As the Governor and the Legislative leadership negotiate, let’s step back and take a look at what is in AB8(Nunez), and how it might change under the Governor’s leadership.
AB8 would cover 70% of the uninsured, 3.2 million of the 4.9 million Californians uninsured at any point in time, through expansions of group coverage, through employers and public programs. (About 6.5 million Californians are uninsured at some in the year: about 4.9 million at any point in time.)
If the bill is accompanied by a successful hospital provider fee, we can cover 80% of the uninsured, FOUR million of the 4.9 million uninsured, by expanding Medi-Cal to cover 600,000 very poor adults without children at home (“childless adults below 100%FPL).If the bill includes the hospital provider fee, we can cover 97.5% of Californians.
The framework of the bill would:
· Create a statewide purchasing pool initially for employees and dependents of employers that choose to use the purchasing pool. A new, affordable option for employers to cover their entire workforce, the purchasing pool would cover an estimated three to four million people.
· Establish a minimum employer contribution to spend 7.5% of payroll on health benefits, either by paying into the purchasing pool or by expending the funds on health insurance or other health benefits.
· Expand Medi-Cal and Healthy Families to cover all children, regardless of immigration status, up to 300%FPL and parents who are citizens/legal residents also up to 300%FPL.
· Reform the individual insurance market so that coverage is available to anyone who wishes to purchases, by limiting insurers ability to deny people based on “pre-existing conditions,” and providing better funding coverage for those that are denied.
· Bring in new federal dollars to California’s health system, through these expansions of public programs and employer contributions.
· Offer workers tax savings, by providing the ability to pay premiums, or share-of-premiums, with pre-tax dollars, for a savings of 15-40%.
· Place other rules and oversight on insurers, including limiting the percentage of premium dollars that go to administration and profit, rather than patient care.
· Provide modest reforms of job-based coverage to make it more accessible and affordable for small and medium-size employers.
· Encourage use of health information technology and disease management.
AB8 is a majority vote bill, but with multiple funding sources, including the minimum employer contribution; required worker contributions; reinvested state savings; new federal Medicaid matching dollars, and use of Section 125 federal and state tax breaks.
· Affordability for Consumers
o Clearer standards/limits on affordability in the pool
§ Out-of-pocket costs
§ Other than broad guidelines, the bill is silent on exactly what people would be expected to pay in the pool to get coverage, or what the deductibles or out-of-pocket costs would be.
o Exemptions to take-up requirement
§ AB8 requires workers to take up coverage offered at work, with exemptions for those with other group coverage (for example, through a spouse), and those under 300% of the federal poverty level who would have to pay more then 5% of premium.
§ Exemptions should be included out-of-pocket cost impact, and also include middle-income families
· Cost Containment
o Better transparency and data on cost and quality
o Prescription drug bulk purchasing
o A public insurer option in addition to the purchasing pool: it would be a publicly operated insurance plan that would build on the various county-based plans that currently offer Medi-Cal and Healthy Families and that have pioneered universal kids coverage.