Key California Health Reform Bills
By Anthony Wright
The California Legislature completes the final two days of the 2009-10 session, major patient protection measures that implement and improve health reform have been passed, but several other key bills are still pending for final floor votes.
Bills must be passed and sent to the Governor’s desk by the end of Tuesday, August 31st, 2010, or otherwise they die for the year. Then, Governor Arnold Schwarzenegger will have the month of September to sign or veto them.
DIFFERENT VERSIONS OF BUDGET ALSO UP FOR FLOOR VOTES: That deadline does not extend to the budget, which is already technically late, but still pending.
The Legislature is expected to vote on different versions of the budget on Tuesday and Wednesday as well. They will consider both the Governor’s May Revision of the budget, brought to the floor by legislative Republicans, that includes dramatic cuts to health, human services, and other vital services; and the Conference Committee-approved budget, supported by legislative Democrats, that prevents the worst of those cuts with increased revenues.
PENDING IN THE SENATE:
Before the budget, the focus will be on remaining bills. Up for a final floor vote in the Senate are the following measures:
* REGULATING AND APPROVING HEALTH INSURANCE RATES: AB 2578 (Jones) would require insurers to justify their rates and give authority to the Department of Managed Health Care or the Department of Insurance to approve or reject increases in the amount of premium, co-payment, coinsurance, deductible, or other charges under a health plan. Click www.hcanca.org for the HCAN-CA ALERT on this important rate regulation measure.
The proposed increases of up to 39% by Anthem Blue Cross of California, and those of other insurers and in the market for small businesses, showed the need for insurers to need to justify their rates to regulators. Even with the very limited authority of the Department of Insurance, the regulator was able to find significant errors. The need for rate regulatory oversight is especially urgent in the interim between now and 2014, to prevent insurers from jacking up rates before health reform is fully in force.
President Obama endorsed an amendment by Senator Feinstein (D-CA) to provide for such rate authority, but there were procedural barriers to getting it included in the federal health reform law. This bill allows California consumers to benefit from the regulatory oversight that exists in other states and for other forms of insurance in California.
* ELIMINATING RESCISSIONS: AB2470 (De La Torre) would implement health reform by eliminating rescissions, so patients don't have their coverage yanked away at the time when they most need it. The bill would standardize the process of underwriting and asking about pre-existing conditions when accepting subscribers in the first place, and require regulatory approval for any insurer seeking to retroactively deny coverage due to fraud. This is an important protection in the interim until 2014, when insurers will be required to take patients without regard to pre-existing conditions.
A related measure, AB2540 (De La Torre), would enact/increase fines for rescinding, canceling, or limiting of a policy or certificate due to the insurer's failure to complete medical underwriting before issuing the policy or certificate or after a claim has been filed.
PENDING IN THE ASSEMBLY:
* TRANSITIONING TO A MORE TRANSPARENT AND COMPARATIVE MARKET: SB 890 (Alquist) would reform the individual insurance market, by setting basic benefit levels and classifying health plans in tiers (Platinum, Gold, Silver, Bronze) to allow consumers better ability to make apples-to-apples comparisons based on actuarial value, so that consumers can have some idea of how much of their medical costs they may need to pay out-of-pocket with different health plans.
The bill helps the California implement and transition to federal health reform in another way as well, by eliminating annual and lifetime caps on coverage that cause individuals with serious illnesses to incur significant medical debt.
* REQUIRING 60-DAY NOTICE AND TRANSPARENCY ABOUT RATE HIKES: SB 1163 (Leno) would require insurers to make information public about premium increases, available for review not just by the regulator but by the public on the insurers’ and regulators’ websites. The bill would also require insurers give 60 days notice to consumers and to the public before raising premiums. Currently, this information is not public, even the notice of a rate hike: insurers only need to give 30 days indication to subscribers, and there is no public notice requirement. This bill allows California, especially the Department of Managed Health Care, to better take advantage of the new federal funding available for review of rates.
SINGLE-PAYER UP FOR VOTE: Also up for a vote in the Assembly is SB810(Leno), to create a universal, single-payer health care system in California. The measure sets up a framework, with public financing to be worked out. While Governor Schwarzenegger has vetoed prior proposals, such as SB840 by Senator Sheila Kuehl, supporters see the vote as a basis for further organizing and education about this vision of quality, affordable health care for all.
