HEALTH ACCESS UPDATE

Tuesday, June 22nd, 2004

UNIVERSAL COVERAGE BILL PASSES ASSEMBLY HEALTH COMMITTEE

– Prescription Drugs Bills Advance Through Committees

– Update on Consumers Protections for Uninsured Patients

– Supreme Court Decision on Managed Care Lawsuits

In a boost to the goal of quality, affordable health care for all, SB 921 (Kuehl), a groundbreaking bill to establish a universal single-payer health system in California, was passed in Assembly Health Committee Tuesday. Having passed the full Senate last year, this new vote raises the profile of this comprehensive health reform solution. The vote was not a given: When Senator Sheila Kuehl decided to schedule the bill in this committee a few weeks ago, she did not know if she would get the votes.

SUPPORT TESTIMONY: Senator Kuehl opened her testimony by stating how “very proud” she was to author SB 921. After describing the “perfect storm” crisis in health care, she described that the bill “imagines a system that provides high quality, affordable health care for all.” Her stated emphatically that “this bill is possible,” pointing to Medicare and the Veterans Administration.

Dr. L. Paul Smith, who practiced and taught at McGill University in Canada and now is a member of AARP California, followed on that point, stating that “America is no stranger to single-payer health plans.” He mentioned key benefits of such a plan, including universality, comprehensiveness, and consolidated administration, leading to cost effectiveness. Dr. Bill Durston, a Sacramento emergency room doctor also with significant credentials, talked of his personal experiences, both with uninsured and underinsured patients. He also highlighted the significant administrative hassles of the current system.

Dozens of organizations came forward to declare their support, as Senator Kuehl joked, half in fun and full in earnest, “I apologize that there are over 500 organizations in support of this bill.” When closing on the bill, she again stated how she had “never seen anything” like the support SB921 has, and simply said that this the bill “is in the interest of California.”

OPPOSITION TESTIMONY: Opposition witnesses used several arguments. The Chamber of Commerce representative stated “we do not support the concept of universal health coverage.” The Chamber stated their belief that the bill would entail “significant costs” beyond what Californians currently spend, but did not produce research to back up that argument. She referred to the recent Oregon ballot initiatives for a single-payer plan, where 79% of the state voted no. She claimed that SB 921 does “nothing to address the underlying cost of health care.”

A representative of health plans challenged the belief that “in order to get to universal coverage, you must junk the concept of private competition.” He argued that we all rely on vital services, such as “food, clothing, and housing,” which are “delivered best by a private, competitive approach.” Finally, he cited that this was a “danger” in thinking there were “easy options” to the health care crisis, and that instead, there are “very difficult tradeoffs.”

Other business associations railed against “government-run health care,” and instead argued for health savings accounts and association health plans. Representations of manufacturers pointed out that the bill removes employers from the “control and cost of utilization of health care,” and the employer would be stuck with “whatever bill that the state sent them.” Health underwriters noted that the United States spends more than most countries with single-payer systems, and “what services will be rationed to reduce our costs?”

LEGISLATOR COMMENTS: Assemblyman Frommer raised concerns that there were “no limits on revenues collected,” “no controls on costs,” and “a Cadillac benefits package.” He also questioned the timing, with the upcoming referendum to repeal SB 2, the Health Insurance Act passed last year. Senator Kuehl responded that she was a co-author of SB 2 and strongly supported its passage and will work to defend it this fall, and that there is no contradiction to support both.

Assemblywoman Goldberg referred to her experiences in Los Angeles with a health system that is unraveling: “If we don’t do something, nobody will have health care.” Assemblyman Dymally supported the bill and urged the people to challenge the monied interests.

Assemblyman Richman stated that he supports “universal coverage” but does not support a single-payer system, and does not believe the terms are interchangeable. He raised concerns about “no limits what the income tax would be, the payroll tax,” etc. He cited provider rate reimbursement concerns, citing the low reimbursement in Medi-Cal, another “government run” health insurer. Senator Kuehl responded that she was not surprised that a program directed at the poor is “nickel and dimed,” and the bill seeks to insulate the health plan from the political concerns of the Governor and legislature.

