Background: The Facts on Healthcare
Index:- Introduction
- Heatlh Care and Artists
- Critial Issues for Artists
- NEA Definition of Artists
- California's Health Care Crisis
- Why Health Insurance is so Important
- Current State of Affairs
- Background on Health Care Reform
Introduction
The cost of healthcare in the United States has been rising unabatedly for the last several decades. Many experts and policy makers believe that the current system of care and insurance coverage is financially unsustainable and on a course for eventual collapse.
The rising number of uninsured Californians--now at 6.6 million--and increasing health care costs have made reform a top priority for the Governor and the Legislature. The sudden momentum for a long-standing problem was influenced by the health care reform plan passed by Massachusetts last year.
As policy makers weigh the various options, the questions regarding any successful reform proposal include: How does the state ensure all Californians receive high quality health care? Who pays for health care and coverage? Will new taxes be required to finance coverage expansion? How do “affordability” defined for individuals, employers, and the state? How will health care costs be contained for today and tomorrow?
In January 2007, Governor Schwarzenegger proposed a comprehensive health care reform plan, and in February of that year, Democratic and Republican legislators introduced a number of bills that aimed to reform the health care system. Health care reform in California, however, is not a new topic, although perhaps not as high profile as it has been over the last several months. Prior to this most recent effort, there were a number of other legislative proposals and statewide ballot initiatives to achieve a similar level of change to the state’s health care system, albeit in different ways and without much success.
The 2007 push for reform resulted in the passage of a comprehensive bill – AB 8 – which was sent to Governor Schwarzenegger for his approval as the legislative session drew to a close in mid-September. The Governor said he could not support the bill, so he called a special session of the legislature to attempt a compromise. As no agreement between the Governor and legislative leaders could be reached, Schwarzenegger vetoed the bill on October 12, 2007 after he released the details regarding his own proposal on October 9, 2007. A second special session was called in November, which resulted in the bill AB X1 1, which combined the ideas of Assembly Bill 8 with that of the Governor’s. By January 2008, AB X1 1 had passed the Assembly and the Governor had stated his intention to sign the bill if it passed both houses. On January 24, 2008 however, AB X1 1 failed to pass the Senate; in light of the CA budget crisis, it seemed imprudent to pass such an extensive bill. Legislators are currently working to create legislation that will regulate the health care industry. Senate Bill 1522 and Assembly Bills 2967 and 1945, in particular, help regulate the health care industry in favor of artists and other self-employed consumers.
Health Care and Artists
Artists face unique challenges to obtaining quality, affordable health care because the vast majority of Americans obtain access to health insurance through their employer. Because of the employment patterns of most artists, i.e. not working in a traditional, single employer full-time job, obtaining health insurance is much more difficult.
Workers at small organizations and individuals whose only option is to purchase coverage on their own – like many artists – are more likely to be uninsured than other Californians. Both of these groups cite affordability as the main barrier to obtaining coverage. Direct comparisons are difficult, but small employers and individuals often do pay higher premiums than large employers do for similar benefits. These observations suggest that larger purchasers benefit from their size in two ways: through lower per-person administrative costs (“economies of scale”) and by exerting greater negotiating power with health plans. Based on this reasoning, gathering many small groups and individuals in a purchasing pool seems a promising strategy for making coverage more affordable for individuals and small businesses. Establishing a voluntary purchasing pool, however, will not automatically reduce premiums; only if the pool is structured so that its enrollment is stable and cohesive will the pool have the potential to achieve economies of scale and negotiate effectively with health plans.
According to U.S. Census data, there were 737,000 "artists" in the labor force in 1970. Since then, the number of artists has tripled to an estimated 2,196,000 in 2001. Using Current Population Survey data from the U.S. Census and applying the broadest possible definition of artist – that is, including all 11 occupational categories classified by the National Endowment for the Arts (NEA – see below) as artistic occupations and counting all self-identified artists, whether employed in primary or secondary jobs or not – there were 2,511,000 artists in the United States in 2001, representing 1.8 percent of the total civilian labor force. Of these:
- 2,108,000 (84%) were employed in primary jobs as artists;
- 315,000 (12.5%) were employed in secondary jobs as artists; and
- 88,000 (3.5%) were unemployed.
Of those who listed “artist” as their primary job, 40% are self-employed. Fify-seven percent of workers who identify themselves as “artists,” earn zero income from their work, compared to only 12% of artists who earn 100% of their income from their work.
Not surprisingly, people working for lower wages and for smaller employers are the most likely to not be offered insurance through their employer.
