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New Study Finds Health Care Proposals Insufficient to Protect Californians

By Hayley Leventhal
Reporter
California Progress Report

With 6.5 million uninsured Californians, both Governor Schwarzenegger and the legislature have placed an emphasis on health care reform this year. However, current state proposals to reform health care do not sufficiently protect California’s families, experts say. A new study, “What Does It Take for a Family to Afford to Pay for Health Care?”, coauthored by the California Budget Project (CBP) and the UCLA Center for Health Policy Research finds that in order to ensure adequate health care for Californian families, the state will need to provide assistance to families making up to almost $62,000 a year.

“A necessary part of health care reform is ensuring that families have healthcare that they can actually use, and that they can realistically afford along with their other basic living expenses,” said David Carroll, the research director of the CBP. “In the midst of complicated health reform discussions, we shouldn’t lose sight of what families can realistically afford to pay for healthcare.”

Full health care benefits are not realistically affordable, the study found, for those making up to three times the federal poverty line. Over 4.8 million Californians live in poverty, according to the U.S. Census Bureau, and that number does not account for the millions living out of poverty but remain unable to afford adequate care. It is not until a two income family of four begins earning almost $62,000, or 300% of the poverty line, that they are able to fully fund health care premiums.

The current proposals for health care reform do not meet these numbers. “The Governor proposes subsidies to 150% of the poverty line, which is lower than what we propose. AB 8…proposes subsidies up to 300%; however, the actual level of those subsidies is not clear up to this point. And it’s not clear if full subsidies would go all the way up to two times the poverty line as we propose,” Carroll said.

Furthermore, “out of pocket expenses” create a financial burden even on families able to afford insurance premiums, the report says.

“Most individuals in the private market, whether they purchase the insurance themselves, or whether they receive insurance through their employer…most policies do not have spending limits, and this is one of the reasons why there are so many personal bankruptcies in the Unites States for people who are already insured… Despite their insurance, they can still, as our studies show, have large expenditures because of the out of pocket responsibility and the lack of limits on out of pocket spending,” said Gerald Kominski, associate director for the UCLA Center for Health Policy Research.

According to the report, “in addition to paying their share of health insurance premium payments, families typically face substantial copayments, deductibles, and other out-of-pocket costs. The typical single adult pays out-of-pocket costs of $340 per year, in addition to amounts spent on premiums. A typical family of three pays more than $500 in annual out-of-pocket costs, and a typical family of four pays approximately $1,000 in out-of-pocket costs each year.”

Families with high out of pocket costs need additional assistance through subsidies and spending limits, the study said. Controlling these costs, which can amount to thousands of dollars per year, will help Californians keep their health care, the study says.

“We think it’s very important for proposals to contain limits on co-payment deductibles and other out of pocket costs,” Carroll said.

AB 8, authored by Nunez, would require employers to pay 7.5% of their payroll towards health insurance for their employees. The Governor’s proposal would require employers to pay about 4% of their payroll towards health insurance, but would require insurers to offer equal insurance to all Californians, regardless of health. Both plans, their proponents say, are important steps to keeping California healthy.

While the Governor’s proposal and AB 8 are important steps toward insuring California’s citizens, they fall short. “Proposals to extend health coverage to the uninsured should ensure that families are able to afford what policymakers ask them to pay for health coverage,” the report says.

“I think that the proposals outline a good starting point and there are improvements that can be made,” Carroll said.

Hayley Leventhal is a summer intern with the California Progress Report as part of the University of California Sacramento Center Public-Affairs Journalism Program. She is a senior at the University of California, Berkeley, where she is majoring in political science. Leventhal is a native of Santa Cruz, where she attended Cabrillo College before enrolling at UC-Berkeley. She was active in Cabrillo College Democrats and as a 2004 campaign volunteer for Moveon.org.

Posted on August 02, 2007

Comments

SB-840 (Kuehl)creates a "single payer" system to replace all current health premiums, taxes, deductibles and co-payments now paid by employers, employees and individuals. Some of SB 840 benefits include:

Security - All California residents are covered for life.

Choice - Everyone has the freedom to choose their doctor. Delivery of care will continue to be private and public.

Comprehensive Benefits - Coverage would include hospital, medical, surgical, mental health; dental and vision care; prescription drugs and medical equipments, diagnostic testing, hospice care and more.

High Quality - The plan invests in needed health care infrastructure.

Efficient Administration Saves Billions - Consolidating the hundreds of insurance plans, both private and public, into one comprehensive insurance plan saves the state, patients and providers billions of dollars each year.

Shared Responsibility - Payment of an affordable premium by employers, employees and individuals supports the health care system we all need at some time.

Fair Reimbursement - Providers receive fair and full compensation for all their services.

Cost Controls - Health care costs are controlled by efficient administration, bulk purchase of drugs and durable medical equipment, global health care budgets, coordination of capital expenditures, and linkage to growth of the State Gross Domestic Product.

SB-840 would have one affordable premium paid a public trust fund to save $8 billion dollars in the first year alone and over $350 billion over a ten year period.

MORE AT www.OneCareNow.org

Posted by: Publisher, AHCR at August 3, 2007 09:00 AM

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