The other shoe drops…

HEALTH ACCESS UPDATE
Thursday, April 26th, 2007

SEN. PERATA’S HEALTH REFORM LEGISLATION CLEARS HEALTH COMMITTEE
* Senate Leader Don Perata’s “pragmatic’’ reform bill clears committee
* Senators urge more work to guarantee affordability
* ROUNDUP: Other bills in Senate Health Commitee

New on the Health Access WeBlog: Additional leg reports; “Near-universal?”; 500th post coming!

A day after his Assembly counterpart passed his health reform legislation in Assembly Health Committee, Senate Leader Don Perata presented his health reform legislation, SB48, for the first time Wednesday in Senate Health. As expected, the bill passed on a party line vote, with Chair of the Senate Health Committee Sheila Kuehl and other Democrats voting to move the measure.

No Republicans voted to move the bill forward, and they did not ask questions, even though the Senate President Pro Tem explicitly stated that “we must have Republicans actively engaged in the discussion. Saying this issue need full debate and should be a “full contact, participant sport,” Perata urged lawmakers of both parties to keep working with him on the bill: “While we differ on approach, we all agree something must be done.”

Bluntly saying the bill is “not finished,” he also stated that by the time the bill goes to Appropriations in a couple of weeks, the bill will be more fleshed out with specific numbers that can be openly debated, to weigh the trade-offs.

“SHARED RESPONSIBILITY’’ IS THEME AMONG REFORM PROPOSALS

Like Assembly Speaker Fabian Nunez’s AB8, Governor Schwarzenegger’s proposal, and Senator Kuehl’s SB840, Perata’s plan relies rhetorically on the notion of “shared responsibility.’’

SB8 would:
• Require every Californian earning more than 400% poverty to have health insurance, or lose personal tax deductions
• Expand coverage to *all* children up to 300% of federal poverty;
• Require employers to spend a percentage of payroll on health care for both full- and part-time workers and their families, or pay an equivalent amount into a state fund that could help fund health care for workers.
• Create a state-run insurance “connector’’ that would negotiate rates and create coverage standards for employers to buy into.
• Require insurers to sell at least one approve plan to any applicant, regardless of health status.
• Combine small group and mid-size group insurance markets.
• Require health plans to spend at least 85 cents for every premium dollar on health care.

Unlike the Nunez and Schwarzenegger proposals, expansions and the “connector’’ purchasing pool would primarily cover workers and their families.

“SB48 is a huge leap to extending coverage to the uninsured, but it does not cover everyone,’’ admitted Perata. “It is shy of universal coverage, but it is a plan that is pragmatic and affordable.”

DISCUSSION ON AFFORDABILITY AND QUALITY

Democratic senators Mark Ridley-Thomas, Darryl Steinberg, Gil Cedillo, and Kuehl, along with advocates weighed in with concerns about whether the plan would actually be “pragmatic’’ for Californians if they could not afford health coverage, yet were forced to buy it.

“This is a very good attempt to cover working people. But our concern is that single people at 400% would have to buy coverage on the market if they are making over $39,000 a year,’’ said Kuehl. She cited that after she is termed out in 2008, she may have this experience herself, perhaps being self-employed or otherwise without employer-based coverage and ineligible for a public program, and just finding it unaffordable to get coverage.

Ridley-Thomas also was concerned that Californians who were not working – for instance, retired or between jobs – would not be able to get insurance through the “connector’’ pool that was negotiated by the state.

Perata said he would continue working on the issue of affordability – and also ensuring that plans met some kind of minimum standards.

STAKEHOLDER TESTIMONY

As with the Nunez bill, groups either gingerly supported or opposed the measure, or even were, as Perata dubbed them, “tweeners.”

Supporters, including those seeking amendments, included the 100% Campaign, PICO California, the California Association of Public Hospitals, and AARP, which called health reform a “top priority.” The California chapter of the American College of Emergency Physicians said any coverage expansion would help, since the uninsured account for 20% of emergency room visits, and since they don’t often get reimbursed, those costs are borne by those with private insurance.

While supporting, the Califormia Medical Association and the association of county health executives urged a Medi-Cal rate increase. Kaiser Permanente was supportive but wanted the “guaranteed issue” requirements to be tied to only the population impacted by the individual mandate–not everybody. Blue Shield argued that the employer fee should not be allowed to be adjusted by regulation.

Some groups that were following the debate did not take position on the Perata bill at the committee hearing. Some groups testified even though not formally stating a support or oppose issue. Health Access California, the California Labor Federation, and SEIU stated their support of several elements but could not support the bill as a whole because of the individual mandate provisions. Health Access appreciated amendments that sought to protect lower-wage Californians and to include consideration for consumers’ ability to pay, but such amendments were not applied broadly. The California Labor Federation echoed the concerns about the practical impact of the individual mandate, as well as the message it sends about shifting responsibility away from the collective and onto the individual.

Other groups were opposed, including the California Chamber of Commerce, which said it was concerned about the employer mandate and affordability of coverage for businesses. Other business opponents included the California Manufacturers and Technology Association, the California Restaurant Association. The California Association of Health Underwriters raised concerns from the employer mandate, as well as issues arising from non-compliance. The California Nurses Association also opposed the continued use of insurance companies. A Christian Science organization sought a religious exemption from the individual mandate.

WHY THIS BILL? WHY NOW?

This past week, Capitol watchers have seen a flurry of activity on health reform – nearly six months after Gov. Arnold Schwarzenegger declared 2007 to be the “Year of Health Reform.’’

“The stars and the planets may be aligning in a way to allow us to get something substantial done to improve health access and cost.’’ Perata said. “We have a historic opportunity and a responsibility to get it right.”

In addition to Tuesday’s passage of AB8, last week, Sen. Sheila Kuehl’s single payer legislation, SB840, cleared her committee. “You know what I think the perfect bill is,’’ said Kuehl, referring to her SB840. “I don’t think this is the perfect, but it’s got some reality base. I see it happening. I see the job of this committee to try and getting it stronger.’’

“I think of your bill and the Speaker’s bill as attempting to move us…(toward) extended coverage for some people in California, and attempting to move it in a way that does no harm,” she said.

She appreciated Perata’s willingness to work on further expanding coverage and making sure that coverage is affordable. Kuehl said that once all is said and done, Californians shouldn’t be saying, “Why did they do this to me?” Kuehl continued, “We may find them saying, ‘Why didn’t they do more for me?,’ which is a different question.”

Perata agreed to work with the committee on these issues and reminded lawmakers to be practical about their approach. “Everyone here has one thing in common – they have health insurance. There is a danger of this becoming an academic exercise,’’ said Perata. But there are people without coverage, he said. “That’s the reason SB48 is here – and I’m still supporting SB840,’’

“Why this year? Why this bill? I know the perfect, the better,’’ said Sen. Perata referring to SB840. “But if we can’t do something for someone now, then shame on us.”

OTHER BILLS

Also in committee on Wednesday:
* SB32 (Steinberg) would expand Healthy Families to children in families up to 300% of poverty. An identical bill, AB1 (Laird) passed Tuesday. PASSED
* SB365 (McClintock) would have allowed out-of-state insurers to sell plans in California without abiding by California’s mandates and regulations. FAILED
* SB893 (Cox) would divert First Five tobacco tax dollars to pay to provide health coverage for low-income children. FAILED

For more information, contact the author of this report, Hanh Kim Quach, policy coordinator, Health Access California, hquach@health-access.org.

Health Access California promotes quality, affordable health care for all Californians.

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