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Health reform enters 2nd year amid broad changes, challenges

U.S. Census Bureau

As the second anniversary of the health care reform law approaches, California health advocates hailed the changes that have been made and those on the horizon. They also noted the difficulties for California, which is emerging as one of the most aggressive states in implementing reform.

While the Affordable Care Act has been a political hot potato in many states, it has been a catalyst for a dizzying array of reforms in California.

Changes include the creation of a health benefit “exchange” that will offer low-cost plans to millions who might be required to buy policies. Lawmakers also are busy selecting "essential benefits" that must be covered. Groups of doctors and hospitals are banding together to form accountable care organizations that are meant to cut costs and promote wellness. The Medi-Cal program has shipped cards to millions in anticipation of a massive expansion in 2014.

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Road bumps to reform have included bureaucratic tangles as Medi-Cal patients are moved into managed care plans to hold down costs as the program’s coverage expands. And questions are cropping up over whether there are enough doctors, nurses and technicians to provide care to millions more who will gain coverage under the law.

During a State Capitol press briefing yesterday, health advocates and the Assembly and Senate health committee chairmen hailed benefits the law has brought to California.

“The passage of this law has been transformative. And for many, I hazard to say, it’s been lifesaving,” said Assemblyman Bill Monning, D-Monterey, chairman of the Assembly Health Committee.

According to a report [PDF] compiled by Health Access, a consumer advocacy group that convened the briefing, changes under the law in California include:

  • About 8,600 Californians with pre-existing medical conditions have gained access to affordable health insurance. Patients who have illnesses such as cancer or multiple sclerosis – who face high costs or denials on the open market – can buy insurance through the program.
  • More than 350,000 young adults have been able to stay on their parents’ health insurance plans until they are 26.
  • More than 370,000 low-income people have been covered by an expansion of Medi-Cal, the health insurer for low-income Californians, that is part of the state’s “bridge to reform” waiver to alter the state-federal program.

The report says consumers saved more than $100 million when health insurance rate increases were rolled back or withdrawn as a result of increased regulatory power to review those increases. Also, seniors saved $171 million in prescription drug costs in a plan to close the Medicare limits in coverage. And 12 million people who currently have health insurance no longer face a cap on coverage in case of a catastrophic illness.

Health industry and advocacy staff are debating what types of care will be considered “essential benefits” that small group and individual health plans must offer in 2014. They include maternity care, mental health, emergency and prescription drug care. California lawmakers are expected to define benefits in legislation that is now pending.

Health leaders also are determining how the state’s health exchange will operate, conduct outreach and broker deals with insurers. The exchange is expected to operate in 2014, ideally offering affordable and valuable health insurance plans to people who will be mandated to buy coverage. That “individual mandate” stands to be upheld or struck down by the Supreme Court after oral arguments scheduled for Monday.

Under the Affordable Care Act, six California “pioneer” accountable care organizations have been named. They consist of groups of doctors and hospitals that will accept per-patient payments and be rewarded or penalized based on the health status of their clientele. The program is meant to transform health incentives so providers can cut costs even as they seek to fend off chronic illness.

California’s vigor in upending the way health care is delivered has, however, met with the criticism that it’s moving too fast. That concern was the centerpiece of a recent legislative hearing that examined the challenges of Medi-Cal recipients who are being moved into managed care programs. Some of those patients were unable to keep scheduled surgeries or access previously covered services.

Gary Passmore, a vice president of the Congress of California Seniors, said state budget cuts imposing co-pays and slashing 10 percent of many Medi-Cal providers' payments also have posed problems for the program, which is expected to cover 3 million more people under health reform.

“What we’re seeing is the diminution of the value of a Medi-Cal card,” he said, noting that California's Medicaid program is among the lowest-paying in the U.S.

And Sen. Ed Hernandez, D-West Covina, said he’s held hearings over the issue of having a workforce adequate to care for 6 million people who are likely to be newly insured in 2014.

“We are going to have a huge access problem,” he said, especially in rural and inner-city areas. “We need to make sure that there is going to be a workforce that is going to see these patients.”

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