Obamacare Funds Allegedly Used For Union Recruitment

According to a letter made public Saturday, federal investigators are looking into whether Obamacare funds were misused to benefit a union.

The letter, which was obtained by The Daily Caller News Foundation, says the Office of Inspector General has been investigating whether Southern United Neighborhoods and its sub grantee, United Labor Unions Local 100, purposely misused federal funds from the Obamacare Navigator program to recruit members. The program was designed to help people enroll in Obamacare.

“Your request as to the disposition of your complaint poses a question, which is outside the scope of the Freedom of Information Act, through which individuals may request records,” the letter noted. “However, we conducted a search for records relative to your request and were informed there was an open and ongoing investigation concerning this matter.”

Back in September, after conducting its own research, the group Cause of Action wrote to the OIG asking to investigate whether SUN and Local 100 misused the federal funds. CoA took notice after a court case involving an individual who claimed he was owed overtime by SUN and ULU.

“On June 16, 2014, plaintiffs Cedric Anthony (‘Anthony’) filed a class action lawsuit seeking damages for unpaid overtime against SUN and ULU under the Fair Labor Standards Act,” a letter from CoA detailed.

“Anthony alleges he was initially employed by SUN as an ACA federal navigator, visiting community events and enrolling individuals in healthcare,” the letter continued. “In addition to these duties at SUN, Anthony alleges that he was directed to recruit members for the ULU by visiting schools to register cafeteria workers for the union.”

“SUN and ULU admit that Anthony was employed by ULU,” the letter added. “They deny, however, that Anthony was employed by SUN.”

On Nov. 6, 2014, the parties filed a Joint Stipulation of Dismissal with Prejudice which effectively closed the case. The Joint Stipulation meant questions raised in the case in regards to misuse of funds were not answered, prompting the need for a federal investigation.

“Cause of Action uncovered that ObamaCare navigator funds were not only funneled to an ACORN-related entity, but were potentially misused to support union activities at the behest of ACORN founder Wade Rathke,” CoA President Dan Epstein told TheDCNF.

“On the basis of Cause of Action’s request for an investigation, the Inspector General for the Department of Health and Human Services disclosed that there is ‘an open and ongoing investigation’ concerning the use of the navigator funds,” he continued. “It’s encouraging to hear that HHS is conducting a probe to ensure taxpayer dollars are used appropriately, and not to enrich ACORN’s political interests.”

Republican Senate Finance Committee Chairman Orrin Hatch recently estimated the administration spent over $120 million on the Navigator program for the 2014 and 2015 open enrollment periods.

SUN and Local 100 did not respond to requests for comment from TheDCNF.

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Originally published by the Daily Caller News Foundation

2015 Job Killers — CalChamber Releases Its Preliminary Report

The California Chamber of Commerce yesterday released a preliminary list of “job killer” bills to call attention to the negative impact that 16 proposed measures would have on California’s job climate and economic recovery, should they become law.

Although we will be opposing a number of bills throughout this year, the ‘job killer’ list represents the worst of the worst. These proposals will unnecessarily increase costs on California employers that will likely lead to a loss of jobs.

The list is preliminary. We expect to add more bills to the list in the coming weeks as legislation is amended, and we will periodically release “job killer” watch updates as legislation changes. Please track the status of “job killer” bills on www.cajobkillers.com or by following @CAJobKillers on Twitter. 

Here is the preliminary list of 2015 “job killer” bills:

Increased Labor Costs

AB 357 (Chiu; D-San Francisco) Predictable Scheduling Mandate/Protected Leave of Absence — Imposes an unfair, one-size fits all, two-week notice scheduling mandate on certain employers that perform retail sales activity, and penalizes these employers with “additional pay” for making changes to the schedule with less than two weeks notice, and additionally imposes an unlimited, protected leave of absence from work as well as a broad new protected class of employees who are receiving public assistance or have an identified family member receiving such assistance.

SB 3 (Leno; D-San Francisco/ Leyva; D-Chino) Automatic Minimum Wage Increase— Unfairly increases’ employers costs while ignoring the economic factors or other costs of employers by increasing the minimum wage by $3.00 over the next two and a half years with automatic increases tied to inflation.

SB 406 (Jackson; D-Santa Barbara) Significant Expansion of California Family Rights Act — Creates less conformity with federal law by dramatically reducing the employee threshold from 50 to less than 5 employees and expanding the family members for whom leave may be taken, which will provide a California-only, separate 12 week protected leave of absence on both small and large employers to administer, thereby increasing costs and risk of litigation.

