2006: It was a good year…

Thursday, December 28th, 2006

2006 for Health Consumers: Big Victories & Momentum for Major Reform
* Big Wins on the Overcharging of the Uninsured, for Prescription Drugs, Hospital Care
* Progress and Momentum for Coverage Expansions, for Children and all Californians
* Key Implementation Work: DRA, Medicare Part D, Regs at DMHC and DOI, Etc.

2006 was a watershed year for health care consumers, as the uninsured won significant relief from being overcharged for hospital services and prescription drugs. Major coverage expansions and reforms advanced further than they had before, and while stalled, this election year created a mandate setting up 2007 as a year for major action.

Below is a description of the 2006 year in review, of which a one-page flyer version is available at:
A list of 2006 bills that made it to the Governor’s desk, and their final fate, is available at:

Health Access, the statewide health care consumer advocacy coalition, is gearing up for next year’s effort, and needs your support. To make an online end-of-year individual contribution to assist our efforts, click on this link:
For your organization to join the Health Access California coalition, click on this link:

Major Victories, in Principle and Practice:
Those With the Least Should Not Be Charged The Most

Uninsured Californians had two major victories in 2007, the subject of multi-year campaigns by health advocates, that will provide real relief, while also establishing a key principle: The uninsured and underinsured, those with the least, should not be charged the most in our health care system. These two bills, on prescription drugs and hospital charges, where California leads the way with only one other state, are the most important and meaningful changes in health policy for the uninsured in years.

PRESCRIPTION DRUG PRICES: Americans without prescription drug coverage pay more for needed medications than anyone else in the world—40-60% more than Canadians or those in other countries that negotiate on behalf of the citizens; more than insurance companies purchasing on behalf of who they cover.

AB2911 (Nunez/Perata) was a landmark prescription drug law, allowing the state of California to use its massive purchasing power through the Medi-Cal program to negotiate lower prices for those without drug coverage. Up to 6 million uninsured, underinsured and senior Californians could benefit with a drug discount card that may provide 40-60% off needed medications. As the first large-scale implementation of a program modeled in Maine , the principle helps propel the national debate about negotiating for the best price under Medicare Part D, and shows that the prescription drug industry can be beaten, despite them spending $80 million to stop a ballot measure the year before.

The program will start to be implemented in 2007, and advocates will be watching to see if the Governor will include the appropriate resources in his budget proposal.

HOSPITAL CHARGES: Uninsured patients who go to the emergency room get a bill that is multiple times what insurers pay for exactly the same service. These inflated bills often send patients to collections, court and bankruptcy.

AB774(Chan) is a groundbreaking law, providing consumer protections for self-pay hospital patients. Hospitals will need to provide uninsured and underinsured patients with information about their consumer rights and financial options, provide a moratorium before sending patients to collections, and not place liens on patient’s homes. In particular, most uninsured and underinsured will not have to pay more than the Medicare, Medi-Cal, or worker’s compensation rate for hospital services. While this issue has gotten attention in national media, Congressional hearings, and class action lawsuits, California joins only New York in passing a bill this year to cap hospital bills. It takes effect on January 1st, 2007.

While neither law provides for actual coverage or free care, the new laws do ensure a fair price. These laws will provide real financial relief, and help millions of Californians get the care they need, and to avoid medical debt and even bankruptcy. A major 2007 challenge for health advocates is to make sure that Californians are informed about these new rights, protections, and opportunities.

Progress and Momentum for Coverage Expansions

UNIVERSAL CARE: Another historic advance was the legislative passage of SB840(Kuehl), the California Health Insurance Reliability Act, a proposal to create a universal, single-payer health care system to cover all Californians. The bill did not include a financing mechanism and was ultimately vetoed by Governor Schwarzenegger, but it clearly put universal health care in the political discussion, and advanced such a proposal farther than it ever has before. The vast majority of Democratic legislators endorsed a broad health care measure, some ran on it, and all who were up for re-election won. The legislature’s endorsement of this and other measures helped force health reform as a major topic for 2007. After four years of sponsoring such legislation, Senator Kuehl has promised to re-introduce the measure in 2007, keeping the momentum alive and ensuring it is part of the conversation.

