Update: California Gets Ready for Reform With New Laws and Regulations; Over 1 Million Already Covered

HEALTH ACCESS UPDATE: Wednesday, September 25, 2013



  • Governor Signs SB639(Hernandez), to Set Limits on Out-of-Pocket Costs
  • Covered California Adopts Major Regulatory Packages to Be Ready for Enrollment
  • 3.5 Years After the Affordable Care Act Signed
  • New Coverage Options and Benefits 98 Days Away. Open Enrollment Starts In 1 Week
  • Revised Report “Counting the Benefits, Countdown to Coverage” Re-Released
  • New Fact Sheets Also Unveil How CA Is Implementing *And Improving* Upon the ACA from Special Legislative Sesssion Laws on Medi-Cal Expansion, on Insurance Reform


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In the last week, major elements have come into place for California to be ready to fully implement the Affordable Care Act (ACA), including on Thursday Covered California adopting major regulatory packages to be ready to start enrollment next week, and on Friday Governor Jerry Brown signing key legislation, SB639(Hernandez), to implement the Affordable Care Act’s consumer protections on out-of-pocket costs, an important safeguard against medical bankruptcy.

Despite the political debate ongoing on the U.S. Senate floor yesterday and today, many of the practical benefits have already been put in place in California, according to a revised status report released yesterday by Health Access this week. The report on the impact and implementation of the Affordable Care Act (ACA) confirms that Obamacare is already working in California, and that over one million Californians are already covered through the new options.

REVISED REPORT ON BENEFITS IN PLACE: The updated report, “Counting the Benefits, Countdown to Coverage,” describes California’s leadership role in implementing the law to not just implement but improve upon the ACA, as do two new fact sheets that show how California continued this effort in the special legislative session this year, with its implementation of insurance market reforms and Medi-Cal expansion.

The report is re-released 3.5 years after the signing of the ACA by President Obama, and at the 3-year anniversary of the first ACA consumer protections coming into place. It is one week before open enrollment in Covered California, the new marketplace for individuals, families, and small businesses seeking to purchase health insurance, and 99 days from the state of these new coverage options through Medi-Cal and Covered California in January 2014.

The report details how over one million Californians have been able to get coverage due to new options under the Affordable Care Act, including:

* Over 16,000 Californians who were denied for coverage by insurers due to their health status now have coverage through the ACA-funded Pre-existing Condition Insurance Program (PCIP).

* Over 435,000 young California adults up to age 26 have coverage through their parent’s health plan, under the ACA and state conforming legislation.

* Nearly 700,000 Californians in 53 counties have gotten new coverage through Low-Income Health Programs (LIHPs) − the most expansive early expansion of coverage under the Affordable Care Act in the country.

Millions more California families also now benefit from new consumer protections, according to the report, and some of the ACA provisions provide direct financial assistance to California families. Hundreds of thousands of seniors and small businesses in California are getting help with the cost of care. New rate oversight has allowed millions of patients and policyholders to get relief when paying premiums.

As we move from the political debate to the practical benefit, millions more will benefit next year from these new options, benefits, and consumer protections, and Californians will be able to shop and survey those options starting next week.

ALERT: Health Access is seeking stories of Californians impacted by the Affordable Care Act, either those folks who have already gotten new coverage and financial help, or those who will qualify for new Medi-Cal coverage or Covered California subsidies to afford coverage. If you or someone you know fit this description and are willing to talk about your experience, please E-mail sabbass@health-access.org.

CALIFORNIA’S LEADERSHIP: The report details how California has been a leader in implementing and improving the federal law, and lists the over 20 pieces of legislation to enact various parts of the Act. The new fact sheets spotlight two flagship bills passed earlier this year in special session, on insurance market reforms and Medi-Cal expansion. The documents highlight areas where the state has improved upon the Affordable Care Act to maximize the benefit for Californians:

* EXCHANGE: California was the first state in the nation to establish our insurance marketplace, Covered California, after passage of the ACA, and only one of a handful to give it the negotiating power to bargain for the best value for consumers–which it used aggressively to keep rates competitive. Covered California also goes beyond what most state exchanges are doing in standardizing benefit packages so consumers can make apples-to-apples comparisons, and not face fear of the fine print of insurance policies.

