HEALTH ACCESS UPDATE
Friday, October 1, 2010
ON DEADLINE DAY, GOVERNOR SIGNS FIRST-IN-THE-NATION BILLS
TO SET UP NEW HEALTH INSURANCE EXCHANGES
AND OTHER KEY HEALTH REFORM IMPLEMENTATION LEGISLATION
Patient Protection Bills Signed by the Governor Include:
* AB1602(Perez) & SB900(Alquist), to Create a New Health Insurance Exchange
* AB2244(Feuer), to Limit Premiums for Children with Pre-existing Conditions
* SB1163(Leno), to Provide 60 Day Notice and Transparency on Rate Hikes
* AB2470(De La Torre) on Eliminating Rescissions
* SB1088(Price), to Allow Young Adults Up to Age 26 To Stay on Parental Coverage
* AB2345(De La Torre), to Eliminate Cost-Sharing for Preventative Care
The Governor Vetoed the Following Measures:
* SB890(Alquist), to Categorize Benefits to Allow for Better Comparisons of Plans
* AB1825(De La Torre), to Phase-In Maternity Coverage as a Basic Benefit
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In his last day of signing and vetoing bills, Governor Schwarzenegger made history by signing a full package of patient protections, including the first-in-the-nation bills to set up a new health insurance exchange–a central element of the new federal health reform law.
MAJOR SIGNINGS: A list of the measures related to implementing federal health reform is available on the front page of the Health Access website. The following key patient protections measures were signed into law:
* CREATING A NEW EXCHANGE WITH BARGAINING POWER: AB 1602, by Speaker Perez and SB 900, by Senate Health Committee Chair Alquist and Senate President Pro Tem Steinberg will, working together, establish a new health insurance Exchange, a core element of the new federal health reform law. In 2014, the new Exchange will be the new one-stop shop for getting health coverage for individuals and small businesses, both providing easy-to-compare choices, access to federally-funded subsidies to make coverage affordable, and the bulk purchasing power (similar to large employers or CalPERS) of millions of Californians to bargain for the best price and value.
Currently, without an exchange, individual consumers are at the mercy of the big insurers, without any purchasing power, in a complex and confusing marketplace. While opposed by Anthem Blue Cross and others, a new, independent exchange can dramatically improve the way Californians individuals and small businesses get coverage—making such decisions easier, more understandable, and more affordable.
The signing of the bill helps get California ready on day one to take advantage of billions of dollars in credits and subsidies to help families and small businesses afford coverage. Over 4 million Californians would be eligible to participate in the exchange in 2014 (and more later). AB1602 establishes the new, indepedent agency; SB900 set ups its governance, as a 5-member board to be appointed by the Governor and Legislature.
* ACCESS & AFFORDABILITY FOR CHILDREN WITH PRE-EXISTING CONDITIONS: AB 2244, by Assemblyman Feuer, implements the federal prohibition on denying coverage to children with pre-existing conditions, and limits the amount that insurers can charge to cover those children. While the federal health law takes a crucial first step this September, by prohibiting insurers from denying coverage to children with pre-existing conditions, this state bill takes another step in making reform real, by also limiting how much insurers can charge children with pre-existing conditions, within an open enrollment period.
Federal law will prohibit such premium differences in 2014, but this bill phases in this affordability help sooner, and provides a smoother glide path for California’s market to transition. Proponents say the bill would save tens of millions in the state budget, giving families the opportunity to buy private insurance rather than having them fall onto public health coverage programs.
The measure also counters the attempts of some insurers from leaving the child-only insurance product. The bill says that if insurers are not selling child-specific plans by the effective date of the law, those insurers are barred from the lucrative individual insurance market for five years.
* REQUIRING 60-DAY NOTICE AND TRANSPARENCY ABOUT RATE HIKES: SB 1163, by Senator Leno, requires insurers to make information public about premium increases, available for review not just by the regulator but by the public on the insurers’ and regulators’ websites. The bill also requires insurers to give 60 days notice to consumers and to the public before raising premiums.
Currently, this information is not public, even the notice of a rate hike: insurers only need to give 30 days indication to subscribers, and there is no public notice requirement. This bill expands California regulators’ authority, especially at the Department of Managed Health Care, to review rate information and better take advantage of the new federal funding available.
* ELIMINATING RESCISSIONS: AB2470, by Assemblyman De La Torre, helps implement health reform by seeking to eliminate rescissions, so patients don’t have their coverage yanked away at the time when they most need it. This is an important protection in the interim until 2014, when insurers will be required to take patients without regard to pre-existing conditions.
* YOUNG ADULT COVERAGE: SB1088, by Senator Price, implements the federal health law that allows young adults up to age 26 to stay on their parents’ group coverage.
* PREVENTATIVE CARE: AB 2345, by Assemblyman De La Torre, implements the federal health law by requiring insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations.
These measures are a major improvement in patient protections, and an aggressive implementation of the federal health reform law. A symbolic signing ceremony is scheduled for today, Friday, in Los Angeles.
GOVERNOR SCHWARZENEGGER VETOES SOME PATIENT PROTECTION MEASURES. While signing significant health reform bills, the Governor vetoed two patient protection measures yesterday, on mandating maternity coverage as a basic benefit, and on helping consumers compare plans and avoid “junk” insurance.
These vetoes added to the five bills the Governor vetoed the day before, on mental health parity, limiting rate hikes to once a year, public health insurance options, increase fines for rescission, and “never events” medical errors. Here’s more information on the bills vetoed yesterday:
* MATERNITY COVERAGE: AB 1825, by Assemblyman De La Torre, would have phased in a requirement for all health insurance plans to cover maternity care. Plans would have been required to have maternity coverage, but until 2014 they can impose a one-year waiting period. See the veto message.
This measure would have helped provide equity for women trying to buy coverage, save the state money by preventing women from having to rely on public programs for maternity benefits, and crucially help provide the public health benefit of getting babies the prenatal and early care coverage needed to live healthy and productive lives.
* AVOIDING “JUNK” INSURANCE: SB 890 by Senator Alquist would have reformed the individual insurance market, by setting basic benefit levels and classifying health plans in tiers (Platinum, Gold, Silver, Bronze) to allow consumers better ability to make apples-to-apples comparisons based on actuarial value, so that consumers can have some idea of how much of their medical costs they may need to pay out-of-pocket with different health plans. See the veto message.
The bill would have helped the California implement and transition to federal health reform in other ways as well, by instituting the new federal requirements on medical loss ratios, to ensure that premiums dollars go to patient care rather than administration and profits; and by eliminating annual and lifetime caps on coverage that cause individuals with serious illnesses to incur significant medical debt.
Right now, consumers are flummoxed by the over 100 choices in the individual insurance market, and rightly concerned that some of those choices won’t cover them when they need it. California lost an important opportunity to transition to a standardized and transparent marketplace.