CHILDREN’S COVERAGE: The goal for universal children’s coverage inched closer to reality, as the issue was actively discussed in the legislature in the budget discussions. While it was disappointing that expanded children’s coverage was not included in the budget, and that Proposition 86–a tobacco tax that would have funded children’s coverage among many other items–was defeated by the narrowest of margins of all the initiatives, the issue is very much alive. New legislative leaders emerged on the issue, and Governor Schwarzenegger took a major step when he voiced support for covering all children, including those that are undocumented. While he opposed both a bill and a ballot measure to accomplish the goal, he has reiterated his overall support for the goal.

SAN FRANCISCO: The passage of San Francisco’s plan to provide access to care to all not only will provide real benefits to those who live and work in the city, but has implications far beyond the Bay Area. Tens of thousands of uninsured San Franciscans will get a medical home and a better ability to get needed care; Most San Franciscans will have better security in the private, employer-based coverage they benefit from now, and in a more financially sound safety-net of clinics and hospitals they they all rely on. California and the nation gets a model of how to set a standard for on-the-job health benefits, much like the minimum wage does for pay, and new spokespeople for the issue, in Mayor Gavin Newsom and Supervisor Tom Ammiano.

MOMENTUM AND A MANDATE: The top goal for health advocates this year was to keep health care in the campaign debate, and use the opportunity of the election to create a mandate for reform and action. Mission accomplished: both gubernatorial candidates pledged to take action on health reform in the first days of their new term. Governor Schwarzenegger displayed a new focus on health care, holding a health care summit in the summer, pledging to unveil a major health care plan in his 2007 State of the State, highlighting health care in campaign ads, hiring key staffers that indicate seriousness, and reconsidering previously-opposed issues that led to the signatures on the bills described above.

With the attention raised by the health reforms passed not just in San Francisco, but in other states and cities, including Massachusetts , Maryland , Illinois , Vermont , and New York City , the momentum for major reform is strong. The new Congress promises to focus more on health issues and health reform, that will both assist California efforts, which in turn can help the national debate.

Other Developments

INDIVIDUAL BURDENS: Advocates were successful in not just advancing good reform proposals through the legislative process, but also stopping bad proposals, most notably proposals for an “individual mandate.” Also stopped were efforts to use the tax code to subsidize underinsurance and high-deductible plans, through so-called Health Savings Accounts.

MEDICARE PART D: In the introduction and first year of the Medicare Part D program, California took a lead role in assisting low-income seniors and people with disabilities (the “dual-eligibles”), providing “emergency coverage of last resort” when these patients were not getting the drugs they needed. Unfortunately, legislative leaders and the Governor did not see fit to fix the ongoing problem for these dual-eligibles, the newly-imposed co-payments. The Governor did sign a bill to provide some additional oversight over Medicare Part D plans, but vetoed a bill to provide seniors with a report card to evaluate the myriad of choices before them.

KEY REGULATIONS: Medicare Part D wasn’t the only law that needed significant work in the implementation. One defeat for health and low-income advocates was the federal passage (by only a few votes) of the Deficit Reduction Act, which left advocates struggling to figure out and to mitigate the onerous documentation requirements for Medicaid patients. At the state level, the Department of Managed Health Care moved along in its consideration of key rules around cultural and linguistic access to care, as well as timely access to care. The Department of Insurance also considered both new rules on language access, and tightening up rules on medical loss ratios, so more money goes to patient care rather than administration and profit.

INTEGRITY OF INSURANCE: While health advocates won battles with the drug companies and hospitals, insurers were successful in killing a range of bills to ensure their plans provided value to consumers. In particular, AB977(Nava) and AB2281(Chan) would have provided consumer protections and oversight on high out-of-pocket costs and underinsurance. Other failed bills attemped to ensure that there were adequate providers in managed care networks, and to ensure a specific amount of a premium dollars goes to patient care. As we consider health reform in 2007, better oversight over the insurance industry will continue to be a goal.

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