Assemblywoman Wolk stated she would support the bill to “move it forward,” but had concerns about it being “not cooked,” especially with the lack of clarity on the revenues to fund the system, and the potential legal challenges. Having lived in other countries, she also has expressed concerns about “the choices and limitations that others live with that would not be put up with here” in America. Finally, Assemblywoman Rebecca Cohn, Chair of the Assembly Health Committee, gave her support, “since everybody has a body,” and each body eventually breaks down.

NEXT STEPS: The bill will not move forward this year. Senator Kuehl will continue to work to develop the revenue package to fund the health system, based in part on economic studies are in the works. This will be a challenge: while the tax system to fund this universal health plan would replace the billions Californians currently spend in premiums, deductibles, and other costs, it still would be considered a tax increase and thus need a two-thirds vote. Yet Senator Kuehl has committed to reintroduce this bill next year, and the organizing and advocacy from this session has created a strong base of support to move forward.

Assemblymembers Cohn, Goldberg, Lieber, Nakano, Wolk, Dymally, Koretz, Montanez, Ridley-Thomas, and Salinas voted for the bill. All Republican Assemblymembers voted against. Assemblymembers Frommer, Chavez, and Negrete-McLeod did not vote.

PRESCRIPTION DRUGS BILLS MOVE FORWARD

The “OuRx Bill of Rights,” a package of over a dozen bills and resolutions to help increase access to and reduce the cost of prescription drugs was successfully released out of a series of policy committees in the last week. The policy committees in the second house have often been a sticking point, and this the farthest that bills on these topics have moved forward in the legislative process.

The bills include, SB 1144 (Burton), SB 1149 (Ortiz), SB 1333 (Perata), and SB 1765 (Sher), all moving through the Assembly, as well as AB1957 (Frommer), AB1959 (Chu), AB1960 (Pavley), and AB2326 (Corbett), all moving through the Senate. A large coalition of senior, consumer, labor, and health care organizations are in support of this “OuRx Bill of Rights” legislative package.

CONSUMER PROTECTIONS FOR HOSPITAL PATIENTS ADVANCE

Last Tuesday, the Assembly Health Committee again supported legislation, SB 379 (Ortiz) to provide consumer protections for self-pay hospital patients, putting them only a floor vote away from the Governor’s desk.

Before the hearing, Senator Ortiz amended her bill to include strong prohibitions against hospital overcharging for self-pay patients. With these amendments, Health Access California strongly supported the bill; Health Access continues to be the legislative sponsor of a similar bill, AB 232 (Chan). Both bills ensure that uninsured self-pay patients:

– Are informed of their consumer rights and financial options

– Have 150 days before being sent to collections

– If they are under 400% of the federal poverty level, don’t pay more than the Medicare, Medi-Cal or worker’s compensation rate for treatment.

MOVEMENT ACROSS THE NATION: There continues to be movement on the federal level. On Thursday, the U.S. House Energy and Commerce Committee will hold an oversight and investigations hearing on “Hospital Billing and Collection Practices” toward the uninsured. The hearing will be online, and information will be posted at:

http://energycommerce.house.gov/108/Hearings/06242004hearing1299/hearing.htm

An issue brief summary on this issue, which talks about developments in California and other states, has just been published by the Commonwealth Fund, at:

http://www.cmwf.org/programs/insurance/pryor_medicaldebt_749.asp

SUPREME COURT STRIKES DOWN CALIFORNIA HMO PROTECTION

On Monday, the Supreme Court decision on the case Aetna v. Davila invalidated laws in Texas, California and at least eight other states that allowed patients to sue their HMOs in state court. A copy of the opinion is at:

http://a257.g.akamaitech.net/7/257/2422/21june20041210/www.supremecourtus.gov/opinions/03pdf/02-1845.pdf

The patient impact of the decision is clear: managed care patients have lost an important consumer protection to ensure their health plans are accountable to provide the health care that they need. The California Department of Managed Health Care will need to be additionally vigilant, even with one less tool at their disposal, in protecting patients’ access to care. Health Access California was the legislative sponsor of the many bills that made up the California Patients Bill of Rights.

When California took the lead in passing laws to protect HMO patients in the last decade, many states followed, but the federal government regretfully did not. This Supreme Court decision places a harsh spotlight on the lack of action of the President and the Congress. The federal government has yet to enact a strong federal HMO Patients’ Bill of Rights, despite this issues prominence in the presidential campaign four years ago, when both candidates promised to pass a bill.

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

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