ASSEMBLY FINISHES FIRST HALF OF SESSION

  • Lawmakers reject proposal to cap annual out-of-pocket costs on high-deductible plans
  • Republican effort to provide tax breaks for Health Savings Accounts also defeated
  • Other bills pass on prescription drugs, other issues
  • ACTION ITEM: Call Budget conferees to urge expansion of children’s coverage

The state Assembly met late into the night Wednesday to finish hearing hundreds of bills before the constitutional deadline for their passage to the state Senate. The Assembly finished their work, adjourning until next Thursday, June 8th (after the primary election), for the second half of this year’s legislative session. In session today, the Assemblymembers approved out several items of interest to health consumer advocates, but with one major exception.

FINANCIAL PROTECTIONS AGAINST HIGH OUT-OF-POCKET COSTS FAILS FOR NOW

AB2281 (Chan) died, failing to get the 41 votes needed for passage before the Assembly adjourned. The bill would have capped annual out-of-pocket costs, providing security for “underinsured” against severe medical bankruptcy.

THE VOTE: An unofficial tally at the end of session indicated a 38-36 vote, largely along party lines. While most Democrats voted for the measure, four joined Republicans in voting “no”: Assemblymembers Barbara Matthews, Nicole Parra, Gloria Negrete-McLeod, and Lois Wolk. Several other Democratic Assemblymembers abstained, dooming the bills chances, including: Juan Arambula, Ed Chavez, Juan Vargas, Ron Calderon, Rebecca Cohn, Joe Canciamilla.

THE BILL: The bill would have capped annual out-of-pocket costs at $5250 for an individual, and $10,500 for a family. Without AB2281, consumers with high-deductible health plans often are decieved that they’re coverage will kick in after they meet their deductible – sometimes as high as $5,000. But in reality, after the $5,000 deductible is met, the costs just start. Patients often must pay co-insurance and co-pays that can add up to tens of thousands of dollars. Without AB2281, there is no cap on the out-of-pocket costs that can be shifted to the individual consumer.

Insurance companies, however, had made AB2281 their top priority bill to kill. Many consumer, health, community of color, patient, labor, and other groups supported the measure.

HSAs: The debate on the Assembly floor started with an attempt by Republican Assemblymember Greg Aghazarian, who is Vice-Chair of the Assembly Health Committee, to substantially amend the bill. His amendments would have dramatically changed the bill to provide state tax breaks for Health Savings Accounts. While the amendments were defeated on a party line vote, the debate did show the stark difference on health care issues.

The Chan bill would have placed limits on new “skeleton” plans that leave many Californians underinsured, by providing some consumer protections against ongoing medical debt, that would be crushing to low and moderate income families. The Agharzarian amendments would have used state tax policy to actually encourage people to be underinsured, providing tax benefits primarily to the healthiest and wealthiest. Both approaches failed today.

DEBATE: Assemblywoman Chan opened by talking about the bill as a “modest regulation of a new product” that requires “higher consumer cost sharing,” plans that are “on sale in California with no regulation and no consistent information for consumers.”

Assemblyman Russ Bogh, an Inland-Empire Republican, mistakely said AB2281 would deny thousands of workers Health Savings Accounts because employers “wouldn’t’’ be able to buy them. “This bill would deny them of that,’’ he said. He supported HSAs, saying that it was better to “have people pay for their health care… to better control costs.”

This was refuted by Democratic Assemblywomen Goldberg and Berg, who pointed out that the bill still allowed high deductible plans and Health Savings Accounts to exist, as they do now, but simply “put a reasonable limit on how much a family would have to pay,” as Assemblywoman Berg said, to prevent medical debt and bankruptcy.

Notoriously conservative Assemblyman Ray Haynes, of Murrieta, said high-deductible plans are a good idea because “it teaches people how to take care of themselves and not have government bureaucracy do it.’’ He argued that they allow patients “to control the cost, by dealing directly with the doctor.” He opposed “foolish mandates like these” that he states would drive up the cost of health insurance and lead to more uninsured. He ended about “why this bill is so evil,” stating that it would “start us down the road to regulation of Health Savings Accounts, start us down the road to government health insurance,” and to more uninsured.

While many of the Republican opponents spoke on their preference of having “consumers and families choose, rather than government bureaucrats,” it was unclear what they were speaking about with regard to the bill. The bill would have actually required the insurers to provide consumers with more information to make better choices.

NEXT STEPS: The effort on these issues around the value and cost of health coverage is not dead. Another bill, AB977(Nava), sponsored by Health Acceszs California, would seek to create a public review of out-of-pocket costs at the Department of Managed Health Care. It is pending in June in the Senate Insurance Committee.

On a related matter, tomorrow, Thursday, June 1st, Insurance Commissioner John Garamendi is holding an investigatory hearing on “the profitability of health insurance products” in Los Angeles. It starts at 9:00am at the Ronald Reagan State Building at 300 South Spring Street, and will consider regulations setting standards for medical loss ratios for health plans.

UPDATE ON OTHER BILLS ON PRESCRIPTION DRUGS

Several bills of concern to health advocates did pass, including on the subject of prescription drugs.

  • Uninsured and underinsured Californians may see a discount drug program this year. AB2911 by Assembly Speaker Fabian Nunez and Senate Leader Don Perata passed the Assembly with little fanfare, on a (unofficial) 45-29 vote tally.
  • Assemblyman Frommer passed his bill, AB2877, which would set up a website to facilitate reimportation of safe and affordable prescription drugs from other countries.
  • Also passing was Assemblywoman Chan’s bill, AB2170, to create a consumer report card for Medicare Part D prescription drug plans.

A full report on the status of bills of interest to health advocates, and actions of the Budget Conference Committee, will be prepared by Health Access at the end of the week. For more information on any of these issues, contact Hanh Kim Quach, Policy Coordinator, at hquach@health-access.org, or 916-497-0923.

ACTION ITEM: SUPPORT EXPANDING KIDS’ COVERAGE

The six-member Budget Conference Committee, chaired by Assemblyman John Larid and Senator Wes Chesbro, is expected to wrap up reconciling the two houses’ budgets on Friday by midnight, earlier than in recent years.

The most high-profile health item is items around expanding coverage to children.

Child, faith, and health advocates are urging the Conference Committee to adopt the Assembly’s version of the children’s coverage proposal, which is more expansive than the Senate version. It includes some of the provisions in SB 437, including assistance to local Children’s Health Initiatives. For this issue, the Subcommittee specified $40 million in bridge funding so that these county efforts can cover all the uninsured children now on waiting lists. These proposals are geared toward the eventual goal of covering all California’s children. For more information, view the campaign updates of the 100 Percent Campaign website at:
http://www.100percentcampaign.org/resources/updates/index.htm

These health items are likely to be heard tomorrow, Thursday, June 1st. Please attend the hearings in Capitol Room 4202 and/or contact the six members of the conference committee. More information is available below:
http://www.senate.ca.gov/ftp/sen/committee/JOINT/BUDGET/_home1/PROFILE.HTM

For questions or more information, please contact Hanh Kim Quach, policy coordinator. 916.497-0923 x 206 or hquach@health-access.org.

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

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