Health Care Insecurity a Top Concern for Californians

A strong plurality of Californians are worried about the economy, and healthcare costs are their greatest concern. Something must be done to address this, and perhaps more transparency and competition are the answer.

24


Apr

Health Care Insecurity a Top Concern for Californians

Californians are uneasy about the economy.

Only 48% expect good economic times in the upcoming year, while 42% expect bad economic times, and a majority of Americans believe that children growing up today will be worse off financially than their parents. Healthcare costs are now the greatest financial concern for Americans, and cost is the most urgent healthcare-related problem, according to a recent Gallup poll. A 2018 poll from the Public Policy Institute of California revealed that a majority of Californians are so worried about rising healthcare costs that they are more enthusiastic about funding universal healthcare than any other state spending priority, including universal preschool, the high-speed rail project, and the “rainy day fund.”

As many as 3 million Californians remain without health insurance.

To maximize the impact of our efforts to make healthcare more affordable, it’s important to take a closer look at the situation. The top three reasons California residents cite for their lack of health insurance are: 1) high cost; 2) citizenship status; 3) not believing in insurance or not seeing the need. The main reason Californians are uninsured is “lack of affordability.” Those who simply cannot afford insurance significantly outnumber those who choose not to buy health insurance for ideological or personal reasons. While 1 in 5 uninsured Californians has an annual household income over $75,000, even more (about 1 in 3) have a poverty-level annual income of less than $25,000. 11% of California’s uninsured population are eligible for for Medi-Cal but not enrolled. 13% qualify for federal ACA subsidies to purchase coverage through Covered California, while the remainder are neither eligible for Medi-Cal nor ACA subsidies.

The repeal of the individual mandate will likely result in higher premiums.

Recent changes in federal healthcare policy including the repeal of the ACA’s controversial individual mandate may spell financial trouble for hundreds of thousands of Californians who will then pay higher premiums or become uninsured. A record-high 59% of Californians have a favorable view of the Affordable Care Act. Many experts attribute this to the implementation of the ACA, which helped lower the overall uninsured rate in California from 16% in 2013 to 9% in 2015 and then to a historic low of 7.2% in 2017. Over the same time period, the percentage of uninsured children in California decreased from 8% to 4%, then reached a historic low of 3.1% in 2017 but has since stagnated and begun to increase. California still has lower rates of uninsured children than the national average, which stood at 3.9% in 2017. The individual mandate helped people in poor health or at low income levels to access health insurance. Covered California will likely temper the impact of the individual mandate’s repeal on California’s health insurance premiums relative to other states.

A majority of Californians want the government to help.

An October 2018 poll found that a 59% majority of Californians believe that providing healthcare coverage for all Americans is a responsibility of the federal government; this group is roughly evenly divided on whether to solve this issue via a single-payer system (28%) or a mixture of private and government measures (27%). As many as 57% think that universal healthcare should be a high priority at the state level.

Analysts estimate that the costs of implementing universal healthcare statewide would likely exceed $400 billion. For reference, California will spend only $23 billion on Medi-Cal for the fiscal year 2019, and a record-setting $209 billion in total for the fiscal year 2020 according to Gov. Newsom’s proposed budget. In 2017, 56% of likely voters approved of California SB 562, a bill that would have created a single-payer healthcare system for the state. This number dropped to 43% when the survey mentioned raising taxes by at least $50 billion per year, but this should serve as a warning sign to policymakers that they must make healthcare a very high priority.

For those who care, the goal should be to make health care more affordable for all.

A more important metric than whether everyone has health insurance coverage may be whether everyone can afford the health care that they need. This goal applies to all public health advocates whether they believe in market solutions, the ACA, or universal healthcare. While the architects of California’s public health policy seek to find the right balance between solvency and support, businesses and providers should also do their part to make healthcare more affordable for patients. Costs of both specialty and primary care are increasing, particularly in California where doctors and hospitals are increasingly consolidating into massive integrated health systems such as Stanford and Kaiser Permanente.

Direct competition may motivate providers to offer more value to their patients.

Since conglomeration in healthcare has so far shown to correlate with increased costs to patients, schemes to increase competition will hopefully have the opposite effect. One way to increase competition may be to increase transparency, giving patients more information on their options and the value they can receive for their dollar. Efforts in this direction have so far met with mixed success. The healthcare consumer advocates at Sami-Aid, however, believe that a breakthrough is coming. This breakthrough involves making a huge “splash” in the healthcare industry by removing the mystery from medical pricing. We believe this splash will have seismic ripples in addressing the #1 economic concern of our fellow Californians.


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