Big Decisions Made on Budget & Bills….

HEALTH ACCESS ALERT: Friday, May 23, 2014



*        SB1005(Lara), to extend coverage to remaining uninsured regardless of immigration status, held in Senate Appropriations Committee. Chairman DeLeon urges summer search for additional financing, despite recent UC analysis showing modest cost.

*        Many health bills, including ones sponsored by Health Access California, pass Appropriations; Bills would help consumers once they get coverage, with network adequacy and timely access to doctors and specialists (SB964), continuity of care (SB1100), avoiding junk coverage (AB2088), prescription drug cost sharing (AB1917), tracking out-of-pocket expenses (SB1176), preventing Medi-Cal estate recovery (SB1124), and more. Floor votes scheduled for next week.

        Budget Committees vote to approve key health restorations and investments, including for cancelling the Medi-Cal 10% rate cut, refunding public health programs including the Black Infant Health Program, as well as restoring Medi-Cal benefits, adding ABA therapy for autism as a Medi-Cal benefit, and more. These augmentations rely on negotiation with Governor Brown in crafting a final budget in next few weeks.

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In a jam-packed day of activity, major financial decisions on both bills and the state budget were made today in the California Legislature, including on several health care issues.

CONSUMER PROTECTION BILLS ADVANCE: In both the Senate and the Assembly, Appropriations Committees made decisions on hundreds of bills, whether to hold them, or to allow them to pass and face floor votes scheduled for next week.

Many key health bills passed, including those that would help insured consumers ensure timely access to care by ensuring provider networks are adequate (SB964-Ed Hernandez); provide continuity of care when switching plans (SB1100-Ed Hernandez); avoid junk coverage at work (AB2088-Roger Hernandez); better manage prescription drug cost sharing (AB1917-Gordon); help track out-of-pocket expenses (SB1176-Steinberg), and avoid Medi-Cal estate recovery (SB1124-Ed Hernandez).

A full list, including those bills sponsored by Health Access California, is below. These consumer protection bills and others will be up for floor votes next week: bills must pass the first legislative house by the end of May–the end of next week–in order to continue to be considered this year.

HEALTH4ALL DELAYED BUT NOT DEFEATED: The most notable health measure to be held was the #Health4All bill, SB1005, by Senator Ricardo Lara and many co-authors, to extend for all California’s remaining uninsured, including undocumented immigrants, by extending state-only Medi-Cal and creating a “mirror marketplace” to complement Covered California.

Appropriations Committee Chairman Kevin DeLeon made a point to pause the proceedings to read a statement about SB1005, indicating the strides California has made under the Affordable Care Act but decrying that it “deliberately left out” many due to immigration status. He stated that California should and ultimately would need to craft its own solution, but that the Committee was holding SB1005 to give the Senator and stakeholders time to craft a “responsible funding solution.” This was after the University of California released this week a study indicating the bill could expand coverage at a relatively modest cost, far lower than what many had anticipated. Senator DeLeon stated that if such financing was figured out, the bill could be reconsidered with an urgency clause–but left unstated was that such an urgency clause would require a 2/3 vote on the bill, which means getting Republican votes in addition to all Democrats.

Regardless of the vehicle or specific timing, all agreed that the campaign continues: Senator Lara said he respected the Committee’s decision, that he was inspired by “the outpouring of thousands of Californians who have attended rallies and hearings to share their stories and show their support. He stated “expanding health coverage to all Californians is not a question of if, but of when.” Health and immigrant rights advocates were disappointed in the decision, but continued to press the urgency of the issue, and to highlight the impacts of this delay on these uninsured families, living sicker dying younger, and one emergency away from financial ruin; on community groups and enrollment counselors who may have to continue turning people away at enrollment fairs in their community; on counties, public hospitals, and safety-net providers who will continue to provide such care with limited funding. Health Access and many other organizations have been very engaged in county-based #Health4All efforts around the state, and are actively working on figuring out next steps toward a statewide solution this year.

BUDGET INVESTMENTS PRIORITIZED: While covering the remaining uninsured did not emerge as a budget priority this year, many other key health restorations and investments were advanced. The Assembly Budget Subcommittee on Health, and the full Senate Budget Committee voted on a number of high-priority restorations and investments in health care.

They had the budgetary room to make those augmentations in part by adjusting the Governor’s estimates for Medi-Cal spending in the budget year. They accepted a Legislative Analyst’s Office (LAO) recommendation to reduce the Governor’s estimates of the Medi-Cal ACA expansion’s per-person per month cost, which is $300 million lower than the Governor’s. In addition, the LAO stated that the Governor’s projections for Medi-Cal enrollment were plausible but high.

The most high-profile budget restoration was on Medi-Cal provider rates, with slightly different proposals adopted in both houses to cancel the 10% rate cut made several years ago in the middle of the recession, but that was delayed until recently due to litigation. Several legislators commented on the problem of expanding Medi-Cal through the ACA but then cutting rates to providers in the same program. The Assembly voted to restore the cut ($69 million in 2014-15, $274 million in out years) with additional help for intermediate care facilities for the developmentally disabled and PACE programs. The Senate voted to restore $120 million for all providers except pharmacies, who have a process for getting exemptions for the cut.

