The Alliance in the News
President Bush wants to shift health care burden
from government to private market
Monterey County Weekly, Feb 01, 2007
By Zachary Stahl
Leaning Away: Monterey County health care officials like
Clinica de Salud’s
Dr. Max Cuevas tend to favor Governor Schwarzenneger’s
plan over
President Bush’s.
— Jane Morba
President George W. Bush’s hazy plan to strip away federal funding
for safety-net hospitals could bleed dry the funds of Natividad Medical
Center, say Monterey County hospital officials.
As vaguely outlined in
his State of the Union last week, Bush wants to redirect $30 billion in
Medicare and Medicaid funds, and distribute the money to states to help
poor residents buy private insurance. California hospitals that serve a
large volume of low-income clients—like Natividad in Salinas—would
lose at least $700 million a year under Bush’s plan, according to
the California Hospital Association.
Laura Zehm, chief financial officer
of Community Hospital of the Monterey Peninsula, says the president’s
proposal is dangerous.
“So much of our health care,” she says, “is
dependant on federal funding and to change that overnight might have unexpected
and unfortunate consequences.” Zehm also severs on the Natividad
Board of Trustees. CHOMP would not likely lose federal funds, she says,
but Natividad could take a big financial hit.
Bush’s proposal would
draw from funds set aside for hospitals that serve an uneven segment of
uninsured and low-income people. Natividad received more than $22 million
in so-called “disproportionate share hospital” funds last fiscal
year. That same year, federal reimbursements for Medicare and Medicaid
patients accounted for 80 percent of the county hospital’s revenue,
according to Harry Weis, Natividad’s chief financial officer. Weis
works for a consulting firm that took over Natividad in November to turn
its finances around.
Hospital officials don’t know how much of this
money Natividad would lose under the White House’s unspecified plot,
but any shift in funds could impair the hospital’s fiscal recovery.
The centerpiece of the Bush Administration’s health care reform is
to give a tax break to most people who have health insurance. Insured families
would pay no income or payroll taxes on their first $15,000 of compensation
and insured individuals wouldn’t pay taxes on their first $7,500
of wages. People whose insurance cost exceeds the deduction cap would receive
a tax hike.
The White House says the strategy will make private health
insurance more affordable for US citizens. But legislators in the Democratic-controlled
Congress call the proposal an attack on employer-provided insurance.
John
Fletcher, senior vice president for finance and information technology
at Salinas Valley Memorial Healthcare System, says Bush’s proposal
is a piecemeal approach that will not solve the nation’s health care
crisis. Similar to his failed attempt to privatize social security, Fletcher
says Bush wants to shift the burden of providing health care from government
programs to the private sector.
“This is taxation without representation,” Fletcher
says.
With many agricultural and hospitality workers unable to get health
insurance through their seasonal jobs, Monterey County residents rely heavily
on government-sponsored health care and affordable clinics.
About 120,000
patients a year turn to Clinica De Salud Del Valle de Salinas, a system
of clinics in the Salinas Valley that provides low-cost medical attention.
Max Cuevas, chief executive officer of Clinica De Salud, says about 45
percent of the clinic’s patients can’t afford health insurance
but pay for their visits on a sliding scale based on income. Estimating
that private health insurance costs $10,500 for an average family, Cuevas
says a tax break at the end of the year would not make health insurance
affordable for the county’s large pool of uninsured and underinsured
residents.
“I’m not convinced that the write off itself would
be a great incentive,” Cuevas says.
About 70,000 people, or 15 percent
of Monterey County’s population, lack health insurance, according
to a 2003 survey. In 2005, the county had 71,000 Medi-Cal recipients.
For
the county’s undocumented immigrants who don’t qualify for
federal or state-subsidized insurance, the emergency room is sometimes
the only place they can receive medical attention. But by the time people
wait to get treatment in the emergency room, Cuevas says, “it’s
too late and it’s more expensive.”
While Bush’s plan
does not create new funds to increase health care coverage, Governor Arnold
Schwarzenegger wants to put new money—$10 billion to $15 billion—into
the state’s health care system.
Schwarzenegger’s plan, which
he unveiled last month, relies on contributions from hospitals, doctors
and employers who do not provide insurance to pitch in to a state pool
that will subsidize health insurance for low-income residents. Very poor
residents would be covered under an expanded version of Medi-Cal. Insurers
would be required to guarantee health coverage and individuals and employers
would get tax breaks for purchasing insurance.
Monterey County health care
officials say they prefer Schwarzenegger’s comprehensive approach
to addressing the state’s 6.5 million uninsured residents over Bush’s
proposals, but they are waiting to see how it pencils out.
“You might
say [the governor’s] proposal is so big that there is something for
everyone to like and dislike,” says Alan McKay, executive director
of Central Coast Alliance for Health, a nonprofit health plan that includes
Medi-Cal and Healthy Families.
Under Schwarzenegger’s proposal, an
uninsured family of four earning $30,000 a year would be able to buy basic
coverage from the state for a $900 premium. Both Republican administrations
in Washington, DC and in Sacramento tout the tax breaks this same family
would receive. Under the governor’s plan, the state would give the
family an $85 tax cut and a $250 increase in earned income tax credit.
Bush’s rewriting of the tax code would give the family another $1,150
in tax cuts.
But if the federal and state governments collect less money
from taxpayers, some critics say that social programs—like health
care—will inevitably get shortchanged. For either proposal to work
more people will have to become privately insured, thus reducing reliance
on government-funded medical coverage. But it’s the changeover that
worries McKay. “This emphasis, to kind of rebalance the health care
economy, typically raises a lot of concern about the transition period
at least,” he says.