LEGISLATION ALREADY PASSED/ONTO THE GOVERNOR’S DESK:
Last week, the California Legislature voted to pass several new patient protection bills, measures that would implement and improve the passage of federal health reform. Here are some of the bills that are now heading to Governor Schwarzenegger’s desk:
* CREATING A NEW CONSUMER-FRIENDLY EXCHANGE WITH BARGAINING POWER: AB 1602 (Perez) and SB 900 (Alquist/Steinberg) are companion bills that will establish a new health insurance Exchange as required by the federal health reform law. In 2014, the new Exchange will be the new one-stop shop for getting health coverage for individuals and small businesses, both providing easy-to-compare choices, access to federally-funded subsidies to make coverage affordable, and the bulk purchasing power (similar to large employers or CalPERS) of millions of Californians to bargain for the best price and value.
Currently, individual consumers are at the mercy of the big insurers, without any purchasing power, in a complex and confusing marketplace. A new exchange can dramatically improve the way Californians individuals and small businesses get coverage—making such decisions easier, more understandable, and more affordable. With an estimated 4 million Californians eligible to participate in the exchange in 2014 (and more later), these bills begin a process to ensure a new exchange is ready to help patients and draw down federal subsidies on day one.
* LIMITING SURCHARGES FOR CHILDREN WITH PRE-EXISTING CONDITIONS: AB 2244 (Feuer) implements the federal prohibition on denying coverage to children with pre-existing conditions, and limits the amount that insurers can charge to cover those children.
The federal health law took a crucial first step by prohibiting insurers from denying coverage to children with pre-existing conditions, starting this September. AB2244, sponsored by Health Access California, takes another step in making reform real, by also limiting how much insurers can charge children with pre-existing conditions, within an open enrollment period.
Federal law will prohibit such premium differences in 2014, but this bill phases in this affordability help sooner, and provides a smoother glide path for California's market to transition. Proponents say the bill would save tens of millions in the state budget, giving families the opportunity to buy private insurance rather than having them fall onto public health coverage programs.
* MATERNITY COVERAGE: AB 1825 (De La Torre) phases in a requirement for all health insurance plans to cover maternity care. This measure provides equity for women trying to buy coverage, saves the state money by preventing women from having to rely on public programs for maternity benefits, and crucially provides the public health benefit of getting babies the prenatal and early care coverage needed to live healthy and productive lives.
* MENTAL HEALTH PARITY: AB1600 (Beall) requires mental health parity in private coverage. Presented in the Senate by GOP Senator Roy Ashburn, the bill ensures that patients should be covered for mental health similarly to how they are covered for physical health.
* JOINT VENTURES AND PUBLIC OPTIONS: SB56 (Alquist) would foster new public health insurance options by allowing county-based Medicaid managed health care plans (such as Alameda Alliance for Health, LA Care, and San Francisco Health Plan) to enter into joint ventures, offer broader provider networks, and be viable choices in the marketplace.
* LIMITING RATE HIKES TO ONCE A YEAR: AB2042 (Feuer) would get health insurers to limit plans from raising rates or changing premiums, cost-sharing, or benefits to once a year. This is intended to provide stability to patients who want to know their premiums don't change mid-year, messing with their annual budget.
* MEDICAL ERRORS: AB542 (Feuer) would set up a process toward the goal that Medi-Cal would no longer pay for "never events," major medical errors that should not "never" happen. This bill is intended to encourage providers to set up systems that prevent such errors before they occur.
* YOUNG ADULT COVERAGE: SB1088 (Price) would implement the federal health law that allows young adults up to age 26 to stay on their parents' group coverage.
* PREVENTATIVE CARE: AB 2345 (De La Torre) would implement the federal health law by requiring insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations.
* EMERGENCY ROOM DOCTOR CHARGES FOR THE UNINSURED: AB1503 (Lieu) provides consumer protections to ensure uninsured and underinsured patients are charged fair prices for emergency physician services. The bill would require physicians who provide emergency medical services in hospitals to implement a discount payment policy, including a limited rate, for financially qualified patients. The bill would also place limits on the collections activities of these physicians.
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.