Critical Issue for Artists
AB 8 and AB X1 1 made major strides at showing a system that would have made health insurance more affordable, particularly for those individuals who do not have traditional full-time positions with an employer who offers employees an affordable insurance option, such as many artists and other professions with a high percentage of self-employed people. In the aftermath of AB X1 1 not passing the Senate, legislators are working to regulate the health care industry to improve the health care industry from the inside out; the bills that are being put forth are setting a standard for coverage while also setting a foundation for further steps in years to come. Artists and other self-employed individuals should play close attention to specific issues when looking at the proposed legislature:
o The extent at which the individual health insurance market will be regulated and to what extent the individual market will become more manageable for consumers.
o In what way insurance companies will be regulated when they try to rescind a policy.
o How transparent insurance providers will have to be about their pricing and safety.
NEA Definition of Artists
When we refer to artists, we use the National Endowment for Arts definition of artists: Any natural person who is an artist or who is engaged in an art-related business. For our purposes the term artist includes choreographers, dancers, architects, landscape architects, urban designers and planners, interior designers, industrial designers, graphic designers, fashion designers, creative writers and literary translators; individual artists working in film, radio, television, video, theater conceptual performance, new genres, painting, print making, drawing, artists' books, photography, sculpture and crafts; and composers, musicians, mimes and playwrights.
California's Health Care Crisis
In California, the realization of the need for substantive health care reform has been building for years. After incremental reforms passed by the legislature, a failed ballot initiative, and a mandate to cover all children in the state, this effort reached a new level when Governor Schwarzenegger announced a comprehensive plan to reform health care in the state in January 2007. This debate was timely, considering the 2006 annual premiums in the state cost $4,500 for individuals and $12,000 for families. In 2006, premiums rose an average 8.7%, more than twice the state’s rate of inflation.
In California, as in the country as a whole, most people with coverage obtain it either through employment or through public coverage programs such as Medicare and Medi-Cal. But an individual market for coverage exists as well. About 8% of California adults purchase coverage through the individual market, and that market maybe the only option for many of California’s uninsured, self-employed, workers not offered coverage, and the non-working. The individual market, therefore, has been proposed as an important vehicle for expanding coverage.
Health insurance carriers typically require a health screening when consumers apply for coverage. Depending on screening results, applicants can be denied coverage outright, charged higher premiums, or offered more limited benefits based on their health status. For example, many individuals who have had cancer or have heart disease are denied coverage; even individuals with a history of a chronic condition they no longer have, such as asthma, can be turned away.
Although California has a state-run pool for those who have been denied coverage on the individual market (the Major Risk Medical Insurance Program, or MRMIP), premiums through that pool average over $450 per month; annual benefits are capped at $75,000; and enrollment can be limited by the availability of state funds. One national survey found that most people seeking coverage in the individual market found it difficult or impossible to find affordable options.
Today, California’s individual market is a viable choice for only a subset of the uninsured. Before relying on the individual market for widespread coverage expansion, policy changes addressing access and affordability are needed. For more facts on the state of California’s health care crisis, click here.
California is not the only state facing this challenge. Nationwide, since the year 2000, health insurance premiums have gone up 87% while average wages have increased by only 18%. The number of uninsured and the cost of health care has been rising all over the country. Comprehensive reform efforts are underway in nearly 40 state legislatures around the U.S., and fixing the health care system is the number one domestic issue being debated by the candidates for President.
Why Health Insurance is so Important
Facilitating access to health insurance is often cited as the best way to ensure healthier outcomes for everyone. The uninsured are much less likely to receive preventive and routine care, such as mammograms, pap smears, or screenings for colon cancer. Only 18% of uninsured patients reported receiving a screening for colon cancer, compared to 56% of insured patients. While they can obtain care at the emergency department or a community clinic, uninsured adults are more likely to lack a regular source of care and more likely to forgo needed care. According to one survey, almost half of uninsured individuals will not seek care when they have a medical problem, compared to just 15% of insured individuals. Because uninsured patients lack routine care, their chronic conditions are often poorly managed, increasing the likelihood of serious, acute complications. Once hospitalized, they receive treatment for acute needs but probably don’t receive appropriate follow-up care, resulting in worse health outcomes over the long term.
Adults without coverage have worse health outcomes. The Institute of Medicine reviewed 130 studies published in the past 20 years and found that uninsured patients consistently have worse health outcomes. For example, compared to patients with private insurance coverage:
- Uninsured patients with breast cancer have 30 to 50% higher mortality rates;
- Uninsured patients with colon cancer have 50 to 60% higher mortality rates; and
- Uninsured accident victims have a 37% higher mortality rate.
Other studies have found that uninsured patients with chronic conditions are almost twice as likely to visit an emergency department or be hospitalized as insured patients.
