California

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California Counties: The Poor’s last Safety Net

February 2, 2010 in Uncategorized | No comments

The county government is often the place of last resort for the medically indigent in California.  Some counties run hospitals and/or clinics to care for these individuals outside of the Medicaid system.  Other counties operate their own HMO to cover Medicaid patients.  As I previously described, there are three types of private Medi-Cal HMO systems that California counties can adopt: Geographic Managed Care, County-Organized Health System, and Two Plan Counties.  In many of these systems, counties operate their own Medicaid HMO.

A recent California Health Care Foundation study, looks at how different counties care for their poor.  This table summarizes those findings.

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Eligibility Requirement for California Government Health Insurance Programs

January 19, 2010 in Medicaid/Medicare, Public Health, Public Policy | No comments

The California HealthCare Foundation has an almanac entry on Children’s Health Coverage Facts and Figures.  Eligibility requirements for these programs is described in this table.  Other key findings include:

  • The proportion of children without health insurance continued to decline through 2007, though the pace of improvement has slowed.
  • Nearly 80 percent of California’s uninsured children are eligible for coverage under either Medi-Cal, Healthy families, or Healthy Kids.
  • Medi-Cal and Healthy families are key sources of coverage for children in low-income households that together have closed the coverage gap among families with incomes up to 250 percent of the federal poverty level.
  • Healthy Kids programs are also important for children’s coverage. twenty-four counties operate Healthy Kids programs and four others rely on California Kids.
  • Children are less likely to have employment-based coverage than adults and are more likely to be enrolled in public programs in California.

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California’s Current Health Insurance Market

January 6, 2010 in Health Insurance, HSA, Managed Care | No comments

The California Healthcare Foundation looks at the latest health insurance trends in the nation’s most populous state.

  • In California, like in many states, there is a blurring line between what defines an HMO compared to other forms of health insurance.  Almost all insurance carriers now offer “a broad array of products, some of which do not conform to traditional product designs.”
  • While HMO enrollment has declined in other states recently, HMO enrollment has been steady in California.  Over 60% of commercial enrollees have either an HMO or POS plan.
  • California has 2 health insurance regulatory bodies: the Department of Managed Heath Care (DMHC) and the California Deparment of Insurance (CDI).  DMHC is responsible for regulating all HMO plans and some PPO plans, while CDI regulates other PPO plans.
  • Consumer Directed Health Plans are gaining ground.  Most large employer offer CDHPs as one choice among many health insurance options.  On the other hand, many small businesses are replacing traditional health insurance products with CDHPs as the employees only option.
  • Anthem, Aetna and Cigna have introduced 3 tiers of network physicians.  There is a high-performance tier (based on physician cost and quality), a second in-network tier, and an out-of-network tier.
  • Some employers have cut cost by giving employees a narrow network plan, which gives them access only to a narrow set of physicians out of the carrier’s entire network.  For instance, when Scripps Health System in San Diego started paying doctors via fee-for-service, many plays excluded Scripps doctors from many benefit packages.  Other plans are attempting to remove the UCSD Medical Center physicians.

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Oakland’s Creative Revenue Generator

July 23, 2009 in Uncategorized | 1 comment

California is known for beautiful beaches, Hollywood, and sublime parks.  In this post, however, I will discuss two other things for which California has recently become famous.  

  • Marijuana.  Here in California, medical marijuana is legal.  Based on my unscientific of pedestrians on a variety of U.S. regions, northern California also has the most lax enforcement of marijuana laws.  
  • Deficits.  California’s current deficit has lead to rumors of bankruptcy.  The University of California system is in a half a billion dollar hole.  Revenue shortfalls have forced California to close enrollment to its SCHIP program called Healthy Families.

In order to solve the problem of deficits, Oakland has decided to rely on marijuana to help solve its deficit problem.  Oakland has decided to institute a tax on medical marijuana.  The plan should raise about $300,000 to Oakland’s coffers.

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California Health Care Market

February 9, 2009 in HC Statistics, Health Insurance | No comments

In her California Healthcare Foundation report, Katherine Wilson does a nice job describing the health insurance market in California.  A little over health of individuals received health care from their employer or themselves (56%), a quarter of individuals receive health insurance through public programs, and 19% of Californians are uninsured (see chart). 

The private health insurance market cannot be portrayed as a monopoly nor one that is truly competitive in the neoclassical sense.  A handful of insurance carriers dominate the market.  Kaiser, Blue Cross, HealthNet, Blue Shield, Pacificare, and Aetna control 77% of the market (see chart).  

