Today--the final day of the legislative session--the California Legislature passed three more consumer protections and health care transparency measures, adding to the large crop of health reform implementation bills voted on last week and that now also head to the Governor.
All together, the California legislature has passed a unprecedented package of patient protections, building off of the new federal health law to make reform real for California consumers. Governor Arnold Schwarzenegger will have the month of September to sign or veto them.
The bills passed today include: * AB2470(De La Torre) on Eliminating Rescissions * SB890(Alquist), to Standardize Benefits to Allow for Better Comparisons of Plans * SB1163(Leno), to Provide 60 Day Notice and Transparency on Rate Hikes
The bills passed last week include: * AB1602 (Perez) & SB900 (Alquist), to Create a New Health Insurance Exchange * SB56 (Alquist), to Foster New Public Health Insurance Options * AB1825 (De La Torre), to Phase-In Maternity Coverage as a Basic Benefit * AB1600 (Beall), to Require Mental Health Parity in Health Coverage * AB2244 (Feuer), to Limit Premiums for Children with Pre-existing Conditions * SB1088 (Price), to Allow Young Adults up to Age 26 To Stay on Parental Coverage * AB2042 (Feuer),to Limit Rate Hikes and Changes to Once a Year * AB1503 (Lieu), to Prevent ER Doctor Overcharges for the Uninsured * AB542 (Feuer), to Prevent Medi-Cal Payment for "Never Event" Medical Errors
As of this writing, one major piece of consumer protection legislation, AB2578(Jones) to institute rate regulation, still is pending, seeking the needed votes to pass the California Senate. We'll keep you posted.
Today the California Legislature considered two budget proposals, one from the Republicans and one from the Democrats. The conversation revolved more around ideology than substance, with very little actually being said about the proposals themselves.
Republicans claimed to represent the priorities of most Californians with their budget proposal, which would cut many health and human services, and eliminate CalWORKs, Child Care, and severely cut IHSS. They blamed the state's budget shortfall on Democrats' failure to take action in February and continued to beat the"raising taxes" and "job killer" drums. They propose $12.4 billion in expenditure reductions.
Democrats contend that the real "job killer" is a budget that eliminates both public and private sector jobs with the cuts proposed by Republicans. Senator Denise Ducheny, Chair of the Budget Conference Committee, argued that the Republican plan would eliminate one of the most successful Welfare-to-Work programs in the country in order to pay for a $4 billion tax cut to corporations. Some legislators relayed touching personal stories of constituents that have already suffered or would suffer as a result of budget cuts, while Senator Gil Cedillo expressed utter disbelief that the Republicans could even propose such a budget. "REALLY?" he asked repeatedly, before pointing out that Ronald Reagan raised taxes to help build California to it's current greatness. "What would Ronald Reagan do?" he asked.
Additional notable quotables:
Senator Mark Leno on the Republican proposal: "This budget takes us backwards, it is a 'starve the beast of government budget' that dismantles all we've built over the last decades."
Senator Gloria Romero on the need to preserve health and human services: "We all want to live within our means - we can live within our means without actually mean."
More health reform implementation bills moved closer to passage in the California Legislature today as the session approaches tomorrow's end date. Three bills of note head to a final concurrence vote tomorrow before going to the Governor's desk.
The Assembly passed SB 890 (Alquist), which would standardize the individual market, categorizing insurance plans by actuarial value. This is an important protection that will give consumers a better idea of the out-of-pocket expenses that they may incur. This bill will also shorten the period of time that individuals must wait before changing plans (without having to undergo underwriting again) to one year.
The Assembly also passed SB 1163 (Leno), a bill that would require insurers to provide regulators and put in public domain the data and methodology for such rates and rate increases, and would double the notice period for rate hikes from 30 to 60 days.
Both bills are in the Senate tomorrow.
The Senate passed AB2470 (De La Torre) to implement the part of federal health reform that eliminates rescissions. It will be up the Assembly tomorrow.
The Senate also considered AB2578 (Jones), to require insurers to justify their rates and to give regulators the authority to approve or reject rate hikes and changes, did come up for a vote, but failed to get the 21 votes needed for passage. It got 17 votes, with Republicans and three Democrats (Calderon, Correa, and Wright) voting no, and three other Democrats abstaning. The bill was granted reconsideration and could be up tomorrow for a final attempt at passage.
