ASSEMBLY HEALTH COMMITTEE PASSES KEY CONSUMER BILLS
- Bills Passed: Limits on High Deductible Plans; Drug Discounts; Part D Report Card
- Individual Mandate Proposal Fails; Another Proposal Passes with Significant Amendments
- More Bills Up Wednesday, April 26th
Earlier today, the California Assembly Health Committee, chaired by Assemblywoman Wilma Chan (D-Oakland), heard a jam-packed agenda of bills, and passed legislation, in some cases with significant amendments, that would serve to protect health care consumers. Virtually all bills passed below on party-line votes, with Democrats voting for the measures that passed, and Republicans largely voting against those bills.
High Deductible Health Plan Consumer Protections: AB2281 (Chan), which would limit annual out-of-pocket costs to $5,000 for individuals and impose other consumer protections on high deductible plans, narrowly passed the Assembly Health Committee Tuesday.
A representative of the Department of Insurance said the bill would “keep the concept of ‘insurance’ in insurance products.’’ As it is now, plans with no limits on the level of deductible consumers must pay “flies in the face of what appropriate insurance is,’’ said Richard Figueroa, with the department. One witness was saddled with nearly $500,000 in debt, after her bare bones insurance covered only approximately 18 percent of hospital bills and treatment for her late husband’s cancer.
Others who turned out in support of the measure included: Health Access California, Foundation for Taxpayer and Consumer Rights, Western Center on Law and Poverty, Older Women’s League, Gray Panthers, Consumers Union , California Neuro Alliance , Congress of California Seniors, California Medical Association, California Academy of Family Physicians, CALPIRG and MALDEF.
The opposition, which included health plans, the Chamber of Commerce and other business groups, said the option of high-deductible plans needed to be preserved. Yet Assemblywoman Chan pointed out that AB2281 does not abolish these plans – it merely sets guidelines to ensure that consumers have a minimum level of coverage and information if they decide on this option, or this is the only option they get from their employer. The representative from the insurers also stated that while many of their products abide by the guidelines in the bill, they want to “preserve flexibility” for the future to allow them to impose, for example, further out-of-pocket costs for in-network services.
Prescription Drug Discounts: AB2911 (Nunez/Perata), which would create a drug discount plan in California for uninsured and underinsured consumers, also passed.
In the aftermath of the battle between Propositions 78 & 79, the bill is a compromise measure between a “voluntary’’ discount program, which drug companies prefer, and one with a stronger enforcement mechanism, which health advocates prefer. Along the lines of a proposal by the independent Legislative Analyst’s Office, if drug companies don’t provide satisfactory discounts by the end of the first three years of the “voluntary” program, then the state would have the authority to put an enforcement mechanism in place, using the purchasing power of Medi-Cal through the exisitng prior authorization system.
Assemblywoman Chan presented this bill for the Speaker, talking about a need to deal with ever-increasing prescription drug prices. Supporting testimony came from AARP, Consumers Union, Health Access California, CALPIRG, Older Women’s League, California Alliance for Retired Americans, Senior Action Network, Congress of California Seniors, Latino Coalition for a Healthy California, California Labor Federation, MALDEF, as well as the California Pharmacists Association with a “support if amended” position.
Those with an “oppose unless amended” position included the drug companies, which said they wanted to be part of the “ongoing debate,” and Western Center for Law and Poverty, expressing concern with the prior authorization process. Assemblyman Dario Frommer, of Glendale , the author of the still-pending AB75, also to create a prescription drug discount program, noted that this was a “nice compromise” and that Maine’s program was able to get significant discounts with only the threat of enforcement. He did express hope that the qualifying income thresholds would be increased to 400 percent (or un-reimbursed medical expenses totally 5 percent of gross income) to mirror his bill. AB2911 currently has a 350% FPL qualifying income threshold, or un-reimbursed medical expenses totally 10 percent of gross income.
- On another note, AB2877(Frommer), to create a website to facilitate reimportation of safe and affordable prescription drugs, did pass out of Assembly Business and Professions Committee in the morning.
Medicare Part D Prescription Drug Plan Report Card: AB2170 (Chan), which would create a report card on Medicare Part D prescription drug plans, also passed committee. The report card would be added to the existing report card on HMOs already done by the Office of Patient Advocate.
