Stay Well Afford Care Secure Coverage July 31, 2008 SCI – San Francisco, CA

Why, How, What, and When The Why – call to action The Why – call to action The How – process lessons The How – process lessons The What – policy lessons The What – policy lessons The When – next steps The When – next steps

Why: Vision 2006 Governor’s Vision:Governor’s Vision: “A first-rate health care system that is accessible to everyone, efficient and affordable”

Basis for Moving Forward Status quo/inaction not an option Status quo/inaction not an option Gubernatorial leadership and resolve Gubernatorial leadership and resolve Framework for reform Framework for reform Broadly shared goals Broadly shared goals Values and principles Values and principles Comprehensive, not incremental Comprehensive, not incremental

Framework for Reform: 2007 Essential elements of reform Essential elements of reform Health and Wellness Health and Wellness Coverage for All Coverage for All Affordability Affordability

GOVERNMENT Healthy, productive & economically competitive state DOCTORS & HOSPITALS Expanded insured population Fair compensation Shared Benefit HEALTH PLANS Expanded market Fair compensation EMPLOYERS Affordable coverage Healthy, productive workforce INDIVIDUALS Access to affordable coverage Health care security Healthier CA

Shared Responsibility EMPLOYERS Support employee access to affordable coverage DOCTORS & HOSPITALS Provide affordable, quality care Share cost savings GOVERNMENT Promote functional health care market Provide access to affordable coverage Fairly compensate Medi-Cal providers INDIVIDUALS Obtain health coverage HEALTH PLANS Guarantee access to affordable coverage Pass along savings

The HOW: Overall Approach  Gubernatorial Leadership  Small dedicated staff team in GO  Administration-wide workgroup  All ideas on the table  Comprehensive approach – prevention, coverage, cost containment

The How: Vehicles to Adoption  Concept Papers  Policy Bill  Financing by Ballot Initiative

Historic Coalition of Support Republican Governor and Democratic Speaker Broad coalition for change – meetings Broad coalition for change – meetings Most insurers pro guaranteed issue and profit caps Most insurers pro guaranteed issue and profit caps Consumer groups, some unions pro-individual mandate Consumer groups, some unions pro-individual mandate Business groups/local chambers pro-minimum employer contribution Business groups/local chambers pro-minimum employer contribution Hospitals pro hospital fee Hospitals pro hospital fee Research, analysis, advocacy communities Research, analysis, advocacy communities

Process Challenges in Getting to Yes Timing, competing priorities Timing, competing priorities 2008 context – Term limits reform; Presidential election; November ballot initiative(s) 2008 context – Term limits reform; Presidential election; November ballot initiative(s) Unusual bedfellows means slow negotiations Unusual bedfellows means slow negotiations Status quo as choice #2 for some groups Status quo as choice #2 for some groups Lack of broad base of legislative champions Lack of broad base of legislative champions Easier to stop than to enact reform Easier to stop than to enact reform

How: Process Lessons Be Consistent With the Messaging Be Consistent With the Messaging Meet, Meet, and Meet Again Meet, Meet, and Meet Again Keep The Issue in The Public Eye Keep The Issue in The Public Eye Build Your Coalition As Early As Possible Build Your Coalition As Early As Possible Use Neutral Third Parties to Conduct Fiscal and Policy Research Use Neutral Third Parties to Conduct Fiscal and Policy Research

What: Resonance of Key Concepts Status Quo as Unacceptable Status Quo as Unacceptable Hidden Tax Hidden Tax Shared Benefit Shared Benefit Shared Responsibility Shared Responsibility Culture of Coverage Culture of Coverage

What: Policy Advances Coverage or expanded access for nearly all of Coverage or expanded access for nearly all of California’s 5.1 million uninsured California’s 5.1 million uninsured Coverage of all kids, regardless of immigration Coverage of all kids, regardless of immigration status status Personal responsibility for coverage Personal responsibility for coverage Shared responsibility for financing – minimum Shared responsibility for financing – minimum employer contribution employer contribution Affordability mechanisms Affordability mechanisms Sweeping insurance market reforms Sweeping insurance market reforms

What: Policy Advances Transparency and public reporting Transparency and public reporting Safety net provider protections Safety net provider protections Affirmation of the role of public health plans Affirmation of the role of public health plans Comprehensive health and wellness Comprehensive health and wellness Medi-Cal provider rate increases Medi-Cal provider rate increases Full financing outside the General Fund; Full financing outside the General Fund; mechanisms to protect the General Fund mechanisms to protect the General Fund

Policy Tension Points Affordability – cost for moderate income individuals Affordability – cost for moderate income individuals Individual mandate – exemptions, enforcement Individual mandate – exemptions, enforcement Financing – employer fee; indexing to health care cost inflation Financing – employer fee; indexing to health care cost inflation Market reforms - timeline for elimination of health status rating, sale of products below the minimum Market reforms - timeline for elimination of health status rating, sale of products below the minimum

What: Policy Lessons More is more - More is more - Comprehensive versus incremental Comprehensive versus incremental Post-partisanship tensions - Post-partisanship tensions - Market-based versus government-based Market-based versus government-based Context matters - Context matters - State budget, economy State budget, economy

What: Policy Lessons It’s all about coverage - It’s all about coverage - Coverage versus cost containment Coverage versus cost containment Show me the money - Show me the money - Sources, adequacy of financing Sources, adequacy of financing

When: Forward We Go Our goals remain – prevention & wellness, universality of coverage, cost containment Our goals remain – prevention & wellness, universality of coverage, cost containment Our commitment to lead remains Our commitment to lead remains Our resolve remains Our resolve remains

Timing of Next Steps Two-Phase Comprehensive Approach Two-Phase Comprehensive Approach Phase I – This Year (Legislative) Phase I – This Year (Legislative) Cost Containment Cost Containment Prevention Prevention Consumer Protection Consumer Protection Phase II Phase II Coverage Expansion Coverage Expansion Financing (Ballot Initiative) Financing (Ballot Initiative)

Contact Info: Kim Belshe, Secretary, Health and Human Services Agency Kim Belshe, Secretary, Health and Human Services Agency Richard Figueroa, Deputy Cabinet Secretary Office of Governor Arnold Schwarzenegger Richard Figueroa, Deputy Cabinet Secretary Office of Governor Arnold Schwarzenegger Sandra Shewry, Director, Department of Health Care Services Sandra Shewry, Director, Department of Health Care Services