LEGISLATIVE UPDATE ON KEY CALIFORNIA HEALTH REFORM BILLS Key Consumer Protections Have Passed, But Other Key Bills Up On Last Two Days
Up for a Final Vote in the Senate: * AB2578(Jones), to Institute Rate Regulation to Prevent Unjustified Rate Hikes * AB2470 & AB2540(De La Torre) on Eliminating Rescissions
Up for a Final Vote in the Assembly: * SB890(Alquist), to Categorize Benefits to Allow for Better Comparisons of Plans * SB1163(Leno), to Provide 60 Day Notice and Transparency on Rate Hikes * Assembly Also Set To Vote on Universal Single-Payer System, SB810(Leno)
Major Bills Passed Last Week Head to Governor’s Desk * AB1602(Perez) & SB900(Alquist), to Create a New Health Insurance Exchange * SB56(Alquist), to Foster New Public Health Insurance Options * AB1825(De La Torre), to Phase-In Maternity Coverage as a Basic Benefit * AB1600(Beall), to Require Mental Health Parity in Health Coverage * AB2244(Feuer), to Limit Premiums for Children with Pre-existing Conditions * SB1088(Price), to Allow Young Adults Up to Age 26 To Stay on Parental Coverage * AB2042(Feuer),to Limit Rate Hikes and Changes to Once a Year * AB1503(Lieu), to Prevent Emergency Room Doctor Overcharges for the Uninsured * AB542(Feuer), to Prevent Medi-Cal Payment for "Never Event" Medical Errors
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The California Legislature heads into its final two days of the 2009-10 session, having passed major patient protection measures that implement and improve health reform, but with several other key bills 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.
More action from the Assembly floor, as two additional bills were approved in the California Assembly for a concurrence vote on Thursday, and now head to the Governor's desk.
One was AB1600(Beall), to provide mental health parity. In floor debate, several GOP legislators questioned expanding what was required to be covered. Assemblymen Beall, Chesbro, and Saldana indicated that the bill had been narrowed, but still would ensure that patients had the security of having mental health coverage similarly as to physical health. Beyond the benefit to consumers directly, they arguedd it would also save money for state and local government, to provide early mental health treatment early rather than the range of health and human service interventions that become necessary later.
Another bill that passed was AB2244(Feuer), to ensure that children with pre-existing conditions have affordable access to coverage, by limiting how much they can be charged to twice the premium of a child without a pre-existing condition, within an open enrollment period around their birthday.
Both bills head to the Governor's desk.
In other news, the Assembly Health Committee quickly considered and passed final amendments on two key transparency bills: SB890(Alquist), that standardizes the individual market, classifies and categorizes the products in the individual health insurance market so consumers can make better apples-to-apples comparisons; and SB1163(Leno), that doubles the notice period for rate hikes for consumers, and requires insurers to make public rate hikes, actuarial justifications, and the like. Both measures head to the full Assembly floor as early as today, Friday.
Some of the most outrageous remarks in recent memory were made yesterday by former Senator Alan Simpson to the national leader of the Older Women's League (OWL) regarding entitlement to Social Security. Specifically, Mr. Simpson took it upon himself to respond to OWL in a very insulting and derogatory manner that 350 million women were in essence "sponging off" Social Security.
We took more attention than most because we value the membership of OWL of California as a Health Access California member, and active participant on our board. The great Betty Perry of OWL is the immediate past president of our board, and a longtime friend and ally of our organization. An insult to her is an insult to us. But even if we look beyond Senator Simpson's sexist and shameful language, was he right?
I actually have some knowledge about Social Security because I worked for that agency for 25 years. It is true that more women than men draw Social Security benefits, both presently and historically since the program was signed into law in 1935. This is because women live longer than men. However, it is entirely wrong to say that in some way women have weaseled their way into drawing a "free benefit" to which they are not entitled. Social Security is a social insurance program to which workers pay taxes in order to partially replace lost earnings due to retirement, disability, or death. So when anyone draws Social Security, the fact of their entitlement and the amount of their benefit is based on their wages, their spouse's wages, or their parent's wages. They have not snookered anyone into giving them "something for nothing."
The same principle underlies Medicare, the health insurance program for seniors and people with disabilities. People pay Medicare taxes and when they reach age 65 or after they become too disabled to work, they become eligible for this national health care program. Both of these programs provide important support for a large segment of the American people and are part of the fabric of our life. In fact, both programs are National Treasures.
Unfortunately, what uninformed comments Mr. Simpson makes probably have more impact than your average ill-mannered lout. This is because he is the co-chair of the President's Commission on the Deficit who will have a role in making recommendations to Congress and the President on reducing the deficit and these recomomendations are likely to encompass some reform of entitlements. His comments were beyond unfortunate and demeaning. They were wrong. It was especially ill-timed because they were made just as we celebrate the 90th anniversary of Women's Equality Day which commemorates giving women the right to vote in 1920.
