HEALTH ACCESS UPDATE
Tuesday, September 7, 2010
KEY PATIENT PROTECTIONS NOW ON GOVERNOR’S DESK
Key Measures to Implement and Improve Health Reform Passed CA Legislature;
Governor Schwarzenegger to Sign or Veto in September
Bills on Governor’s Desk Include:
* AB1602(Perez) & SB900(Alquist), to Create a New Health Insurance Exchange
* SB890(Alquist), to Categorize Benefits to Allow for Better Comparisons of Plans
* AB1825(De La Torre), to Phase-In Maternity Coverage as a Basic Benefit
* AB1600(Beall), to Require Mental Health Parity in Health Coverage
* AB2244(Feuer), to Limit Premiums for Children with Pre-existing Conditions
* AB2470 & AB2540(De La Torre) on Eliminating Rescissions
* SB56(Alquist), to Foster New Public Health Insurance Options
* SB1088(Price), to Allow Young Adults Up to Age 26 To Stay on Parental Coverage
* SB1163(Leno), to Provide 60 Day Notice and Transparency on Rate Hikes
* AB2042(Feuer),to Limit Rate Hikes and Changes to Once a Year
* AB1503(Lieu), to Prevent Emergency Room Doctor Overcharges for the Uninsured
* AB2345(De La Torre), to Eliminate Cost-Sharing for Preventative Care
* AB542(Feuer), to Prevent Medi-Cal Payment for “Never Event” Medical Errors
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The California Legislature ended their session last week after passing over a dozen patient protection measures. If signed by the Governor, these bills will implement and improve a number of provisions of federal health care reform law, enacting a number of new consumer protections.
A lists of the measures related to implementing federal health reform, and how they fared in the California Legislature, is available on the front page of the Health Access website.
These bills that passed are now on the desk of Governor Arnold Schwarzenegger. He has the month of September to decide to sign or veto the hundreds of bills on his desk, including the following measures:
Creating a Consumer-Friendly, Transparent Health Insurance Exchange
* CREATING A NEW EXCHANGE WITH BARGAINING POWER: AB 1602, by Speaker Perez and SB 900, by Senate Health Committee Chair Alquist and Senate President Pro Tem Steinberg are complementary measures that establish a new health insurance Exchange, a core element of the new federal health reform law. In 2014, the new Exchange will be the new one-stop shop for getting health coverage for individuals and small businesses, both providing easy-to-compare choices, access to federally-funded subsidies to make coverage affordable, and the bulk purchasing power (similar to large employers or CalPERS) of millions of Californians to bargain for the best price and value.
Now, individual consumers are at the mercy of the big insurers, without any purchasing power, in a complex and confusing marketplace. A new, independent exchange can dramatically improve the way Californians individuals and small businesses get coverage—making such decisions easier, more understandable, and more affordable. With over 4 million Californians eligible to participate in the exchange in 2014 (and more later), these bills begin a process to ensure a new exchange is ready to help patients and draw down federal subsidies on day one. AB1602 establishes the new, indepedent agency; SB900 set ups its governance, as a 5-member board to be appointed by the Governor and Legislature.
Setting Minimum Standards
* TRANSITIONING TO A MORE TRANSPARENT AND COMPARATIVE MARKET: SB 890 by Senator Alquist, would reform the individual insurance market, by setting basic benefit levels and classifying health plans in tiers (Platinum, Gold, Silver, Bronze) based on actuarial value. This would allow consumers better ability to make apples-to-apples comparisons, so that consumers can have some idea of how much of their medical costs they may need to pay out-of-pocket with different health plans.
The bill helps California implement and transition to federal health reform in other ways as well:
* by instituting the new federal requirements on medical loss ratios, to ensure that premiums dollars go to patient care rather than administration and profits; and
* by eliminating annual and lifetime caps on coverage that cause individuals with serious illnesses to incur significant medical debt.
* MATERNITY COVERAGE: AB 1825, by Assemblyman De La Torre, phases in a requirement for all health insurance plans to cover maternity care. This measure provides equity for women trying to buy coverage, saves the state money by preventing women from having to rely on public programs for maternity benefits, and crucially provides the public health benefit of getting babies the prenatal and early care coverage needed to live healthy and productive lives.
* MENTAL HEALTH PARITY: AB1600, by Assemblyman Beall, requires mental health parity in private coverage. The bill ensures that patients should be covered for mental health similarly to how they are covered for physical health.
