Part 19: Insure the Uninsured Project
I left the employ of the state legislature and in 1993 opened up my own law office and a project (Insure the Uninsured Project or ITUP) to seek health reform to cover California’s uninsured. I distilled my learning and thinking from eight years in Sacramento into a book on California’s choices for health reform. In the aftermath of the collapse of the Clinton health reform efforts, I convened a group of the leaders of the major interest groups. We met over the course of a year to see where there was agreement and common ground on the types of approaches to move forward; it turned out there was very little interest group agreement other than on very modest and incremental reforms, but the group wanted the coverage expansion issues pushed on by ITUP nevertheless; they would support when it was feasible, and so we did and so they did, until I retired in 2016.
I practiced law representing doctors and dentists who provided care to the uninsured and those on MediCal, and working with county departments, small business associations, local unions, provider associations, public health plans and others who wanted to expand care and coverage of the uninsured. We used the proceeds to support our efforts to cover the uninsured.
Let’s discuss the coverage expansions first, then changes in the delivery system. There are three ways to get to universal coverage – the Canadian style (Medicare for All) of a government paying private doctors and hospitals; the Swiss style of an individual mandate that every citizen must buy private health insurance, and the German style of a hybrid public private approach building on coverage through employers to insuring everyone. Many advocates prefer the single payer Canadian style system, which eliminates private coverage. I have typically preferred to get to universal coverage by building on the existing private and public coverage models (the hybrid style), because it is far less difficult and costly to finance, and because it is much more viable politically to advance. That was the bill I wrote for my old boss then Assemblyman Burt Margolin; it’s the legislation President Obama signed, and it's the foundation that candidate Joe Biden wants to improve with a goal of coverage for all. The disadvantage is that it relies on four or five very different and at times discordant systems: Medicare, Medicaid, private employment-based insurance and private individual insurance. There may be some back-up of county hospitals and county indigent programs that help some of the uninsured; these programs and facilities are highly variable from extensive to non-existent depending on the particular county or state.
The uninsured in California have been primarily low-wage and moderate-wage workers, often working for small business, and often working in the gig economy/flex workers where health benefits are rare. A small but very costly percentage of the uninsured are individuals with pre-existing conditions who are excluded by private insurers. In California a much higher proportion of Latinos were uninsured than any other ethnic group. Part of that was due to undocumented workers, and part was due to types of employment. Many of the uninsured work in the fields, in agriculture, landscaping, domestic employment, childcare, or home construction, where few employees are offered private employment-based coverage.
California state government made three big changes prior to its implementation of the ACA (Affordable Care Act or Obamacare). The first was delinking MediCal from welfare eligibility and covering working parents in families up to 100% of FPL as a part of its implementation of the Clinton welfare reforms. The second was establishing a separate Healthy Families program for children with family incomes up to 266% of FPL as part of its implementation of the Kennedy-Kassenbaum (CHIP expansion) legislation. The third was seeking and securing a federal §1115 waiver to allow willing counties to pioneer early implementation of the ACA. California then chose to aggressively implement the federal Medicaid expansion (about 5 million newly covered) and the subsidized individual coverage through the Exchanges (Covered California, about 1.5 million covered). Governors Schwarzenegger and Brown deserve enormous credit.
As a result in California, we declined from about 6.5 to 7 million uninsured to fewer than 3 million remaining uninsured, of whom 60% are undocumented workers and their families because the ACA does not offer full scope coverage for the undocumented. California has begun over the past five years to extend full scope MediCal coverage to low income, undocumented uninsured workers and family members – first children, then young adults up to age 26, and most recently a gubernatorial proposal to cover those over 65 (this last proposal is delayed due to the state’s shrinking tax revenues as a result of Covid 19). California has also expanded the premium assistance and cost sharing reductions to help subscribers with higher incomes (600% of FPL in California’s Exchanges vs. 400% of FPL in other states). We have coverage available for nearly every pregnant woman and every child regardless of immigration status or income. Those newly unemployed due to the Covid 19 pandemic can access either MediCal or Covered California depending on their income levels.
President Trump seeks to undo California’s and the nation’s progress by legislative or judicial repeal of the ACA. This would return us to well over 7 million uninsured or over 20% of the state’s population under age 65, and would strip coverage and affordability protections from individuals with pre-existing medical conditions who can once again be denied coverage or charged exorbitant premiums. He would also make the long-standing Medicaid program for the poor into a capped block grant for state governments with no entitlements to coverage, services or access to health care. The Trump proposals would disproportionately impact Latinos as they have the lowest incomes among California residents and are disproportionately uninsured and reliant on the programs that will be decimated. They would disproportionately impact the poor and the sick, regardless of race, but would have disproportionately adverse impacts on racial minorities who have lower incomes and few assets than non-Hispanic whites.