Mr. Simpson comments have caused quite a stir. Many people are calling for him to be removed from this role on the Deficit Commission. I am not sure what the President will do. However, I am convinced we should all reaffirm our support for organizations that work on behalf of women, seniors, people with disabilities, communities of color, labor, faith organizations, and children. We should demonstrate in the strongest way possible our support for these organizations, such as Older Women's League, Health Access and our allies, and if we use Alan Simpson's remarks as the catalyst for action, to support our legislative agenda and provide financial backing, so be it!
posted by Elizabeth C Abbott | Permalink | 9:56 AM
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Key patient protections on their way to the Governor's desk...
Wednesday, August 25, 2010
HEALTH ACCESS UPDATE Wednesday, August 25, 2010
CALIFORNIA LEGISLATURE PASSES KEY PATIENT PROTECTIONS
* CA State Senate Passes Efforts that Implement and Improve Health Reform, Including: * AB1825(De La Torre), to Phase-In Maternity Coverage as a Basic Benefit * AB1600 (Beall), to Require Mental Health Parity in Health Coverage * AB2244 (Feuer), to Limit Premiums for Children with Pre-existing Conditions * SB56 (Alquist), to Foster New Public Health Insurance Options * SB1088 (Price), to Allow Young Adults up to Age 26 To Stay on Parental Coverage
* CA Assembly Passes and Sends to Governor Other Key Consumer Protections, Including: * AB1602 (Perez), to Create a New Health Insurance Exchange * AB1503 (Lieu), to Prevent Emergency Room Doctor Overcharges for the Uninsured * AB542(Feuer), to Prevent Medi-Cal Payment for "Never Event" Medical Errors * AB2042(Feuer),to Limit Rate Hikes and Changes to Once a Year
* Rate Regulation, AB2578(Jones), and Other Key Bills Up Later This Week
Earlier today, 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 were considered:
* 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 an important 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 the reform real, by also limiting how much insurers can charge children with pre-existing conditions. Federal law will prohibit such premium differences in 2014, but this bill phases in this help with affordability 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, like Medi-Cal, Healthy Families, and CCS (California Children’s Services for children with disabilities). The California State Senate passed AB2244.
* EMERGENCY ROOM DOCTOR CHARGES: 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.
Since emergency room patients are not in a position to shop around or bargain for the best price, AB1503, sponsored by Health Access California, puts in place some protections against unfair bills. It provides first-in-the-nation consumer protections that ensure that self-pay emergency room patients pay similarly to what is billed to other payers and insurers, and not multiple times more, as has sometimes been the case.
California passed groundbreaking consumer protections in 2006 against hospital overcharging, where hospitals charged uninsured patients 3-4 times what insurers and government programs paid for exactly the same service. AB 1503 provides similar notice and protections to the emergency room doctor bill that often accompanies the hospital bill. Consumer advocates appreciated emergency room doctors working to reach an equitable fair pricing agreement. The measure passed the Senate yesterday, the Assembly today on a unanimous vote, and is heading to the Governor's desk.
* 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 most importantly provides the public health benefit of getting babies the prenatal and early care coverage they need to live healthy and productive lives. AB1825 passed the California State Senate and goes back to the Assembly for concurrence.
* MENTAL HEALTH PARITY: AB1600 (Beall), which requires mental health parity in private coverage, also passed the California State Senate and goes to the Assembly for concurrence. 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.
* NEW HEALTH INSURANCE EXCHANGE: AB1602 (Perez) (along with SB900(Alquist)) sets up the a new health insurance exchange, where consumers can easily compare plans, get coverage, and access federal subsidies to make coverage more affordable. Like large employers do now, the exchange would bargain with health insurers for the best price and value, for potentially over 4 million Californians. AB1602 (Perez) passed the Assembly, and with SB900 (Alquist) which passed the Legislature yesterday, is now heading to the Governor's desk.
* 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. AB2042, sponsored by Health Access California, passed the Assembly, and heads to the Governor.
* MEDICAL ERRORS: AB542 (Feuer) would set up a process so 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. The bill passed the Senate today and heads to the Governor's desk.
* 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.
* PREVENTATIVE CARE: AB 2345 (De La Torre) requires insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations. The measure passed the Senate floor yesterday.
KEY VOTES COMING UP: Several other consumer protections are still pending in this final week of legislative action. Of particular note:
In Assembly Health Committee tomorrow for final amendments: * SB890(Alquist) to make the individual insurance market more transparent and secure, classifying health plans in tiers (Platinum, Gold, Silver, Bronze) to allow consumers better ability to make apples-to-apples comparisons, and implement health reform with regard to prohibiting annual or lifetime limits on coverage. * SB1163(Leno) to require insurers to provide greater transparency about their rates, their methodology, and their proof of actuarial soundness.
