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Q and A with California Health Secretary About Supreme Court and Health Care

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(Sacramento, CA)
Thursday, March 29, 2012
The State of California has already been rolling out health system changes outlined by the Affordable Care Act. It's implementing the health benefit exchange, expanding Medi-Cal, and it has passed laws to enhance and extend health coverage. The Supreme Court hearings this week raised questions about the future of health changes in California.
[The following is a transcript from a longer version of an interview with Secretary Dooley. A shorter version of this interview aired on Capital Public Radio and can be viewed here
Secretary Dooley: California has a long history of innovation in the delivery of health care. For the past decade, California has had a number of legislative efforts from mandating employers carry it early in the decade; in '07 and '08, there was a strong effort that had bi-partisan support across insurers and employers. Some liked it, some didn't. But the recognition in California that the people who don't buy insurance are shifting those costs to the people who do buy insurance has been a principle that's been understood in California for a very long time.
Bartolone: And you would say that's why California is a leader in implementing health reforms?
Secretary Dooley: Yes. Making the playing field fair is at the heart. Everybody uses healthcare, but not everyone pays for it. And so getting to a system where the people who need the care pay for the care, or if they can't they are on a government program, that this sliding scale of your ability to pay will even out the market and reduce the really significant cost-shifting that occurs from the people without insurance to the employers and the individuals that are paying for insurance and doing their part to be responsible citizens.
Bartolone: If the Supreme Court were to strike down the entirety of the Affordable Care Act, how would that affect how California is rolling out with health reform?
Secretary Dooley: California is building a health benefit exchange with funds provided under the Affordable Care Act. And those funds are available through 2014. My agenda is to use as much of that as possible, as quickly as possible, to be sure that California has a marketplace even if we don't have the full promise of the ACA - the Affordable Care Act. I believe that the constitutional questions will be answered in favor of the law. I believe that the law will be upheld. But I'm also working very hard to assure that we have as much benefit for California as possible, even if we don't have the full promise of the Act.
Bartolone: So for the common person who may be interested in getting insurance come 2014, can they expect to see a health-benefit exchange in 2014 regardless of what happens with the Supreme Court?
Secretary Dooley: We are going to do everything we can to have an operational health benefit exchange in January 1, 2014. The extent to which we will be able to do that will be decided in part by the Supreme Court this summer and in part by the election in November. Those are parts of our process that we will accommodate. We are making an investment in the future of California, and we hope and believe that that marketplace will be available.
Bartolone: Tell me a little bit more about using the federal funds to implement the exchange. Would the exchange also need money from the federal government to operate the exchange once it's already set up?
Secretary Dooley: Under the terms of the Affordable Care Act and the California legislation that implemented that, both require that the exchange be self-supporting in 2015 so that as a marketplace for people to buy insurance, the insurance providers that are offering their product will pay a fee for this marketplace. So the federal funds are to start up the exchange, but it must be self-supporting, whether or not the Affordable Care Act is upheld.
Bartolone: Would the exchange work without the individual mandate?
Secretary Dooley: With the mandate, the operation of the exchange will move more quickly at the outset. But there is a strong appetite in the marketplace for people to buy insurance. And if the exchange can offer insurance at an affordable price, in transparent… people know what they're getting and they know which doctors and hospitals they can go to, there will be a marketplace for that even without the mandate and the subsidies. It will be very hard to do because many well-intentioned people would like to buy insurance now but they can't afford it. So it's much more about the affordability.
Bartolone: Would California consider its own state individual mandate? That people get insurance and participate in the exchange?
Secretary Dooley: California has considered a state mandate in the past…California was one of the first to have mandatory auto insurance, and I think California could well be one of the first to have mandatory health insurance.
Bartolone: Is that something that you would support?
Secretary Dooley: I think we have to look at the broader context of making the system fair, and having everybody pay a fair share. And so if you're going to get healthcare at an emergency room or in a catastrophic situation, to shift that cost to the people who are being responsible and buying their health insurance is not something that can be sustained over time. So I think we would have to look very carefully at the need in California to reduce the burden of the cost shift that occurs without a requirement that everyone be insured.
Bartolone: There are already things that California has implemented under the Affordable Care Act that require federal money, right? There's the Pre-Existing Condition Insurance Plan, there's the Medicaid expansion through the Low-Income Health Insurance Program [Low-Income Health Program]. What would happen to those programs if the Affordable Care Act were overturned in the courts and that money would be unavailable?
Secretary Dooley: Some of what California has done will survive any court decision. California has acted to stop insurance companies from rescinding or cancelling insurance. The Act itself requires plans to offer coverage to dependent children up to age 26. We have a regulatory system in place in California to review rates and control costs and rate increases in insurance. All of that is in California. The expansion of Medi-Cal to low-income populations in the counties was done through a federal waiver process that is existent in Medi-Cal law that is related to the Affordable Care Act but it isn't dependent on the Affordable Care Act. If those populations don't move into regular Medi-Cal, we will still have a contract with the federal government to provide that care.
Bartolone: Is there any aspect of health reform in California that you feel that California couldn't move forward on without the federal government's support?
Secretary Dooley: I think the most significant challenge that California faces in the short run is our budget deficit. We have had to make very serious reductions because of the recession. There are more people without jobs and therefore without health insurance now than even five years ago when California was looking at healthcare reform. So in the short run, it will be very hard for us to move forward to expand health coverage without the additional federal funds that we would have under the Affordable Care Act. We simply have to balance our budget and get California on a strong footing to do any of this work.
Bartolone: So it sounds like the Supreme Court decision will help determine "how" California moves forward with health reform, not "if"?
Secretary Dooley: I think that's a very fair characterization. The Supreme Court will define how California will move forward and how quickly California will move forward, but I believe our history and our current understanding of the real mess that the healthcare system - loosely called a system - is in need of reform. And if we have to do it without our federal partners we will find a way to do it. But it will be a much better transition to better health if we can do it with the benefits of the Affordable Care Act.
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