Steps forward…

Wednesday, April 25, 2007


* Speaker’s bill (AB8) on health reform expands coverage, set rules on insurers, etc.
* Other bills: Health plans would need to follow stricter rules before rescinding coverage
* Roundup of other bills of interest to health advocates

New on the Health Access Weblog: Blog Update, Gov’s Proposal, Medicaid Grades

With one week left before bills need to be out of policy committees, the Assembly Health Committee was a flurry of activity on Tuesday. Of highest interest to many health advocates was AB8 (Nunez), getting its first legislative hearing this year.

While AB8 was heard for the first time Tuesday, it’s not on the only health reform proposal on the table. Gov. Arnold Schwarzenegger started the year by unveiling his proposal and a declaration that 2007 would be the “Year of Health Reform.’’ Last week, the Senate Health Committee passed SB840 (Kuehl), which would create a universal single-payer health system in California, which has been vetted for the last five years. Senate President Pro Tem Don Perata will have to present his health reform measure today at 1:30 in the Senate Health Committee.

AB8 (Nunez)

AB8 passed on a 10-5 votes (unofficial tally). Assembly Speaker Fabian Nunez started by saying “there is no greater state interest or urgency this year than strengthening our fragile health care system.” He characterized the bill as a “very broad approach to reforming our broken health care system.” He admitted that his bill “is not the finished product’’ but said it was thoughtful and sound and urged fellow lawmakers to work with him on improving the measure. “This year we have a rare opportunity. A chance to act. I don’t think that we can miss this opportunity,’’ Nunez said. “This system is going to fall on us if we don’t fix it.’’

Speaker Nunez had several Assembly Democrats present on different parts of the bill.

* Assemblywoman Karen Bass talked about expanding and simplifying public programs:
* Increasing eligibility for public programs such as Healthy Families and Medi-Cal, for children, as well as many parents;
* Creating a premium assistance program for low-income families;
* Streamlining enrollment in these programs, including elimination of the asset test in Medi-Cal;

* Assemblyman Hector De La Torre described the insurance market reforms, including new rules for government and insurers:
* Imposing rules on health insurers so that relatively minor ailments are no longer grounds for denying coverage;
* Extending protections in the small group market to the mid-size insurers;
* Requiring insurers to dedicate at least 85 cents on every premium dollar toward patient care, rather than administration and profit;

* Assemblyman Ed Hernandez talked personally, from his experience as a optometrist dealing with patients who had diabetes, about the focus on prevention. This includes the creation of uniform benefit standards that include preventative care and disease management.

* Assemblyman Kevin de Leon presented on cost containment issues, such as:
* The use of Section 125 plans to allow health premiums to be paid for with pre-tax dollars;
* The creation of the state purchasing pool to bargain rates, as well the creation of uniform benefit plans to allow for better price comparison by health purchasers;
* Promoting health information technology;
* The savings yielded by covering the uninsured, reducing the estimated 10% cost shift.

* Speaker Nunez finished on the financial aspects, including the drawing down of new federal funds, and issues of employer and employee responsibility. That includes the option for businesses to contribute money toward coverage or pay a fee. (The exact level of the fee was unspecified, as the modeling of the proposal is continuing).

Read full text of the bill here.

Assemblyman Nakanishi, Republican vice-chair of the committee, started off the discussion by saying that while they agreed with the concern, the Republicans were “vehemently against the approach” of the bill.

Assemblyman Bob Huff, R-Diamond Bar, said he did not believe Nunez was approaching the problem correctly and “stifling choice.’’He said the health care system “is not broken. People come here from countries with socialized medicine for cutting edge treatments.’’ The problem, he said, “”It’s not an equally distributed health care system.’’ Huff said he believed that Nunez’ attempts to fix the system would “kill the baby while trying to save it.’’ Rather, Huff is supportive of the Assembly Republican assortment of health care legislation that focuses on “increased choice’’ that allows for “incentive- and market-based’’ reforms.

Assemblywoman Audra Strickland, R-Thousand Oaks, took issue with the part of Nunez’ proposal that would eliminate the Medi-Cal asset test. “We are opening our doors to the world…offering “Cadillac Coverage” to anyone who sets foot here,’’ she said. She also said she believed that taking away insurers’ ability to discriminate against people who had illnesses – major or minor – was a losing proposition, “increasingi premiums and deductibles’’ in other states. Nunez clarified that his bill would create a high-risk pool for consumers who had more serious illnesses, but that his bill simply prevented insurance companies from denying policies for ailments such as bunions or ear infections. “I believe the healthcare insurance industry has got to step up to the table,’’ he said.

Assemblyman Ted Gaines, R-Roseville, said he resisted the mandates in the bill, and would argue to even remove the mandates in the current law. “Maybe you don’t need ‘bells and whistles’ on a catastrophic health policy,’’ he said.

A handful of groups, such as the 100% Campaign of Children Now, Children’s Defense Fund, and Children’s Partnership, as well as the NAACP and PICO California, supported the measure outright. Many expressed general support but had suggested amendments including the California Labor Federation, California Medical Association, Health Access California, Consumers Union, SEIU, Teamsters, AARP, AFSCME, California Association of Public Hospitals, California Federation of Teachers, CALPIRG, Congress of California Seniors, Jericho, said they would support the measure if amended. Also in the same position of seeking amendments was the California Association of Health Underwriters, Kaiser Permanente and Blue Shield, the latter saying that the bill “does not go easy on health plans,” and while they have concerns, they recognize they need to be part of the “shared responsibility.”

