Latinos and California Health Care Reform

1. Latinos and California Health Care Reform Sumi Sousa Office of the Assembly Speaker California State Assembly

2. Context • What happens with the Latino population drives CA. • Latinos constitute 35% of CA residents • Latinos will become the largest race/ethnic group in CA by 2011 • Latinos will constitute 52% of CA’s population by 2042. • 6.7M non-elderly Californians are uninsured for all or part of the year. 60% are Latino. • 1 in 3 Latinos in California is uninsured.

3. Context • California embarked upon a serious health care reform effort in 2007-08, wanting to address: • Unsustainable growth in the cost of health care • The large and growing population of uninsured and related problems of health care access • Dysfunctional individual market • Prevention agenda • Improvements to the overall health care delivery system • Short window of opportunity • Republican Governor in mid-2006 says 2007 will be “Year of Health Care Reform” • CA’s 2/3 vote requirement for taxes and 2008 elections meant a deal must be struck by the end of 2007/early 2008.

4. Context • Significant constraints related to financing • 2/3 vote requirement for taxes • ERISA • Significant Political Constraints • Children’s health ballot initiative had just been defeated in 11/06 • Previous, more modest reform attempt had been defeated in 2004 • 2/3 vote requirement meant Governor had no Republican votes • Politics of immigration

5. What Would AB 1x Have Done? • Established a system of near universal coverage. • Employer and individual responsibility: Pay or play with an individual mandate • Established a purchasing pool for workers in firms not offering coverage and tax credits (subsidies) for coverage for lower income workers. • Individual market reforms, including guarantee issue. • 85/15 medical loss ratio • Major public program expansions (Medi-Cal and Healthy Families) for low-income Californians, including childless adults.

6. What Would AB 1x Have Done • $2.3B Medi-Cal rate increase funded via a 4% quality improvement fee assessed on hospitals • Public Health and Prevention Programs: Obesity, diabetes, tobacco cessation • $1.75 per pack increase in the tobacco tax • Scope of practice changes to increase supply and availability of health care providers

7. How Would It Have Affected/Why Was It Important for Latinos? • Coverage • Affordability • Access • Prevention/Public Health • Workforce

8. Coverage • 1 in 3 Latinos is uninsured in CA • Uninsured in CA are largely low income workers. • 84% of the uninsured in CA are workers and their family members • Latinos work in firms with the lowest offer rates amongst all groups in CA – 70% (for ex., whites = 90.2%). • They have one of the lowest take up rates in CA – 80%. • So structure of the employer “Pay or Play” important for Latinos. • Minimum spending requirement of 1% - 6.5%, depending on payroll size • Purchasing pool w/ the available tax credit meant there was a place for lower income families to purchase comprehensive, affordable coverage • Contained a major expansion of the state’s Medi-Cal and Healthy Families (SCHIP) programs. • Medi-Cal and Healthy Families expansion would have covered California’s 800,000 low income uninsured children regardless of documentation status. • Undocumented children are 4.1% of all children in CA and 18.5% of uninsured children.

9. Coverage • Coverage program for remaining uninsured adults (ineligible for the pool or any public programs), via state’s non-profit community clinics. • Significant expansion of an existing state-only program which funds primary care services to low income uninsured adults. • Undocumented adults 19 – 64 are 8.9% of all adults and 25.3% of uninsured adults in CA. • Gruber estimates that AB 1x would have resulted in 71% of California’s uninsured gaining coverage, and an overall coverage rate of 98% of documented adults and 100% of children in CA. • Individual mandate exempted people below 250% of FPL whose premiums would have been greater than 5% of income – essentially, the undocumented.

10. Affordability • 41.1% of CA’s non-elderly population have incomes below 250% of FPL. • 61.6% of the Latino non-elderly population have incomes below 250% of FPL, 80.3% have incomes below 400% of FPL. • In addition to public program expansion which ensure free or very low cost coverage, AB 1x contained significant affordability provisions for lower income workers. • Required establishment of Sect. 125 plan • Purchasing pool for non-offering employers • Advanceable, refundable tax credit via the purchasing pool for those 250% - 400% of FPL. • Favorable cost sharing for products offered in the pool • Incomes up to 150% = 0 cost sharing • Incomes 150% - 250%, premiums limited to 5% of income.

11. Access • More than half of uninsured children in CA are eligible for public coverage. 68% of the eligible but unenrolled are Latino. • So enrollment simplification measures for Medi-Cal and Healthy Families, including elimination of the asset test, changing of the deprivation standard and simplification of the semi-annual status report are particularly important for Latinos. • Increased income limits to 300% of FPL for kids. • $2.3B Medi-Cal rate increase for CA’s hospitals and physicians • CA’s low reimbursement rates have created a serious access problem for recipients. • 53% of all Medi-Cal recipients are Latino.

12. Prevention • The Community Makeover Grants - Obesity Prevention • Grants for all the state’s local public health officers for purposes of healthy eating, living, and overall obesity prevention. • Particularly focused on changing environmental and lifestyle factors, such as gaining access to fresh foods, location of supermarkets in urban core, open space for physical activity. • Nearly 7 out of 10 Latino adults in California is overweight or obese.

13. Prevention • Diabetes • Created the CA Diabetes Prevention Program within Medi-Cal to provide diabetes prevention and management services to all adult fee for service Medi-Cal recipients • Similar to obesity prevention programs, focused on education, prevention and lifestyle changes. • Would have worked with health plans and providers on incorporating culturally and linguistically appropriate lifestyle coaching, self-management, in addition to clinical interventions. • Diabetes prevalence is 8% for Latinos adults overall in CA. However 21% of Latino adults age 50 – 64 have diabetes, the highest amongst any race or ethnicity for this age group.

14. Prevention • Tobacco cessation • California has been a leader in tobacco education and prevention • AB 1x contained an expansion of existing tobacco cessation programs, including Smoker’s Helpline which is available in 6 languages. • Allowed community clinics to bill for smoking prevention and cessation as a part of primary care services. • Tobacco tax = additional $1.75 per pack (current taxes = 87 cents per pack)

15. Workforce • CA faces a severe shortage of health care professionals, particularly in rural and low-income areas of the state. There’s an even greater shortage of minority health care professionals. • AB 1x would have established a scope of practice in law for nurse practitioners and expanded their ability to supervise medical assistants in clinical settings other than community clinics. • AB 1x also contained money for health care workforce training programs in Los Angeles County that incorporated more minorities into the health care professions.

16. Latinos Have A Huge Stake in Health Care Reform • Both at the state and national level, Latinos have much to gain in health care reform. • Important that future policy decisions related to health care reform, particularly in the area of affordability and prevention, pay close attention to the demographic trends of this population.