Californians to Be Covered
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Estimated two-thirds of uninsured Californians. SB840
covers all California residents. |
Requirements Imposed on
Consumers/ Individuals
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All Californians are required to have
a minimum level of coverage, to be determined by the Managed Risk
Medical Insurance Board (MRMIB).
If the total cost of coverage for the minimum mandated policy
exceeds 6.5% of family income, then individual is exempt from
the mandate.
MRMIB will consider additional exemptions in cases of serious
hardship. An Individual
mandate can never provide universal healthcare because many
will not choose to purchase insurance. An individual
mandate exists for car insurance but 20% drivers in california
do not buy it.
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Treatment of Self-Employed
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Same individual
mandate applies.
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Requirements Imposed on employers
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Pay or play approach - employers required to pay 2
- 6.5% of Social Security wages for employee health care expenditures
or pay equivalent amount into a trust fund to allow employees to
access coverage through a pool.
Sliding scaled based on payroll size of the firm.
Pay or play imposed separately for full and part-time workers.
Employers who provide insurance will drop
coverage to pay into trust fund because will save between 3-7.5%
of payroll on healthcare costs. Employers who do not provide insurance
will cry poverty as always.
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Treatment of Small Employers
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Lower payroll employers would pay a smaller contribution
based on a sliding scale. |
| Changes in Provider Payments/Funding |
Medi-Cal rate increases for physicians to 80% of Medicare
rates. Yes.This is great!
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Public Program Expansions and
Support for Low-Income Individuals
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Healthy Families expansion for children in families
with incomes 133 - 300% FPL, regardless of immigration status, pending
the appropriation of state funds.
Expands Healthy Families coverage to parents with incomes 133% -
300% FPL, pending federal approval and pending the appropriation
of state funds.
Medi-Cal expansion to single Medically Indigent Adults up to 250%
FPL (benefits may be less than traditional Medi-Cal).
Medi-Cal expansion (via benchmark plan with new pool) to adults
ages 19 and 20 earning less than 250% FPL (benefits may be less
than traditional Medi-Cal).
New coverage program for childless adults under 100% FPL (contingent
on unspecified county contributions). Benefits may be less than
traditional Medi-Cal; where applicable, provided through new Local
Coverage Option.
Proponents envision individuals with incomes 250 - 450% FPL will
receive a tax subsidy to help purchase coverage through the new
pool.
Individual/ family contribution toward premium for coverage obtained
through purchasing pool is linked to gross income:
0 - 150% FPL pays no premiums or out-of-pocket costs;
151 - 300% FPL pays no more than 5% of income in premiums.
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Insurance Market Requirements/ Reforms:
Guaranteed Issue, Rating Reforms, and Other Requirements Imposed
on Health Plans
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* By 2010, all health plans required to guarantee issue and
use community rating in the individual market (e.g. premiums may
vary based on age and geography, not health condition) for individuals
without serious medical conditions.
* Simplified medical underwriting, including standardized individual
application form. Requires health plans to offer five classes
of benefits to facilitate comparison shopping.Will
fail. Governments have been trying these same reforms for 20 years
with the same lousy results. Insurers will add many more plans
so that comparisons are impossible. Insurance brokers want more
plans to help sell individualized policies which then messes up
the comparisons. Insurers will create many more application forms
so that the one required by the government is meaningless.
* Applies rules currently regulating the small group market (such
as guaranteed issue) to the mid-sized (51 – 100 employees)
employer market.
* Health plans must spend 85% of premiums on patient care. Will
fail because the clever accountants for insurers will figure out
ways to reclassify insurance profits as patient care. How
well do you think Republican administrations will enforce this?
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Insurance Market
Requirements/Reforms:
Connector/Purchasing Pool
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Establishes CA Cooperative Health Insurance Purchasing
Program (Cal-CHIPP) to be administered by MRMIB to negotiate and
purchase health insurance for eligible enrollees.
Maximum contribution cannot exceed 5% of family income for families
earning less than 300% FPL.
MRMIB would set premiums for those earning less than 300% FPL
to meet the 5% requirement.
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Insurance Market
Requirements/Reforms:
Participant Contribution to Obtain
Coverage Through Purchasing Pool
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* Maximum contribution cannot exceed 5%
of family income for families earning less than 300% FPL.
* MRMIB would set premiums for those earning less than 300% FPL
to meet the 5% requirement. |
| Cost Containment: |
* Establishes a new Health Care Cost and Quality Transparency
Commission to establish a cost, quality, and transparency plan.
* Cap on health plan administrative costs and profits (must spend
85% of premiums on patient care).
* Makes a variety of changes aimed at increasing health care quality
and efficiency and reducing costs, including changes to professional
scope of practice, promotion of PHRs in CalPERS, and requirements
on pharmacies for e-prescribing.
These are cosmetic. Private
insurance companies have never and will never contain overall
healthcare costs.
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| Enforcement |
Plan envisions uninsured individuals would
be automatically enrolled in the state pool. |
