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California Health Reform Proposal

Governor Schwarzenegger's proposed health reform plan in California focuses on expanding coverage to all residents. Key features include individual mandates, subsidies for low-income adults, and insurance market reforms aimed at improving access and affordability.

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California Health Reform Proposal

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  1. California Health Reform Proposal Proposed by Governor Schwarzenegger January 8, 2007

  2. Health Insurance Coverage of the Nonelderly in California, Massachusetts, and the U.S., 2004-2005 Total Population: 35.8 million 6.3 million 256.3 million Uninsured: 6.7 million 677,000 45.4 million SOURCE: KCMU/Urban Institute Analysis of the March 2005 and 2006 Current Population Survey. Two-year pooled estimates also used for the United States.

  3. Covering All Californians • Individual Mandate • Public Coverage Expansions • All children to 300% FPL • Legal parents and childless adults up to 100% FPL • County-based coverage for undocumented adult immigrants up to 250% FPL • Subsidies for Adults 101-250% FPL • For purchasing pool or share of employer-sponsored insurance premium • Insurance Market Reforms • New purchasing pool • Guaranteed issue for plans • 85% of plan revenues on patient care • Financing • Medicaid/SCHIP federal match • 4% of payroll fee for non-offering employers with 10+ employees • “Coverage dividend” fee of 4% for hospitals, 2% for physicians • Reprogramming of current state, county, and local funding

  4. Proposed Coverage by Poverty Level Above 300% FPL SOURCE: Governor’s Health Care Proposal, January 8, 2007

  5. How the Uninsured are Covered People in Thousands Total: 4.6 million Uninsured SOURCE: Governor’s Health Care Proposal, January 8, 2007. Coverage estimations are approximations.

  6. Financing for California’s Reform Plan Dollars in Billions $12.1 billion $12.1 billion Prevention/Wellness State Savings* 125 Plan State Tax Loss Local Funds County Coverage for Adult Undocumented Immigrants County Funds** Employer Fee Subsidies for Low-Income Adults Provider Fee Medi-Cal/SCHIP Expansion Medi-Cal Payment Increases Federal Funds *The state expects to save $203 million through the elimination of several state programs after the reform (Access for Infants and Mothers, Managed Risk Medical Insurance Program, and MediCal Share-of-Cost) ** County funds will be available from the relief of other county obligations

  7. Key Challenges in California • Large number of uninsured • Political challenges • Individual mandate • Employer fee • Provider fee • Coverage of immigrants • Affordability of coverage • Adequacy of benefits and subsidies in purchasing pool • Ability of individual market to meet increased demand • Long-term funding challenges

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