will receive no payments. With regard to the viability of the Exchange, even with the Basic Health Plan, roughly 2 million individuals would remain eligible for the Exchange, greater than almost any other state exchange in the country.
Despite this setback, we now have a second chance to get it right. Governor Brown this month signaled his intent to call lawmakers back into session to deal specifically with President Obama’s Patient Protection and Affordable Care Act. This is an opportunity for California to establish a Basic Health Plan to reduce the number of uninsured without greater risk to the state’s general fund. At least two separate financial studies have concluded that California will be able to put a Basic Health Plan into place at zero cost to state taxpayers: both Mercer and the Urban Institute have found that available federal subsidies will more than cover the cost for our state.
Every Californian, regardless of income level, wants affordable health care coverage. Senate Bill 703 will put a Basic Health Plan in place to make that happen. Legislators should not complete their special session on health care without sending SB 703 to the Governor’s desk.
Ed's Note: Dr. Mitchell H. Katz, M.D., is director of the Los Angeles County Department of Health Services.