In the Senate: * AB2578(Jones), which would require insurers to justify their rates and submit rate hikes for approval to the Department of Insurance and Department of Managed Health Care. Click here for the HCAN-CA ALERT on this important rate regulation measure. * AB2470 (De La Torre), which 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 deadline to pass measures is the end of August, and then the Governor will have the month of September to sign or veto measures.
CALIFORNIA LEGISLATURE PASSES FIRST-IN-NATION BILL TO IMPLEMENT HEALTH REFORM BY CREATING NEW INSURANCE EXCHANGE
* Key Bills, AB1602(Perez) and SB900(Alquist/Steinberg), Pass Tough Senate Vote
* In 2014, New Exchange Will Be One-Stop Shop for Consumers to Compare Plans, Get Affordability Subsidies & Get Quality Coverage with No Pre-Existing Conditions Denials * Exchange Would Pool Bargaining Power of Millions of Californians to Negotiate with Insurers for Best Price & Value * Anthem Blue Cross Opposed Bills, Including the Exchange's Bargaining Power, and its Conflict-of-Interest Provisions
* AB1503(Lieu) Also Passes Senate, to Prevent Uninsured from Overcharging from Emergency Room Doctors * Key Other Bills Up Later This Week, including Rate Transparency, Rate Regulation & Approval, Benefit Standards, and Affordable Access for Children with Pre-Existing Conditions
Earlier today, the California State Senate voted to pass bills to set up a new health insurance exchange, putting California on track to be the first state in the nation to enact take this central step of implementing the new federal health reform law.
Companion bills AB 1602 (Perez), which would establish the new health insurance exchange, and SB 900 (Alquist/Steinberg), which would set up its governance, passed on party-line votes. As envisioned in the new federal law, the exchange would be the heart of health reform. 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, individuals and small businesses have little market power purchasing health coverage, and are simply alone against the big insurers. In contrast, the new California exchange is projected to have as many as 4 million or more Californians who will be eligible to participate--either as individuals or as workers of small businesses who join. The exchange could grow larger in future years, as larger employers are allowed to join.
SB900 has passed both the Assembly and the Senate, and heads to the Governor's desk. AB1602 has passed the Senate and goes to the Assembly for concurrence, before also heading to the Governor's desk. If the Governor signs the measures, California would be the first state to enact legislation to set up an exchange since the passage of federal reform.
EMERGENCY ROOM CHARGES: In other news, the State Senate passed a key consumer protection sponsored by Health Access California, AB1503(Lieu), which limits the bills to uninsured patients from emergency room doctors. The measure is a companion to 2006 bill that prevented the practice of hospital overcharging the uninsured 2-3 times what insurers paid for the same service.
KEY VOTES COMING UP: Several other consumer protections are still pending in this final week of legislative action. Of particular note, the one that have opposition from Anthem Blue Cross of California and other insurers include:
In the Senate: * AB2578(Jones), which would require insurers to justify their rates and submit rate hikes for approval to the Department of Insurance and Department of Managed Health Care. Click here for the HCAN-CA ALERT on this important rate regulation measure. * AB2244(Feuer), which would, in an open enrollment period, limit premiums for children with pre-existing conditions. Starting in September, the new federal law will prohibit children for being denied for health status, and this bill improves upon the federal law by ensuring affordable access to coverage.
In the Assembly: * SB890(Alquist) to make the individual insurance market more transparent and secure, classifying health plans in tiers (Platinum, Gold, Silver, Bronze) to allow consumers better ability to make apples-to-apples comparisons, and implement health reform with regard to prohibiting annual or lifetime limits on coverage. * SB1163(Leno) to require insurers to provide greater transparency about their rates, their methodology, and their proof of actuarial soundness.
The deadline to pass measures is the end of August, and then the Governor will have the month of September to sign or veto measures.
KEY HEALTH CONSUMER PROTECTIONS HEAD TO FINAL FLOOR VOTES THIS WEEK
* Bills Pass Monday to Prevent Rate Hikes More Than Once a Year; Allow Young Adults up to Age 26 Onto Parental Health Plans; and Facilitate Local Public Health Insurance Options
* Multiple Pending Bills Would Implement & Improve Federal Health Reform in California * Key Bills Would Set Up New Exchange to Negotiate with Insurers for Best Price & Value * One Bill Would Establish Minimum Benefit Standards, Allow Better Comparison Shopping * Bills for Rate Review & Transparency and Rate Regulation & Approval Hotly Contested * Also At Stake: Affordable Access for Children with Pre-Existing Conditions * Votes This Week, While Anthem Blue Cross and Other Insurers Oppose
This week, the California Legislature is voting on key bills to implement federal health reform and enact important consumer protections.
