BUDGET & LEGISLATIVE UPDATE: Conference Committee Reviews Proposed Health Budget

  • Children’s health coverage and application reimbursements remain unresolved.
  • Medi-Cal provider reimbursement rates stays the same; study to confirm insufficiency of CA rates
  • BUDGET ACTION: Urge Conferees to support Assembly’s expansion of children’s coverage
  • LEGISLATIVE UPDATE: Bill wrap-up as first half of session is over

The bicameral Budget Conference Committee Thursday made a first pass through the health items.

In contrast to earlier years during the height of the budget crisis, few health items are in conference committee this year since many were either resolved earlier in the budget subcommittees or were routed in the normal legislative process for policy bills. The discussion is described below, courtesy of Beth Capell, legislative advocate, Health Access California.


The major health item discussed Thursday was children’s health coverage. While the committee has yet to act on the major elements, the debate helped shed further light on the thinking of the various parties involved. The Conference Committee is expected to take final action next week.

Assembly Budget Chair Laird, the major proponent of children’s coverage in the budget, explained how the Assembly proposal would expand Healthy Families to 300% FPL in three steps:

  • First, in 06-07, it would do the administrative work necessary to support future expansions as well as both funding backlogs at the county level and allowing new counties to start up.
  • In 07-08, it would expand eligibility to 275% FPL.
  • In 08-09, it would complete the expansion by expanding eligibility to 300% FPL.

The Assembly proposal would NOT eliminate the existing provision that children ages 6-18 over 100% are covered by Healthy Families while those under age 6 are covered by Medi-Cal up to 133% FPL. Nor does the proposal implement the CHDP Gateway or the bridge.

It would cost about $300 million annually when fully implemented, but much less in the first year.

The proposal prompted a lively discussion.

The Legislative Analyst Office now maintains that we should “maintain the county obligation” to fund coverage and require counties to match any state or other dollars. No conferee concurred.
Assm. Keene said that this proposal should go through the normal policy process (neglecting to note that he had voted no on a prior policy bill, AB774 Chan/Escutia). Keene said that the proposal did two things he opposed: make eligible families making more than $60,000 a year and cover kids who are here illegally. He said these were policy issues where both sides felt passionately and had a right to be heard. Because of that, he felt uncomfortable taking action in the budget. While Keene several times referred to “illegal” kids, he was very careful to be respectful of those who support coverage for them.

From Laird’s perspective, though, it is absurd that children aren’t all covered yet, in light of the fact that California is “the wealthiest state in the wealthiest nation in the world.” He also corrected Keene ’s misimpression that the Assembly Democratic proposal covered kids in families with incomes over 300% FPL. Laird said this was “a targeted investment” of eventually $300 million in $100 billion budget – approximately 3/10ths of one percent of California ’s budget — that would save money on emergency rooms and preventive care and allow children to learn better.

Chesbro agreed that this was an investment and he said that in his district many parents cannot afford coverage and people with chronic conditions are often unable to obtain affordable coverage at any premium because of high out of pocket costs.

With that, the various items associated with this proposal were left open to be reconciled at a later time.

ACTION: Support Children’s Health Coverage in the State Budget Now!

Child and health advocates are urging the Conference Committee members to pass the Assembly version of the budget on children’s coverage, especially the $5 million to start the administrative process to phase in coverage for all children. Please call the committee members (listed below) to ask them to support health insurance for California ’s kids:

  • Support the Assembly version of Department of Health Services and Managed Risk Medical Insurance Board (MRMIB) issue #160, which would provide state resources to begin establishing a comprehensive health care program for children in families with incomes at or below 300% of the poverty level. The Senate took no action on this item.
  • Support the Assembly version of MRMIB issue #128, which would provide a total of $40 million for local Children’s Health Initiative programs. This proposal was adopted as part of the health care coverage for all low-income children program. The Senate approved the Governor’s proposal of $22.8 million for these programs to enroll 24,000 children in 2006-07 with priority on programs that have established a waiting list to serve children.

