CA Assembly Health Committee Passes AB 1130 to Contain Inflated Health Care Costs

On April 6th, the California Assembly Health Committee passed AB 1130 by Assemblymember Jim Wood on a 12-0 bipartisan vote. The bill will implement a statewide Office of Health Care Affordability, a new effort to address the rising cost of health care. As Californians face an affordability crisis on many fronts, the proposed Office is a bold, far-reaching effort to address inflated health care costs that are taking a bigger and bigger bite out of workers’ wages and family finances, forcing many people to skip or ration their care. This Office would put in place a comprehensive strategy to contain health care costs, setting targets for affordability with accountability, and drive innovation in payment and delivery of care while still prioritizing quality and equity.

Crushing increases in health care costs are at the top of mind of consumers, particularly during a pandemic. While California has made enormous progress in extending health care coverage to millions of people in our state, the spiraling cost of care is still a huge obstacle to consumers, even when they have insurance coverage. Californians rank health care affordability as a top priority, with 84% calling it “extremely” or “very” important, according to a poll by the California Health Care Foundation (CHCF). The worry Californians experience about costs has direct implications for their care. The same survey reported that more than half of adults skipped or postponed care because of the cost, and 42% felt the consequences in worse health outcomes.

As consumers, workers, and taxpayers, we are paying more and getting less—less care and less health. When we can’t afford health care, it’s not just our pocketbooks that are at stake, it’s our lives.

The high cost of care in America – and in California – does not correlate to better care. The price of health care in the United States is higher, for almost all services, than in other developed nations. In California, health insurance premiums for employer coverage  increased by 249% between 2002 and 2017, six times the rate of general inflation. Americans get less care than those in many other wealthy countries, including fewer doctor visits and health outcomes in terms of illnesses, health status, and life expectancy are no better in the U.S., and on some measures, are even worse than other wealthy nations.

An Office of Health Care Affordability addresses many of the market failures that have led to this situation, including unchecked cost growth and consolidation. It will set real goals for health care cost containment across our health care system, providing strategies and flexibility to the health stakeholders to meet these targets, and accountability if they don’t. AB 1130 is complementary to a companion effort by Governor Newsom in the California state budget. Both have the support of a broad range of organizations, including consumer, labor, business, and health care stakeholders.

This Office does not single out any one part of the industry, but instead recognizes the role that hospitals, health plans, medical groups, and other parts of the health system play together in finding the best solution to preventing higher costs.
We can’t meet goals that aren’t set, with an Office of Health Care Affordability in place, we can track health costs across the industry, set enforceable targets, provide accountability, and better ensure quality, access, and equity goals are met.

Ultimately, we hope to have savings returned to consumers who are facing these crushing health costs.

Learn More

VIEW THE FILE Affordability
Cost Containment
Legislation

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