Just yesterday, Monday, state legislators had crucial floor votes on three health care measures: * SB1088(Price) passed the Assembly, which would implement federal health reform on the issue of allowing young adults to stay on their parent's coverage up to age 26. * AB2042(Feuer), sponsored by Health Access, passed the Senate with 21 votes, would provide predictability to the insurance market by limiting changes in premiums, cost-sharing and benefits more than once a year. * SB56(Alquist) also passed the Assembly, and would facilitate new public health insurance options for consumers by encouraging joint ventures between county-run Medicaid managed care plans (think San Francisco Health Plan, Alameda Alliance for Health, LA Care, etc), so they have broader geographical networks and be viable in the non-Medi-Cal marketplace.
These bills need to go back to their respective houses for concurrence votes before being sent to the Governor.
MAJOR BILLS COMING UP TODAY AND LATER THIS WEEK: Other key consumer protection bills are up today and later this week, bills to implement health reform and provide greater oversight over the health insurance industry. Anthem Blue Cross of California, the largest private insurer in the state, and other insurance companies are actively opposing these measures.
These bills go to the heart of health reform: they create the exchange that will allow individual Californians to pool together to bargain for the best price and value for coverage; they require insurers to disclose their rate filings and justify their rates, and to submit those rates for approval by state regulators; they set standards for coverage, and better classify health plans so consumers can make apples-to-apples comparisons; and they limit the premium charges for children with pre-existing conditions, to ensure meaningful access to coverage for them.
To counter the opposition from Anthem Blue Cross and other insurers, health care and consumer advocates are actively supporting these measures, which are expected to come up for final floor votes in the next few days in the California legislature. A run-down of the key bills is below.
* CREATING A NEW CONSUMER-FRIENDLY EXCHANGE WITH BARGAINING POWER: AB 1602 (Perez) and SB 900 (Alquist/Steinberg) are companion bills, up in the Senate today or tomorrow, 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.
Right now, individual consumers are at the mercy of the big insurers, without any purchasing power, in a complex and confusing marketplace. A new insurance exchange, can dramatically improve the way Californians buy coverage as individuals and small businesses.
With an estimate 4 million or more Californians who will be eligible to participate in the exchange starting 2014, it is critical that we begin creating an exchange that will be prepared to serve consumers and draw down federal subsidies on day one.
* TRANSITIONING TO A MORE TRANSPARENT AND COMPARATIVE MARKET: SB 890 (Alquist) would reform the individual insurance market, by setting basic benefit levels and categorizing health plans to allow consumers to compare plans based on the actuarial value, so that they can have some idea of how much of their medical costs they may need to pay out of pocket.
Countless Californians who thought they were covered by insurance, have ended up incurring medical debt or worse, losing their savings or their homes are a result of health care costs. This bill categorizes insurance products based on actuarial value, allowing consumers to compare the degree of risk they take on with various plan options and give consumers much needed information about how much they may end up spending out of pocket.
This bill also eliminates caps on coverage that cause individuals with serious illnesses to incur medical debt.
* REGULATING AND APPROVING HEALTH INSURANCE RATES: AB 2578 (Jones) would require approval by the Department of Managed Health Care or the Department of Insurance of an increase in the amount of premium, co-payment, coinsurance, deductible, or other charges under a health plan.
We’ve seen the huge increases of up to 39% by Anthem Blue Cross of California, and even more by other insurers and in the market for small businesses. Even with the very limited authority of the Department of Insurance, they were able to find significant errors.
We especially need rate regulatory oversight in the interim between now and 2014, to prevent insurers from jacking up rates when health reform is fully in force.
President Obama endorsed an amendment by Senator Feinstein to provide for rate review, but there were procedural barriers to getting it included. But we can do it at the state level with this bill. This bill can take advantage of the new federal funding available for review of rates.
* MAKING RATES TRANSPARENT AND ACTURIALLY SOUND: SB 1163 (Leno) would require insurers to provide information about premium increases and insurer rate filings to be reviewed by the state and released to the public. The bill would also require insurers to notify consumers in writing of rate increases, these notifications must include clear justifications and rate increase notifications must be sent at least 60 days prior to the change taking effect.
The rate increases, such as the up to 39% increases by Anthem Blue Cross of California that ultimately had to be withdrawn because it was determined that they were based upon mathematical errors.
This bill will require insurers to disclose their methodology for determining rates and to show their actuarial soundness. This bill allows California to take advantage of the new federal funding available for review of rates.
* 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.
Starting this year, federal reform prohibits insurers from denying coverage to children with pre-existing conditions. California can make this reform real, by also limiting how much insurers can charge children with pre-existing conditions. The bill would limit different premiums in an open enrollment period. Federal law will prohibit such premium differences in 2014, but this bill provides a smoother glide path for the CA market’s transition.