Both houses also seem to be moving to restore some of the public health programs cut during the recession, with the full Senate Budget Committee voting today on the Black Infant Health Program ($3.9 million), and on HIV Prevention Pilot Projects ($5 million). The Assembly Subcommittee also voted to restore the Early Mental Health Initiative and other public health efforts that had been defunded during the recession.

Other programs the Senate Budget Committee approved included:

* Adding Applied Behavioral Analysis (ABA) therapy for children with autism as a Medi-Cal benefit, aligning Medi-Cal with private health coverage ($50 million)

* Restoring some of the Medi-Cal benefits cut in 2009, including acupuncture, audiology, chiropractic, incontinence cream and washes, optician services and optical lab, podiatry, and speech therapy. ($13 million) Last year’s budget partially restored the biggest benefit eliminated in 2009, which was dental coverage for adults, which restarted in May of this year.

These votes were critical, but not final. The two houses are expect to pass final versions of a budget in the next week, and then go to Conference Committee to work out differences between the Assembly and Senate budgets. The most important negotiation is on a parallel track between the legislative leaders and the Governor, who has voiced his desire for frugality and putting money to debt restoration as a top priority, his disapproval for restorations beyond his spending plan, and who must sign the Budget and also has the ability to line-item veto.

The next few weeks will be critical to see if any or all of these investments are finalized and ultimately approved. The Legislature has a constitional deadline to pass a final Budget by mid-June, with the Governor having until the end of June to sign the measure, so the spending plan is in plan when it begins on July 1.

Health advocates are actively working on both bills and the budget to ensure Californians have improved access to health care.



Letters of support and floor alerts would be appreciated on these bills that passed Appropriations Committee today:

NETWORK ADEQUACY OVERSIGHT OF HEALTH PLANS: SB964 (Ed Hernandez) requires the Department of Managed Health Care (DMHC) to conduct surveys of health plans for timely access and network adequacy to be done more frequently, and by book-of-business, separately for Medi-Cal managed care and Covered California plans, to ensure access to care for patients in those programs. It also requires separate surveys until five years after implementation of the major Medi-Cal managed care transitions, including not only Healthy Families but also the seniors and persons with disabilities, the dual eligibles (both Medicare and Medi-Cal) and the rural transition. SPONSORED by Health Access California.

PRESCRIPTION DRUG COST SHARING: AB1917 (Gordon) spreads out the cost of expensive prescriptions over a year, to better help those with HIV/AIDS, cancer, MS, and other diseases manage out-of-pocket expenses. Consumers would still have the annual out of pocket limit of no more than $6,350 for an individual or $1,700 for a family under the ACA, but the cost of any one drug can’t be more than 1/12th of the annual limit. This means multi-tier drug formularies in which some high-priced drugs are on a fourth tier that involves 20% co-insurance won’t burden patients all at once. Under this bill, a patient might still end up owing the annual out of pocket limit but at least the cost will be spread out over a year. SPONSORED by Health Access California.

JUNK INSURANCE FOR LARGE EMPLOYERS: AB2088 (Roger Hernandez), while not banning limited benefit plans, makes them supplemental to employer-based coverage. While the California Insurance Code allows the sale of “insurance” that provides very limited benefits, such as cancer-only policies and hospital fixed amount indemnity policies that pay $100 or $200 a day when someone is hospitalized, current California law allows it only as supplemental to essential health benefits in the individual and small employer markets. This bill extends this consumer protection to large employer coverage, closing a loophole for employers to possibly avoid compliance with the full intent of the ACA. SPONSORED by Health Access California.

CONTINUITY OF CARE: SB1100 (Ed Hernandez) will be amended to provide continuity of care protections for consumers who change their individual coverage—something that was not possible for many until the ACA. While Californians with employment-based coverage now have the right to continuity of care if in the midst of treatment or had a serious condition when their coverage changed, this bill extends this protection to those with individual coverage including in Covered California. SPONSORED by Health Access California.

AB1558 (Roger Hernandez) would provide claims data to the University of California so that UC can do studies on cost and quality. SUPPORT.

SB1182 (Leno) would implement large group rate review for rate increases in excess of 5%. It also provides claims data or other detailed data to large purchasers.  SUPPORT.

SB1124 (Hernandez) limits Medi-Cal estate recovery. California is one of only ten states that impose estate recovery on more than long term care services, where the state, for those over 55, recovers the cost of care from the estate of an individual after death. This has discouraged some from signing up for Medi-Cal coverage. It is co-sponsored by Western Center on Law and Poverty and California Advocates for Nursing Home Reform. SUPPORT.

SB1176(Steinberg) makes the health plan or insurer responsible for tracking out-of-pocket costs for in-network providers, and reimbursing the consumer when they exceed their out-of-pocket limit. SUPPORT


SB1005 (Lara) seeks to extend access to affordable coverage to all Californians, without regard to immigration status, by offering the same financial help as the ACA provides to Californians excluded under the federal law. The bill creates a state-only Medi-Cal program for those who are barred from Medi-Cal by reason of immigration status, covering kids up to 266%FPL and adults up to 138%FPL through state-only Medi-Cal. It also creates a parallel Exchange or “mirror marketplace” that would provide immigrants with the same coverage options and subsidies as those covered through Covered California.


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