Increased Fuel Costs

SB 350 (de León; D-Los Angeles) Costly and Burdensome Regulations — Potentially increases costs and burdens on all Californians by mandating an arbitrary and unrealistic reduction of petroleum use by 50%, increasing the current Renewable Portfolio Standard to 50% and increasing energy efficiency in buildings by 50% all by 2030 without regard to the impact on individuals, jobs and the economy.

Tax Increases

ACA 4 (Frazier; D-Oakley) Lowers Vote Requirement for Tax Increases — Adds complexity and uncertainty to the current tax structure and pressure to increase taxes on commercial, industrial and residential property owners by giving local governments new authority to enact special taxes, including parcel taxes, by lowering the vote threshold from two-thirds to 55%.

SB 684 (Hancock; D-Berkeley) Increased Tax Rate — Threatens to significantly increase the corporate tax rate on publicly held corporations and financial institutions up to 15% according to the wages paid to employees in the United States, and threatens to increase that rate by 50% thereafter, if the corporation or institution reduces its workforce in the United States and simultaneously increases its contractors.

SCA 5 (Hancock; D-Berkeley) Lowers Vote Requirement for Tax Increases — Adds complexity and uncertainty to the current tax structure and pressure to increase taxes on commercial, industrial and residential property owners by giving local governments new authority to enact special taxes, including parcel taxes, by lowering the vote threshold from two-thirds to 55%.

Increased Burdensome Environmental Regulation

AB 356 (Williams; D-Santa Barbara) Limits In-State Energy Development — Jeopardizes high paying middle class jobs in resource extraction fields by severely restricting wastewater injections sites and requiring unnecessary monitoring of those sites.

AB 1490 (Rendon; D-Lakewood) Limits In-State Energy Development — Drives up fuel prices and energy prices by imposing a de facto moratorium on well stimulation activities by halting the activity after an  earthquake of a magnitude 2.0 or higher.

SB 32 (Pavley; D-Agoura Hills) Halts Economic Growth — Increases costs for California businesses, makes them less competitive and discourages economic growth by adopting further greenhouse gas emission reductions for 2030 and 2050 without regard to the impact on individuals, jobs and the economy.

Increased Health Care Costs

SB 546 (Leno; D-San Francisco) Health Care Rate Regulation — Threatens employers with higher premiums and interferes with their ability to negotiate with health plans by imposing unnecessary and burdensome new reporting requirements on health plans and insurers in the large group market, and giving the Department of Managed Health Care and the Department of Insurance authority to modify or deny all rate changes in the large group market.

Economic Development Barriers

AB 359 (Gonzalez; D-San Diego) Costly Employee Retention Mandate — Inappropriately alters the employment relationship and increases frivolous litigation by allowing a private right of action and by requiring any successor grocery employer to retain employees of the former grocery employer for 90 days and continue to offer continued employment unless the employees’ performance during the 90-day period was unsatisfactory.

SB 576 (Leno; D-San Francisco) Stifles Mobile Application Technology Development — Stifles innovation and growth in the mobile application economy and creates unnecessary and costly litigation by mandating unnecessary, redundant and impractical requirements that will leave many current and future mobile applications unusable, with no benefit to the consumer.

Increased Unnecessary Litigation Costs

AB 244 (Eggman; D-Stockton) Private Right of Action Exposure — Jeopardizes access to credit for home mortgages, increasing the challenge to attract business to California because of high housing prices, by extending the homeowner’s bill of rights to others, thereby opening the door to more private rights of action.

AB 465 (Hernández; D-West Covina) Increased Litigation — Significantly drives up litigation costs for all California employers as well as increases pressure on the already-overburdened judicial system by precluding mandatory employment arbitration agreements, which is likely pre-empted by the Federal Arbitration Act.

SB 203 (Monning; D-Carmel) Lawsuit Exposure — Exposes beverage manufacturers and food retailers to lawsuits, fines and penalties based on state-only labeling requirements for sugar-sweetened drinks.

 president and CEO of the California Chamber of Commerce

Originally published by Fox and Hounds Daily

Allowing a market in health care

In 1965, Medicare was passed as an amendment to the Social Security Act and the government became the primary payer for medical care for all those over 65. With the stroke of a pen, a health care system that had been centered on individualized care was transformed into at system about population management fervently fixated on cost containment.