The bill provides some affordability and meaningful access to children with pre-existing conditions, and 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 like Medi-Cal, Healthy Families, and CCS (California Children’s Services for children with disabilities).
A number of additional consumer protection and health reform bills are also up for vote in the next week. A list of these bills are on the front page of the Health Access California website, at www.health-access.org. If these bills pass the final floor votes before Tuesday, they will head to the Governor’s desk in hopes of signature. If the bills are passed, the Governor has the month of September to either sign or veto the measures.
For more information about these bills, contact the author of this report, Linda Leu, Policy Analyst, Health Access California, at lleu@health-access.org
It's an important reminder of the full extent of the health care crisis--statewide, the number of uninsured grew to 8.4 million over the course of a year, and grew in every region.
For those of us focused on bills to implement health reform, it's an important reminder of the urgency--especially for the coverage expansion elements, of which many don't kick in until 2014.
In legislative action today, there were floor votes on a couple of key bills today:
* SB1088(Price) passed the Assembly, which would implement federal health reform on the issue of allowing young adults to stay on their parent's coverage up to age 26.
* AB2042(Feuer), sponsored by Health Access, passed the Senate with 21 votes, would provide predictability to the insurance market by limiting changes in premiums, cost-sharing and benefits more than once a year.
* SB56(Alquist) also passed the Assembly, and would facilitate new public options for consumers by encouraging joint ventures between county-run Medicaid managed care plans (think San Francisco Health Plan, Alameda Alliance for Health, LA Care, etc), so they have broader geographical networks and be viable in the non-Medi-Cal marketplace.
These bills need to go back to their respective houses for concurrence votes before being sent to the Governor.
The key bills in this week's legislative battle...
This week, California legislators will decide whether to institute new patient protections, to provide consumers with greater access and affordability for coverage, and to implement and improve the new federal health law. Victoria Colliver at the San Francisco Chronicle reports on some of the bills heading to a final deadline.
Here are key bills that are crucial for health care consumers, yet are opposed by Anthem Blue Cross and other insurers.
* CREATING A NEW CONSUMER-FRIENDLY EXCHANGE WITH BARGAINING POWER: AB 1602 (Perez) and SB 900 (Alquist/Steinberg) are companion bills, up in the Senate today or tomorrow, 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.
The exchange is the heart of health reform. The Courage Campaign has a petition, with insurance whistleblower Wendell Potter to the CEO of Anthem Blue Cross of California, calling on them to stop their opposition to the implementation of health reform in California: http://www.couragecampaign.org/page/s/StopAnthem
* TRANSITIONING TO A MORE TRANSPARENT AND COMPARATIVE MARKET: SB 890 (Alquist) would reform the individual insurance market, by setting basic benefit levels and categorizing health plans to allow consumers to compare plans based on the actuarial value, so that they can have some idea of how much of their medical costs they may need to pay out of pocket.
* REGULATING AND APPROVING HEALTH INSURANCE RATES: AB 2578 (Jones) would require approval by the Department of Managed Health Care or the Department of Insurance of an increase in the amount of premium, co-payment, coinsurance, deductible, or other charges under a health plan.
* MAKING RATES TRANSPARENT AND ACTURIALLY SOUND: SB 1163 (Leno) would require insurers to provide information about premium increases and insurer rate filings to be reviewed by the state and released to the public. The bill would also require insurers to notify consumers in writing of denials or rate increases, these notifications must include clear justifications and rate increase notifications must be sent at least 60 days prior to the change taking effect.
* 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.
Other Bills on the Assembly Floor * SB 56 (Alquist) would authorize county-organized health plans and other health benefits programs to form joint ventures in order to create integrated networks of public health plans that pool risk and share networks. This will provide better public health insurance options for consumers. * SB 208 (Steinberg) and AB342(Perez) renews California’s Medi-Cal financing waiver, drawing down up to $10 billion in federal funding. This would allow the state to begin phasing in expansions of public programs to build the bridge to full health reform implementation. * SB 1088 (Price) would implement federal requirements that employers extend dependent coverage to dependents up to age 26. * SB 810 (Leno) establishes the authority (but not financing) for a state administered Single Payer health care system.
Other Bills on the Senate Floor * AB 1825 (De La Torre) requires all health insurance plans to cover maternity care. * AB 2345 (De La Torre) requires insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations; continues to permit co-pays and deductibles for managing asthma, diabetes, heart disease, and other chronic conditions. * AB 2470 (De La Torre) would eliminate rescissions by establishing standard information and health history questions used by health insurers on application forms, and requires insurers to complete medical underwriting and review for accuracy before issuing an individual a health plan contract or policy.
