As the country finds itself at a historic turning point following the vote on national health reform, the California HealthCare Foundation (CHCF) considers the promise of the moment and the challenges that remain for the state. If the new law is implemented as envisioned, it has the potential to have a meaningful impact on the lives of millions of Californians.
Number of Insured Will Dramatically Increase
Under the health reform overhaul, the number of Californians with health insurance would dramatically increase. "As many as two million low-income Californians would be newly enrolled in Medi-Cal and other public coverage programs, and another two to three million would obtain private coverage," says Mark D. Smith, MD, MBA, president and CEO of CHCF. "Having health insurance would make it easier for people to get the care they need at a price they can afford."
The health coverage playing field will be more level, Smith notes. "Many childless adults will now be eligible for Medi-Cal. People could not be denied private coverage based on their health status or pre-existing conditions, nor will they remain tied to jobs solely to keep their health insurance."
Smith says that the law also sets much higher reimbursement rates, initially paid for entirely through federal funding, for primary care physicians who treat Medi-Cal enrollees. Medi-Cal physician payments are lower than those for other state Medicaid programs, Medicare, and commercial payers. If primary care physicians are paid at levels on par with Medicare, more physicians will be willing to treat existing and newly insured Medi-Cal beneficiaries, he contends.
Insurance Easier to Buy
Marian Mulkey, MPH, MPP, CHCF senior program officer, notes the individual insurance market would be positively affected by the law. "People will find it easier to shop for health coverage," she says. "A new health insurance exchange will help consumers compare and understand insurance prices and benefits. It will also administer federal subsidies to help modest-income Californians afford coverage."
Smith notes that, over time, the law will help to identify and implement new ways to pay for and deliver care that have the potential to slow the rise in health care spending. For example, reimbursing episodes of care across outpatient, inpatient, and rehabilitation settings will provide incentives to ensure quality outcomes while managing costs.
Improvements May Take Time
Despite this milestone, however, Smith says things may get worse before they get better. Some of the law's major provisions will not take effect until as late as 2014, and the long implementation timeline means that public and private cost pressures will intensify before many Californians realize much benefit.
Given the difficult budgetary conditions facing the state, California's public health care programs are a shaky foundation on which to build a major coverage expansion. Smith says the infusion of federal funds will not fully offset the new costs the state will face in covering more individuals.
"The cost of health insurance will still remain out of reach for many consumers," Smith says. "Younger and middle-income Californians who are not insured by an employer may find mandated coverage unaffordable. And the undocumented will receive no direct help."
Smith stresses that much more needs to be done to change the expensive and inefficient way medical care is often delivered and how providers are paid for their work. For example, rather than paying hospitals and physicians for each individual visit or procedure, which creates an incentive to do more than is necessary to keep people healthy, they could be compensated according to clinical outcomes. On the consumer side, patients who want elective or unproven care could be required to bear a greater share of the expense. And lower-cost models of care could replace many of the approaches we rely on today. Until politically difficult decisions are made to tackle these issues, Smith says, health care costs will continue to rise at an untenable rate.
The State Will Require New Resources
Under the new law, state government is assigned many implementation tasks. Yet the state budget squeeze means fiscal and human resources are already overextended, Smith says. New resources and public-private partnerships will be required to help state leaders effectively execute the responsibilities created by this legislation. Smith says that CHCF stands ready to support those efforts.
CHCF has prepared a look at how some hypothetical Californians with various employment, income, and demographic profiles will be affected by the new law. The news media should feel free to cite from the profiles.