At the time it was clear that Congress appreciated its limitations. It acknowledged a physician’s professional expertise and the value of the sacrosanct patient/doctor relationship. Congress memorialized this acknowledgement in Section 1801 of the Medicare Act as follows:

Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine, or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer, or employee, or any institution, agency or person providing health care services. …  Section 1801, Medicare Act, 1965

Since then, Congress has relentlessly imposed themselves into the exam room and interfered with our opportunity to do what is best for our patients in the name of controlling cost. Government regulations and computer systems designed to invade the privacy of our patients and send bad data back to the government eat away at any semblance of physician autonomy. Repeatedly and assuredly, government intrusion has only led to confusion, wasted resources and added cost.

The concept of Balanced Billing allows the government or any third party payer to pay a fixed dollar amount for a service. The patient pays the difference between the retail price and the “subsidy” paid by the government. Physicians compete and patient choice is preserved. It is a fair market place with a subsidized floor. Balanced Billing was made illegal in 1984 under the Deficit Reduction Act.

The Physician Fee Schedule was established in the late 1980s in an attempt to control the cost of care. Instead, costs escalated and the volume of services continued to increase as would be expected when the fixed cost of managing a physician practice is well over 70 percent.

The SGR was established in 1997 under the Balanced Budget Act, tying physician payments to the GDP. The SGR formula was contrived to ensure that the (increased) Medicare dollars spent per patient was less than the per capita increase in the GDP.

The SGR has proven to be an ineffective means of controlling cost. Every year Congress finds itself with a choice to cut physician payments substantially or “give the physician community a loan.” This is only a budget gimmick serving as a noose around our neck compelling our professional community to allow the government to reduce our discretion as experts and to limit patient choice.

The bottom line: Health care costs continue to skyrocket, patients have fewer choices and physicians find themselves serving the public more as slaves than professionals.

Americans properly expect a trusting relationship with their doctor. However, together with Obamacare, Congress is proposing to further intrude into their medical care. Masquerading as a “fix” to another failed congressional Medicare system of price controls, congress has written the SGR reform bill that serves to create a penalty system that will force doctors to follow government cookbooks and ration care. The SGR reform bill is another contrived financing system that fails to provide quality, affordable health care to the greatest number of Americans.

We are left with a tireless array of manufactured financial systems that serve to address large populations rather than individuals. Failure to allow our patients to voluntarily privately contract and own their lives denies them the privilege of choice.

Congress has decided it is time to get the SGR off its plate. We applaud the decision. In the spirit of limited government, a healthy economy and the First Amendment, America’s physicians ask that Congress do the right thing and finally get out of the exam room and allow America’s physicians to work for our patients and do our job.

Marcy Zwelling-Aamot, MD FACEP, CoChair, National Physicians Council for Healthcare Policy 

Support strengthening for assisted suicide in CA

In a medical community sharply divided on the issue of assisted suicide, momentum has shifted to the side that embraces the idea — with California at the forefront of the change. Two Golden State doctors with life-threatening illnesses have recently become plaintiffs in a lawsuit aimed at shielding physicians from legal liability “if they prescribe lethal medications to patients who are both terminally ill and mentally competent to decide their fate.”

Changing mores among MDs

For disability-rights advocates like Marilyn Golden, senior policy analyst at the Disability Rights Education and Defense Fund, “the marriage of a profit-driven healthcare system and legalized aid in dying sets up dangerous possibilities,” the Los Angeles Times reported. “She warned of a scenario in which insurers might deny or delay life-sustaining treatments and a patient ‘is steered toward assisted suicide.’”

But views among doctors have moved strongly toward accepting illness-driven suicide. A recent nationwide poll conducted by the Medscape Ethics Center showed that 54 percent of respondents agreed that medically-assisted suicide should be permitted — an 8 percent increase in support among American doctors over the past five years.

The numbers showed how sharply and deeply the divide among physicians has become. “Historically, doctors have been some of the most vocal critics of assisted suicide,” The Atlantic recently noted.

“The American Medical Association still says that ‘physician-assisted suicide is fundamentally incompatible with the physician’s role as healer.’ Similarly, the California Medical Association takes the view that helping patients die conflicts with doctors’ commitment to do no harm. ‘It is the physicians’ job to take care of the patient and that is amplified when that patient is most sick,’ said a spokeswoman, Molly Weedn.”

