Health care in critical condition
Sheila Kuehl discusses her objections to the governor's health care plan.
Squeezed by mandates
Sheila Kuehl: The bill has an individual mandate; every Californian would be required to buy health insurance. The minimum creditable coverage would be established by the Medical Risk Management Insurance Board, fondly known as MRMIB... MRMIB exists today. They essentially are tasked currently with finding insurance for uninsurable people. They have a waiting list that would go around this building, because they can't find sufficient insurance. But that's their job.
Eryn Brown: When I was reading over this a few months ago it seemed as if they didn't have jurisdiction over all the plans, that it was only some. So if they're determining minimum coverage would that be for all people in California or just for people in certain pools?
Sheila Kuehl: That's a good question. They are not allowed to say that employers have to buy certain plans. However, you would not satisfy the mandate unless you bought a plan that was the minimum creditable coverage. I think what they're trying to do I mean, this give Rube Goldberg a new name for simplicity. It's much more complicated than any Rube Goldbergian machine that used to appear in this paper many many years ago. So they might offer plans that don't meet the minimum creditable coverage, but if you bought them you wouldn't have satisfied your mandate. So it's quite confusing.
Eryn Brown: "They" would be the insurance industry?
Sheila Kuehl: Correct. The thought being that young men who won't get pregnant and think they're going to live forever don't want to buy all these things because policies are mandated to cover pregnancy; they're mandated to cover diabetes, etc. Minimum creditable coverage would include all of those mandates in the state. Theoretically no policy can be offered in the state now that doesn't include all those items. So you would be required to buy an insurance policy. Employers would be required to spend a certain percentage of their payroll on insurance. And there are a certain number of things they can deduct from their percentage if they contribute to the employees' health, things like gym memberships. That is a real loophole, in my opinion... What we found when we studied workers comp in California is that some employers categorized some employees as independent contractors. Independent contractors don't count toward your payroll. It potentially is a way that employers could reduce their burden, by increasing the number of employees they categorize as independent contractors. Some of that happened with workers comp, but this is a big bite for employers. They might say, "I can't do this. You're an independent contractor now."
Lessons of Massachusetts
Sheila Kuehl: In Massachusetts a lot of people were let out of the requirement because it said it had to be affordable, and the connector board could not actually find affordable policies. But they found some. Now we're in the next year and premiums are going up 8% to 10%, so far less people will be required to buy insurance.
Eryn Brown: That's built into this bill too, right? The newest version of it?
Sheila Kuehl: It is. Because the premiums themselves are not capped in any way. All the bill does is say if you're poor enough you don't have to spend more than x% of your income on insurance. After that the state will subsidize you. I think the funding mechanism is very iffy.
The other thing is there's an assumption in the budget that we'll spend more on children, where right now we're going the other way: kicking children off Healthy Families, lowering the top income level, such as it is, for people who are receiving Medical benefits, cutting out Medical Dental. You know, a lot of cuts.
Sheila Kuehl: The doctors are against this bill. The nurses are against this bill. Several of the insurance companies are against this bill. It's sort of a range of people. But the hospitals were for the bill, and indeed had told the governor that they would fund the signature-gathering for the initiative. Last week they had a very contentious meeting with the governor, indicating that they were no longer secure in believing this money would come back to the hospitals. They didn't feel that the language in the initiative guaranteed it sufficiently. So it threw some things into disarray. Dan Zingale told me, "We'll fix it. We'll fix it."
What will happen today
Sheila Kuehl: My job as chair of the health committee is to have the world's most complete hearing on this bill, which there's never been. The hearing in the Assembly was perfunctory at best, the cost hearing in the appropriations committee was even worse, and then it was amended, heavily amended on the floor, and there was no hearing on those amendments. So we're going to start Wednesday morning at nine. The speaker will present. Kim Belshé I think will present for the administration. And then Liz Hill will present, and I have no idea what she will say. Which is great. We're going to televise it on the Cal channel, and people have got to at least hear some of this. Instead of going through section by section, which is very confusing, we broke it down into issues in the bill: Issue 1, the mandate; issue 2, the pool; issue 3, the mandate, etc. I'm going to bring in people who support the bill in each section, people who oppose the bill in each section, so it's going to be very long.