With 47 prescription drug program options offered by 10 health plans, Chan said her bill would give consumers some information to make informed decisions about their health. Supporters that testified included Health Access, Congress of California Seniors, Older Women’s League, Gray Panthers, California Alliance for Retired Americans, Consumers Union, CALPIRG, Latino Coalition for a Healthy California, AARP, and the California Medical Association.
The California Association of Health Plans opposed, since it would be funded by the same nominal assessment on managed care plans used for the current HMO report card. While there is significant overlap between the companies operating HMOs and Medicare Part D plans, the report card, in order to be comprehensive, would cover some prescription drug plans not related to HMOs.
Individual Mandates: AB2450 (Richman), which would have required Californians have proof of health insurance – regardless of affordability — was defeated by the committee, garnering only one vote: the author’s.
While it was conditionally supported (with amendments) in testimony by the California Association of Physician Groups, the range of opposition was impressive: Health Access California, Foundation for Taxpayer and Consumer Rights, SEIU, Western Center on Law and Poverty as well as Kaiser Permanente, Blue Shield, and the California Association of Health Plans. The bill got “no” votes from both Democrats and Republicans on the committee.
Assemblyman Richman described the problem of the uninsured, in terms of the costs to the overall system, he focused on “young invincibles” that don’t have coverage. (While young people are more likely to be uninsured, it is because they are more likely to be low-income and work in jobs that don’t provide coverage, rather than any desire not to have insurance.) The author did make comparisons to the “framework” of the Massachusetts proposal, but acknowledged that it wasn’t the same.
AB1952 (Nation), a health care coverage proposal that includes requirements on both individuals and employers, did pass out of Committee, although with concerns and caveats expressed. Assemblywoman Chan recommended several significant amendments with the bill, which were accepted by Assemblyman Joe Nation (D-San Rafael). The chair continued to express concerns with the proposal, especially the individual mandate, but suggested that the committee pass out the bill to keep the conversation on health care reform alive.
Assemblyman Nation focused on the notion of “shared responsibility,” with his proposal that would require individuals to purchase health insurance, require employers to spend 7 percent of their payroll for coverage on both full-and part-time workers, and also create an affordable health package for Californians below 300% of poverty level. The amendments served to deal with many of the concerns by the chair and consumer groups, including to:
- Clarify “medical necessity” to ensure it doesn’t exclude family planning, treatment of diseases and incurable diseases.
- Clarify “evidence-based medicine’’ standards so it includes standards currently found in the Health and Safety Code.
- Apply standards for affordability and availability of coverage to the larger market, providing community rating by age and geography for all Californians, so that no one is denied because of “pre-existing conditions.”
- Clarify that existing protections in state law also apply – that the bill would not negate the HMO Patients’ Bill of Rights or other consumer protections.
- Create programs to provide affordable coverage for the unemployed and uninsurable.
- Limit the individual mandate to be contingent upon availability and affordability of insurance.
Supportive testimony came from the California Medical Association, which cited problems but called it a “balanced bill” that should be allowed to pass through. In a similar vein, Jericho supported the bill as a way to deepen the conversation on health reform.
In spite of these changes that responded to its letter of opposition, Health Access California continued to express concern with the individual mandate, but acknowledged the improvements made through the amendments. Opposition was cited by a range of groups, from the Foundation for Taxpayer and Consumer Rights against the individual mandate, to business groups opposed to the employer mandate, including the California Chamber of Commerce, California Manufacturers and Technology Association, California Retailer Association and the National Federation of Independent Businesses. The California Association of Health Underwriters noted a number of “technical problems,” but noted that they were not opposed in principle to an employer mandate, and that they didn’t oppose SB2 a few years ago.
BILLS UP WEDNESDAY APRIL 26: The following bills will be heard:
Senate Health Committee (those below all supported by Health Access California)
- SB1702 (Perata/Nunez) would create a prescription drug discount program, and is identical to Nunez’s AB2911, which passed today.
- SB1622 (Escutia) would give employers a notice to pass along to employees, advising them of the availability of Healthy Families and Medi-Cal.
- SB1804 (Florez) requires health insurers to disclose the number of physicians accepting new patients on a county-by-county basis.
Senate Revenue and Taxation Committee (those below opposed by Health Access California)
- SB1584 (Runner/Ackerman) allows holders of Health Savings Accounts to receive a tax credit in California.
- SB1639 (Dutton) gives businesses tax breaks if they contribute to employees’ Health Savings Accounts.