A legislative push

Dianne_Feinstein,_official_Senate_photo_2With the shift in medical opinion, political support has also increased. While the doctors’ lawsuit makes its way through the courts, Sacramento Democrats have begun to advance legislation that would go even further. In a letter to state Sens. Lois Wolk, D-Davis, and Bill Monning, D-Carmel, U.S. Sen. Dianne Feinstein, D-Calif., gave her stamp of approval to Senate Bill 128, the so-called California End of Life Option Act:

“The right to die with dignity is an option that should be available for every chronically suffering terminally ill consenting adult in California. I share your concern that terminally ill California residents currently do not have the option to obtain end-of-life medication if their suffering becomes unbearable. As a result they may well experience terrible pain until their illness has taken their life naturally.”

The bill “would allow mentally competent California residents with less than six months to live obtain physician-prescribed lethal drugs that they’d administer themselves,” according to the Los Angeles Times. “A patient would need two doctors to confirm the illness was terminal. Also required: two oral requests 15 days apart and a written version witnessed by two people. Physicians, pharmacists and healthcare facilities could opt out. Those participating would be protected against lawsuits. Coercing a patient would be a felony.”

SB128 recently passed through the Senate Health Committee, which viewed a video message prepared by the activist Brittany Maynard, who moved to Oregon from California last year in order to end her life in accordance with that state’s assisted-suicide law.

“Before she died, Maynard recorded testimony in favor of passing such a law in California,” Reuters reported. “I am heartbroken that I had to leave behind my home, my community, and my friends in California, but I am dying and I refuse to lose my dignity,” Maynard said in the video. “I refuse to subject myself and my family to purposeless, prolonged pain and suffering at the hands of an incurable disease.”

A bellwether in the making

The assisted-suicide movement has positioned itself well to exploit a potential success in California. In addition to Oregon, Washington and Vermont also legally permit the practice. “Courts in New Mexico and Montana also have ruled that aid in dying is legal, and a suit was also recently filed in New York,” according to The Atlantic.

Originally published by CalWatchdog.com

Prison doctors double pay with O.T.

As reported by the U-T San Diego:

Twenty-nine state prison medical workers were paid more than $100,000 in overtime last year, including 15 doctors and nurses who were able to more than double their wages with the extra hours.

Physicians typically are not eligible for overtime under federal rules, as they are highly compensated professionals with advanced knowledge and training who work on salary.

But doctors are in short supply in the California prison system, and are represented by a union that has negotiated for them to receive overtime pay under certain circumstances. …

Click here to read the full story

Pain-Pill Abuse Can Be Curbed Through Private-Sector Innovation

Picking the proper medication for our patients is a delicate nuance that is part of the art of medicine.  Cook book medicine does not often make a very good cake. Of late, government regulations have made it more difficult to find the right recipe for our patients particularly when they need pain relief.

Pain is a common problem.  Pain may be chronic or acute and may take on a life of its own particularly if it is not managed properly   I have seen patients with the kind of pain that makes living a normal life nearly, if not completely, impossible. Simple daily functions that most of us take for granted, such as walking or sleeping, can become insurmountable tasks.  Many of these patients unquestionably require the use of pain medication.  For them it is not a choice, it is a necessity.

Opioid pain relievers are almost never a first choice. The side effects are overwhelming particularly for the elderly. But, they can literally be lifesaving for these patients.  Unfortunately, the opioid abuse is a billion dollar industry and the government has decided to come in with an iron fist and impose regulations that neither curb the abuse or establish a means of reasonable accessibility for those who need the medication.

More than 60 people die every day in the United States from prescription drug overdoses.  6.5 million people abused prescription drugs in 2013, more than double that of heroin, cocaine and hallucinogens, combined.

According to a 2010-2011 government survey almost 1.5 million Californians, ages 12 and over, were estimated to have abused painkillers in the previous year. Seven percent of adolescents ages 12 to 17 in California used pain relievers for nonmedical reasons in the previous year, according to 2009-2010 figures.

Taxpayers are left on the hook for increased medical and policing costs, and abuse can also wreak economic devastation by reducing productivity.  Misuse and abuse of opioids is estimated to cost the U.S. $56 billion annually.

The opportunity to find a better means of administering opiods opened the door to the American entrepreneurial spirit and private industry has answers. By utilizing “abuse deterrent formulations” for opioid painkillers, we can significantly reduce the abuse of these drugs.