Was/is there racism involved in denying coverage to the uninsured? As far as I could tell it was more about ideology than racism. For example a then Assemblyman, now Representative Tom McClintock or a then Assemblyman and then Senator Ross Johnson did not want you to be covered through taxes and by the public sector whether your skin color was white, brown or black. It was also about interest group politics (and consequently political donations and re-election) more than about race – i.e. if you are a Republican, does the Chamber of Commerce support or oppose, does the Association of Health Plans support or oppose, if you are a Democrat, does Health Access support or oppose, do the big unions support or oppose? It was a form of Social Darwinism in which you can get your health coverage and health care if you’re healthy and wealthy, regardless of your race, but not if you are poor and/or sick and desperately need it. Its ideology seems to have infected very large swaths of Republican lawmakers in Congress and the Trump Administration, but it has been on the wane, I think, among blue state Republican Governors like Hogan (MD), Scott (VT) and Baker (MA). Lack of consistent universal coverage in the US has had terrible impacts on infant and maternal mortality, life expectancy and the extent of preventable chronic conditions. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2020/02/19/there-are-clear-race-based-inequalities-in-health-insurance-and-health-outcomes and http://www.publichealth.lacounty.gov/epi/docs/Life%20Expectancy%20Final_web.pdf
The Tea Party protests against the ACA, many of which I witnessed first hand, were very clearly animated and fueled by racial animosities of some older, better off whites with private insurance or Medicare towards those who were becoming insured by the ACA under the auspices and leadership of President Obama. I was never clear whether their animus was directed at the President who was bi-racial, or at the poor, moderate and middle-income individuals and families being helped by Obamacare, some of whom were minorities. Only a few years earlier, some conservative think tanks like Heritage or AEI (American Enterprise Institute) had embraced and put forward the very types of coverage expansions and payment reforms later passed and signed by President Obama – reforms which they now detested.
California made some big changes in its delivery system: negotiated payment rates, mandatory HMOs for the poor and the development of public HMOs; we also experienced a huge growth in non-profit FQHC community clinics. In California, your delivery system can be either fee for service (PPO) or capitated (an HMO). Some patients can choose, and others, primarily the poor, have only one choice of delivery system (HMO).
Providers can be either public or private, and either for profit or non-profit. Those individuals with certain types of coverage (like Medicare) have wider choices of providers while most others are limited to the providers in their health plan’s network. Insurers can be public or private, non-profit or for profit. Low income MediCal patients can choose among public or private HMO plans; the privately insured can typically only choose among private plans. Reimbursement rates can be negotiated between plans and providers or set by the state (MediCal) or federal government (Medicare).
During this period, the trend in public and private coverage was towards enrollment in capitated systems (HMOs) and towards negotiated rates. It was a time of growth of public health plans, of growth of non-profit community clinics, of financial difficulties and closures of non-profit hospitals in poor communities, of shifting the big health insurance plans from non-profit to for profit status, and of consolidation of the big provider systems and health plans into price-insensitive oligopolies. Both parties in California embraced the “managed competition” model with Republicans leaning towards higher patient out of pocket and Democrats wanting better accountability and more regulatory back-ups for the most obvious market failures.
Was there racism involved in the delivery system? Some of my colleagues reported that in the Central Valley, certain doctors would not see MediCal patients in their private offices due to the colors of their skin and their low-income status. I certainly experienced some health plans not willing to include some of my minority physician clients in their private insurance networks; would they have acknowledged it was due to skin color; “no”, they would not – “we just don't know and have no managed care experience or track records with your clients”. In Los Angeles and the Bay Area, there are abundances of practicing physicians and plenty of hospital beds; yet too many doctors and some local hospitals closed their practices to MediCal patients who are disproportionately minority. Is this racism? They would say “no”, they simply prefer the higher reimbursements associated with employment-based coverage. All of this was certainly racist in its impacts if not in its intent, as we all would discover with inescapable shock when the pandemic of 2020 hit racial minorities the hardest, at three times the rates of whites in Los Angeles.
