HEALTH ACCESS UPDATE
Wednesday, April 15th, 2009
KEY HEALTH MEASURES PASS ASSEMBLY HEALTH COMMITTEE
* Young adults up to age 27 would qualify for coverage as dependents.
* Agents would be required to disclose compensation from health insurers.
* Private insurers would have to cover medical equipment such as wheelchairs, lifts.
* Insurers would pay higher fines for rescinding coverage after clients’ medical bills arrive.
* ALERT: Letters of Support Due for Bills Next Week on Underinsurance, Overcharging
More Updates on the Health Access WeBlog: More on Prop 1A; Leveling the Playing Field for a Public Health Insurance Option; New Studies on How Many More Californians are Uninsured; The White House Forum on Health Reform; Health Wonk Review, Yogi Berra Edition; Gender Discrimination and Maternity Coverage Bills in Play; Healthy San Francisco Upheld!; The “Trigger” Cuts; Sen. Sanders Introduced Single-Payer; Semi-Annual Status Reports Suspended.
The Assembly Health Committee on Tuesday approved a number of key health consumer protections. The measures would expand guarantees of coverage to Californians who are underinsured, uninsured or, in some cases, just plain inadequately served by their health care providers.
One of the bills would sharply increase civil fines in response to the insurer practice of retroactively canceling policies after patients become sick and need expensive treatments. Another would address a vast, and quickly expanding, demographic of the uninsured–young adults transitioning between school and careers that offer financial stability and benefits.
Yet another would require insurance brokers and employees to reveal their financial interests–such as paid commissions – in selling certain health care policies. One measure would require private providers to cover more of the costs of doctor-ordered medical equipment, something Medicaid and MediCal already do.
The following looks at these bills, all sponsored or supported by Health Access California, in more detail:
DISCLOSURE OF AGENT COMMISSIONS
* AB1521 (Jones) would require health insurance agents and other sellers of health insurance to notify consumers of the commissions they receive when they sell a client on a certain insurer’s coverage plan. The bill would also impose a duty of “honesty, good faith and fair-dealing” on the brokers and employees, in addition to the requirement to reveal their financial interests.
Assemblyman Dave Jones (D) said this would provide the transparency that consumers need to better choose a health care plan. Jones pointed to other industries, such as real estate, where agents are required to reveal such detailed financial information as commissions and fees. Supporters included Health Access California, the sponsor, as well as the California Labor Federation and other consumer and labor organizations.
Beth Capell, of Health Access California, testified that some consumers have been sold health care plans that were not in their best interest, citing the case of a woman who wanted a comprehensive plan but was sold a plan that ultimately only covered $3,000 of her $73,000 medical bill. Greater transparency would help consumers avoid such traps, consumer advocates testified, as well as provide better understanding of where premium dollars go.
Speaking in opposition were independent brokers as well as health insurance plans, including Anthem Blue Cross, Association of California Life and Health Insurance Companies, California Association of Health Plans, California Insurance Wholesalers Association, Civil Justice Association of California, Health Net, Insurance Brokers and Agents of the West, and the National Association of Insurance and Financial Advisors of California. They questioned the need for such legislation, and that there was significant competition in the industry to keep costs down.
The bill got a party line vote, with ten Democrats in support and Republicans against, with Assemblymember Nava not present and Assemblymembers Hayashi and Hall not voting. The bill advances to the Assembly Insurance Committee.
* AB730 (De La Torre) would increase from $118 to a maximum of $5,000 the civil penalty for rescinding, canceling or limiting coverage. In cases where it can be proven that the provider knew the act was illegal, but committed it anyway, the fine could rise to up to $10,000. The bill will now advance to the Assembly Judiciary Committee. According to Assemblyman Hector De La Torre, AB730 is needed because some insurance companies consider the current fines, levied by the California Department of Insurance, an affordable cost of doing business compared to paying for expensive medical care should a policy-holder need it.
Supporters included the California Department of Insurance, AIDS Healthcare Foundation, California Association of Marriage and Family Therapists, California Medical Association, California Psychological Association, Professional Fiduciary Association, and Health Access California.
* AB29 (Price) raises the age limit for dependent coverage to 26, rather than 19, the current limit for a young adult not enrolled in school. (Presently, for college students, dependent coverage may continue until age 22). The bill intends to help cover the gap in health care coverage that occurs after a young adult leaves home, but before he or she is settled into a career that allows enough stability and financial security to provide and afford health care coverage. Currently, young adults are the fastest growing large demographic segment that is uninsured or underinsured. The subscribers electing to extend this coverage to their dependents would continue to pay the premiums. The bill moves on to the Assembly Appropriations Committee.
Supporters included the American College of Obstetricians and Gynecologists, American Federation of State, County and Municipal Employees, AFL-CIO, California Commission on the Status of Women, California Medical Association, California Public Interest Research Group, and Health Access California.
Opposition came from the insurance industry, including Anthem Blue Cross, Association of California Life and Health Insurance Companies, California Association of Health Plans, Health Net, as well as the California Chamber of Commerce.
DURABLE MEDICAL EQUIPMENT
* AB214 (Chesbro) would require health plans to cover physician-ordered durable medical equipment such as wheelchairs, canes, support lifts, oxygen tanks and more, at the same level the private providers would cover medical services. Currently, such equipment is covered through Medicare and MediCal but most private plans provide no more than $2,000 toward the cost of these items, or explicitly exclude coverage altogether. Assemblyman Wes Chesbro (D) said this amounts to an unfair burden on patients and taxpayers, alike, with the public, budget-strapped sector bearing the ultimate costs of a patient’s inability to rely on DME to resume a productive life. Chesbro noted that the estimated cost to an individual to add such coverage to a health plan would be no more than $2.09. Industry opponents targeted this amount as too expensive. The measure advances to the Assembly Appropriations Committee.
Supporters included Disability Rights California (sponsor), Disability Rights Education and Defense Fund (sponsor), National Multiple Sclerosis Society – California Action Network (sponsor), AFL-CIO, and many other groups.
Opposition came from Anthem Blue Cross, Association of California Life and Health Insurance Companies, California Association of Health Plans, California Chamber of Commerce, Health Net, and others.
ALERT: Next week, the Assembly Health Committee will consider two crucial consumer protection bills sponsored by Health Access California. SUPPORT LETTERS ARE DUE TODAY, WEDNESDAY, FOR:
* AB786(Jones) to set standards for coverage, allowing for apple-to-apples comparison shopping and limiting “junk” insurance.
* AB1503(Lieu) to prevent overcharging of the uninsured and underinsured by emergency room physicians.
To have your organization included in the committee analysis, please get your organizational letters of support faxed by the end of the day Wednesday to the Assembly Health Committee, chaired by Assemblymember Dave Jones, State Capitol, Room 6005, Sacramento, CA 95814. The fax is: 916-319-2197.
Bills need to pass policy committees by April 30. Health Access will continue to provide updates on actions taken in the Legislature. For a broader list of interest to health advocates and Health Access California , check out the bill list on our website.
For more reports on legislation, visit the Health Access WeBlog, at http://www.health-access.org/blogger.html