Breakthrough abuse deterrent formulations provide patients with the same pain relief as conventional opioid medications, but protect against abuse by making crushing, cutting and dissolving for injection extremely difficult and blocking the euphoric effect of the pills when manipulated.

While there are many contentious issues among those in the healthcare field, the facts in this situation are clear: pain management is a necessity for millions of people and non-medical use of these drugs is a medical, ethical and public safety problem that must be addressed.

The Food and Drug Administration considers the development of abuse deterrent formulations a high public health priority, and those of us in the medical community, along with policymakers in the Capitol, should as well.

Research on the relatively new abuse deterrent formulation of OxyContin, the first opioid approved by the FDA to make abuse deterrent claims, found that inhalation and injection abuse dropped from 70 percent to 40 percent, and poison control center calls declined by 32 percent.

It is estimated that utilizing abuse deterrent formulas can save hundreds of millions of dollars in medical and criminal justice costs.   These are dollars that would be far better spent elsewhere, as we struggle to rebound from the worst economic downturn most of us have ever seen.

Abuse deterrent formulations have received widespread support as part of a comprehensive effort to combat prescription drug abuse and promote appropriate pain management, including from the Office of National Drug Control Policy, the Community Anti-Drug Coalitions of America, members of Congress and the National Association of Attorneys General.

The California Medical Association approved a resolution in December 2014, supporting the FDA’s ongoing efforts to evaluate and label abuse deterrent technology and opposing the imposition of administrative deterrents that decrease access to and coverage of prescription drugs with abuse deterrent properties.

Our regulators need to open the doors for these new formulations rather than developing regulations that only hurt those patients who legitimately need these meds.  It is time that healthcare professionals, patient advocates, stakeholders and policymakers move forward to improve access to this new technology.  I welcome this rare opportunity where private industry can work productively with government to help America’s patient find a productive pain-free day.

Marcy Zwelling, MD, is Vice Chair, American College of Private Physicians 

Brown plan may cut state retiree health payment

Something that rarely happens in California could result from Gov. Brown’s proposal to contain growing state worker retiree health care costs — benefits received by current government retirees might be reduced.

Part of the governor’s proposal allows state workers to choose a new low-cost health plan, increasing take-home pay. If enough choose the new option, the average cost of four health plans used to set retiree health care insurance payments would be lowered.

How many would choose the option is unknown. But the low-cost plan may have the potential to soon slow some of the rapid growth in health care costs, unlike other parts of the proposal that have delayed impact and require bargaining with labor unions.

Last week at a Senate and Assembly public retirement committee orientation, the new Senate chairman, Richard Pan, D-Sacramento, told a Brown administration official his committee will hold a hearing on the low-cost health plan proposal.

He did not mention “vested rights,” which under California court decisions protects public pensions from cuts. It’s been the central issue in attempts by local governments to cut retiree health care benefits in recent years.

Senator Pan

Pan, a pediatrician and former chairman of the Assembly health committee, said “there are some policy concerns” about whether the low-cost options ensures state workers have access to adequate health care when they retire.

“I realize it’s voluntary but, having been a former health committee chair, voluntary still has certain implications on choices people make, and so forth, and how that can impact other employees,” Pan said.

The senator said his committee hearing on the low-cost health plan would be separate from budget committee action on the plan. Some past decisions on key budget issues have emerged from leadership meetings.

Odd as it may seem, the health care subsidy state workers receive when retired, often 100 percent of the insurance premium, is more generous than the subsidy on the job, usually 80 to 85 percent of the premium, depending on labor bargaining.

Active state workers once had the same full health care subsidy as retirees. Then in a state budget crunch in the early 1990s, the state saved money when workers agreed in labor contract bargaining to pick up some of the health care cost.

There is no labor bargaining for retirees. So retirees continue to receive the average payment of the four health plans with the largest state worker enrollment, which can cover 100 percent of the premium for retirees and 90 percent for their dependents.

The new state budget the governor proposed in January would give active state workers the option of choosing a low-cost health plan with a high “deductible” that must be paid out of pocket before insurance covers expenses.

To help workers who choose the low-cost plan pay deductible costs, the state would contribute to a tax-deferred “Health Savings Account,” a 401(k)-style individual investment plan.

President Obama’s health care act imposes a “Cadillac tax” on full-coverage “platinum” health plans in 2018, a move to control costs by encouraging employers to move toward plans with higher deductibles and more out-of-pocket expenses.