Members of the Budget Conference Committee include:

  • Senator Wesley Chesbro (D – Humboldt, Lake, Mendocino, Napa, Solano, & Sonoma counties), 916-651-4002
  • Senator Denise Moreno Ducheny (D – Imperial, parts of San Diego & Riverside counties), 916-651-4040
  • Senator Dennis Hollingsworth (R – parts of Riverside & San Diego counties), 916-651-4036
  • Assemblymember John Laird (D – Santa Cruz ), 916-319-2027
  • Assemblymember Judy Chu (D – Monterey Park (in LA County)), 916-319-2049
  • Asemblymember Rick Keene (R – Chico ), 916-319-2003

Other legislators we urge you to contact on these issues include:

  • Senate Democratic Leader Don Perata ( Oakland ), 916-651-4009
  • Senate Republican Leader Dick Ackerman ( Irvine ), 916-651-4033
  • Asembly Speaker Fabian Núñez ( Los Angeles ), 916-319-2046
  • Assembly Democratic Floor Leader Dario Frommer ( Glendale ), 916-319-2043
  • Assembly Republican Leader Plescia ( San Diego ), 916-319-2075


The conferees had a lively discussion of whether those who use E-App should be paid an additional $25 per enrollee. The Assembly, LAO and Finance all supported doing so.

Sen. Ducheny said it was not fair to application assisters who did not have computers or were not on the internet. Sen. Ducheny also thought that if it were so much more efficient, then CAAs would use simply to do higher volume. The item was left open for the moment.


On a number of other minor issues in which the Assembly had augmented in excess of the Senate, the conference committee adopted the Senate action. They also discussed one major issue, physician fees for service compensation which the Assembly had proposed to increase by $15 million.

Conferees had a lively discussion in which Keene pointed out that, taken in isolation, this was an important problem to correct, but that the problem needed to be looked at more broadly. (It was not entirely clear whether he was referring to Medi-Cal, health care or the budget more generally).

Sen. Ducheny responded that she and Sen. Cox had agreed to hold hearings in the fall on the larger issue of Medi-Cal funding in which she said California is 51st in the nation.

Conferees repeatedly expressed their frustration with low rates of Medi-Cal reimbursement for providers. Only Keene posed improving provider reimbursement as a tradeoff for limiting expansions of eligibility. In the end, the doctors did not get additional dollars but language requiring a study by DHS and a report back.

In a particularly memorable exchange Dept. of Finance cited the approximate backlog of 10,000 providers seeking Medi-Cal provider certifications as proof of physician interest in caring for Medi-Cal patients.

Sen. Ducheny on behalf of the six conferees retorted that she knew of no legislator who believed that physicians were happily accepting Medi-Cal reimbursement as adequate and Sen. Chesbro recounted how some physicians were forgoing Medi-Cal reimbursement entirely and just taking patients referred by a schoolteacher or a Catholic priest. Assemblymember Keene noted that physician reimbursement under Medi-Cal is less than their overhead.

On Medi-Cal managed care rates, most of these items were left open. Conferees expressed frustration about the existing rate setting process and the need to improve it. This will be a major focus in next year’s budget. Health Access and other advocates will also raise issues around access for enrollees and quality of care under Medi-Cal managed care. As those of us with commercial HMOs frequently experience lack of timely access, those covered by Medi-Cal have even greater difficulties.


Both houses rushed to get bills out of their own houses by the constitutional deadline this week, passing many bills of interest to health advocates. Yet health advocates also lost some battles in the budget and legislature this year, including $76 million that would have provided 1.1 dually eligible seniors with coverage of their newly-imposed co-payments.
Below is a list of the status of key bills of interest to health consumer advocates. It includes the bill number, the bull author, whether it passed (and is alive, pending) or failed in the first house, the position of Health Access California, and a description of the measure:

Those bills that PASSED the first house this year, or are PENDING after having passed last year, now have to be heard in the second house. Most of these bills are up in policy committee in the next few weeks.