The next week will be crucial in determining the extent of our ability to implement and improve upon health reform, to make reform real here California. Many of these bills continue to face strong opposition from the insurance industry and other lobbyists. Health and consumer advocates will be mobilizing this week to move all these bills through.
A bill that sets up the governance of a new health insurance exchange, SB900(Alquist/Steinberg), passed the Assembly earlier today, 49-25. This, along with the companion bill AB1602(Perez), which creates the exchange, is a central element of health reform, as it will how California families and small businesses will be able to get coverage easily and affordably.
Starting in 2014, individuals will be able to get coverage regardless of pre-existing conditions. The exchange will offer one-stop shopping, providing easy-to-compare options. It also will be the vehicle for consumers to get which to get subsidies to afford coverage. In the exchange, basic coverage won't cost more than a certain percentage of premium, based on a sliding scale. And for those under 400% of the poverty level (around $88,000 for a family of four, which is just above median income), the exchange will provide a (federally-funded) subsidy between that percentage of income (a sliding scale from 2%-9.5%) and the cost of coverage.
This bill package of SB900 and AB1602 just doesn't set up an Exchange, but gives it the power to negotiate for the best possible price and value for consumers. The insurers--led by Anthem Blue Cross--oppose allowing the Exchange to have such bargaining power, but it's essential for a better reform.
SB900 now goes back to the Senate, to be voted on with AB1602(Perez), the companion bill to SB900. So more work to do...
Being clear about the consequences of a bad budget...
Thursday, August 19, 2010
California's budget debate heated up yesterday. But beyond the news of pending IOUs and furloughs, a boisterous rally made the point about what this budget crisis is actually about.
Over 250 people rallied at the Capitol against the proposed cuts to health and human services, and for the revenues to sustain these key programs. Organized by a coalition of health and human service advocates, including the HHS Network and Health Access California, the speakers talked about Governor Schwarzenegger's cuts that would eliminate the CalWORKS welfare-to-work program, eviscerate home care services, and place cruel limits and major financial barriers preventing patients from getting the health care they need in Medi-Cal.
The protestors wanted to make quite clear the choices that legislators and the Governor have in this budget debate. "Cuts Kill, Taxes Heal" read one of the signs. Another chant was "Tax the oil, tax the booze, save the services we all use." Whether from the disability community or social service agencies or just working families, these advocates knew that in these tight budget times, the stubborn reliance on "no new taxes" pledges force severe cuts and real pain.
The rally led into a march, around the block, led by a large statue of Governor Schwarzenegger wielding a budget axe (pictured here under the marquee of the Crest Theater).
When the procession got to the intersection of 11th and L Street, many protestors--including some blind and others in wheelchairs--just stopped, blocking traffic while chanting "We want Arnold!" and other slogans: "What do we want? A Fair Budget! When do we want it? Now!"
This led to a seperate action of civil disobedience, with 22 people, mostly from the disability community, blocking the intersection right in front of the state Capitol. (The Sacramento Bee has a slide show of photos.) Over 50 police eventually showed up. Health Access provided up-to-the-minute updates on our Twitter feed, at www.twitter.com/healthaccess
There were many headlines today that focused on the arrests, from BusinessWeek to KCRA, Capitol Weekly to News10 to the Sacramento Bee, and the Sacramento Press to Channel 13. Indeed, our own Jessica Rothhaar, who directs our budget organizing for Health Access, was arrested--unplanned and not in traffic at the time--and eventually taken to jail. (There's more to say about that later.) We were glad that she was safely released at around midnight that night, and that the message about the severity of these cuts got out.
Too often, the budget is reported on as merely a process story--a series of negotiations, political postures, and statements by politicians--rather than about the real consequences of the services that would be cut and the people that would be affected. Yesterday was an attempt to refocus the budget debate on the the human impact, and on the need for people to be involved in these crucial budget decisions.
Anthem Blue Cross of California infamously opposed health reform both in California, and nationally--as we document on the website www.sickofbluecross.com.
Now the company has come out against the flagship bills to implement health reform. Anthem Blue Cross is circulating a floor alert opposing AB1602 and SB900, the bills that would set up the new health insurance exchange in California. The new exchange is the heart of health reform, the place where consumers will quickly, easily and affordably to get coverage, as well as the subsidies to better afford such coverage.
What is the basis of Anthem Blue Cross' opposition?
* They oppose the Exchange's ability to bargain for the best price and value on behalf of consumers. Anthem Blue Cross argues against the Exchange having the power to "design products and choose which carriers can sell insurance in the Exchange." They would rather the Exchange is merely a flea market, letting all insurers sell whatever they want--rather than a purchasing pool that would use its market power to negotiate the best deal for consumers.