Of the premiums insurers receive, the percentage of revenues going to medical care varies widely.  Kaiser spends 93% of revenue on medical expenses, but Blue Shield and Pacificare’s traditional insurance plans spend only 70% of revenues on medical expenses.  Administrative expense ratios are also much lower for Kaiser (3.6%) than for providers such as Blue Shield’s tradiational Insurance plan (22.7%). More details about load factors are available here (see chart).

The full CHCF report can be viewed here.

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Cross-border health insurance

February 28, 2008 in Current Events, Health Insurance | 1 comment

The San Diego Union Tribune has an article (“Cross-border coverage“) profiling entreprenuer Jim Arriola and his low cost health insurance plan covering medical care in both the U.S. and Mexico.

His company, Sekure Healthcare, provides a limited-benefit insurance program through employers along with a discount health card program. Both can be used by Sekure members and family members to visit doctors and hospitals on either side of the U.S.-Mexico border.

The health plan is not as generous as typical employer-provided health insurance, but may be an attractive option for low wage workers who can not afford top-of-the-line coverage.  Sekure specifically targets low wage Mexican workers in California.

While the plan certainly fills a niche, this type of cross border plan likely will not gain broad appeal.  First, most people want to receive their medical care where they live.  Thus, the option to have treatment in Mexico will likely only be attractive to frequent migrants or those living near the border (i.e. San Diego).  Secondly, the Sekuye plan does not cover catastrophic medical costs.

“Sekure pays up to $50 for each doctor’s office visit and a maximum of $300 a year for the service. Beneficiaries can get up to $800 a day and a maximum of $3,000 a year for hospitalization. They pay out of their own pockets for any charges exceeding their benefits. “

The Sekure plan is the exact opposite of health plans advocated by Republicans.  Instead of having catastrophic health insurance with a high deductible, the Sekure plan provides a minimal benefit and does not cover catastrophic costs.

Nevertheless, some insurance is better than no insurance for many low wage workers.

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California’s Attempt at Universal Health Care

December 21, 2007 in Current Events | Permalink

On Monday, the California Assembly passed a bill that mandates health insurance for all California’s citizens. The government will provide subsidies households with incomes below 250 percent of the federal poverty level. Those earning between 250 percent and 400 percent of the federal poverty level [FPL] would be able to deduct premium costs that exceed 5.5 percent of their incomes. Health insurance will still be privately run, but the government will pay a larger portion of the premiums.

One odd twist of the legislation is that “some Californians would be granted exemptions if their income is too low to afford premiums but too high to qualify for heavy government subsidies.” Which type of people would fall into this group? The poorest poor have Medicaid. People between with income between 0-250% of the FPL are receiving large subsidies from the government.

One of the major arguments in favor of universal health care is that it creates a more equal society, giving the poor a helping hand. Yet if the working poor are exempted from buying health insurance, why is California spending all this money for health insurance when the working poor don’t have insurance.

Of course, providing these subsidies will be expensive. According to the L.A. Times, California is “about to enter a ‘fiscal state of emergency’ because of a $14-billion budget shortfall.” Who is going to pay for the subsidies?

  • Smokers: The California government will raise the tax on cigarette smoking significantly.
  • Business: Business will have to provide health insurance. If they do not, they will be hit with a tax fine.

Do I think the California plan is a step in the right direction? Maybe one step forward and one step back. Providing means-tested subsidies to help the poor afford health insurance is a step in the right direction for those who prefer a more egalitarian society. Further, although the state is financing much of the insurance premiums, it is leaving insurance to the private market. However, in the presence of a private insurance market, I believe that a minimum standard of health insurance should be established by either the government or decided on by insurance groups. This is not because I think regulation is good in general, but because 1) the insurance contract customers sign is incomprehensible and customers do not know the benefits they are receiving and 2) insurance companies often deny claims that they should pay. Setting a minimum standard with regulation could help to clear up some of this ambiguity while allowing insurance companies to offer more generous, more expensive plans if they choose.

What I do not approve of in the California plan is that health insurance is mandated. Poor families may better be able to use cash to buy food and pay for rent rather than health insurance subsidies. Healthy individuals are forced to buy a product they don’t need. Further, do not be fooled by the Governator’s statements that ‘this plan will pay for itself’; this piece of legislation will be very expensive and increase the utilization of medical care in the U.S.

Here are some news stories covering the issue:

And here is the actual text of the bill.

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