California Moves Forward on Reducing Health Care Costs: Bills to Improve Transparency on Health Care Pricing Advance in Legislature

Today, the Senate Health Committee approved SB 343 (Pan), the third of several bills from Care4All California that hold the health care industry accountable for soaring insurance premiums, hospital, doctor, and prescription drug costs.
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For Immediate Release

April 3, 2019

Contact: Rachel Linn Gish 916-532-2128
Mike Roth, 916-813-1554

California Moves Forward on Reducing Health Care Costs: Bills to Improve Transparency on Health Care Pricing Advance in Legislature

California’s leadership on health prices comes as health care debate intensifies on the national level

Sacramento, CA –Today, the Senate Health Committee approved SB 343 (Pan), the third of several bills from Care4All California that hold the health care industry accountable for soaring insurance premiums, hospital, doctor, and prescription drug costs.
SB 343 (Pan) will add greater transparency to the health care industry by bringing Kaiser Permanente up to the same reporting requirements as the rest of the industry. This continues the momentum to address the rising cost of care in the California legislature. On March 26th, the Assembly Health Committee also approved AB 731 (Kalra) to enhance the rate review of large group plans, providing this protection and cost-savings to millions more Californians, and AB 824 (Wood) that would curb the harmful pay-for-delay prescription drug pricing practice that drives up costs for consumers.

On April 23rd, the conversation on health care costs will continue when the Assembly Health Committee will hear AB 1611 (Chiu) to prevent surprise out-of-network emergency room bills than can amount to tens of thousands of dollars.

“Responding to urgent voter demand for price relief, California legislators are moving bills to confront soaring costs that are crushing families,” said Anthony Wright, Executive Director of Health Access California, the statewide health care consumer advocacy coalition. “AB 731 and SB 343 empower Californians to demand fairer insurance prices, building on successful reforms that have already saved small businesses and individual consumers more than $226 million. These bills supported by the Care4All California campaign improve accountability on the health care industry and prevent consumers from picking up the tab of increasing health care costs. While DC debates, we need our state legislators to take action to curb the high costs for care and coverage.”

Care4All California is a campaign of more than 70 consumer, community, labor, progressive and health care organizations. In February, the campaign unveiled a plan, made up of a package of bills and budget items that together will move California closer than ever to universal coverage by eliminating many remaining coverage gaps, improving quality and equity, and reducing prices for health care consumers. The health care price reduction legislation includes:

  • AB 731, passed from the Assembly Health Committee on March 26, would expand the Department of Managed Health Care and California Department of Insurance’s authority to conduct “rate review” in the large group insurance market. Today, California’s health insurance regulators can tell individuals and small businesses whether their insurance company’s charges are reasonable or justified, and what goes into proposed rate hikes. Since this law went into effect in 2011, it has saved individuals and small businesses $226 million. If the state applies the same transparency rules to insurance plans for large employers, it will give workers and their employers the ability to negotiate a better deal on health care and has the potential to save employers and their workers billions of dollars. The legislation is co-sponsored by Health Access California, California Labor Federation, SEIU California, UNITE HERE, and Teamsters.
  • SB 343 (Pan), passed from the Senate Health Committee today, creates a uniform reporting standard for health plan data and hospital financial reporting. The bill removes special exemptions in law that have allowed Kaiser Permanente to have an unfair advantage over its competitors. Since Kaiser covers over half of all workers in large firms with coverage through their employer, and one in ten California hospitals, these exemptions have created a massive information gap and prevented regulators from doing their jobs to protect the public from unfair pricing. This bill is sponsored by SEIU California.
  • AB 824 (Wood) will be heard in the Assembly Judiciary Committee April 9. This bill targets the practice of “pay for delay” for prescription drugs, seeking to end the collusive agreements where drug manufacturers pay generic companies to delay the introduction of lower-price medication to the market which keep drug prices too high. This bill is sponsored by Attorney General Xavier Becerra.
  • AB 1611 (Chiu) will be heard in the Assembly Health Committee April 23. The bill bans “surprise” out-of-network Emergency Room visits consumers are only billed for their co-pay or deductible, and caps the rate that can be charged. This bill is co-sponsored by the California Labor Federation and Health Access California.

Nationally, there is a vigorous debate about the best path to expanding and strengthening our healthcare system. But whether the debate is about pursuing single-payer healthcare or achieving universal health care through augmentations to the Affordable Care Act, both paths will require addressing rising health care prices in order to be sustainable. The Care4All California bills advance California’s leadership in confronting increasing health care costs that are devastating California families.

“Being healthy is essential to the California Dream, but out-of-control healthcare costs are crushing opportunities for Californians and our families,” said Kimberly Samuel, a Laboratory Technician at Kaiser South Sacramento. “We see patients who are worried about money when they should be focusing on their health. And the cost of healthcare is a concern for SEIU members who see our hard-earned raises going to insurance companies, and in turn to doctors, hospitals, and pharmaceutical companies. We are proud to lead the fight to make healthcare corporations accountable for fair and reasonable prices because we are tired of our own families and the people we serve going broke over outrageous healthcare bills.”

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