See Health Access California’s position letter on AB8 here.



The%20bill%20comes%20about%20after%20several%20high%20profile%20cases%20in%20which%20Blue%20Cross%20Ca.%20rescinded%20coverage%20–%20retroactively%20–%20from%20policyholders%20after%20expensive%20claims%20were%20made.%20Consumers%20were%20left%20with%20hundreds%20of%20thousands%20of%20dollars%20in%20bills%20after%20Blue%20Cross%20refused%20to%20pay%20the%20bills%20incurred%20during%20the%20time%20patients%20believed%20they%20were%20insured.  %20Blue%20Cross%20alleges%20that%20the%20patients%20knowingly%20lied%20about%20their%20health%20status%20on%20their%20applications%20for%20coverage,%20triggering%20the%20cancellation.%20

Since%20then,%20policyholders%20filed%20hundreds%20of%20lawsuits%20against%20Blue%20Cross.%20Physicians%20and%20hospitals%20have%20also%20joined%20with%20consumers. %20






•   %20AB1%20(Laird)%20PASSED.%20Would%20allow%20children%20in%20families%20up%20to%20300%%20of%20poverty%20to%20enroll%20in%20Healthy%20Families.%20This%20bill%20is%20similar%20to%20AB772%20(Chan),%20which%20was%20vetoed%20by%20Gov.%20Schwarzenegger%20in%202005. %20(Health%20Access%20position:%20Support)%20
•   %20AB1468%20(Garrick)%20FAILED.%20Would%20require%20hospitals%20to%20collect%20and%20report%20information%20on%20how%20much%20care%20they%20provide%20to%20uninsured%20patients%20–%20particularly%20undocumented%20immigrants%20–%20and%20how%20much%20of%20that%20care%20is%20uncompensated.%20(Health%20Access%20position:%20Oppose)%20
•   %20AB1312%20(Emmerson)%20SUPPORT. %20Would%20increase%20Medi-Cal%20reimbursement%20rates%20to%20near%20Medicare%20levels. %20(Health%20Access%20position:%20Support)%20
•   %20AB1572%20(DeVore)%20FAILED.%20Would%20require%20conversion%20foundations%20that%20administer%20grants%20to%20spend%2090%20percent%20of%20those%20dollars%20providing%20direct%20medical%20services.%20(Health%20Access%20position:%20Oppose)
•   %20AB1072%20(Gaines)%20PASSED.%20Would%20create%20the%20California%20Health%20Insurance%20Exchange%20within%20MRMIB%20that%20would%20“” face=”Arial”>here

Opponents included the business groups largely opposed to the employer mandate, with the Chamber of Commerce and others citing their concern about health costs rising higher than the rate of inflation. The California Restaurant Association testified that there was “much to applaud” in the measure, but was concerned about the mandate on “labor intensive, low-margin businesses.” Other opponents included the National Federation of Independent Businesses, California Manufacturers Association, and the Automotive Business Association. The California Nurses Association also opposed, saying “health insurance isn’t health care,” suggesting amendments to only expand coverage to children, as a “bridge” to SB840.

Nunez responded to the various questions by Republican Assemblymembers, arguing that his proposal “expands access to health care, improves quality of health care… and provides the opportunity to put a hold on the cost of health care.”


In a victory for consumers Tuesday, the Health Committee also passed AB1324 (De La Torre), which re-states and re-emphasizes California’s law prohibiting health insurers for canceling coverage consumers if they turn out to be sick.

The bill comes about after several high profile cases in which several insurers such as Blue Cross of California rescinded coverage – retroactively – from policyholders after expensive claims were made. Consumers were left with hundreds of thousands of dollars in bills after the insurer refused to pay the bills incurred during the time patients believed they were insured. Blue Cross alleges that the patients knowingly lied about their health status on their applications for coverage, triggering the cancellation. Since then, policyholders filed hundreds of lawsuits against Blue Cross. Physicians and hospitals have also joined with consumers.

Insurers opposed AB1324, but attacked it on unrelated issues regarding the bill’s overall scope. For instance, the California Association of Health Plans, said they were concerned insurers would have to continue to cover patients even if premium payments had not been made for the patient.

De La Torre reiterated several times that the bill would not force health plans to pay for consumers that weren’t paying their premiums. It only addressed the narrow issue of health plans canceling coverage when it turned out consumers needed coverage.


* AB1 (Laird) PASSED. Would allow children in families up to 300% of poverty to enroll in Healthy Families. This bill is similar to AB772 (Chan), which was vetoed by Gov. Schwarzenegger in 2005. (Health Access position: Support)

Several bills that were part of the Assembly Republican health package were considered as well:

* AB1468 (Garrick) FAILED. Would require hospitals to collect and report information on how much care they provide to uninsured patients – particularly undocumented immigrants – and how much of that care is uncompensated. (Health Access position: Oppose)
* AB1312 (Emmerson) SUPPORT.
Would increase Medi-Cal reimbursement rates to near Medicare levels. (Health Access position: Support)
* AB1572 (DeVore) FAILED.
Would require conversion foundations that administer grants to spend 90 percent of those dollars providing direct medical services.
* AB1072 (Gaines) PASSED. Would create the California Health Insurance Exchange within MRMIB that would “facilitate” the purchase of health insurance.

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

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