San Francisco Universal Healthcare - They're Going To Need More Ca$H....

There's been a lot of coverage lately about San Francisco and Universal Heathcare, namely the city's Health Benefits Ordinance, which would provide coverage for 73,000 uninsured adults in the city.    Lately, there's been some volleys back and forth whether the plan is legal.

Not sure if the plan is going to make it or not, but I am assuming it eventually will.   If it does make it and the city implements the plan, my layperson math indicates their best case assumptions will result in a plan that is dramatically underfunded. 

Check out these notes From SF Gate:

"As written, San Francisco’s ordinance would require private employers with at least 20 employees, and nonprofits with at least 50 employees, to provide health coverage at certain minimum levels or to pay a fee to the city. The fee would pay part of the cost of a $200 million-a-year program of care for the 73,000 uninsured adult city residents.

Without the employer fee, city officials say they will limit enrollment to those making no more than three times the federal poverty level, or about $32,000 a year for an individual."

Here's what I don't get.  By math, the city is planning on spending about $2,800 per covered individual annually.  That's great, but there's no way that's going to cut it, right?

Why won't it cover it?  By the very nature of the risk pool, the cost per covered individual is going to skew higher than average.  The uninsured includes people who can't work or are otherwise deemed uninsurable due to heath concerns.

A similar program for universal coverage in Connecticut failed, in part because the legislators were shocked about what the cost was (from Managed Care Matters):

"An effort in Connecticut to implement a single payer, universal coverage program is just about dead, after the state's Office of Fiscal Analysis determined it would cost as much as the entire state budget.

Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion (cost range per covered individual - $4,000 to $6,000).

I'm shocked that they were shocked."

That's why I don't get the plan in San Francisco.  The State of Connecticut runs the entire risk pool for the state and comes up with 4k to 6k per covered individual, and SF handles a risk pool that skews more severe and they're only going to pay $2,800?

When people underestimate things, I also think of that great line in the original "Jaws" - "We're going to need a bigger boat..."  That seems to fit here.... 

There's been a lot of coverage lately about San Francisco and Universal Heathcare, namely the city's Health Benefits Ordinance, which would provide coverage for 73,000 uninsured adults in the city.    Lately, there's been some volleys back and forth whether the plan is legal.

Not sure if the plan is going to make it or not, but I am assuming it eventually will.   If it does make it and the city implements the plan, my layperson math indicates their best case assumptions will result in a plan that is dramatically underfunded. 

Check out these notes From SF Gate:

"As written, San Francisco’s ordinance would require private employers with at least 20 employees, and nonprofits with at least 50 employees, to provide health coverage at certain minimum levels or to pay a fee to the city. The fee would pay part of the cost of a $200 million-a-year program of care for the 73,000 uninsured adult city residents.

Without the employer fee, city officials say they will limit enrollment to those making no more than three times the federal poverty level, or about $32,000 a year for an individual."

Here's what I don't get.  By math, the city is planning on spending about $2,800 per covered individual annually.  That's great, but there's no way that's going to cut it, right?

Why won't it cover it?  By the very nature of the risk pool, the cost per covered individual is going to skew higher than average.  The uninsured includes people who can't work or are otherwise deemed uninsurable due to heath concerns.

A similar program for universal coverage in Connecticut failed, in part because the legislators were shocked about what the cost was (from Managed Care Matters):

"An effort in Connecticut to implement a single payer, universal coverage program is just about dead, after the state's Office of Fiscal Analysis determined it would cost as much as the entire state budget.

Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion (cost range per covered individual - $4,000 to $6,000).

I'm shocked that they were shocked."

That's why I don't get the plan in San Francisco.  The State of Connecticut runs the entire risk pool for the state and comes up with 4k to 6k per covered individual, and SF handles a risk pool that skews more severe and they're only going to pay $2,800?

When people underestimate things, I also think of that great line in the original "Jaws" - "We're going to need a bigger boat..."  That seems to fit here.... 

"An effort in Connecticut to implement a single payer, universal coverage program is just about dead, after the state's Office of Fiscal Analysis determined it would cost as much as the entire state budget.

Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion (cost range per covered individual - $4,000 to $6,000).

I'm shocked that they were shocked."