A Busy Day for Bills….

Wednesday, April 8th, 2008

* Insurers would face restrictions in cancelling coverage retroactively
* Patients would be better able to assess hospital cost and quality data
* Other bills on hospital community benefits, boutique hospitals, and others

Click Here for What’s New on the Health Access WeBlog: Balancing the Budget; Re-Examining Hillary-Care; Balance Billing; Dennis Quaid and Medical Mistakes; Prescription Drug Gifts to Doctors; PHRMA’s Revenge; Coverage Matters; Deaths Due to Uninsurance; The Health Wonk Review Spotlight; The Individual Market; Nuggets from the Medi-Cal Cuts Hearings.

The Assembly Health Committee on Tuesday approved a smattering of bills that would begin to set the foundation for health care reform, providing security to health consumers – both for their coverage and choice of provider.

Two of the bills deal with the insurer practice of retroactively canceling policies after patients become sick and need expensive treatments. These rescissions leave patients tens of thousands – if not hundreds of thousands in debt. Another bill would require medical providers to disclose cost and quality information in order to give purchasers more power in selecting the highest quality and most efficient care.


* AB1945 (De La Torre) would create an independent panel to review cases where an insurance company wishes to rescind a policy. The bill passed on a bipartisan 11-0 votes, with Republicans Alan Nakanishi and Bill Emmerson voting for the bill. In addition to an independent panel, and review by regulators for rescissions, AB1945 would establish a standardized application for consumers to fill out. De La Torre cited recent investigations by state regulators, which found violations in every single instance.“That’s not an accident,’’ he said. Insurers, he said, should not be permitted to “act as judge and jury whenever they want to rescind a policy.’’

SUPPORT: California Medical Association, Health Access, California Alliance for Retired Americans, AARP, Congress of California Seniors, CalPIRG, Consumers Union, California Teachers’ Association, California Academy of Family Physicians and Consumer Federation of California spoke in support of the bill.

INDUSTRY: Industry associations were not completely opposed to the bill, but were concerned about whether the application would give insurers enough information about a potential enrollees condition so that “they can do reasonable underwriting up front,’’ said Charles Bacchi, for the California Association of Health Plans. That means the industry wants to be able to deny for pre-existing conditions, and the questions need to elicit enough detail to do that. Others had concerns about the need for regulator approval of rescissions, and the authority given to the state to revoke the licenses of health plans. Blue Cross of California opposed the measure.

* AB2549 (Hayashi) is a related measure would limit health plans ability to cancel coverage because of a fraudulent application to six months after the application is approved. The bill passed on a party line vote, with Republicans either abstaining or opposing. The industry opined that the six-month period was too short. Current industry practice allows a period of two years for insurers to rescind because an expensive claim may not occur within the first six months – usually the trigger to review an enrollees application.

SUPPORT: Health Access, California Teachers Association, Congress of California Seniros, AARP, California Medical Association, California Academy of Family Physicians, AFSCME, California Psychological Association and Having Our Say!

OPPOSITION: Association of California Life and Health Insurance Companies, California Association of Health Plans, California Association of Health Underwriters.


Another important bill passed by Assembly Health Committee on Tuesday would require medical providers to publicly disclose price and safety information.

* AB2697 (Lieber) would create an independent panel, which would include hospitals, doctors, consumer and labor representatives to recommend a plan that would be continuously updated. The data collected would be scientifically based, consider where providers practiced (urban, rural, affluent or poor communities) and risk adjusted – to account for the fact that some physicians/hospitals would attract higher risk patients. This bill passed 11-5 on a party line vote, with Republicans opposing in spite of small business support.

SUPPORT: Along with a usual cast of consumer groups, the National Federation of Independent Businesses, Pacific Business Group on Health and Small Business California supported the measure. “We all know the challenges small businesses face. A system of comparable statistics is important to helping rectify the situation,’’ said Michael Shaw, with NFIB. Other supporters included Health Access, SEIU, AARP, CalPIRG, California Labor Federation, Consumers Union, Congress of California Seniors, Having Our Say among many others.

OPPOSE: The California Medical Association opposed saying that the state should work on the existing program, rather than create a new expensive one funded by providers. The hospitals also opposed the measure.


The following bills also passed in Assembly Health Committee on Tuesday. For a broader list of interest to health advocates and Health Access California, visit our website, at:

* AB2942 (Ma) would require all hospitals to develop and publicly a community benefit plan, just as non-profit hospitals are currently required to. The plans would need to consider and report what the community needs and levels of charity and discount care. The bill passed 11-3.

* AB2697 (Huffman) requires “boutique hospitals,’’ which tend to serve more affluent patients to assess its impact on the community health system, and whether it siphons dollars and workers from providers and hospitals that take care of sicker or less affluent populations. This bill passed 12-5.

In addition to these and other bills heard this past Tuesday, another bill, SB1633 (Kuehl), passed Senate Business and Professions Committee on Monday. SB1633 addresses the issue of credit cards for dental services. These are offered in dentists offices with little explanation to the patient of their course of treatment or the terms, and interest rates on the cards. Patients are often charged the full amount of services, even before they are rendered and some are asked to sign for the credit line while under the influence of anesthesia. This bill passed with a unanimous vote.

Bills need to pass policy committees by April 18. Health Access will continue to provide updates on actions taken in the Legislature. For more information, contact the author of this report, Hanh Kim Quach, at hquach@health-access.org.

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

Leave a Comment

%d bloggers like this: