This Week’s Hot Health Committee Action…

Thursday, April 28, 2011


* Rate Regulation, AB52(Feuer), Would Allow Regulators to Deny Unjustified Rate Hikes
* Key Bills Pass To Implement New Federal Rules and Consumer Protections in State Law
* Some Seek to Improve Eligibility and Enrollment So More Californians Get Care
* Bills Move Onto Appropriations Committee, Then Onto Floor Votes in May

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The Assembly and Senate Health Committees were live-tweeted and blogged…

SACRAMENTO–Key legislation to implement and improve upon the federal Affordable Care Act are moving forward this week, passing key Health Committees in the Assembly and Senate, respectively.

Some bills were heard in Assembly Health Committee on Tuesday; others in Senate Health Committee on Wednesday. The bills included measures to conform state law to the new federal law with regard to everything from Medi-Cal eligibility rules in 2014 to consumer protections regarding how much insurers have to spend on patient care rather than administration and profit. Several bills sought to streamline eligibility and enrollment to maximize the number of Californians who will benefit from expanded coverage. Other proposals would place new oversight on insurance companies, from rate regulation to requiring maternity coverage.

For a full list of legislation impacting health care consumers, visit our full bill list on the Health Access website. There’s also a list of bills specifically related to implementing the Affordable Care Act in California. Full reports from the commitee hearings are on our blog, at

AB52(Feuer) RATE REGULATION: The most high-profile bill was AB52(Feuer), which would give regulators the explicit ability to approve or deny rates. While supported by consumer, community, labor, and other organizations, AB52 was vigorously opposed by insurers and other parts of the health industry.

Assemblyman Feuer argued on behalf of California’s families and small businesses that are struggling under “astronomical health insurance rates that skyrocket unchecked.” Along with Insurance Commissioner Dave Jones, Feuer presented evidence that insurance companies’ rates needed the oversight that currently exists for car and homeowners insurance. Feuer and Jones pointed to the fact that while medical costs rose 3.4%, proposed health insurance rate increases went up to 80%, and insurance company profits rose 17%. Both made the strong case that regulators need the authority to step in and protect consumers in cases where proposed rates are unreasonable and are not sufficiently justified by evidence presented. Proponents also pointed to the many other states that require some form of prior approval from regulators for health insurance rate increases. They emphasized the experiences of California small businesses struggling to take care of their workforce while staying afloat and the millions of Californians who have dropped coverage as a result of prohibitive costs.

The opponents called rate regulation simply a “distraction” from the work of bringing down costs of health care. Mr. Feuer reminded the committee to measure the bill against the status quo, which is failing to make health care affordable and accessible to consumers, and that the bill is intended to be part of the solution, not to solve every problem in the health care system. Several members expressed concern that this bill (if it reduces rates) would negatively impact physician and hospital reimbursement. M r. Feuer referenced a LA Times editorial that points out “that insurers and healthcare providers have a shared incentive to raise premiums”.

After a lengthy debate, AB52 (Feuer) passed out of Assembly Health Committee with 12 votes, largely on party lines with nearly all Democrats voting for the bill, and new Democratic Assemblyman Richard Pan voting with GOP members in opposition.


AB43 (Monning) MEDICAL EXPANSION: This bill would in state law allow for the expansion of Medi-Cal, starting January 1, 2014, under the Affordable Care Act. According to federal law, adults under 133% of the federal poverty level will quality for Medi-Cal starting in 2014 regardless of whether they have dependent children. Assemblymember Monning spoke of the importance of ensuring that the state stands ready to enroll as many eligible Californians into coverage as possible on day one. This will also allow the state to begin taking full advantage of federal dollars, which will cover 100% of costs for newly eligible Medi-Cal enrollees. AB43 passed out of Assembly Health Committee and moves on to Appropriations.

SB677 (Hernandez) MEDI-CAL ELIGIBILITY: This measure would implement the changes in Medi-Cal eligibility rules in 2014. The current eligibility rules are notoriously complicated, and this bill will simplify them by eliminating the assets test and using instead the Modified Adjusted Gross Income (MAGI) test currently used for tax purposes. The old assets test was both ineffective in keeping ineligible individuals off public programs (poor people don’t have assets), and an unnecessary barrier to breaking the cycles of poverty by prohibiting low-income families from saving. SB677 passed out of Senate Health Committee on party lines.

AB714 (Atkins) PRE-ENROLLMENT: Assemblymember Atkins referred to this bill as the “conveyor belt to the front door of the Exchange”, also known as our “pre-enrollment” bill. This bill will provide notice to nearly 3 million or so Californians currently enrolled in one of the state’s existing programs such as FamilyPACT, AIM, etc., that they may become eligible for the Exchange when it goes live. It also provides for early enrollment starting in 2013. AB714 passed Assembly Health on party lines.

AB792 (Bonilla) AUTOMATIC ENROLLMENT: This bill provides for more seamless transitions between coverage in certain life situations that have traditionally resulted in temporary if not extended uninsurance. Prior to 2014 the bill would require employers to provide information about the Exchange to terminated employees as they would provide COBRA notices; it requires other state agencies to provide this information when individuals file for divorce, unemployment, adoption, and other life changes. After 2014, the bill creates a culture of coverage by enrolling individuals in these situations into the Exchange (unless they decline coverage) by default rather than letting them go without insurance unless they take proactive action. AB792 also passed out of Assembly Health on party lines.


SB155 (Evans) MATERNITY COVERAGE: The bill would require maternity care in health plans, something that will be required in health plans under the federal law in 2014. (Other mandate bills were held in Senate Health, awaiting federal guidance on an essential minimum benefits standard. Senator Evans said that it was becoming more difficult for women to find health plans that cover maternity care in the individual market, citing a sharp downward trend in the plans that offer these services, which have dropped from 82% in 2004 to 19% last year and 12% this year. Witnesses testified about the importance of early maternity services early in pregnancy and the impact that prenatal care can have on child health and delivery outcomes. SB155 passed out of Senate Health Committee with some bipartisan support.

SB51 (Alquist) MEDICAL LOSS RATIO: Part of the implementation of the Affordable Care Act, this bill puts into California law the federal “Medical Loss Ratio” requirements, to ensure dollars go to patient care, rather than administration or profit. The ACA requires that insurers spend 80% of premium dollars on health care in the small group and individual market plans, and 85% of premium dollars on providing care in the large group market, it further requires that insurers that do not meet Medical Loss Ratios provide annual refunds to customers. SB51 passed out of the Senate Health Committee on party lines.

AB151 (Monning) GUARANTEED ISSUE FOR MEDIGAP: This measure would protects seniors from unintended consequences of changes in Medicare. The bill provides guaranteed issue for seniors who wish to transition from Medicare Advantage plans to Medi-Gap plans. AB151 garnered some bipartisan support and moves forward as well.

SB222 (Alquist) PUBLIC HEALTH PLANS JOINT VENTURES: A reincarnation of SB52(Alquist) last year. The bill would allow local health plan initiatives and county organized health systems to form joint ventures. These entities could form joint ventures to broaden their networks so that their local coverage programs could become regional public health insurance options. SB222 passed out of Senate Health Committee with some bipartisan support.

Contact the author of this update, Linda Leu at Health Access (, for more information on these bills or for a list of health reform related bills.

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

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