Uninsured children also lack access to care and experience worse health outcomes. Because uninsured patients lack routine care, their chronic conditions are often poorly managed, increasing the likelihood of serious, acute complications. Once hospitalized, they receive treatment for acute needs but probably don’t receive appropriate follow-up care, resulting in worse health outcomes over the long term.
Health coverage matters. Children and adults without health insurance can receive care from California’s safety net or in an emergency situation. Studies consistently demonstrate, however, that California adults and children without insurance have difficulty accessing needed care and are more likely to have worse health outcomes.
Current State of Affairs
The year 2007 was called the “Year for Health Care Reform” by Governor Schwarzenegger. By the end of the year, AB X1 1, a bill that represented the combined efforts of the Assembly and Senate Health Committees and the Governor himself, had passed the Assembly. The Governor stated he would sign the bill if it was passed by the Senate.
On January 28th, 2008, after additional financial analysis of AB X1 1 and in the face of a $14.5 billion state budget deficit and worsening national economy, AB X1 1 failed to pass the Senate. In the aftermath of AB X1 1, legislators concentrated their efforts on bills that would regulate the health care industry to improve it from the inside out.
At the end of the 2008 legislative season, Governor Schwarzenegger only signed seven of the health care bills; two of these bills in particular, AB 1150 and AB 2529, reduce the incentives to health care companies in rescinding health care policies. In addition, on November 4, Proposition 3 passed in California, which funds the construction and renovations of children’s hospitals.
While we have yet to accomplish the goal of universal health care, we are making progress towards reforming our health care system. After the election of Barack Obama as president, it is likely that more health care legislation will be occurring on the national level.
Background on HealthCare Reform
1990 - 2006
Over the last ten years, California voters have seen numerous efforts to reform the health system on state and local ballots. The legislature has also made several attempts at comprehensive reform. No significant measures, however, have succeeded.
Between 1990 and 2006, as reported in Blue Sky Consulting Group’s report, California voters considered 213 statewide ballot measures – 27 related to health. Half of those initiatives addressed the financing of health insurance coverage or expanding access to medical services for the poor and the needy.
The early 90’s saw efforts to increase taxes on alcohol to support medical expenses, and propositions to establish more comprehensive systems including a single-payer health care scheme. These measures failed.
In the late 90’s, voters considered measures that would have tighter regulated the insurance industry, particularly health maintenance organizations. None of these measures were approved.
The 2004 election cycle saw five different measures related to a variety of health care financing. Only measures to fund hospital construction, mental health programs, and stem cell research were approved. One of the ballot questions actually struck down a law passed by the legislature that would have created a state health insurance coverage program for eligible workers at medium and large firms. Employers would have been required to show evidence of coverage or pay a fee to enroll employees and uncovered dependents into a program to be created by the California Managed Risk Medical Insurance Board (MRMIB). Ballot measures in 2005 and 2006 were related to prescription drugs, and increased cigarette taxes to fund hospitals, expand coverage to children and support a host of treatment and prevention programs. None of these measures passed.
These ballot measures have focused on an essential question that is currently being considered by the legislature: how should the burden of financing health care coverage be shared by employers, employees, and the taxpayers? The use of the ballot to address the health care crisis is seen by many as a result of the legislature’s failure to act until now. Most likely, the final solution in California, if there is one, will be a combination of legislative action and a ballot put to the voters.
2007
In January of 2007, Governor Schwarzenegger took a bold step and pledged to reform California's health care system. With this announcement, he included a broad set of principles for reform that he believed should guide the discussion. The need for reform was building due to a health care system under increasing pressure due to rising costs and number of uninsured, but the Governor’s move was spawned by the comprehensive plan approved by the state of Massachusetts the previous year. The work accomplished by Massachusetts and some of the principles of their plan gave new life to the debate over health care reform in California as well as in many other state capitals around the country.
Over the succeeding months, a number of competing proposals emerged in the Assembly and the Senate, chief among these was Assembly Bill 8; for more information on AB8 and other prominent bills, click here. After more legislative debates, AB X1 1, which was a combination of AB 8 and the Governor’s health care proposal, passed the Assembly while the Governor said he would sign the bill if it passed the Senate; the Senate hearing for AB X1 1 was delayed until January 2008.
2008
In light of the state’s $14.5 billion deficit, the Senate Health Committee voted against AB X1 1 in January 2008, which stopped the bill from moving forward. In the aftermath of the bill not passing the Senate, the California legislature put forth several bills that would regulate the health care industry to improve the industry from the inside out; Governor Schwarzenegger signed seven of these bills. In addition, Proposition 3 passed in California in early November, which establishes funds for the improvement of the children’s hospital system. While these new laws do not establish universal health care, they are steps forward to reforming the health care system.