CA health care to equalize the unequal

Jan. 16, 2013

By Katy Grimes

SACRAMENTO — Health care in California is about to get a makeover. But this makeover will not be improving the look of healthcare in the state, despite California’s state-of-the-art medical facilities and teaching hospitals.

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The Assembly Committee on Health has been hard at work under the tutelage of Committee Chairman, Assemblyman Dr. Richard Pan, D-Sacramento, to prepare the state to implement health reforms enacted by the federal government’s Affordable Care Act, more commonly known as Obamacare.

The ACA requires states to launch online insurance marketplaces by 2014. California’s health exchange, “Covered California,” is “guided by six primary values,” and claims that health insurance costs will be lowered for all Californians.

But even at the hearing Tuesday, Marian Mulkey, Director of the California Healthcare Foundation, said costs will go up for young people — and down for older people. No one at the hearing made the case that, as the number of people covered under one California health insurance exchange dramatically increases, costs will go down — especially since 1.8 million Californians are eligible for subsidies, according to a recent U.C. Berkeley study.

Changes to California

“Risk Pools” and “Adverse Selection” were on the agenda Tuesday at the health committee hearing. This is where the free market and individual choice are completely removed from health care.

“Adverse selection is the tendency for individuals to select different health insurance products based on what is most cost effective to meet their anticipated short term health needs and expected use of health services,” the health committee overview said.

Adverse selection occurs when people who anticipate they will need more health care purchase commensurate insurance coverage, and those who “consider themselves healthy” stay out of the market or purchase the minimal coverage.

None of this sounds unusual; that’s how the free market works when consumers have choices. But the health committee doesn’t approve of this and said that this free market approach “leads to an uneven distribution of risks and healthcare costs.”

This concept of “uneven distribution” is the crux of the entire Obamacare plan. “Many of those risk avoidance strategies will no longer be available because of the ACA,” the overview said.

Affordable Care Act

The largest piece of health policy legislation in more than 45 years, the ACA was passed in 2010 amid much national opposition. The ACA mandated health coverage for almost everyone in the country, and subsidized the costs for low-income or unemployed people. The ACA also will dramatically expand Medicaid, the nation’s largest health coverage program, serving both low-income individuals and families, and providing long-term care services for people with disabilities, as well as the low-income elderly.

Medi-Cal, the California Medicaid welfare program, serves low-income families, seniors, persons with disabilities, children in foster care, pregnant women and low-income adults.

According to the California Department of Health Care Services, 8.8 million residents were enrolled in Medi-Cal for at least 1 month in 2009-10, or about 23 percent of California’s entire population.

In 1996, Medicaid was separated from the welfare system, and increased dramatically in size to include people with disabilities, foster children, pregnant womenand low-income seniors.

California Health Insurance

In California, approximately 50 percent of the people have health coverage through an employer, 18 percent have health coverage through government programs such as Medi-Cal or Healthy Families, 12 percent purchase insurance directly from an insurance carrier or have federal veterans’ benefits and 20 percent are uninsured, according to the Legislative Analyst’s Office CalFacts 2013.

“One last consequence of adverse selection is that it leads to an inefficient, often inappropriate distribution of health insurance across the population,” according to David M. Cutler, Richard J. Zeckhauser in a 1997 report. The report was quoted by the Assembly Health Committee in its Jan. 15, 2013 overview paper, “Health Insurance Informational Hearing: What Policy Makers Need to Know About Risk Pools and Adverse Selection.”

The committee is using 2013 statistics on California’s population, but referencing a report from 1997 on uneven distribution of health coverage. Since 1997, not only has Obamacare been enacted, but in 2003, President Bush signed into law a major expansion of Medicare drug provision to the elderly.

“One of the main reasons that adverse selection occurs is that there are so many insurance products available with varying levels of coverage and costs from which to choose,” the Assembly overview paper said. The health committee proposed to take care of this by standardizing insurance plans. “Thus, insurance companies will not be competing for enrollees primarily based on significant differences in the comprehensiveness of coverage,” the Affordable Care Act and California’s implementation “contemplates coverage among insurers based on price, quality and service instead of benefits or enrollee risk.” This is a model borrowed from the Kaiser health system, but implemented with the full powers of the state.

The federal government and the state of California are attempting to level the playing field and equalize health coverage. In doing so, they have to pass mandates on all insurance companies, preventing them from offering anything unique to Californians.

“As long as coverage is available outside the exchange, healthy individuals and groups may find cheaper policies, or employer-sponsored groups may self-insure, leaving only unhealthy groups in the exchange,” the overview paper said.

Critics pointed out that this is just what Obamacare would bring, leading to a degradation of the whole medical system in California, and eventually America.

10 comments

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  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 17 January, 2013, 06:05

    Healthcare is broken in America, at least Obama is trying to fix it.