“The current ‘platinum’ level of health coverage leaves the state — and employees — vulnerable to to the pending Cadillac Tax,” the governor’s proposed state budget said in January.


After a pension reform in 2012 and a phased-in $5 billion annual rate increase last year for the underfunded California State Teachers Retirement System, Brown’s new budget plan would pay down a huge debt for retiree health care promised state workers.

The state worker retiree health care debt or “unfunded liability” is estimated to be $72 billion over the next 30 years. That’s more than the unfunded liability CalPERS reported for state worker pensions last year, $50 billion.

If nothing is done to contain the rapidly growing cost, the state worker retiree health care debt is expected to reach $90 billion in the next five years.

The state will spend an estimated $1.9 billion on retiree health care next year, four times as much as $458 million spent in 2001. Retiree health care will be 1.6 percent of the general fund, up from 0.6 percent 15 years ago.

Brown’s plan would save the state money in the future by switching from “pay-as-you-go” funding, which only pays the health insurance premiums each year, to pension-like “prefunding” that invests additional money to earn interest.

The budget calls for bargaining a 50-50 split between employers and employees of the retiree health care “normal” cost, the actuarially determined value of retiree health care earned by workers during a year.

For current state workers, prefunding would be a bite from their paycheck. The state estimates that its half of the retiree health care normal cost will be $600 million a year when prefunding is fully phased in.

“The proposal to eliminate the unfunded liability, by the state and our employees sharing in the cost of prefunding those benefits, is generally a matter of bargaining, and those will be pursued at the bargaining table,” Richard Gillihan, Brown’s Human Resources director, told the two committees last week.

Some state workers have begun prefunding retiree health care. The Highway Patrol contributes 3.9 percent of pay with a state match of 2 percent of pay. Two other small bargaining units contribute 0.5 percent of pay with no state match.

For the state, prefunding would be spending to save. Costs go up for years before investment earnings begin reducing annual expenses. The California Public Employees Retirement System, for example, expects investments to cover two-thirds of its pensions.

For new hires, in addition to sharing the normal cost the budget calls for bargaining longer service to become eligible for retiree health care and limiting state premium payments to the amount received while on the job.

Ten years of service is needed for state workers to be eligible for retiree health care, beginning at 50 percent coverage and increasing to 100 percent after 20 years. The proposed budget pushes back the thresholds to 15 and 25 years.

For current retirees, the low-cost health plan could indirectly be their contribution to containing state costs, if the number of state workers choosing the option is large enough to lower the four-plan average that sets their premium payment.

The low-cost health plan apparently would not be bargained. Legislation would direct CalPERS to begin offering the option among the health plans from which state workers can choose.

The low-cost health plan is similar to Brown’s proposal for a “hybrid” pension, combining a smaller pension with a 401(k)-style plan. It was rejected by the Legislature in 2012 when most of the governor’s 12-point pension reform was approved.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune.

Originally published by Calpensions.com. Click here to read more stories.

Medi-Cal Struggles Leave Politicians Worried, Patients Hurting

A victim of its own success, California’s popular Medi-Cal program has rapidly swelled to a large enough size to malfunction. It’s known as Medicaid in the rest of the country and provides medical care to poor people.

Mounting woes — from applicant backlogs to outdated regulations — have raised serious concerns among analysts and policymakers.

In part, the challenges facing the Medi-Cal system came about because of administrative changes triggered by the federal Affordable Care Act, or Obamacare. Here it’s called Covered California. As CalWatchdog.com reported, a combination of cuts in federal and state budgetary subsidies boosted provider costs.

“A provision of Obamacare hiked the rates for primary care doctors to the substantially higher Medicare rates for two years, but those increases ended on Dec. 31,” reported the San Jose Mercury News. “A second blow came last month when the state cut the Medi-Cal reimbursement rate by another 10 percent, a reduction approved by California lawmakers in 2011 but delayed in a court battle that doctors ultimately lost.”

But the ACA has made an even greater impact on California’s health care challenges by ballooning the population accessing Medi-Cal benefits. As the Mercury News reported, Obamacare opened the floodgates in Jan. 2014, resulting in 2.7 million more recipients to date.

California’s expanded recipient group now makes up 17 percent of total national Obamacare enrollment, even though California’s overall population is just 12 percent of the U.S. total.

