Key Health Bills On the Governor’s Desk After Legislature Adjourns

HEALTH ACCESS ALERT: Tuesday, September 2, 2014 


*        Legislature ends 2013-14 session with a flurry of activity; Governor has month of September to sign or veto bills passed, including SB 964 (Hernandez) on network adequacy and timely access to care.

*       Also pending on Governor’s desk are key Medi-Cal bills: limiting Medi-Cal estate recovery (SB1124), and allowing State to accept foundation money for Medi-Cal renewal assistance (SB18).

       Closely-fought bill to require paid sick leave passes, as does SB1094(Lara), to expand the Attorney General’s authority to enforce conditions of non-profit hospital mergers and acquisitions. Other measures on out-of-pocket costs stall, with advocates commiting to action next year.

*        POST-LEGISLATIVE SESSION RECEPTION TODAY to wish Health Access’ Beth Abbott well as she transitions to her new post as director of the revamped Office of the Patient Advocate. Please RSVP here for the reception Today, Tuesday, September 2nd, 4-7pm, Ambrosia Cafe in Sacramento.

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The Legislature ended its 2013-14 session early Saturday morning, passing a flurry of bills to the Governor’s desk for his consideration.  Some key health care consumer protections and proposals made it through the legislative process, and are now headed to the Governor for his final review. Several other measures stalled, some earlier in the year and some in the last days or even hours of the session.  Governor Brown now has the month of September to either sign or veto bills before him.


In this year where California was successful in enrolling people into coverage under the Affordable Care Act, new scrutiny focused on whether patients had timely access to care once enrolled in Medi-Cal managed care, which has long been criticized for lack of adequate access,  or Covered California with some plans offering “narrow networks.” Passing this week was the Health Access California-sponsored bill, SB 964 (Ed Hernandez), which would require DMHC to do annual reviews for timely access and network adequacy, separately for Medi-Cal managed care and the individual market so that consumers in Medi-Cal and Covered California have the guarantee that they can get needed care, when and where they need it.

Two important Medi-Cal bills are also headed to the Governor. SB 18 (Leno/Hernandez) would have the State accept $6 million from the California Endowment to fund Medi-Cal renewal assistance by community based organizations, and drawing down federal matching funds as well.

Getting near unanimous votes in the legislature was SB 1124 (Hernandez) which would limit Medi-Cal estate recovery to long-term care, so those getting Medi-Cal managed care services would not find that their family home had a claim on it after death. Over 40 states already do this, allowing Medi-Cal to be a true safety-net for medical care without putting the family’s assets at risk. “Estate recovery,” which amounts to about $500 per month in liens for those over age 55, arbitrarily seeks assets from a small slice of lower-income families who are trying to do the right thing and get covered. While this would have a small state budget impact, enactment would be a big deal for families’ economic security: health and low-income advocates are making it a major priority to get the Governor’s signature.

Another Health Access California-sponsored bill that is headed to the Governor is AB 2088 (Roger Hernandez), which makes, in the large group market, limited benefit plans supplemental to comprehensive coverage. This consumer protection already exists in the individual and small employer market; the bill closes a loophole for employers to possibly avoid compliance with the full intent of the ACA. Employees who accept employer coverage are barred from subsidies in Covered California even if that coverage is unaffordable or does not meet 70% minimum value: AB2088 would protect those employees by assuring that they get comprehensive coverage.

Also passing, but not without major effort, was SB 1094 (Lara), which would expand the Attorney General’s authority to enforce conditions of non-profit hospital mergers and acquisitions, to assure that a nonprofit hospital will continue to serve its community after a transaction in which ownership changes. SB 1094 initially failed passage on the Assembly Floor and was granted reconsideration, passed out of the Assembly Floor Thursday evening with a vote of 43-27 thanks to the tireless work of advocates ranging from Planned Parenthood to the California Labor Federation, from SEIU to Consumers Union to Health Access California. This bill is now headed to the Governor.

A last minute bill of interest to health advocates in Fresno County was AB 2731 (Perea) which would give Fresno County the budget flexibility it says it needs to preserve safety-net services to the undocumented and indigent—the bills allows the County to defer the county’s maintenance of effort requirement for its transportation fund, with the freed-up resources required to go to indigent care. The County felt that the language in the budget passed in June was too restrictive, and had voted to nearly eliminate its medically indigent program a few weeks ago—but put a 90-day stay in anticipation of a legislative fix such as AB2731, which now heads to the Governor.

While not about health insurance or treatment, the health-related bill that got the most attention was AB 1522 (Gonzalez), the requirement on employers to offer at least 3 days of paid sick leave to their workers. While major cities across the country have adopted similar policies, California would be only the second state to require paid sick leave—but with a major and problematic exemption of home care workers, a carve-out requested by Governor Brown, but actively opposed by the unions representing in-home supportive services caregivers.

There were also a few bills that were held in the Legislature, some with commitments from the Administration to address the issue at hand in the next legislative session and others with commitments from the State to address the issue at hand via changes in regulations.


