Failed healthcare reform efforts in California can provide important lessons for future efforts in state and federal healthcare reform, according to new papers in the journal Health Affairs.
"No other state has Massachusetts' combination of high incomes, low uninsurance rate, sizable existing federal waiver funds and high healthcare and coverage costs," Rick Curtis and Ed Neuschler say in "Affording Shared Responsibility for Universal Coverage: Insights from California," one of two Health Affairs papers.
"California, on the other hand, has a large low-income population and high uninsurance rate," said Curtis, president of the Institute for Health Policy Solutions in Washington, D.C., and Neuschler, a senior program officer there.
Curtis and Neuschler discuss the differences between Massachusetts' and California's approaches to providing affordable health coverage to working people and their families. They note that both states tried to determine what constitutes "affordable" insurance, and both state plans opted to subsidize coverage for low-income residents.
But Massachusetts decided to allow some of its working people to remain uninsured. The state denied public subsidies to state residents with access to employer-sponsored coverage and granted "affordability waivers" to those who could not obtain affordable insurance, relieving them of the obligation to purchase coverage.
In contrast, to achieve near-universal coverage, California's plan included tax credits for workers and others with incomes above the threshold for subsidized comprehensive coverage who faced high premiums relative to their incomes.
State leaders held down costs and incentives for employers to drop coverage by tying tax-credit amounts to premiums for a health plan with a sizable deductible and by phasing out the credit as incomes rose. California's plan also provided public assistance to workers with access to employer-sponsored coverage, although it deferred the final decision on how that assistance would be structured.
In a second paper, "Designing Health Insurance Market Constructs for Shared Responsibility: Insights from California," Curtis and Neuschler examined the framework through which California's plan provided coverage to those without access to employer-sponsored coverage. They explained how the California plan tried to safeguard against "adverse selection," the tendency of insurers to seek out relatively healthy, low-risk customers, and the tendency of consumers to purchase minimal coverage when they are healthy and more extensive coverage after they get sick.
In a third paper, "The Long and Winding Road: Reflections on California's 'Year of Health Reform,'" Marian Mulkey and Mark Smith of the California Health Care Foundation examined lessons from the California policy experience.
They concluded that reform attempts are most likely to succeed if they have bipartisan buy-in, address the needs of both insured and uninsured people, deliver short-term progress within the context of longer-term goals, rely on broad and sustainable financing, strike a balance between specificity and flexibility and occur within a clear framework of state and federal responsibilities.
"The political energy and media attention that fuel the health reform debate focus on 'coverage' and (often only by implication) access to care," said Mulkey and Smith. "In contrast, the obstacles center on cost and value: assuring that costs can be contained and that increased spending will improve access to high-quality care for the uninsured without undermining access and affordability for those who are insured."
"Long-term success will require that the focus be expanded from finding revenues that allow broader participation in existing coverage and care arrangements to a fundamental reorganization of financing and delivery systems,"
the authors concluded.