Nearly 2 million Californians lost their health insurance in the past two years

It’s a staggering number. According to a study released this week by the UCLA Center for Health Policy Research, over 8.2 million Californians now lack health insurance, up from 6.4 million in a mere two years.

The findings that nearly 2 million Californians lost their health insurance should have profound impact on the policy debate both here in Sacramento and in Washington, DC.

The first finding should be that our state Legislature be resolved not to add fuel to the fire by cutting additional Californians off coverage. Yet Governor Schwarzenegger’s budget proposal would, at a minimum, remove over 300,000 children and others from public health insurance programs.

And without federal reforms and resources, the Governor proposed the wholesale elimination of Healthy Families — which covers one million children—and the drastic reduction of eligibility for Medi-Cal coverage to federal minimums. No state in the nation has taken either step. Last week, the Western Center on Law and Poverty released estimates that the Governor’s total proposed cut would result in 2.7 million more uninsured.

With approximately 1 in 4 nonelderly adults already uninsured, such additional cuts and resulting increases in the uninsured rate would have dramatic aftershocks to the fragile, overstretched health care system on which we all rely.

This time of economic recession is when we need to invest in basic health and human services, to provide the economic security to help people get back on their feet. Instead, our policymakers may yank away coverage from Californians at the moment they most need it.

Given that we get significant matching funds for every dollar we spend on programs like Medi-Cal and Healthy Families, the economic case is clear. For every dollar cut from these programs, our health system and economy loses two or three dollars. For every dollar to help Californians stay insured, our state draws down federal funds to which we are entitled, that helps our economic recovery.

There is some hope in the horizon with health reforms that may be voted on in Congress in the next week. The pending reforms go directly to the issue raised in the UCLA report, by providing families the financial assistance and purchasing power so that they don’t lose coverage just because they lose their job. People would get an assurance that they won’t have to pay more than a percentage of their income for premiums.

While these subsidies will take a while to kick in, reform would also prevent the rapidly deteriorating situation from getting worse.

In the near term, for example, we could get funding for the Major Risk Medical Insurance Program, California’s small, beleaguered high-risk pool, which currently has a waiting list. What this means now is that those denied for “pre-existing conditions” have literally no place to turn for coverage. The reform would allow us to dramatically expand the program.

By 2014, the health reform would allow us to expand Medicaid for 1.5-2 million Californians up to 133% of the federal poverty level—and for the first three years, the federal government will pick up the entire cost of coverage for the newly eligible. Afterwords, the state would need to chip in up to 10% of the cost for these patients—but that’s still at worst a 9:1 matching rate. That’s an amazing bargain, not a burden, for the state of California.

Let’s not forget there’s another 1.5-2 million Californians that will get federal subsidies to buy private coverage in new exchange.

So California has a choice. We can allow or even exacerbate the decline of California’s health system. As described above, each of the three ways that people get coverage is under direct threat—employer-based coverage is dramatically dropping along with jobs in a recession; public health insurance programs are on the chopping block due to state deficits; and those in the individual market see huge rate increases and outright denials with nobody to turn.

Or we can make the commitments to invest in our health care, by passing health reform at the federal level, and by raising the revenues need to prevent cuts in our current system. By preventing cuts today, we not just help Californians get through a recession and help our economic recovery, but we lay the foundation that health reform will build on in the years to come.

These policy decisions will make the difference, where future UCLA reports will show millions more uninsured, living sicker, dying younger, one emergency away from financial ruin. Or we could reduce the number of uninsured dramatically, and ensure a more stable and secure health system for all of us. It all depends on what our elected leaders do in the next few weeks and months.

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