HEALTH ACCESS UPDATE
Wednesday, March 24, 2010
HISTORY & HELP: OBAMA SIGNS COMPREHENSIVE HEALTH REFORM BILL;
ASSEMBLY MOVES SWIFTLY ON COMPANION HEALTH REFORM BILLS FOR CA
* Historic Bill to Provide Immediate Help to Californians, This Year
* CA Assembly Revives Rate Regulation Bill, With Support from Consumers
* Unfair Practice of Rescissions To Get Independent Review Under Assembly Bill
* Bill to Undo Schwarzenegger Cut of Breast Cancer Program Moves Forward
* Federal Reform Movement Gives New Momentum to Previously Stalled CA Bills
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HISTORY: President Barack Obama signed historic health reform legislation yesterday, legislation that will provide security and stability to those with coverage, and new, affordable options for those that don’t. When fully implemented in 2014, the bill has the potential of reducing the number of uninsured Americans by 32 million, and preventing people from becoming uninsured due to a loss of income, being between jobs, or due to health status.
IMMEDIATE HELP: At the signing ceremony, the President emphasized the immediate benefits of the reforms. For Californians in 2010, the health reform will:
1. Prevent people from being denied coverage based on “pre-existing conditions.”
– Soon, people who are uninsured due to a pre-existing condition will be able to buy insurance through a special insurance program. Right now, Californians are left in a lurch: our state has a small, underfunded “high-risk pool” that currently has a waiting list–even though it is estimated that over 400,000 have been denied coverage due to health status.
– Within 6 months of passage, no new health plan will be able to discriminate against children with pre-existing conditions.
– In a few years, no insurance plan will be able to deny coverage to anyone for pre-existing conditions.
2. Provide people with more security, by outlawing the worst insurance company abuses. Insurance companies will:
– No longer be able to cancel insurance coverage retroactively when you get sick. Over 6,000 Californians had their coverage rescinded in the past several years, and health reform would end the practice of rescission.
– No longer be able to put lifetime limits on the dollar value of benefits
– No longer be able to place co-payments or cost-sharing on key preventive benefits
3. Provide real relief to young adults and their families, to seniors, and to small businesses. Health reform will:
– Allow young adults up to age 26 to stay covered on their parents’ insurance
– Reduces prescription drug costs for seniors. Seniors whose spending falls into Medicare’s prescription drug donut hole will have hundreds of dollars of immediate help and the entire coverage gap will be eliminated over time.
– Gives subsidies to small businesses. Small businesses choosing to offer coverage to workers will receive a tax benefit of up to 35% of premiums.
SENATE RECONCILIATION: The effort to improve health reform began today as well, as the Senate start to debate a package of “reconciliation” improvements that were passed by the House of Representatives. They are expected to vote on the package before the end of the Easter recess at the end of the week.
NO MORE EXCESSIVE RATE HIKES: It didn’t take long for federal health care reform to spur movement of related, complementary legislation in the California Capitol.
The combination of President Obama signing the historic health care reform bill this morning and, back in California, continuing outrage over Anthem Blue Cross’ rate hikes and the company’s sending profits to out-of-state corporate parent WellPoint, Inc., provided new momentum to a bill for rate increase reviews.
Assemblyman Dave Jones (D), the previous chair of the Assembly Health Committee, had tried twice before with versions of this bill, AB 2578. Supporters hope the third time is the charm. Under the leadership of new chair Assemblyman William Monning (D), the Assembly Health Committee members moved the bill on to the Assembly Appropriations Committee, the next stop in the legislative process.
It remains to be seen whether the Governor likes the idea of installing rate review on for-profit and non-profit insurers. But one thing is sure: Legislators from all over California have been hearing from plenty of constituents unhappy about the profiteering bad behavior of Anthem Blue Cross and other insurers.
One consumer who attended the hearing just to speak up for himself as an individual testified that his health insurance premium had ballooned from $600 a month to $1,100 a month in just nine months. Such wild rate hikes may be the insurers’ way of purging aging baby boomers and others they calculate may soon need their benefits – and replacing them with new customers buying less generous plans.
