Harbage in the Ventura County Star on Schwarzenegger's Health Reforms
SACRAMENTO — There are 4.1 million New Yorkers who get healthcare coverage under Medicaid, the federal safety net for the poor. For each of them, Uncle Sam spends an average of $5,891 a year.
In California, there are 6.5 million low-income people who rely on the same program. For each of them, Uncle Sam spends just $3,419.
Who makes up the difference?
To a large degree, health policy experts say, it is Californians with private insurance: They pay higher premiums to backfill the losses incurred by doctors and hospitals that lose money by treating poor patients insured by the government.
The clock is ticking toward the deadline for enacting major healthcare reforms before the Legislature adjourns next month. New attention is being focused on one element of Gov. Arnold Schwarzenegger's proposed reforms that has been largely overlooked — tapping into a pool of up to $2 billion in federal money that could help reinvigorate what the governor calls the state's "broken healthcare system."
"The money's there, if the Legislature acts," said Health and Human Services Secretary Kim Belshé.
There is, however, a catch: In order to access the money, the state would have to match it dollar for dollar.
To do that, Schwarzenegger has proposed a prime-the-pump approach: Impose a fee on healthcare providers, drop that money in the well, and then pull out twice as much to give back to many of the same doctors and hospitals who paid the initial fee.
A similar fee was imposed on nursing homes several years ago, which allowed the state to tap into additional federal funds and substantially increase Medi-Cal — the California version of Medicaid — fees to nursing homes.
"Other states have done it — Illinois is the most recent example, and there are lots of others," said healthcare consultant Peter Harbage, whose work with the New America Foundation has helped drive the California healthcare reform debate. "It's a logical approach."
But there is also another catch: Federal regulations require provider fees be structured in such a way that not everyone who pays becomes a net winner.
"That means," Harbage said, "that for some hospitals, the fee will cost them money, and for others, they will make money..."
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