Big Day in Senate Health on Insurer Oversight
By Anthony Wright
Wednesday was a big day in Senate Health Committee, chaired by Senator Elaine Alquist, as legislators considered a number of key bills to provide new patient protections for California consumers, and especially to implement and improve health reform.
Most of the bills were authored by the Assemblymembers, having passed the full Assembly, with the exception of SB 227 (Alquist), the bill about the "high-risk pool" that was reformulated in the context of federal health reform.
All the key health reform bills considered cleared Senate Health Committeee, some with more ease than others. Below are a selection of those that were debated in committee Wednesday:
HELP FOR THOSE WITH PRE-EXISTING CONDITIONS
HIGH RISK POOL: SB 227 (Alquist), in conjunction with AB 1887 (Vilines). establishes the authority and guidelines for a new state-run, federally-funded high-risk pool, consistent with the requirements of federal health care law. The new high risk pool will provide health insurance coverage to individuals denied for pre-existing conditions. Coverage would cover at least 65% of a patient's costs, and limits consumers’ out-of-pocket costs. To be set-up alongside the Major Risk Medicaid Insurance Board, the state's existing high risk pool, the new high risk pool will be federally funded but run by the state in order to ensure that the needs of Californians are met by people who are familiar with California. The bill passed and heads to the Senate floor immediately.
CHILDREN WITH PRE-EXISTING CONDITIONS: AB 2244 (Feuer) “This is about assuring that kids have health care,” Assemblyman Feuer said, presenting this bill for consideration. It requires guaranteed issue of health insurance to children in 2011 and adults in 2014. The bill phases out premium variance so that children newly eligible for insurance pay no more than 120% of the standard risk rate up to 2012 and no more than 110% starting January 1, 2010. Perhaps finding it difficult to argue with assuring health care for kids, the industry representatives opposed to the bill again asked that Senators not take action, and instead await further federal regulations. Democratic Senators supported the bill, indicating they didn’t come to Sacramento to sit on their hands and wait for the federal government on all policy issues.
RESCISSIONS: AB 2470 (De La Torre) President Obama said it, the Congress said it, and countless others echoed one of the most basic mantras of health reform “no one should lose their health coverage when they get sick” – that is what health coverage is for. This bill outlaws the practice of rescissions and establishes an independent review process for health plan decisions to cancel or rescind coverage. In presenting the bill, Senator Gloria Romero described the importance of the independent review process as a recourse for consumers when their plans are cancelled or rescinded, “so that health plans don’t get to act as judge and jury”. The bill passed with the minimum 5 votes needed over the opposition of insurers and of the Department of Managed Health Care, which argued that the independent review process was too costly and didn’t justify the expense for the interim period between now and 2014.
RESCISSION FINES: AB 2540 (De La Torre) The bill prohibits “postclaims underwriting”, the practice of health insurers cancelling coverage retroactively after claims are submitted. The bill increases the fines on insurers who engage in this practice. The bill enjoyed swift passage out of committee.
MENTAL HEALTH PARITY: AB 1600 (Beall) provides parity for mental health services. It requires health plans and health insurance policies to cover medically necessary treatment of mental illness under the same terms and conditions as physical illness – including maximum lifetime benefits, co-payments, deductibles, etc. The insurers predictably opposed this mandate, and further argued that the bill would impair consumers’ freedom to choose what they wanted to buy. Assemblymember Beall pointed out the an extremely high number of people with mental illnesses end up using public programs and/or funding either through the Mental Health system or by more expensive means – when they end up in emergency rooms or jails. By not covering mental health, insurers are in effect shifting the costs associated with their policy holders to the taxpayers. Beall also made mention to the fact that the bill encompasses drug and alcohol services – which he argued have a positive impact on the economy by improving worker productivity.
MATERNITY COVERAGE: AB 1825 (De La Torre) requires every individual or group health insurance policy to cover maternity services – including prenatal care, ambulatory care maternity services, involuntary complications, neonatal care, inpatient hospital maternity care, labor and delivery, and postpartum care. Senator Negrete-McLeod presented the bill and presented the shocking statistic that right now only 19% of plans in the individual market offer maternity coverage, a sharp decline from the 82% that offered them just 6 years ago. The bill had Blue Shield of California as a supporter, whose representative argued that maternity care to be a fundamental health need. By not covering maternal care, the Blue Shield representative said, insurers undermine the basic premise of insurance – to pool risk related to fundamental health needs. Other industry representatives did not share that view, and urged Senators not to act until further federal regulation was available. Senator Negrete-McLeod spoke on behalf of the thousands of women and children who can not wait until federal law is in full force in 2014, she urged passage of the bill.
RATE REGULATION: AB 2578 (Jones and Feuer) The legislation requirers insurers to apply for approval before enacting rate increases starting January 1, 2012. Assemblymember Jones explained that this bill would be similar to an extension of Proposition 103, a voter-approved measure that requires state approval for rate increases in auto, home, and casualty insurance. Why, he asked, should health insurance be the exception? Senator Leno emphasized that health insurance is “a matter of life and death” and the voters have already agreed that insurance should be regulated.
The committee heard compelling testimony from Mr Fred Taylor, a small business owner who had provided comprehensive health benefits for his employees and their dependents for over 2 decades. However, Mr Taylor testified, it has been getting more and more difficult to continue to do so with insurance rate increases that went far beyond the rate of inflation 6 years ago his premiums were increased 96% and just this year they went up another staggering 75%. Without any regulation or intervention, he is forced to consider various cost cutting measures and looking at insurance that covers less.Testimony in support also included a range of consumer, labor, and health organizations. It passed committee with five votes.
FREQUENCY OF RATE HIKES: AB 2042 (Feuer) Prohibits insurers from raising rates more than once a year. This bill was on the agenda as “Vote Only” per discussion of amendments last week. It moved out of committee with 6 votes.
DISCOUNTS FOR UNINSURED
FAIR PRICING: AB 1503 (Lieu) requires physicians providing emergency services in hospitals to implement a discount payment policy for qualifying patients. Current law prevents hospitals from overcharging uninsured patients; however that law currently does not extend to the separate bills from emergency room doctors and others that patients get alongside the hospital bill. This legislation requires that emergency room physicians and others offer discounts to uninsured patients up to 350% FPL in accordance with prices determined by the FAIR Health database of physician charges and payments. This bill passed with Senators Alquist, Cedillo, Leno, Negrete-McLeod, Pavley, and Romero voting yes.
Anthony Wright is Executive Director of Health Access California, a statewide health care consumer advocacy coalition of over 200 groups. This article has been re-published from the Health Access Blog.