Legislation to Lower Health Care Costs for Californians Face Crucial Votes This Week

Senate Health Committee will hear AB 1611 to Protect Patients from Surprise Emergency Room Bills on Wednesday; Senate Judiciary Committee will hear AB 824 to Lower Prescription Drug Costs on Tuesday.
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For Immediate Release: Monday, July 8th, 2019

CONTACT: 

Anthony Wright, executive director, Health Access California, awright@health-access.org, 916-870-4782
Rachel Linn Gish, director of communications, Health Access California, rlinngish@health-access.org, 916-532-2128 (cell)

 

LEGISLATION TO LOWER HEALTH CARE COSTS FOR CALIFORNIANS FACE CRUCIAL VOTES THIS WEEK

Senate Health Committee will hear AB 1611 to Protect Patients from Surprise Emergency Room Bills on Wednesday; Senate Judiciary Committee will hear AB 824 to Lower Prescription Drug Costs on Tuesday

  • AB 1611 by Assemblymember David Chiu and Senator Scott Wiener to stop surprise ER bills, that can often reach thousands or tens of thousands of dollars, faces test in Senate Health Committee, with major opposition from hospital lobbyists.
  • The bill prevents “balance billing” patients beyond in-network cost-sharing and helps lower inflated premiums by setting a standard for reimbursement to the hospital–a vital consumer protection to prevent hospitals from charging the monopoly price.
  • Also up in Senate Judiciary Committee on Tuesday is AB 824 (Wood) to discourage drug companies from paying generic manufacturers to delay the entry of competitive alternatives – a practice that keeps the price of prescriptions artificially high. FTC says Americans pay at least $3.5 billion a year more in drugs because of these “pay for delay” practices. 

SACRAMENTO, CA –  California legislative committees will consider key measures to contain health care costs, most notably AB 1611 by Assemblymember David Chiu and Senator Scott Wiener to end surprise emergency room bills. Up in Senate Health Committee on Wednesday, AB 1611 is an important patient protection that will prevent insured patients from getting hospital ER bills of tens of thousands of dollars while also preventing premium increases driven by hospital monopoly pricing.

After an emergency room visit, some insured California patients still receive a “balance bill” which is the difference between what the hospital charged for the service and what the insurer paid for the service. These unexpected medical bills result from an ER that is out-of-network and can be huge, even after the patient’s insurance pays their portion. When experiencing an emergency, Californians are not able to choose where they are taken for their care and therefore should not be on the hook for a bill they had no control over. Existing state law requires a health plan to cover the cost of the emergency care a patient receives whether or not a hospital is in-network, but gaps remain. Sponsored by Health Access California and the California Labor Federation, AB 1611 extends existing state consumer protections to the six million Californians with federally regulated health plans and one million Californians with coverage regulated by the California Department of Insurance who are currently at risk for surprise emergency room bills. The bill also sets a fair reimbursement payment to hospitals for that care, ensuring that consumers do not see spikes in their premiums due to the monopoly that hospitals have in emergency situations, which allow them to charge inflated “sticker prices” to insurers.

“Patients in an ambulance are in no position to choose what emergency room they end up at, and certainly should not get any extra or inflated charges if the hospital ER is out-of-network. AB 1611 is a key consumer protection that could help save millions of Californians from crushing medical bills,” said Anthony Wright, Executive Director of Health Access California, the statewide health care consumer advocacy coalition. “Patients should be protected from these surprise medical bills, and hospitals shouldn’t be allowed to leverage the monopoly they have in emergency situations to charge whatever they want. Hospitals should be fairly reimbursed, but should not be able to demand a price that inflates health care costs and premiums for everyone.”

Another key health care cost containment measure is AB 824, by Assembly Health Committee chair Jim Wood, up in Senate Judiciary Committee on Tuesday. Sponsored by Attorney General Xavier Becerra, AB 824 seeks to prevent “pay for delay” pricing practices by pharmaceutical companies that artificially inflate the price of prescription drugs. The bill would provide for greater enforcement against this collusive practice where pharmaceutical companies pay generic drug makers to slow down or stop lower-cost alternative medications from entering the marketplace. This forces patients to pay for the more expensive name-brand drug for longer, when, unbeknownst to them, a less expensive alternative is available. The bill would place the burden of proof on the drug companies to provide the information that any such payments were not for “pay-for-delay” anti-competitive purposes. The Federal Trade Commission estimated Americans pay at least $3.5 billion more for medications because of these harmful practices, and many believe the figure has gone up significantly since that finding.

Consumer, community, patient, and purchaser organizations have prioritized these pieces of legislation, as part of a broader Care4All California package to get to a universal, affordable, and accountable health care system. “By building on proven practices and increasing oversight of hospitals and prescription drug companies, our legislators can provide significant savings of hundreds of millions of dollars for California patients,” said Wright. “While Washington DC debates what to do about drug prices, hospital bills, and premiums, by moving these bills California lawmakers can take action this year to get us closer to a health system that is affordable and accountable to all.”

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