The California Assembly passed AB 1130 by Assemblymember Jim Wood, to implement a new statewide Office of Health Care Affordability, a bold effort to address the rising cost of health care.
We’ve known for a long time that it’s the price of health care that’s the problem, not that people use more care. The inflated cost of care is taking a bigger and bigger bite out of workers’ wages and family finances, actually forcing many people to skip or ration their care.
We cannot make health care more affordable for Californians unless we tackle the underlying cost of care, which would be the mission of this new Office of Health Care Affordability.
The price of health care in the United States is higher, for almost all services, than in other developed nations, but does not correlate to better care. In California, health insurance premiums for employer coverage increased by 249% between 2002 and 2017, six times the rate of general inflation. If costs were to continue to grow just at the rate of general economic growth, Californians could save billions of dollars every year.
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. According to a recent California Health Care Foundation poll, more than half of California families delayed or skipped care due to cost and nearly half of those who postponed care said it made their conditions worse.
The new Office of Health Care Affordability would monitor cost trends and data for a range of health care spending such as health insurance premiums, hospital care, physician care, and prescription drugs, recognizing the role that they all play together, rather than singling out any one part of the industry. It would use that data to look at the real-world costs experienced across our health care system, and use that data to set targets for these health sectors. The Office would provide strategies and flexibility to health stakeholders to meet these targets, but costs could not exceed targets without penalty or explanation. The Office would also set goals for quality and equity.
Californians are facing an affordability crisis on many fronts, but crushing increases in health care costs are at the top of the list, particularly during a pandemic.
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.
The establishment of an Office of Health Care Affordability has the support of a broad range of organizations, including consumer, labor, business, and health industry stakeholders. It is also included in Governor Newsom’s 2021-22 budget proposal, and in the joint legislative budget proposal.
- Office of Health Care Affordability Factsheets:
- California Health Reform Initiative: A New State Government Entity to Address Health Care Costs and Affordability
- California Health Care Foundation: Aligning Health Cost Growth with Economic Growth Would Save Californians Billions
- UC Berkeley Labor Center: Proposed Office of Health Care Affordability: An important step towards addressing the health care cost problem for California workers