Senate Health Committee Passes Final Health Reform Implementation Bills

Thursday, July 1, 2010


* Implementation of Health Reform Makes Progress in California
* On Last Policy Hearing of Year, Senate Health Advances Bills to Implement Medi-Cal Waiver, Set Up Exchange, Draw Down Federal Funds, Freeze Rates, and Implement Other Reform Provisions

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This week was the last opportunity to get bills out of health committees this session, which led to a marathon meeting of the Senate Health Committee with over 30 bills to be considered. Fortunately, key bills to implement and improve health reform and some other important ones all made it through.

The bills now go to Senate Appropriations Committee, and need to pass out of the full Senate and legislature by the end of August, in order to be considered by Governor Schwarzenegger for signature or veto.

* MEDI-CAL WAIVER: AB 342 (Perez) is the Assembly vehicle for implementing the “Section 1115” Medicaid Waiver, currently being negotiated between the state and federal government. Senator Alquist allowed short testimony of a broader range of consumer advocates and stakeholders than is normally allowed, as most conveyed the importance of the waiver but still needed to present specific issues to be considered in the amending and refining of the bill language. Areas of concern, as discussed in Assembly Health Committee yesterday, remain bringing in adequate federal funding for safety-net health providers, and the need for consumer protections for seniors and people with disabilities being mandatorily shifted to Medicaid managed care plans. Protections that were sought included ensuring (1) network adequacy, (2) accessibility to seniors and people with disabilities, (3) access to specialists, and (4) in-person assessments. The author (represented by Assemblymember Monning, chair of the Assembly Health Committee) and committee agreed to continue working with advocates to ensure these concerns are addressed.

* EXCHANGE: AB 1602 (Perez) is the Assembly bill that would establish the insurance exchange in California, the centerpiece of health reform that would represent a new way for individuals and small businesses to buy health coverage. The discussion was similar to the one that the Assembly committee engaged in yesterday over SB 227. Consumer advocates supported provisions that would allow the exchange to negotiate on behalf of purchasers for the best price and value; that would institute conflict-of-interest provisions regarding the governance of the exchange; and that would include other consumer-friendly policies. This bill, still in progress as many sought additional amendments, passed along party lines.

* OMBUDSPERSON: AB 2787 (Monning) creates an important protection for consumers by establishing an Office of the California Health Ombudsman as a go-to place for consumers–who will largely be mandated to have insurance coverage by 2014–to address grievances and complaints as well as to access consumer information. The bill would allow the state to draw down federal funds available under haelth reform for this purpose. The current consumer assistance system is a fragmented combination of public and private entities, and the new entity would serve as a cohesive and accessible hub for consumer concerns. At the end of the hearing, Senator Romero requested that the term “Ombudsman” be changed to “Ombudsperson”.

* RATE HIKE MORATORIUM: Assemblymember De La Torre presented 3 bills that reform the insurance market. AB 591 (De La Torre) provides protections to consumers by first imposing a moratorium on rate increases above the average increase in the medical care component of the consumer price index, that allow such increases if plans apply to DMHC or CDI to justify such increases, and lastly, prohibits insurers from raising rates more than once per 12-month period. Industry representatives argued that the consumer price index and cost of providing care was only part of the determination of rate increases, to which Assemblymember De La Torre quoted the CEO of Anthem Blue Cross who testified before Congress that the reason insurers needed to raise rates was precisely because of increased medical care costs and the increase in the CPI.

* GRACE PERIOD: AB 2110 (De La Torre) mandates that insurers allow a 50 day grace period before cancelling coverage for failure to pay premiums. Kaiser Permanente’s current policy is to allow for a 50 day grace period, while other insurers policies range from 10 to 30 days. Assemblymember De La Torre emphasized the importance of keeping people covered, and noted that the repercussions for cancelling coverage can be dire – since some individuals who lose coverage may need to pay exponentially higher rates to get it back, while some are never able to buy insurance again, denied for pre-existing conditions. Senator Leno said he was unable to sympathize with the concerns of insurers given the fact that they continue to rake in record profits in the current economy. Senator Romero even asked the opposition to reconsider their position, calling this a modest measure in these economic times.

* NO COST-SHARING FOR PREVENTATIVE SERVICES: AB 2345 (De La Torre) enacts the provisions of the federal health reform law which prohibits insurers from imposing cost-sharing of any type (premiums, co-pays, deductibles) for preventive services. Removing barriers to preventive services is a key component of federal health care reform as it begins to change the way individuals use health care and the way we spend out health care dollars. In addition to foster a healthier population, investing in prevention can reduce the amount of health care dollars spent on treating more serious and more expensive health conditions.

* COMMUNITY TRANSFORMATION GRANTS: AB 2287 (Monning) would, as Assemblymember Monning described it, begin to fulfill his vision of transforming our health care system from its current “broken bodies” focus to a system that centers on health and wellness. The bill would direct appropriate departments to take full advantage of any opportunities to apply for Community Transformation Grants available as part of the federal health reform law.

* PROMOTORES: AB 2354 (Manuel Perez) directs the Department of Public Health to assess grants available through federal health reform law that might support “promotores” or community health worker programs. The “Promotores” model has demonstrated success in using community based health workers to improve health outcomes in a manner that is accessible and culturally and linguistically appropriate. The bill would also require additional evaluation of the efficacy of these programs.

* EVERY WOMAN COUNTS: AB 1640 (Evans) would restore eligibility requirements for the Every Woman Counts Breast and Cervical Cancer detection programs to those prior to cuts made in December 2009. This would allow women in their 40s, who are also at risk for cancer, to be included in the program. Assemblywoman Evans argued that early detection is critical both because early treatment has better outcomes and can be as much as ten times less expensive than treatment at later stages.

The health reform implementation and improvement bills cleared an important hurdle today. As promising was the sheer number of prevention focused bills considered by the committee. The vision that Assemblymember Monning spoke of today, of a world in which our health care system focuses on health and not sickness, is one that many of us share, and one that we have an opportunity to begin to realize through the federal law and those that we are able to enact here in California.

For more information, contact the author of this legislative update, Linda Leu, at For more information on the 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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