    I said it before and say it again, give Obamacare a chance, see how it works out. We can cancel it if it bobs.

    Reply this comment
  2. CalWatchdog
    CalWatchdog Author 17 January, 2013, 08:04

    Rex, I’ve read much of the Obamacare bill. It is one of the scariest pieces of legislation I’ve ever seen. It’s not about health care any more than gun control is about the safety of our children.

    Freedom of choice is the best answer for health care. We can’t even buy insurance outside of California. That is the problem. The government has manipulated the free market to the point of then being able to claim that it doesn’t work.

    Katy

    Reply this comment
  3. BobA
    BobA 17 January, 2013, 08:20

    Rex:

    Is that right? Is seeing the cost of my private health care insurance double from last year “fixing” the problem? By California law, I have to pay for abortion coverage and I’m a man with 2 grown sons and no daughters!! Why do I have to pay for abortion coverage?

    Liberals in America are so enamored with socialized medicine but I spent some time in Europe and it works well if you catch a cold or get the flu. Good luck though if you need any kind of surgery. You have to get on a waiting list regardless if you need immediate surgery to save your life. Once you reach a certain age, the government would rather you go away and die if you get sick.

    Same goes for Canada. Canadians who can afford it come to the US for surgery
    as do Europeans who can afford it.

    You should read the British newspapers about the horrors of their hospitals and medical system. It’s fairly common for women to have babies outside on the sidewalks in front of a hospital because the done have an appointment.

    Reply this comment
  4. Hondo
    Hondo 17 January, 2013, 08:30

    Like the man once said, if you think health care is expensive now, wait till its free.
    And you don’t think there will be ‘death panels’. Go to Europe. Go to England.
    Hondo…

    Reply this comment
  5. BobA
    BobA 17 January, 2013, 09:11

    CalWatchdog

    In the engineering profession we have a saying that comes in the form of a question:

    Question: What is a camel?
    Answer: A horse that was designed by a committee.

    That’s pretty much what Obamacare is. The design called for a simple scalpel but instead we got a Swiss Army Knife.

    Reply this comment
  6. Rex the Wonder Dog!
    Rex the Wonder Dog! 17 January, 2013, 13:00

    Like the man once said, if you think health care is expensive now, wait till its free.
    ==
    Hondo, you made me laugh so hard I spit my cereal onto the computer.

    Give it a go, if it flops repeal it.

    Reply this comment
  7. Cindy
    Cindy 17 January, 2013, 19:35

    Rex, that is the mantra of the liberal left, we need to try something… meanwhile I am seeing doctors sell thier life long practices because they can no longer stay in business as a business owner, so if it fails what happens to them. You may say the hell with them, but when you’re ill and you need a doctor and none of them are paid enough to waste the time to help you; then you will understand you can’t just try anything to see if it works. Unfortunately for you it the flop may cost you your life.

    Reply this comment
  8. Rex the Wonder Dog!
    Rex the Wonder Dog! 17 January, 2013, 20:26

    Rex, that is the mantra of the liberal left, we need to try something… meanwhile I am seeing doctors sell their life long practices because they can no longer stay in business as a business owner…

    Name ONE doctor that has SOLD their “life long practice” in the last 6 months, for ANY reason.

    You’re up Cindy-I’m calling your bluff. Name one.

    Reply this comment
  9. BobA
    BobA 17 January, 2013, 20:34

    Cindy:

    Liberal never solve a problem: they only make the worse. Fundamentally, that is what’s wrong with our health care system. Our health care system was fine until the government got involved. They bureaucratized to the point where it now costs infinitely more to run it than to do simple medicine.

    The big pharmaceutical and medical device companies are equally culpable in the high costs of health care. Their prime directive is profit. Their second directive is buying politicians to protect their profits. Their tertiary directive is to use their political whores to write rules and regulations that keep out the competition in order to protect their profits.

    We, the consumers of health care, get the privilege of bankrupting ourselves to pay the outrageously high costs of health care and the right to vote for their stable of bought & paid for political whores in the next election.
    Their whores come in two flavors: democrat and republican.

    Reply this comment
  10. BobA
    BobA 17 January, 2013, 20:34

    Cindy:

    Liberals never solve a problem: they only make them worse. Fundamentally, that is what’s wrong with our health care system. Our health care system was fine until the government got involved. They bureaucratized to the point where it now costs infinitely more to run it than to do simple medicine.

    The big pharmaceutical and medical device companies are equally culpable in the high costs of health care. Their prime directive is profit. Their second directive is buying politicians to protect their profits. Their tertiary directive is to use their political whores to write rules and regulations that keep out the competition in order to protect their profits.

    We, the consumers of health care, get the privilege of bankrupting ourselves to pay the outrageously high costs of health care and the right to vote for their stable of bought & paid for political whores in the next election.
    Their whores come in two flavors: democrat and republican.

    Reply this comment

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