Three bills on trying to make out-of-pocket costs manageable were held—but health advocates hope to revisit these issues in the year ahead.

AB 1917 (Gordon) which would have capped prescription drug co-pays at 1/12 of the annual out-of-pocket limit so that patients with HIV/AIDS, cancer, MS, and other diseases will not be forced to pay high upfront costs for their medication was held due to insurer and Administration opposition. Assemblyman Gordon, sponsoring organization Health Access California, and others are committed to continuing the effort and conversation with the Administration to address this issue in the next legislative session.

Another bill that has been held is SB 1176 (Steinberg), which would have made a 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. The Department of Managed Health Care has committed to developing regulations that will require health plans and insurers responsible for tracking out-of-pocket costs for in-network providers and responsible for reimbursing consumers when they exceed their out-of-pocket limit.

Also not proceeding was AB 2533 (Ammiano) which would have ensured that if a patient can’t get timely access to care, the health insurer must arrange for needed care out-of-network, but with in-network cost sharing. This is now the practice with plans regulated at the Department of Managed Health Care, but not the Department of Insurance.

Finally, a late push to extend the July 2015 sunset for the California Health Benefits Review Program, which provides University of California analysis of benefit mandate proposals, AB 1578 (Pan), stalled in literally the last moments of the legislative session.

Below is a full bill list of all the key health legislation on the Governor’s desk.


RECEPTION TODAY: This afternoon/evening, Health Access California is hosting a reception to recognize our director of administrative advocacy, Beth Abbott, as she is about to start working as the Governor’s appointment to direct a revamped Office of the Patient Advocate. The reception will take place Tuesday, September 2nd, from 4-7pm, at Ambrosia Cafe in Sacramento. Please RSVP at this link to join our advocates and colleagues to wish her well.



Ø  Insurance Consumer Protections

NETWORK ADEQUACY OVERSIGHT OF HEALTH PLANS: SB964 (Ed Hernandez) requires the Department of Managed Health Care (DMHC) to do annual reviews for timely access and network adequacy to be done separately for Medi-Cal managed care and the individual market so that consumers in Medi-Cal managed care and Covered California get timely access to necessary care. Sponsored by Health Access California.

JUNK INSURANCE FOR LARGE EMPLOYERS: AB2088 (Roger Hernandez) while not banning limited benefit plans, makes them supplemental to comprehensive coverage. California’s Insurance Code allows the sale of “insurance” that provides very limited benefits with a minimum actuarial value of less than 60%. 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.

SB959 (Ed Hernandez) is the clean-up bill for the individual and small group market reform legislation to implement the ACA enacted in 2012 and 2013. SUPPORT.

Ø  Medi-Cal

FOUNDATION & FEDERAL FUNDS FOR MEDI-CAL RENEWAL: SB18 (Leno/Herrnandez) provides $6 million to the State from the California Endowment to fund Medi-Cal renewal assistance Sponsored by Health Access California.

LIMIT ON MEDI-CAL ESTATE RECOVERY: 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 all medical care from the estate of an individual after death. This has discouraged some from signing up for Medi-Cal coverage. Co-sponsored by Western Center on Law and Poverty (WCLP) and California Advocates for Nursing Home Reform. SUPPORT.

AB2325 (Speaker Perez) would create a Medi-Cal medical interpreter program. The bill was vetoed last year: this is a re-introduction of that measure. SUPPORT.

Ø  Cost/Quality Transparency

SB1182 (Leno) would provide claims data or other detailed information to large purchasers.  SUPPORT.

AB1962 (Skinner) would make transparent what dental-only plans spend, as a percentage of premium, on patient care. It requires specialized dental-only plans to disclose a “medical loss ratios” as for medical coverage. The bill is sponsored by the California Dental Association. SUPPORT.

Ø  Hospital Oversight and Consumer Protections.

SB1094 (Lara) amends existing law on Attorney General oversight of nonprofit hospital mergers and acquisitions. It extends the review period from 60 days to 90 days. It also gives the Attorney General authority to enforce conditions of hospital transactions. This bill is sponsored by the Attorney General. SUPPORT.

SB1276 (Ed Hernandez) updates the Hospital Fair Pricing law (which Health Access California sponsored in 2006) by: defining a reasonable payment plan as monthly payments that are no more than 10% of income after essential living expenses; allowing underinsured individuals with high health costs (over 10% of income) to receive the hospital fair pricing discount even if they receive a discounted rate on their cost sharing from their health plan or insurer. It is being sponsored by Western Center on Law and Poverty based on their experience assisting consumers. SUPPORT.

Ø  Prevention and Other

SB912 (Mitchell) would eliminate the sunset on the current requirement that vending machines in state buildings include 35% healthy food and drinks. Sponsored by California Pan-Ethnic Health Network. SUPPORT

AB 2731 (Perea) would allow Fresno County budget flexibility in their county budget to spend $5.5 million for indigent healthcare by deferring the county’s maintenance of effort requirement into a Proposition 42 transportation fund. SUPPORT.