Facilities were closing and services were being curtailed in low-income communities with insufficient access to begin with. Centinela, Daniel Freeman and MLK all closed in South Los Angeles. Were these just the casualties of market competition? Why weren’t the private hospitals in over-bedded Santa Monica closing, for example? MLK hospital serving South Central Los Angeles had a history of mismanagement and lack of accountability for poor patient outcomes – i.e. preventable deaths due to gross errors of hospital and medical staff. Finally, the federal government decertified it so they no longer qualified to receive Medicare and Medicaid reimbursements. https://www.nytimes.com/2007/08/11/us/11hospital.html I visited many times while I was serving on the Hospital Commission, and to my mind, there was blame all around – the union, the management, the civil service, the county Health Department and the LA County Board of Supervisors. It was located in the middle of the poorest area of LA and served patients with some of the toughest medical conditions. In my observation, its demise was less a function of funding and far more a function of mismanagement since the adjacent county hospitals were doing much better with less per capita funding. After eight years, a brand new, smaller, technologically up to date, community run hospital was opened on the MLK site through the collaboration of UCLA and the County of Los Angeles. https://www.scpr.org/news/2015/07/07/52912/new-mlk-hospital-opens-in-south-la/ The adjacent Drew Medical School nearly went under in the undertow of the collapse of MLK hospital. It lost accreditation and was placed on probation for several years; the leadership, many Board members, and most of the faculty were terminated. Under the new leadership of Dr. David Carlisle, it is now growing and expanding into undergraduate education, nursing education, physician assistants and is also growing its traditional medical school.
The loss of hospital capacity in poor communities was somewhat offset by the very large growth of community health clinics and rural health clinics. They provide low-income patients access to primary care visits, but not the follow up specialty care and sophisticated services, which are only available in hospital settings.
In rural California, there are simply not enough doctors to serve the population. Counties in California are not well funded to care for high percentages of uninsured poor, particularly in rural farming counties with high percentage of uninsured farmworkers. Insurers charge exorbitantly high prices for their products. There are many rural areas where competition on prices and premiums is not even a possibility since there is only one hospital and one medical group in town. Furthermore organized medicine has been too reluctant and slow to expand the ability of nurse practitioners and physician assistants to help meet the needs in these communities. Telemedicine and locating specialty services as a part of community clinics have helped somewhat in rural California.
What we really need is many more Latino and African American doctors, dentists, and behavioral health practitioners. That is going to require a sustained effort from the grade school levels, through high school, college and professional school – a pipeline from elementary school through medical school and then back into the community.
In California, behavioral health access and efficacy has been particularly problematic for minorities. Counties are responsible for these programs in our state, and while some like San Mateo or San Francisco have been pioneers, many others have not. Minorities are more reluctant to seek behavioral care and are more likely to be treated poorly by providers without the requisite cultural and linguistic skills to effectively care for them. Likewise, behavioral health providers have embraced fragmentation of care into separate departments without the necessary whole patient linkages to treat a patient with co-occurring mental illness, substance abuse disorders and physical conditions like hypertension or diabetes. Those who are untreated may end up in our county jails, in state prisons, or in fatal encounters with local law enforcement authorities not well trained to diagnose and treat behavioral health conditions in split-second street or home encounters.
Health reform will require both universal coverage and more affordable, more effective delivery systems. We can get there; we know how to do it, but there are very different coalitions that need to be assembled on each issue. For example, advocates, providers, unions and plans want to get to universal coverage, but employers do not want to pay any more than they already do and want to pay less if possible. Employers, advocates, and unions want to get to a more affordable, more effective delivery system, but providers and plans want to get paid more, not less for their services.
The road to covering everyone in California requires much more affordable coverage in the Exchanges, auto enrollment, coverage for the undocumented, and taxes. The road to a more affordable, more effective delivery system requires payment reforms and accountability for improved patient outcomes paired with enforceable and actually enforced limits on the growth of health spending. The simpler answers offered by single payer are appealing, but in my opinion not reachable without a far reaching education and advocacy effort of, by and for American voters across the political spectrum and a wholesale change in the composition of Congress.
ITUP was based in Los Angeles, the epicenter of the state and nation’s uninsured. We worked all over the state helping local, philanthropic, state and federal programs and policies to cover the uninsured. We tried to bring together the divergent interest groups necessary to make progress. W did bring together advocates and insurers, unions and small business, hospitals, doctors and clinics. My biggest disappointment was our inability to bring in sustained involvement of big business; this was not for lack of effort; we were able occasionally to attract some, but we could not sustain their participation, as it was not high on their list of priorities.
We grew from a start up staff of one to about 15 at our largest during ACA implementation. We would not have existed or persisted without the kindness of philanthropic strangers — TCE, TCWF, CHCF, Blue Shield Foundation, California Community Foundation, and LA Care. At ITUP, we had a young, diverse and talented staff. We had staff whose families had immigrated to the US from India, Pakistan, South Korea, Vietnam, Iran/Persia, Eritrea, Kenya and Mexico. We had a multi-ethnic staff of Latinos, African Americans, Native Americans, Asians and Anglos. Professors Michael Cousineau and Jeff Oxendine played key and crucial roles in referring talented young persons to ITUP. We had a hard time retaining our staff due to the higher pay being offered by the county, the health plans, the consulting groups, philanthropy and state government, so one could say we developed and seeded well. We experienced only one instance of intra-office racism that I can recall -- towards our immigrant staff from Iran/Persia.
Prepared by: Lucien Wulsin
Dated: 9/25/20