State health officials, according to the Mercury News, have concluded that by the middle of 2016, “more than 12.2 million people — nearly a third of all Californians — will be on Medi-Cal.” Meanwhile, the program already consumes about two-thirds of California state-government spending on health and human services overall.

Budgetary fears

For both Gov. Jerry Brown and Sacramento legislators, these trend lines have raised sharp worries, as McKnight’s news servicereported:

“State lawmakers this week said the latest enrollment news is alarming, and that even if a new pending rate request hike goes through, there is concern the state will run out of funding to care for its Medicaid recipients. State Medicaid costs are up 4.3 percent this year while federal share of costs for new enrollees will begin dropping in 2016, according to Gov. Jerry Brown.”

Brown has made an effort to head some costs off at the pass in his budget plan. According to State of Reform, a health-care think tank, “Brown has earmarked $2 billion in total funds ($943.2 million General Fund dollars) to cover mandatory Medi-Cal expansion.”

But pressure to change the budgetary calculus in California’s favor has intensified.

Reducing access

The big picture for Medi-Cal has officeholders and policymakers so nervous because of the ripple effects of increased costs and recipient rolls. State of Reform observed:

“In addition to Medi-Cal primary cuts making it potentially impossible for new patients to find physicians, President Barack Obama’s executive action will make approximately 1 million undocumented immigrants in California eligible for health insurance tax subsidies.”

That has critics warning access to doctors could decrease sharply. In a sobering report issued by the Legislative Analyst’s Office, the impact of the president’s actions was incalculable:

“The benefits received by undocumented immigrants through these programs are almost entirely funded by the state and would therefore result in additional General Fund costs of an unknown amount. The General Fund costs to provide state–funded benefits to this population are unknown at this time.”

With the federal government putting the squeeze on California’s budget, state doctors have become increasingly scarce.

“There are mounting concerns there will not be enough plan doctors to accommodate the enrollment surge,” according to McKnight’s. “One recent study found that only 57 percent of the state’s primary care doctors accept new Medi-Cal patients.”

As a result, increasing numbers of recipients have been winding up in the ER. As the Fresno Bee observed, that transfer of burdens has undermined the claim advanced by Obamacare proponents “that patients with insurance would have primary care doctors to take care of them and less reason to use expensive and overcrowded hospital emergency rooms.”

Although experts have not determined the likely extent of doctors’ unwillingness to treat Medi-Cal patients, California lawmakers have begun to brace for the worst: a substantial budgetary increase that will not be covered by the federal government.

Instead, the higher health tab may have to be absorbed by increased taxes, cuts in other budget areas, or both.

Originally published at CalWatchdog.com

Covered CA Facing 2015 Adjustments

After posting some of the biggest numbers in the Obamacare firmament, Covered California is putting the squeeze on Golden Staters. Amid concerns that bureaucratic and administrative rules will reverse initial gains, the statewide exchange is stressing the substantial increase in tax penalties facing Californians who don’t get insurance.

Meanwhile, choices for coverage are shrinking, not expanding.

In order to hold down spikes in the cost of care, Obamacare included insurance subsides calculated according to a family’s expected yearly income. In keeping with federal tax practices, if a family’s actual income exceeds the estimated amount, their subsidy shrinks accordingly — regardless of whether it leaves them in the hole.

According to the Los Angeles Times, analysts now predict that as many as half of all families enrolled and subsidized under Covered CA could face a bill this tax year.

The implications are so serious that Covered CA executives are on edge. They’ve had to pivot swiftly from public relations mode — pushing a traveling awareness campaign designed to boost enrollments — to public warning mode.

“As the health law’s second open enrollment period draws to a close, Covered CA , the largest of the state-run health insurance exchanges set up under Obamacare, is about to start emphasizing the tax penalties one can incur by not getting covered,” Reason’s Peter Suderman observes.

“As the penalty increases,” Covered CA Executive Director Peter Lee said in a statement, “it makes more and more sense for those who have been waiting on the sidelines to get in and get coverage.”

Toby Douglas, director of the Medi-Cal management organization DHCS, put it more bluntly. “This is an important message that should be heard by Californians of all income levels,” he said. “Applying for coverage not only gives you an opportunity to get comprehensive health care; it can help you avoid a penalty that could hurt you and your family.”