Eryn Brown: How long do you think it will take?
Sheila Kuehl: Ten hours. But I hope to be done by 7:00. Because this is the only item of the day.
Robert Greene: Can you amend in your committee?
Sheila Kuehl: You can, but I'm not going to be proposing any amendments, because it would be dishonest of me to propose just a few amendments and pretend that makes the bill OK. I don't think anything makes the bill OK unless you take it all the way back to AB-8, which is silly, because the governor vetoed that. So to me, I think the bill should stand or fail on its own. The only step we're asking the speaker to take is to clarify the language in the bill that says that if the initiative doesn't pass the bill goes away. Because I could see a scenario where if the initiative fails, you could still be required to buy insurance.
What are the arguments in favor?
Eryn Brown: Health Access is supporting this, and that's a group that believes in a lot of what you've been trying to do. Why would they be supporting this bill as it is?
Sheila Kuehl: They have a deeper belief in the positives and smaller belief in the negatives than I do. I met with Anthony Wright; Anthony believes it could potentially, because of some of the reforms like guaranteed issue and employer mandate, that it could pave the way for single payer. Because it would make people find, if the bill's in place, their premiums are so high and their insurer denies them care, that that would make people say "Let's look at single-payer again, because the premiums are much lower and you don't have insurance companies denying care." That's his belief. He also believes this is not so bad. He thinks the subsidies in the pool are positive, and he sees the employer mandate in place...
I think momentum is building for single payer. Any kind of movement needs to time to build. It's like FDR and Medicare. It took a long time but eventually it became OK to say it. Anthony does believe that if you have certain things in place it's like a ratchet, and then other things will follow. I'm not as confident in his analysis.
Robert Greene: So are there interim steps, assuming you believe single payer is at the end of the line, are there interim steps for people who just aren't ready to take that plunge, where they can say this is an incremental improvement?
Bruce McLeod: I'm saying the same thing. Are you letting the perfect stand in the way of the good?
Sheila Kuehl: I'm hearing the same thing. But if it ain't good, it doesn't fit into that construct. The thing that worries me about this bill is the lack of affordability caps and the lack of coverage floors. Everything's left up to MRMIB. Incremental steps toward single-payer, there must be some. I know Massachusetts tried it. The problem is insurance companies suck money out of the system, so it's really not possible to judge what a non-insurance-company system would be like once you get there. Because you're still basing the system on the one entity that adds no value to the mix. I'm not insisting on single-payer. I'm the author of single-payer. That's completely different. If I believe that's the best way and this bill is flawed, that's just me, and this bill will probably pass...
This bill has a long road to go. I think everybody sees this as an easy vote because they don't see the initiative possibly even getting on the ballot. It's not clear who's going to pay to gather signatures. That's a crucial element of any initiative these days. Nobody's out there saying, "Oh, we really need this bill! Let's stand at the Safeway and gather signatures." There is no fan of this bill. SEIU has a lot more to do than stand outside Safeway gathering signatures for this bill. They're enmeshed in the presidential campaign; they've got their eyes on the prize in November, and I don't think they're going to do it. So if the hospitals aren't going to pay for it, it's hard to see how they can get the signatures, which is very expensive. Then it doesn't even get on the ballot. If it gets on the ballot, then it's possible people will say, "Oh, sure, I'm going to tax myself to get a policy with no cap on the premiums I'm going to pay!" The nurses are against it, and that's money against the initiative. The doctors are against it. The hospitals may decide they're against it. Half the unions are adamantly against it. Teamsters are against it, California school employees. So this has a long road to go. I don't think single-payer is perfect. But once we have a governor who is open to it then we can talk about it.