Health Care Coverage

Major Coverage Expansions

  • SB437/ Escutia. PENDING. Strong Support. Expands public insurance programs to provide comprehensive health coverage to *all* children
  • SB840/ Kuehl: PENDING. Strong Support. As the California Health Insurance Reliability Act, creates a universal, publicly-financed (single-payer) health care system, similar to Medicare

Related Legislation on Access and Coverage

  • AB1840/Horton. PASSED. Support. Requires the state to disclose names of employers who, rather than providing health coverage, have many of their workers and their families on Medi-Cal and Healthy Families
  • AB1948/Montanez. PASSED. Support. Simplifies application for Medi-Cal and Healthy Families using CHDP Gateway and electronic application
  • AB1971/Chan. PASSED. Support. Extends sunset for Managed Risk Medical Insurance Program, which covers patients who are unable to get coverage elsewhere
  • AB2889/Frommer. PASSED. Support. Prohibits health plans from discriminating against people who have been insured, but who have chronic or serious illnesses
  • SB1448/Kuehl: PASSED. Support. Expands coverage using money from state’s federal hospital waiver
  • SB1622/Escutia. PASSED Support. Gives employers a notice to be passed along to employees, advising them of the availability of Healthy Families and Medi-Cal
  • AB1952/Nation. FAILED. Oppose Unless Amended. Repeals HMO reform, while forcing businesses to provide health coverage and individuals to purchase it
  • AB2450/Richman. FAILED. Oppose. Obligates every Californian to purchase skeleton health coverage.
  • AB2473/Wyland. FAILED. Oppose. Intends to require personal identification for any kind of state-funded health care benefits.

Consumer Protections Against Medical Debt

  • AB774/Chan. PENDING. Support-Sponsor. Provides consumer protections against abusive hospital billing and collections practices, including those that charge self-pay patients multiple times what insurers pay for the same service.
  • AB977/Nava. PASSED. Support-Sponsor. Allows the state to monitor and determine the fairness of out-of-pocket costs permitted by health plans
  • AB2281/Chan. FAILED. Strong Support. Provides information and protections to consumers with high-deductible health plans
  • AB2010/Plescia FAILED. Oppose. Allows holders of Health Savings Accounts to receive a tax credit in California
  • SB1584/ Runner-Ackerman. FAILED. Oppose. Allows holders of Health Savings Accounts to receive a tax credit in California .
  • AB2737/Nakanishi. FAILED. Oppose. Gives businesses tax breaks if they contribute to employees’ Health Savings Accounts
  • SB1639/Dutton. FAILED Oppose. Gives businesses tax breaks if they contribute to employees’ Health Savings Accounts

Affordable Prescription Drugs

  • AB75/Frommer: PENDING. Support.Would establish a prescription drug discount program, to use the purchasing power of the state of California (through its Medi-Cal program) to negotiate the best possible drug prices for 8-10 million Californians who are uninsured or underinsured
  • AB2911/Nunez-Perata. PASSED. Support. Establishes a prescription drug discount program
  • SB1702/Perata-Nunez: PASSED. Support. Establishes a prescription drug discount program
  • AB2877/Frommer: PASSED. Support. Establishes a website listing sources that are safe for purchasing more affordable drugs from other countries.
  • SB452/Alarcon: PENDING. Support. Requires Medi-Cal contracts with drug manufacturers to be disclosed to the chairs of relevant legislative committees

Patient Protections

Prescription Drugs

  • AB71/Chan-Frommer: PENDING. Support. Establishes a clearinghouse for information about the safety and effectiveness of prescription drugs that are advertised on television.
  • SB1683/Scott: FAILED. Support. Requires pharmaceutical companies to report the results of all their clinical trials.

Medicare Part D

  • AB2170/Chan: PASSED. Support-Sponsor. Creates a consumer report card on Medicare Part D prescription drug plans
  • AB2667/Baca: PASSED. Support-Sponsor. Allows the state to monitor prescription drug coverage plans in the same way it monitors health plans
  • AJR40/Chan-Berg: PASSED. Support Calls on federal government to make changes to the Medicare Part D prescription drug plans, including extending the deadline for it.

Insurance Oversight and Other Patient Protections

  • SB1405/Soto: PASSED. Support. Creates a Task Force on Reimbursement for Language Services to recommend actions for achieving linguistic access to care
  • SB1704/Kuehl: PASSED. Support. Extends the sunset for the existing California Health Benefits Review program to 2010.
  • SB1804/Florez: PASSED. Support. Requires health insurers to disclose the number of physicians accepting new patients on a county-by-county basis.
  • AB2855/Parra: FAILED. Oppose. Allows fraudulent “discount health plans” without needed consumer protections

For information on these issues, please contact Hanh Kim Quach, Policy Coordinator, Health Access, at hquach@health-access.org, or (916) 497-0923 x 206.

Health Access California promotes quality, affordable health care for all Californians.
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