AB 2578, co-authored by Assemblyman Mike Feuer (D) and supported by Health Access California, California Labor Federation, Consumer Watchdog, Consumers Union, would extend the kind of regulation that Proposition 103 requires for auto and other policies to health insurance policies.
The bill would fill a need left unfilled by federal health reform. Although Sen. Dianne Feinstein (D) worked with President Obama to try to insert rate regulation in the federal bill, procedural process rules prevented that from happening. Rather, the federal bill requires that insurers spend at least 85% of the consumer’s premium dollar on health and medical expenses, keeping only 15% for administrative expenses.
As it stands now, AB 2578 would trigger a review for rate increases over 7%, conducted by the Department of Insurance or the Department of Maernaged Health Care. In recent years, insurers have imposed double-digit premium increases on consumers annually, so that the average policy in California expanded in cost by 130% since 1999, Jones said.
Speaking out in opposition to the legislation was the Chamber of Commerce, the California Association of Health Plans, the California Medical Association, Health Net and Anthem Blue Cross. Assemblymembers Anthony Adams, Ted Gaines and Audra Strickland voted against the bill.
RESCISSIONS TO GET INDEPENDENT REVIEW UNDER BILL: The Assembly Health Committee also voted in favor of passing AB 2470, authored by Assemblyman Hector De La Torre (D), out of committee.
Though an insurance industry spokesman testified that firms have cleaned up their act since the Los Angeles Times first wrote a series of stories exposing the practice of insurers’ rescinding policies once patients incurred medical expenses, De La Torre said the Department of Insurance has been less than forthcoming with information to support that statement.
Insurers also stated that the new federal health reform prohibits rescission immediately, and eventually moves to a guaranteed issue market–and so the bill is unnecessary. De La Torre welcomed the federal law, but said that the bill would provide the regulation to implement the new federal reform. In addition, state regulators have been too slow in coming up with their own regulations that they promised to unveil a year ago this month.
Stalled last year, De La Torre said the bill was needed because consumers were vulnerable to insurance company abuses in the four year window until the federal reform phases out denials for “pre-existing conditions” in the individual market altogether. It is in the individual market that the recissions — fully 6,000 of them between 2004 and 2009– took place in California. In only 5% of those cases were consumers compensated, said De La Torre.
Arguing against the bill was the California Association of Health Plans, the Chamber of Commerce, California Life and Health Insurance Companies.
EVERY WOMAN COUNTS, REALLY! — Assemblywoman Noreen Evans (D), challenging the Schwarzenegger Administration over an unapproved cut of public breast cancer prevention and treatment services, ushered through the committee a bill that states the Legislature’s intent to reverse the governor’s decision.
Evans, who earlier held a hearing and orchestrated a Capitol steps bakesale to call attention to the cuts and raise money (about $3,800) for the program, reiterated that the Administration was specifically told “no” — it could not go through with the cutbacks — but it did so anyway.
The governor needs the Legislature’s consent to make the kinds of changes to the program that it did starting in January of 2010. Breast cancer screenings were scaled back to just women 50 and above, eliminating the service for those who previously could access it starting at age 40. Experts testified that many deadly, aggressive breast cancers tend to show up before age 50.
The governor also unilaterally froze enrollment in the “Every Woman Counts” program for the first six months of this year in order to save money. Again, the Legislature had said no to this proposal last June. The bill passed out of Assembly Health on Tuesday, and will pick up details about its funding (through the tobacco tax provided by Proposition 99 ) before it moves to the next commitee, Evans said.
NEW MOMENTUM EVIDENT ON HEALTH INSURANCE REFORM: President Obama’s signing of the federal health reform legislation clearly gave a boost to bills to shape up California’s insurance industry practices. Supporters spoke about the importance of a fresh era of transparency and consumer protection.
Also speaking in support of AB 2578, Assemblymember Mary Salas (D) said: “This bill is so important at this historic moment.”