Exchange bills pass the CA Senate…

Tuesday, August 24, 2010


* Key Bills, AB1602(Perez) and SB900(Alquist/Steinberg), Pass Tough Senate Vote

* In 2014, New Exchange Will Be One-Stop Shop for Consumers to Compare Plans, Get Affordability Subsidies & Get Quality Coverage with No Pre-Existing Conditions Denials
* Exchange Would Pool Bargaining Power of Millions of Californians to Negotiate with Insurers for Best Price & Value
* Anthem Blue Cross Opposed Bills, Including the Exchange’s Bargaining Power, and its Conflict-of-Interest Provisions

* AB1503(Lieu) Also Passes Senate, to Prevent Uninsured from Overcharging from Emergency Room Doctors
* Key Other Bills Up Later This Week, including Rate Transparency, Rate Regulation & Approval, Benefit Standards, and Affordable Access for Children with Pre-Existing Conditions

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Earlier today, the California State Senate voted to pass bills to set up a new health insurance exchange, putting California on track to be the first state in the nation to enact take this central step of implementing the new federal health reform law.

Companion bills AB 1602 (Perez), which would establish the new health insurance exchange, and SB 900 (Alquist/Steinberg), which would set up its governance, passed on party-line votes. As envisioned in the new federal law, the exchange would be the heart of health reform. In 2014, the new Exchange will be the new one-stop shop for getting health coverage for individuals and small businesses, both providing easy-to-compare choices, access to federally-funded subsidies to make coverage affordable, and the bulk purchasing power (similar to large employers or CALPERS) of millions of Californians to bargain for the best price and value.

Currently, individuals and small businesses have little market power purchasing health coverage, and are simply alone against the big insurers. In contrast, the new California exchange is projected to have as many as 4 million or more Californians who will be eligible to participate–either as individuals or as workers of small businesses who join. The exchange could grow larger in future years, as larger employers are allowed to join.

SB900 has passed both the Assembly and the Senate, and heads to the Governor’s desk. AB1602 has passed the Senate and goes to the Assembly for concurrence, before also heading to the Governor’s desk. If the Governor signs the measures, California would be the first state to enact legislation to set up an exchange since the passage of federal reform.

EMERGENCY ROOM CHARGES: In other news, the State Senate passed a key consumer protection sponsored by Health Access California, AB1503(Lieu), which limits the bills to uninsured patients from emergency room doctors. The measure is a companion to 2006 bill that prevented the practice of hospital overcharging the uninsured 2-3 times what insurers paid for the same service.

KEY VOTES COMING UP: Several other consumer protections are still pending in this final week of legislative action. Of particular note, the one that have opposition from Anthem Blue Cross of California and other insurers include:

In the Senate:
* AB2578(Jones), which would require insurers to justify their rates and submit rate hikes for approval to the Department of Insurance and Department of Managed Health Care. Click here for the HCAN-CA ALERT on this important rate regulation measure.
* AB2244(Feuer), which would, in an open enrollment period, limit premiums for children with pre-existing conditions. Starting in September, the new federal law will prohibit children for being denied for health status, and this bill improves upon the federal law by ensuring affordable access to coverage.

In the Assembly:
* SB890(Alquist) to make the individual insurance market more transparent and secure, classifying health plans in tiers (Platinum, Gold, Silver, Bronze) to allow consumers better ability to make apples-to-apples comparisons, and implement health reform with regard to prohibiting annual or lifetime limits on coverage.
* SB1163(Leno) to require insurers to provide greater transparency about their rates, their methodology, and their proof of actuarial soundness.

The deadline to pass measures is the end of August, and then the Governor will have the month of September to sign or veto measures.

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