Our Full Update On the Governor’s Actions on Health Bills

HEALTH ACCESS UPDATE: Friday, September 26, 2014


     Governor signed SB964(Hernandez) to provide more oversight over insurers, including annual reviews of Medi-Cal managed care and Covered California plans and others, even those with “narrow networks,” to ensure timely access to care for patients

*        Other bills signed include SB18(Leno/Hernandez) to accept foundation and federal funding for community groups to help Medi-Cal enrollees with renewals; SB1052(Torres) on disclosing formularies; SB1053(Mitchell) on contraceptive coverage; SB1182(Leno) on disclosing large group claims data; and AB1962(Skinner) on disclosing how much dental plans spend on care versus administration and profit.

*       Bills vetoed include SB1124(Hernandez) on limiting Medi-Cal estate recovery; and AB2088(Hernandez) on avoiding junk coverage. Consumer groups vow to continue efforts next year.

Consumer, community, and health organizations were pleased yesterday that Governor Brown signed several key health consumer bills into law, but disappointed in some of the vetoes in yesteray’s batch of bills release this evening: http://www.gov.ca.gov/news.php?id=18726

Key bills supported by Health Access California and other consumer groups that were signed today include SB18 to allow California to accept foundation and federal dollars for community groups to help those on Medi-Cal renew their coverage, SB964 to increase oversight on network adequacy and timely access to care, SB1052 to require insurers to disclose their prescription drug formularies, SB1053 to ensure coverage of contraceptive services, SB1182 to better disclose claims data, AB1962 to disclose how much dental plan premiums are spent on patient care, and others.

Consumer groups were disappointed that vetoed bills included AB2088 to limit “junk” coverage being offered by large employers to their workers, and SB1124 to limit Medi-Cal estate recovery to just long-term care.

Governor Brown has the month of September, next week, to either sign or veto the remaining bills on his desk, which include SB1094(Lara) on Attorney General oversight over hospital sales and mergers, and others.

The new law with perhaps the most direct impact on the biggest number of consumers is SB964(Hernandez) which will increase oversight of network adequacy in health plans.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 or other commercial plans offering “narrow networks.” SB964, sponsored by Health Access California would require the Department of Managed Health Care to do annual reviews for timely access and network adequacy for all plans,with reviews done 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.

Also signed was SB 18 (Leno/Hernandez) which would have the State accept $6 million from the California Endowment to fund Medi-Cal renewal assistance by community based organizations, drawing down federal matching funds as well. Advocates saw this as critical especially in this first-ever renewal period, when the processes and rules have changed under the ACA.

Consumer, community, senior, and low-income advocates were very disappointed by the veto of SB 1124 (Hernandez) to 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 follow this practice, 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. Advocates vowed to continue to work to fix this policy that currently penalizes low-income families taking personal responsibility by building savings while signing up for coverage. The Governor’s veto message suggested addressing this issue in the budget process next year, which advocates will do so Californians can get the coverage they need without any fear of any financial repercussions for their family. Advocates have appreciated the testimonies from impacted Californians, and continue to seek those stories for the continued effort.

A Health Access California-sponsored bill that was vetoed was 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: Advocates are disappointed by the AB2088 but will continue next year to work to limit this “junk” coverage and ensure employees get comprehensive coverage, with the guidance the Governor offered.

Below is a longer bill list of the key health legislation acted upon yesterday by Governor Brown:

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 for all plans and 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.

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.

SB1052 (Torres) to require health insurers to disclose and standardize their prescription drug formularies.

SB1053 (Mitchell) to ensure health coverage includes contraception and birth control services for women.

Ø  Medi-Cal

FOUNDATION & FEDERAL FUNDS FOR MEDI-CAL RENEWAL: SB18 (Leno/Herrnandez) accepts $6 million to the State from the California Endowment–and $6 million in federal matching funds–to fund Medi-Cal renewal assistance by community groups. Sponsored by Health Access California and Western Center on Law and Poverty.

Ø  Cost/Quality Transparency

SB1182 (Leno) would provide claims data or other detailed information to large purchasers, including employers and union trust funds.

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.

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.



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.

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.