HEALTH ACCESS UPDATE
Wednesday, June 2, 2010
KEY BILLS TO IMPLEMENT AND IMPROVE HEALTH REFORM
PASS FLOOR VOTES IN CALIFORNIA LEGISLATURE
* Bills Would Protect Consumers and Help Californians Benefit from Reform
* Passed Bills Set Up New Exchange to Help Individuals Buy Insurance; Set Minimum Benefit Requirements; Standardize Benefits to Allow for Apples-to-Apples Comparisons; Prevent Overpriced Premiums for Children with Pre-Existing Conditions; Provide Mental Health Parity; and More.
* ALERT: Key Insurance Rate Bills, AB2578(Jones), SB1163(Leno) Up for Floor Votes This Week
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Yesterday, Tuesday, June 1st, key legislation to implement and improve health reform passed floor votes in the California Assembly and Senate. These are part of a larger set of bills to provide new health care consumer protections and fulfill the promise of health reform in California.
The measures, largely supported by consumer advocates including Health Access California, would provide new benefits and patient protections to California consumers. In the context of federal health reform, these bills would provide even stronger oversight and accountability on the insurance industry, and empower consumers to make more informed choices about their health care, allowing for apples-to-apples comparisons, and helping to ensure that basic benefits are provided. Among the bills that passed included:
* AB1602(Perez) and SB900(Alquist/Steinberg) to implement health reform and set up a health insurance exchange;
* SB890(Alquist/Steinberg) to reform the insurance market to standardize benefits and provide a range of consumer protections;
* AB2244(Feuer) to allow access to coverage and limit health insurance premiums for children with pre-existing conditions; and
* AB1600(Beall) to provide for mental health parity in health coverage
In some cases, the federal law requires states to act, within certain parameters; other bills would implement some aspects of health reform early, and in other cases would build on federal health reform but go further.
The bills are now halfway through the legislative process, having passed one of the two legislative houses. They next go to be heard in the Health Committee of the second legislative body, before the end of June.
* KEY BILLS UP THIS WEEK ON RATE REVIEW AND DISCLOSURE: Additional bills, including key measures to review insurance rate hikes and have insurers disclose the basis of their rates, are up for key votes later this week. These bills face tough insurance industry opposition, and consumer groups are mobilizing in support.
Up for a floor vote in the next day or two is AB 2578 (Jones), which would require approval by the Department of Managed Health Care or the Department of Insurance of an increase in the amount of premium, co-payment, coinsurance, deductible or other charges under a health plan. Another bill up for a vote shortly, SB1163 (Leno) would require health plans to provide, in writing, specific reasons for denial of coverage or for charging higher than the standard rates for coverage.
The need for these bills became more apparent with the spotlight on the huge increases of up to 39% by Anthem Blue Cross of California, and even larger increases by other insurers and in the market for small businesses. Even with very limited authority, the Department of Insurance was able to find significant errors. Consumer groups argue that insurers should not be allowed to raise rates without justification, and that ratepayers especially need regulatory oversight in the interim between now and 2014, to prevent insurers from jacking up rates before health reform is fully in force.
Other bills up for floor votes include measures to regulate rescissions, AB2470(De La Torre); to allow young adults to stay on their parents coverage, SB1088(Price); to require maternity coverage, AB1825(De La Torre); to keep children continously eligible for Medi-Cal in accordance with federal law, AB2477(Jones); and to extend grace periods for people paying insurance premiums, AB2110(De La Torre).
* KEY EXCHANGE BILLS PASS: In floor votes yesterday, two flagship bills, AB1602 (Perez) and SB900 (Alquist/Steinberg), both authored by legislative leadership, passed the Assembly and Senate, respectively. Both contain multiple elements of implementing health reform, including the central task of creating a new exchange that would make it easier for consumers to get health insurance. By 2014, many families would get subsidies through the exchange. Under these bills, a new exchange could also use its purchasing power to negotiate for the best price and value.
Consumer advocates suggest that even before the subsidies kick in, such a new purchasing pool can dramatically improve the way Californians buy coverage as individuals and small businesses, given the problems that individual consumers face now at the mercy of the big insurers, without any purchasing power, in a complex and confusing marketplace.
* REFORMS PASS TO PROVIDE TRANSPARENT & STANDARDIZED BENEFITS: SB890(Alquist/Steinberg) passed the Senate. It standardizes and simplifies the individual insurance market, so that consumers can understand their coverage choices, make apples-to-apples comparisons, and have the security that coverage does not have hidden loopholes, or lifetime and/or annual caps on coverage. Consistent with federal reform, the bill sets standards for basic health care services for products at both the Department of Insurance as well as the Department of Managed Health Care products. The bill is broadly supported by consumer, doctor, hospital and other health stakeholders, with different insurers in both support and opposition.
The legislation would help Californians who now find buying coverage complex and confusing, with consumers having little ability to know what a plan covers and doesn’t. The bill implements many of health reform’s consumer protections early, from a strong medical loss ratio so premium dollars go to patient care rather than administration and profit, to basic benefit standards, including maternity coverage. And by standardizing the benefits in the insurance market, consumers can make real apples-to-apples comparisons, forcing insurers to compete on price and quality rather than on avoiding sick people.
* BILL PASSES TO ENSURE AFFORDABLE COVERAGE FOR CHILDREN WITH PRE-EXISTING CONDITIONS: AB2244 (Feuer) also passed the Assembly. It requires that children under 19 are able to get coverage on a “guaranteed issue” basis, regardless of pre-existing conditions, and that any differences for the premiums because of health status are limited and eventually phased out. Starting this year, federal reform prohibits insurers from denying coverage to children with pre-existing conditions. (A policy of “guaranteed issue” for adults doesn’t kick in until 2014 along with the requirement for individuals to have coverage and corresponding affordability subsidies.) Supporters, including sponsor Health Access California, say that the bill will limit how much insurers can charge children with pre-existing conditions, and provide a smoother glide path for our market’s transition in California to health reform.
* MENTAL HEALTH PARITY PASSES: AB1600 (Beall) passed the Assembly. The bill would require most health plans to provide coverage for the diagnoses and medically necessary treatment of a mental illness. While federal reform includes mental health parity, but supporters suggest early adoption of these basic benefit standards would not just provide a more graceful transition to health reform, but more quickly prevent discrimination between physical versus mental health issues, and also prevent further cost-shifting of these treatments from private insurers onto public programs.
A broad list of pending legislation to “implement and improve” health reform is available on the Health Access California website.