Advances on the Implementation of Health Reform…

Wednesday, June 30, 2010


* Implementation of Health Reform Makes Progress in California
* Governor Signs Bills to Set Up Federally-Funded High-Risk Pools

* Assembly Health Advances Bills to Implement Medi-Cal Waiver, Set Up Exchange
* Other Bills Would Standardize Benefits, Draw Down Federal Funds for Rate Review
* Single-Payer Health Reform, SB810(Leno), Also Advances

* Report Coming Tomorrow on Today’s Key Senate Health Committee

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Yesterday was a big day in advancing health reform in California, both legislatively and adminsitratively. Major legislation on implementing and improving reform was reviewed and passed in Assembly Health Committee; a full report is below. As this is a deadline week for bills to pass policy committees, additional bills are being heard today in Senate Health Committee; a report will be forthcoming shortly.

GOVERNOR SIGNS HIGH-RISK POOL BILL: Governor Schwarzenegger signed both SB 227 (Alquist) and AB 1887 (Vilines). establishing the authority and guidelines for a new state-run, federally-funded high-risk pool, consistent with the requirements of federal health care law. Funded by $761 million dollars over the next three and a half years, the new high risk pool will provide health insurance coverage to individuals denied for pre-existing conditions. Coverage would cover at least 65% of a patient’s costs, and limits consumers’ out-of-pocket costs. To be set-up alongside the Major Risk Medicaid Insurance Program, the state’s existing high risk pool, the new high risk pool will be federally funded but run by the state in order to ensure that the needs of Californians are met by people who are familiar with California.


The Assembly Health Committee, chaired by Senator Elaine Alquist, considered and approved some expansive bills as well as some more specific ones that would enact significant reforms to the health care system.

* MEDI-CAL WAIVER: SB 208 (Steinberg) is one of two vehicles by legislative leadership for renewing and implementing a new Medicaid waiver, setting rules for the state’s Medi-Cal program for the next five year. A new waiver, negotiated between the state and federal governments, would potentially draw down federal funds for both the state’s safety-net providers and to provide access to health care for the medically indigent, seniors, and people with disabilities. The waiver is presented as a bridge between the existing Medi-Cal program and the full access expansion that will happen in 2014 as a result of federal reform.

The discussion generally addressed three basic issues with the waiver: (1) the state’s need for federal dollars, (2) expansion of access to care for low-income California through the Coverage Initiatives run by the counties, and (3) shifting seniors and people with disabilities into organized systems of care, including Medicaid managed care plans. Consumer advocates testified to the need for additional consumer protections for these patients, particularly surrounding health plans’ obligation to demonstrate “readiness” to care for the senior and people with disabilities – whether that means beefing up provider networks to insure adequate access to specialists or whether that means insuring that facilities are accessible to those with wheelchairs. Senator Steinberg agreed to continue working with advocates to work out details, and emphasized the importance of coming together with a unified voice in requesting the federal dollars in DC.

* CREATING A NEW HEALTH INSURANCE EXCHANGE: SB 900 (Alquist/Steinberg) is the Senate bill that would set up the insurance exchange as related to the federal health reform law, similar to its Assembly counterpart, AB1602(Perez). Passage of this bill this year will allow for the state to take the necessary time to set up the exchange and be ready to draw down federal subsidies in 2014. Goals of the exchange are to make it easier for consumers to access care by: (1) eliminating risk selection in the individual market, (2) facilitating seamless enrollment mechanisms and administration of subsidies, (3) providing choices between plans and products, and (4) creating an even marketplace with standardized products so that consumers can make informed decisions. Senator Alquist reiterated her strong conviction to creating an exchange that both serves as an active purchaser or rate negotiator and that it is responsive to the needs of consumers.

* STANDARDIZED BENEFITS: SB 890 (Alquist/Steinberg) makes the individual health insurance market more consumer friendly by (1) giving individuals the freedom to change plans, (2) standardizes insurance products to allow for “apples to apples” comparisons, and (3) extending requirements that insurance products cover medically necessary benefits regardless of whether they are regulated by the Department of Insurance or the Department of Managed Health Care. These regulations would ensure that individuals purchasing insurance on the individual market could make informed choices between various standardized plan designs that would cover standard medically necessary benefits. The insurance representatives argued that this bill would prohibit them from designing more affordable products – but failed to point out that their less affordable products often don’t cover the care consumers need. The bill passed on a party line vote.

* SINGLE-PAYER HEALTH REFORM: SB 810 (Leno) also moved out of Assembly Health today with the support of a packed room and overflow gallery. The bill would create a single payer health care system that would cover all California residents. It was met with significant turnout in support. One member of the Gray Panthers testified “I turn 80 this year. I’ve been working on this for 30 years. I hope you pass it.” They passed it despite objections from insurance lobbyists. SB810 is a policy bill, that would allow for the set up of the system. If the bill were signed into law, it would require separate financing.


* SB 1088 (Price) codifies the federal requirement under health reform law that health plans offering dependent coverage offer coverage to dependents up to the age of 26.

* SB 771 (Alquist) addresses, because “California’s foster children are our children too”, the needs of young adults that age out of the foster care system who either may not have parents, or may not have parents that are able to cover them as dependents under their health insurance policies. Senator Alquist reiterated the importance of providing coverage to young adults because it is often much more challenging for them to qualify for or afford insurance. Federal reform allows young adults aging out of foster care to participate in Medicaid up to the age of 26, but this provision does not go into effect until 2014. This bill would make Medicaid (Medi-Cal) available to these young adults starting January 1, 2011.

* SB 1163 (Leno) would require insurance companies to disclose their rationale for denying coverage, as well as for raising rates. It would require that insurers provide consumers with 180 days notice of rate increases to allow them adequate time to make adjustments or provisions. The bill would also allow the state to take advantage of grant funding available from the federal government for states to set up rate review processes.

* SB 1283 (Steinberg) clarifies existing law and expedites grievances and appeals to the Department of Managed Health Care, ensuring that consumer grievances are addressed in a timely manner.

Tomorrow the Senate Health Committee will meet for the last time this session – and the remainder of the health reform implementation bills will have their shot to move out of committee. Then it’s on to floor votes in August and hopefully, the governor’s desk in September.

BILL FOR READABLE DRUG LABELS STALLS: While several good consumer protection bills did advance yesterday, one bill actively supported by consumer, senior, and community of color advocates stalled yesterday. The Assembly Business and Professions Committee voted to reject AB1390 (Corbett) to require readable prescription drug labels, including 12-point font and the option for translation.

For more information, contact the author of this legislative update, Linda Leu, at For more information on how these bills related to federal health reform, read the new report, “Health Reform 3-Month Status Report: Californians Begin To See the Benefit, Much More Work To Do.” which is available on the Health Access website. A broad list of pending legislation to “implement and improve” health reform is available is also on the Health Access California website.

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