* BENEFITS: The California Legislature has passed laws requiring new “essential benefits” standards for coverage that will go into place in 2014 so that consumers no longer have to fear the fine print that might exclude the service they need. In addition, California mandated maternity coverage as a basic benefit 18 months early, in July 2012, which revived a benefit that many insurers were no longer providing in the individual insurance market.

* CHILDREN WITH PRE-EXISTING CONDITIONS: California quickly implemented the ACA provision that banned denials for children with pre-existing conditions starting early in 2010. When insurers balked, state law made it clear that insurers who refused to offer policies to children would be barred from covering adults as well—bringing the major insurers back into the market. The state law also went further than federal law, to also limit what children with pre-existing conditions can be charged to no more than twice any other child for the same policy.

* EARLY EXPANSION OF MEDI-CAL: California has been one of only five states to expand coverage early, and has been the leader, using federal matching funds to so that nearly 700,000 Californians are now getting coverage in county-run Low Income Health Programs. (This total is multiple times what any of the four other states with early Medicaid expansions have covered, and over half of the projected newly-eligible population in California.)

* MAXIMIZING MEDI-CAL ENROLLMENT: California passed a Medi-Cal expansion that will automatically shift these nearly 700,000 Californians into coverage on day one, January 1, 2014, and also allows for “express lane” enrollment of hundreds of thousands of additional Californians who are parents of Medi-Cal/Healthy Families children, and those who are on food stamps. It streamlines other enrollment processes, keeps on foster youth who would have aged off coverage, and includes state-only coverage for legal immigrants otherwise excluded from federal Medi-Cal coverage.

Medi-Cal benefits were also improved, including the restoration of dental coverage and the improvement of mental health and substance abuse benefits. The insurance market reforms go beyond federal law in allowing more reasons for signing up between enrollment periods, having an inclusive definition of family that includes LGBT domestic partners, preventing surcharges for health status including smoking, and limiting out-of-pocket costs.

GOVERNOR SIGNS COST SHARING CONSUMER PROTECTIONS: On Friday, Governor Jerry Brown signed another remaining element of the legislative implementation of the Affordable Care Act. Sponsored by Health Access, SB 639 (Hernandez) limits out of pocket costs (deductibles, copays, co-insurance) to no more than $6,350 for an individual or $12,700 for a family. This will protect Californians from medical bankruptcy by limiting their costs for covered medical benefits, especially for those with a very serious illness such as cancer, multiple sclerosis, HIV/AIDS or an organ transplant. SB639 will prevent patients from facing tens of thousands or even hundreds of thousands of dollars in coinsurance even though they had health insurance.

SB639 goes beyond the Affordable Care Act by:

·         Limiting out of pocket costs in 2015 to no more than $6,350 for all essential health benefits.

·         In 2015, not allowing an additional limit of $1,000 for pediatric dental or other categories like out-of-network emergency room use.

·         Protecting small employers and their employees from higher out of pocket limits in 2014, a year earlier than federal guidance requires.

Consistent with federal law, the bill also limits deductibles for small employer coverage, and defines the actuarial value tiers (platinum, gold, silver, bronze) for individual and small group law. As permitted under federal guidance, it also allows rates for the entire small employer market to be rebased quarterly though California law provides that small employers face rate increases no more than once a year.

KEY BILLS ON GOVERNOR’S DESK: Bills are still pending on the Governor’s desk on language access, rate review, and data collection. The Health Access website has a full bills list of all the legislation of interest to the health consumers that were passed that are now awaiting a decision by Governor Jerry Brown in the next few weeks.

Bills related to health reform include AB1208 (Pan), to allow data collection in health care on race, ethnicity, language, disability, sexual orientation, and gender identity; SB353 (Lieu), to protect limited English proficient consumers from deceptive marketing by requiring plans to provide information in languages they market in; and SB161 (Hernandez), a set of key consumer protections in the small group market on “stop-loss” insurance. Another consumer measure pending is SB205(Corbett) would require 12-point font size on prescription drug labels.

ALERT: Supporters of these measures should submit letters of support for these and other bills as soon as possible to Governor Jerry Brown’s office. A full list of consumer-oriented bills, both those inactive, pending, and passed, are on our website, at: http://www.health-access.org/files/advocating/HAC%20Bill%20List%209-18-13.pdf