Providing Access, Including for Those with Pre-Existing Conditions
* ACCESS & AFFORDABILITY FOR CHILDREN WITH PRE-EXISTING CONDITIONS: AB 2244, by Assemblyman Feuer, implements the federal prohibition on denying coverage to children with pre-existing conditions, and limits the amount that insurers can charge to cover those children. While the federal health law takes a crucial first step this September, by prohibiting insurers from denying coverage to children with pre-existing conditions, this state bill would take another step in making reform real, by also limiting how much insurers can charge children with pre-existing conditions, within an open enrollment period.
Federal law will prohibit such premium differences in 2014, but this bill phases in this affordability help sooner, and provides a smoother glide path for California’s market to transition. Proponents say the bill would save tens of millions in the state budget, giving families the opportunity to buy private insurance rather than having them fall onto public health coverage programs.
* ELIMINATING RESCISSIONS: AB2470, by Assemblyman De La Torre, would help implement health reform by seeking to eliminate rescissions, so patients don’t have their coverage yanked away at the time when they most need it. The bill would standardize the process of underwriting and asking about pre-existing conditions when accepting subscribers in the first place, and require regulatory approval for any insurer seeking to retroactively deny coverage due to fraud. This is an important protection in the interim until 2014, when insurers will be required to take patients without regard to pre-existing conditions.
A related measure, AB2540, by Assemblyman De La Torre, would enact/increase fines for rescinding, canceling, or limiting of a policy or certificate due to the insurer’s failure to complete medical underwriting before issuing the policy or certificate or after a claim has been filed.
Reviewing Health Insurance Rates
* REQUIRING 60-DAY NOTICE AND TRANSPARENCY ABOUT RATE HIKES: SB 1163, by Senator Leno, would require insurers to make information public about premium increases, available for review not just by the regulator but by the public on the insurers’ and regulators’ websites. The bill would also require insurers give 60 days notice to consumers and to the public before raising premiums. Currently, this information is not public, even the notice of a rate hike: insurers only need to give 30 days indication to subscribers, and there is no public notice requirement. This bill expands California regulators’ authority, especially at the Department of Managed Health Care, to review rate information and better take advantage of the new federal funding available.
* LIMITING RATE HIKES TO ONCE A YEAR: AB2042, by Assemblyman Feuer, would get health insurers to limit plans from raising rates or changing premiums, cost-sharing, or benefits to once a year. This is intended to provide stability to patients who want to know their premiums don’t change mid-year, messing with their annual budget.
New Options and Expanded Coverage for Consumers
* JOINT VENTURES AND PUBLIC OPTIONS: SB56, by Senator Alquist, would foster new public health insurance options by allowing county-based Medicaid managed health care plans (such as Alameda Alliance for Health, LA Care, and San Francisco Health Plan) to enter into joint ventures, offer broader provider networks, and be viable choices in the marketplace.
* YOUNG ADULT COVERAGE: SB1088, by Senator Price, would implement the federal health law that allows young adults up to age 26 to stay on their parents’ group coverage.
Encouraging Prevention and Better Care
* MEDICAL ERRORS: AB542, by Assemblyman Feuer, would set up a process toward the goal that Medi-Cal would no longer pay for “never events,” major medical errors that should not “never” happen–like surgery on the wrong body part. This bill is intended to encourage providers to set up systems that prevent such errors before they occur.
* PREVENTATIVE CARE: AB 2345, by Assemblyman De La Torre, would implement the federal health law by requiring insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations.
Other Consumer Protections
* EMERGENCY ROOM DOCTOR CHARGES FOR THE UNINSURED: AB1503, by Assemblyman Lieu, provides consumer protections to ensure uninsured and underinsured patients are charged fair prices for emergency physician services. The bill would require physicians who provide emergency medical services in hospitals to implement a discount payment policy, including a limited rate, for financially qualified patients. The bill would also place limits on the collections activities of these physicians.
The passage of this legislation is an important step toward establishing California as a leader in the implementation of health care reform. If the Governor signs these bills into law, California consumers will begin to benefit from some of the provisions of the federal law as well as some state-only improvements. Additional advocacy is needed to ensure signing of these bills.
For more information related to federal health reform, read the new report, “Health Reform Three-Month Status Report: Californians Begin To See the Benefit, Much More Work To Do.” which is available on the Health Access website.