The California State Senate and Assembly held their floor sessions this week, with the opportunity to vote on major health care legislation to increase accountability in our health care system and improve health access for consumers.
AB 2080 by Assemblymember Wood strengthens oversight on for-profit hospital and health industry mergers to ensure they are in the public interest and SB 858 by Senator Scott Wiener which updates penalty amounts that the state can levy on health plans that don’t meet consumer protection standards. Both passed this week and head to the opposite house for next steps.
ADDRESSING HEALTH INDUSTRY CONSOLIDATION
Research shows health care consolidation is one of the major drivers of increasing health care costs. Health prices in California have less to do with the cost of providing the care, the quality of care, or the health outcomes, than with the relative size and market power of health providers to be able to charge whatever they can.
As the cost of living is on the mind of everyone these days, it’s easy to forget that health care prices have been skyrocketing for years, taking more and more from people’s paychecks, driven by health care consolidation. Health care mergers have often reduced competition for consumers, resulting in the cutting of services, lower quality and accessibility of care, and higher prices.
AB 2080 would ensure that hospital and health industry mergers are subject to public hearings and Attorney General approval, to prevent inflated prices and loss of key services.
For decades, the California’s Attorney General has reviewed, held public hearings, imposed conditions, and approved nonprofit hospital mergers so that consumer impact could be measured and considered. AB 2080 extends that existing authority and process to for-profit hospitals, medical groups, and the other major health industry transactions.
HEALTH PLAN FINE UPDATES
Despite strong consumer protections for Californians in health plans regulated at the Department of Managed Health Care (DMHC), many are still denied or delayed in getting medically necessary services. Yet fine amounts for violations related to grievance handling and other specific consumer protections have not been updated for decades, all while health insurance premiums have not just doubled, but quadrupled since 1999. Some fine amounts have not been updated since 1975 when gas was 59 cents a gallon.
With outdated fines, some plans may find it cheaper to pay the penalties instead of improving care. The California Legislature can and should update and increase the penalties when health plans deny or delay care or otherwise violate patient protections and other state laws.
SB 858 (Wiener) would increase the minimum civil fines imposed by DMHC from a maximum of $2,500 per violation to a minimum of $25,000. SB 858 would increase fixed fine amounts by four, based on the rate of increase in health insurance premiums since 1999. SB 858 also increases future fine amounts along with healthcare premiums and out-of-pocket costs.
COVERED CALIFORNIA AFFORDABLITY
Other bills that passed the floor this week include AB 1878 by Assemblymember Dr. Jim Wood, and SB 944 by Senator Dr. Richard Pan, both sponsored by Health Access California, to increase affordability assistance in Covered California.
With the new federal assistance in the American Rescue Plan in 2021, premiums are at an all-time low, but many patients continue to face barriers to care with other out-of-pocket costs such as deductibles and co-pays. AB 1878 and SB 944 would zero out deductibles and reduce co-pays in Covered California, removing financial barriers to care for hundreds of thousands of patients, and encourage even more Californians to sign up for coverage through Covered California.
This help would only happen however if Congress extends or makes permanent the premium subsidy enhancement passed as part of the ARP, which expires at the end of this year.
All of these bills are part of the larger #Care4AllCA campaign of over 70 organizations advocating for bold state action now towards a universal health care system that is affordable, high quality, and accountable to consumers.
Health Access Factsheets