California has “passed two bills that provide the mechanisms and functions of the exchange” and separate legislation to boost adverse-event reporting among hospitals, leading the way in implementation of reform. The advances come in the midst of growing budget shortfalls and increasing number of uninsured, both of which are taxing the state’s health safety net programs.

A new report from the UCLA Center for Health Policy Research finds “8.4 million Californians were uninsured in 2009 — up from 6.4 million in 2007, a 31% surge in just two years.” “The sharp increase was driven by widespread job loss, as areas that reported higher unemployment figures corresponded to areas with the highest rate of uninsured residents.” A higher number of uninsured means that state funds will have to be stretched further, to cover more people. As California HealthLine points out:

However, state budget issues continue to raise red flags for health care stakeholders. The budget, which is now about two months late, currently threatens cuts to health and human services, which critics say would hamper access to Medi-Cal, reduce home health services and make other changes. The budget delay also means that community clinics are now going without Medi-Cal reimbursements, which represents 50% to 80% of their revenue, and could force clinics to scale back their hours and service.

But what’s interesting is that this ongoing economic crisis in the states may be motivating state governments to implement health care reform more quickly, apply for all of the available federal grants and pressure even reluctant politicians to comply with the law’s requirements. For instance, I’ve noted that at least 19 of the 22 states that are suing the federal government over health care reform are also applying for the law’s recently released rate review grants and some — like Utah — are actively working with HHS to ensure that the law meets their needs.

Shana Alex Lavarreda, Director of Health Insurance Studies at the UCLA Center for Health Policy Research tells me that California, which is currently setting up its high risk insurance pool program, is rushing to implement reform precisely because it would lessen the stress on state safety net programs. “It’s funny, politically they were talking about, the change was happening too quickly, we need to slow it down, we need to put it off, now that it’s actually passed, I’m hearing many more complains along the lines of, why isn’t this here yet, why isn’t it fully implemented, why aren’t we getting our subsidies now?” she observed.

Lavarreda said that from the federal prospective, an increase in the uninsured would result in higher costs, but argued that “from the state budget prospective, that’s actually a really good thing.” “More people might be going into the exchange, including the people that would otherwise be eligible for Healthy Families [the CHIP program]. If the adults are going into the exchange, they might not want their kids to be on Healthy Families — the CHIP program here in the state — and they might pull out their kids from that program, which would actually reduce state expenditures. It’s possible that the exchanges would pull people out of the public programs if they prefer to be in the private programs, receiving subsidies from the federal government instead.”

Some lawmakers have argued that implementation itself might stress the state budget, but for now, it’s still too early to tell if states will need more funding. “For us, [the economic downturn] has pushed it to the forefront of our current legislature’s agenda,” Lavarreda stressed. “The problem is not getting better, it’s getting worse right now and we’re going to be incredibly active in getting as much federal funding as possible given our budget situation right now.”

The Congressional Budget Office is out with a new letter saying that while the health care law could reduce the projected budget deficit by $30 billion in 2020, repealing it would increase the deficit by an estimated $455 billion:

On balance, the two laws’ health care and revenue provisions are estimated to reduce the projected deficit in 2020 by $28 billion, and the education provisions of the Reconciliation Act are estimated to reduce the projected deficit in 2020 by $2 billion. [...]

Finally, you asked what the net deficit impact would be if certain provisions of PPACA and the Reconciliation Act that were estimated to generate net savings were eliminated—specifically, those which were originally estimated to generate a net reduction in mandatory outlays of $455 billion over the 2010–2019 period. The estimate of $455 billion mentioned in your letter represents the net effects of many provisions. Some of those provisions generated savings for Medicare, Medicaid, or the Children’s Health Insurance Program, and some generated costs. If those provisions were repealed, CBO estimates that there would be an increase in deficits similar to its original estimate of $455 billion in net savings over that period.

If they were to repeal the law, Republicans would have replace it with something that makes up for the deficit increases (assuming, of course that they will still care about the deficits) and helps slow the growth rate in the Medicare program. The GOP’s old leadership backed plan and its reliance on medical malpractice reform as a money saver won’t be enough.

Separately, the CBO also estimated that preventing payment reductions to the physician fee schedule would cost some $330 billion over the 2011–2020 period.

Last night, during an appearance on CNN, Florida Republican gubernatorial candidate Rick Scott defended his stewardship of Columbia/HCA, a large for-profit hospital chain that pled guilty to 14 felonies and paid $1.7 billion in criminal and civil fines for defrauding Medicare. Scott explained that he invested his life savings in the business to “built the largest health provider in the world” and stressed that he “took responsibility for what went wrong”:

SCOTT: And what I tell people is, you know, when you’re in business, anything that goes wrong, you should take responsibility if you’re the CEO. I do. The difference is let’s think about where we are in the state. We have the highest unemployment on record. We have almost 50 percent of our home owns under water on their mortgages. We’re walking into a five-plus billion dollar deficit. Has any politician in the state taken responsibility for putting us in this position? No. What I tell people all the time is I’m a business person. I know, you know, you put up your money, you try to build your companies and you take responsibility for what goes wrong. I do. When I’m governor, I hope nothing goes wrong. If it does, I’ll show up, I’ll take responsibility and I’ll fix it.

Watch it:

Scott may certainly be sorry for what happened, but it seems that the only thing he took was “a $9.88 million severance package, along with 10 million shares of stock worth up to $300 million at the time” after he was ousted from the Columbia/HCA board. In fact, during a deposition Scott gave in 2000 about his time as head of Columbia/HCA, “he invoked his Fifth Amendment right against self-incrimination 75 times,” an issue Scott’s challenger, Attorney General Bill McCollum tried to use against him. McCollum “circulated a transcript in which Scott took the Fifth even when asked if he worked for Columbia/HCA Corp., in addition to questions about the firm’s accounting and billing practices.” According to the transcript, Scott was holding a card, which read “Upon advice of counsel, I respectfully decline to answer the question by asserting my rights and privileges under the Fifth Amendment of the U.S. Constitution.”

During the interview with CNN, Scott reiterated that he would not be releasing his deposition in a separate lawsuit against Solantic, a series of urgent care clinics he established across Florida. That business has also come under fire for engaging in the very same kind of practices that led to Columbia/HCA’s downfall. “Well, it’s a private matter. It’s something — it’s not — has nothing to do with this race,” he told CNN. “What I’m going to campaign on is what I’ve campaigned on in the primary. It’s about jobs.”

Scott also added that that he would not support changing the 14th amendment to revoke birthright citizenship and insisted that he would reject any federal stimulus dollars. “I think stimulus money is an absolute mistake. There’s no free money in those stimulus dollars. We’re going to have to pay those dollars back whether we pay it back, our children pay it back, our grandchildren pay it back. Stimulus does not work.”