Stakeholder issues
1. How would SB 840 affect seniors who already
have Medicare health coverage?
Medicare recipients will continue with their
current coverage until Medicare funding is transferred to the Universal
Healthcare Fund. However, SB 840 provides that Medicare recipients
will receive all their health care from the publicly financed universal
health care system. This means seniors can choose their own primary
care doctor. The system’s providers will bill Medicare directly for
Medicare covered services that they provide to Medicare recipients.
In addition, Medicare recipients will be eligible
for wrap-around benefits from the health care system. These benefits
will include all the other benefits provided by the system that
are superior to the benefits they have under Medicare, including
prescription drug and dental coverage.
Seniors are now filing for bankruptcy at a higher
rate than any other age group although they accounted for only five
percent of filings as of 2001.[1]
Coverage provided by SB 840 can save seniors from financial hardship
due to high health care costs. The Lewin Group finds that a system
similar to SB 840 provides the greatest savings among families headed
by someone age 65 and older.[2]
2. How would SB 840 affect doctors and
other providers?
SB 840 provides that doctors and other providers
can remain independent for-profit or non-profit entities. However,
instead of dealing with numerous insurance companies and hundreds
of different policies, they can chooses to work with the health
care system and have one set of rules for coverage and one set of
procedures for payments. This will give doctors and other providers
relief from excessive administrative costs and the burden of dealing
with a myriad of insurance plans.
All providers will be paid for all covered services
because all residents are covered under the publicly financed health
care system. SB 840 provides that the Universal Healthcare Fund
reimburses doctors and other providers within 30 days from the date
the service is provided. Also, bonus payments are provided for doctors
who meet performance standards and outcome goals established by
the system.
Doctors also can see private patients whom they
can bill directly. Specialists can bill residents who are not referred
to them by a primary care or emergency room doctor. However, doctors
who accept payment for services from the state’s Universal Healthcare
Fund are prohibited from billing residents for any covered services.
Also, the California Universal Healthcare System does not cover
visitors to California. Doctors and providers will need to charge
them for provided health care services.
SB 840 allows doctors who participate in the
publicly financed health care system to choose to be compensated
either as fee-for-service providers or salaried providers. Fee-for-service
providers must choose representatives to negotiate their rates with
the Payments Board. Doctors who are employed by health care systems
will have their rates determined by their employers through rate
negotiations. The Payments Board can set binding rates for the providers
if reimbursement rates are not agreed upon according to a specified
timeline. Under SB 840, payment schedules remain in effect for three
years, but adjustments can be made at the discretion of the Payments
Board. After the three-year period, reimbursement rates would be
renegotiated.
3. How would SB 840 affect essential community
providers and other health care facilities?
Health care facilities would not need to go
through the costly process of negotiating payment rates every year.
Under SB 840, payment schedules will be in effect for three years
and then could be renegotiated. And, payment adjustments can be
made at the discretion of the Payments Board to meet system’s goals.
These providers will no longer have to bill
hundreds of insurance companies for payments. SB 840 provides for
enough funding for all facilities, including those in inner cities
and rural areas that now provide high levels of non-reimbursed services.
When all residents have health coverage and their own primary care
doctor, all provided care will be reimbursed in a timely manner
and long waits and overcrowding in emergency rooms will no longer
be the norm.
4. How would SB 840 affect employers?
SB 840 provides for system cost controls, which
will stabilize health care costs. Employers will be relieved from
negotiating new premium rates each year as well as managing complex
health care plans. Under the new system, all businesses will be
on a level playing field when it comes to health care costs.
Employer payrolls are expected to be the basis
of employer contributions under SB 840. Further, the bill provides
that individuals, businesses and governments share fairly in the
costs of providing health care under the publicly financed health
care system. Health care costs are expected to be significantly
less for employers who currently provide health insurance.[3]
In addition, the new premium costs will be more affordable than
current market insurance premiums for businesses that do not provide
insurance.
SB 840 provides that health care budget increases
are tied to the rate of growth in the state’s Gross Domestic Product.
The competitive position of California products in global markets
will improve when their prices no longer reflect steep increases
in health care costs.
5. Does SB 840 provide assistance for people
who lose their jobs under the new system?
SB 840 provides for the Universal Healthcare
Commissioner to implement the means to assist persons who are displaced
from their jobs. For a period of five years from the date the California
Universal Healthcare System becomes operative, support in retraining
and job placement will be provided.
There will be both job loss and job creation
under SB 840. Providing 36 million Californians with health care
will increase the need for health care jobs like drivers, interpreters,
nurses, home health aides, and therapists. There also will be new
jobs in health care education and in quality and health planning
programs. There will still be a need for jobs involving administration,
billing and similar functions. Another job generator that could
occur at the state level would be outsourcing claims and payments,
similar to the federal government's outsourcing of Medicare's claims
and payments to Blue Cross.
6. Why should anyone pay into a universal
health system that also provides health coverage for people who
are not paying into the system?
The dominant reasons to support a publicly financed
health care system is that all residents, both those able and unable
to pay into the system, would have affordable comprehensive health
coverage, improved care quality and choice of doctor and hospital.
First, businesses, individuals and families who purchase insurance
under the current multi-payer system, have added costs imposed on
them annually--not by so-called “hidden taxes,”--but by insurance
companies that increase their premiums to cover their losses from
non-reimbursed health care. Instead, SB 840 provides comprehensive
care to all residents while reducing costs and saving money. The
Lewin Group finds in a system similar to SB 840 that most individuals,
families and businesses will pay less than they now pay for health
care while state and local government agencies will save money under
the state health care system.[4]
The publicly financed health care system would
eliminate dramatic increases in health care costs for individuals
who have serious or chronic illnesses. In 2001, nearly two million
people experienced bankruptcies from medical bills for services
not covered by insurance.[5]
Nearly 80 percent of those declaring these bankruptcies had health
insurance, but were under-insured.[6]
Eliminating the risk of financial ruin due to health care costs
is an incentive to support a state administered health care system.
Secondly, care quality would improve under the
publicly financed health care system. According to the Office of
Statewide Planning and Development, 65 emergency rooms have closed
in California in the past decade because of non-reimbursed care.[7]
When an emergency room is not available in a community, both those
who pay for insurance and those who do not are in harm’s way. SD
840 provides that all emergency room health care services are reimbursed.
Thirdly, there are other factors that impact
care quality. A 2005 international survey on sicker adults finds
that the United States leads other advanced countries in medical
mistakes, medication errors, and inaccurate or delayed lab results.[8]
Each year, as many as 600,000 people die in the US from preventable
errors in both hospitals and outpatient facilities, infections acquired
in hospitals, and misapplications of technology.[9]
Furthermore, the US ranks lower in overall population
health compared to countries that have universal health care systems.
Data compiled by the Organisation for Economic Cooperation and Development
that compared health trends among 30 developed countries from 2004-2005,
indicates the US ranks ninth in life expectancy and 28th in infant
mortality. Of these countries, only Turkey and Mexico experience
more infant deaths per 1000 live births than the US.[10]
7. Could California be overwhelmed with
people coming here to get care?
This is not likely to happen because uprooting
a family for a major move and finding new jobs is not easy. If it
were to happen, stringent fees and waiting periods could be imposed
to protect the financial integrity of the new system. Non-residents
visiting California for health care would be charged for all provided
services.
