Some “high risk” reforms…

Our new Health Access colleague, Cynthia Craft, reports from today’s Senate Health Committee, which passed some key health measures today. Of particular note was two bills to assist those who are denied for “pre-existing conditions,” and thus cannot get health insurance at any price:

SB 227, Alquist (D), would launch an overdue overhaul of the state’s 20-year-old health insurance program of last resort for Californians deemed by insurance companies to be too sick to enroll. Of two measures on the topic in the Senate Health Committee Wednesday, SB227 had a greater reach, offering more opportunities to extend coverage to the so-called “high-risk” individuals whom health plans blacklist as “medically uninsurable.”

The bill would update the state’s “high-risk” pool for those who are denied private coverage, called the Major Risk Medical Insurance Program (MRMIP), so it would have no annual benefit cap, and raises the program’s lifetime benefit cap to $1 million or more – from the currently inadequate $75,000 cap. (The removal of the cap allows California to be eligible for federal funds it would otherwide not be.) The money from a relatively minor insurer assessment–a version which is in place in over two dozen states–would also expand the program to benefit many more people with pre-existing conditions. Presently, the program can insure only 7,100 statewide, while the true need in California is estimated as high as 790,000, Alquist testified. “So long as we allow health plans to reject people, we need to offer them an alternative,” Alquist told the committee. Speaking in support of the bill were representatives from the Congress of California Seniors and Health Access California. The California Labor Federation raised concerns in opposition not to the program, but to the funding source. The concern is that an assessment on health plans would be passed on in higher premiums, even for group coverage which do not exclude sick people, and so are already doing their share. Committee members urged Alquist to work with organized labor to address the federation’s concerns, and she expressed a willingness to do so. SB 227 advanced to the Senate Appropriations Committee.

In SB 57, Aanestad (R), Republican Sam Aanestad proposes different changes to the state’s Major Risk Medical Insurance Program, including increasing deductible and maximum out-of-pocket expenses; requiring an option to purchase a health benefit plan with a health savings account; and requiring three declinations in the private market or proof of a qualified medically uninsurable condition in order to qualify. Speaking in opposition to the bill was Health Access California, which stated that additional deductibles and cost-sharing was particularly inappropriate for a population needing care, and said that the proposed cap of 10,000 people was not acceptable, considering that “hundreds of thousands” of California have been denied coverage and are likely in need of this program. The measure stalled in Committee.

If you think you will ever be in a position where you are seeking to buy health coverage but are denied for so-called “pre-existing conditions,” then these debates over MRMIP are important. It’s frankly a band-aid for a much more systemic problem with the individual insurance market, one that hopefully will be given a broader fix within comprehensive health reform. But until then, California consumers need a place to go.

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