A snowball effect

The federal picture is not the only one that matters in California. It turns out that Medi-Cal faces a simultaneous reduction in state reimbursement rates. As David Gorn notes at California Healthline:

“The 10 percent rate cut, approved by the California Legislature in 2011, was held up while the matter was thrashed out in court. Last year, the courts upheld the state’s right to reduce provider reimbursement and health care officials decided to implement the cutbacks in phases. The last phase, which includes primary care providers, went into effect Jan. 1.”

That puts pressure on legislators to pour more state tax dollars into funding Medi-Cal. “More than 11 million Californians are on Medi-Cal — more than 30 percent of the state’s population. Raising rates by any amount, given that huge pool of recipients, would be an expensive proposition,” writes Gorn.

The result is a snowballing budgetary problem, not just for families seeking health coverage but for the state of California. It’s bad timing for Gov. Jerry Brown in particular.

Brown has just come off of a fragile but significant political success — debuting an eye-popping budget plan that’s nevertheless been greeted as relatively well-disciplined, if only by California’s profligate standards. Brown has had to carefully balance competing demands for more cash for statewide interests, from environmentalists to the universal pre-K lobby.

Too hard a push for additional health care funding could foster a political crisis that cuts strongly against Brown’s agenda, which is heavy on infrastructure and fiscal management.

Pressure on the left

Adding more wrinkles to the challenge facing Brown, important constituencies on the political left have imposed increasing burdens on the scope of coverage promised under Obamacare. USA Today reports that perhaps half-a-million unlawful immigrants residing in California will soon become eligible for Medi-Cal, while Sacramento Democrats are working “to extend state-subsidized health insurance to everyone, including those barred from getting covered through the Affordable Care Act.”

Meanwhile, some 280,000 Northern and Central California customers have been put on notice that their coverage may collapse or cost more, thanks to a contract dispute that has Blue Shield of California squaring off against the Sutter Health network. Sutter, earning the sympathy of liberals, insists Blue Shield is to blame for slashing reimbursements and expecting Sutter to somehow absorb the costs.

But the controversy is poised to remind Californians of the intra-party divisions that had Democrats at odds in November over Proposition 45, which would have given the state insurance commission the power to negotiate rates with insurers, including Covered CA itself. Voters rejected it, 59 percent to 41 percent.

Prop. 45 was backed by Insurance Commissioner Dave Jones, who was re-elected to his job, and billionaire hedge-fund investor Thomas Steyer, who is contemplating a bid for the U.S. Senate.

Opposition included Diana Dooley, the head of the state’s Health and Human Services Agency and chair of Covered California, a Brown appointee, and the Service Employees International Union, a key Democratic power center.

This piece was originally published on CalWatchdog.com

Pay for Retiree Health Care by Putting California Government Workers in Obamacare

As I’ve stated here before, there is no reason for California governments to continue retiree health care benefits for those who aren’t already retired or vested. It’s costly as heck (and getting costlier), and money hasn’t been set aside to pay for the benefits. And this country has Obamacare and Medicare to cover government retirees.

But retiree health care seems here to stay – in fact, the Brown administration is widely reported to be coming up with a plan to provide more of a funding base for it. That’s essential — even if the state comes to its senses and ends retiree health care, there will be many decades of benefits to pay for those who already have earned them.

But how to provide funding? I’d suggest taking a hard line: no other program or part of the budget should suffer to pay for retiree health care (that could just as easily be provided by existing public programs). So how to pay for it? The most appropriate way would be to put today’s state and local government workers into the insurance markets created by Obamacare.

The money saved – a Stanford study estimated the annual savings to California would be $1.4 billion – would be significant, providing a base of funding for retiree health care.

There’d be other benefits to the shift – including building up the fledgling markets with new customers and giving powerful public employee unions a stake in making the markets work. (Do you think it would be so hard to get Covered California on the phone if SEIU members were its customers?) And it’d be more than fair, since unions are the most important backers of the party that gave us this new health insurance system.

Of course, the fairness of such a policy wouldn’t stop unions from opposing this . And that opposition represents an opportunity for both sides of the political spectrum. The right could point out that even Democratic interest groups don’t want to go on with Obamacare. Republicans in the legislature, if they’re going to use their newfound ability to block Democrats who lost their supermajorities, would be wise to seize on this issue; they should block measures that require two-thirds until they get the elimination of retiree health care going forward.

Less-political people on the left could point out that having public employees getting platinum-coated health benefits means less money for vital public programs and investments. And they could make the most fundamental of progressive arguments: shouldn’t we all be in this together?

This article was originally published on Fox and Hounds Daily