* They want to control the Exchange, and object to the conflict-of-interest provisions that exclude employees of insurers from being on the board. Anthem Blue Cross complains the bill "specifically precludes from consideration many qualified individuals with expertise regarding health insurance and insurance product design from serving on the Board." The bills include such conflict of interest lanugage because the point of the Exchange is to represent consumers and purchasers of insurance. If the Exchange is to negotiate with the health insurance industry, it really shouldn't have health insurance industry employee being on both sides of the table.
There're other objections as well--they oppose the funding mechanism for the exchange, so as to better cripple its operations--but the details may not matter as much. Anthem Blue Cross opposed health reform in various incarnations, including the federal law. So its not a surprise that Anthem Blue Cross opposes the bills that seek to implement that law. But it should be a clarion call for California consumers about why we need to advance these bills, this year.
Well, I'm back from the National Association of Insurance Commissioners (NAIC) meeting in Seattle!
I went to the NAIC meeting because I am one of the dozen or so consumer representatives who were chosen in March to represent consumers' interests as that organization works out many of the details of how health care reform will play out. The NAIC increased the numbers of consumer representatives this year because of the central role the NAIC has in writing policies and model regulations for the states and their official advisory role to the federal government in health care reform implementation. They already are lobbied by hundreds of industry representatives, and the commissioners needed the consumer perspective of how the implementation of health care reform.
But the real "Battle in Seattle" actually took place inside the meeting hall among the commissioners who were voting on relatively obsure insurance issues that literally affect all consumers. This "battle" had lots of drama, including strong language, mini-confrontations, and 'shuttle diplomacy.' The most contentious issue is the requirement of the new health care reform law that mandates that insurers spend most of the premiums they collect from consumers on actual health care medical expenses. The insurance companies will soon be required to spend a sizeable percentage (80 or 85%) on things like doctor's fees, hospital care, x-rays, and prescription drugs, and they are resisting this requirement by trying to redefine what is a medical expense. This rule prevents more than 15% or 20% of our money to be spent on CEO salaries, marketing expenses, and other administrative costs. Some insurers object to such restrictions on high salaries and limitations on profits and are struggling to meet these new percentage thresholds. If they are unable to meet these percentages, they will be required to issue rebates to their policyholders. That's why the industry was present at the NAIC meeting in such large numbers in what even they are characterizing as their attempt to change the rules of the health care reform law; they want to redefine many adminstrative expenses so they can be officially counted as a medical expense.
One of the "battles" involve a particularly vocal and powerful group at the conference advocating in favor of counting the fees paid to brokers and agents as a medical expense. (No, I am not making this up!) While many Americans find the services provided by brokers and agents to be valuable in finding quality, affordable health insurance coverage, companies pay these brokers in California sometimes 20% as a fee for securing the customer's business. (Some people do not use a broker or agent, but get advice through employers, unions, associations, on internet sites, and from friends and neighbors.) In any event, while many believe there remains a place for the role of the broker/agent in the new health care marketplace, virtually no one can argue with a straight face that a broker fee represents a true medical expense. We believe those fees clearly represent an administrative expense which should not be counted as a medical expense in the new health care world.
The NAIC has held many and lengthy conference calls over the last four months in which industry and consumer representatives argued about what can be construed as a medical expense in order to draft a policy for the commissioners to vote on in Seattle. The brokers and agents pushed furiously for their fees and commissions to be left out of the calculations altogether. The consumer representatives argued that only true medical expenses should be counted toward the requirement that 80-85% of premiums should go toward real health care. Although the policy as written was not a perfect decision and did involve compromises--the consumers' view prevailed in Seattle.
In addition, the commissioners did pass a resolution affirming the value of brokers and agents which does not have the force of law or regulation nor changes any of the definitions of what counts as a medical expense.
Many challenges remain before we can declare victory in this medical loss ratio (MLR) fight. The NAIC still has work to do, and the recommendations will go to the U.S. Department of Health and Human Services (HHS), which will develop final rules that take effect on schedule for 2011 health plans.
posted by Elizabeth C Abbott | Permalink | 11:14 AM
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Onto to Final Floor Votes...
Friday, August 13, 2010
HEALTH ACCESS UPDATE Friday, August 13, 2010
KEY HEALTH BILLS PASS APPROPRIATIONS, HEAD TO FINAL FLOOR VOTES
* Multiple Bills Would Implement & Improve Federal Health Reform in California * At Stake Are New Consumer Protections; New Federal Funds; New Rules for Insurers
Key health consumer protection bills in the California legislature, including several that would implement and improve the federal health reform law passed earlier this year, are heading into final floor votes for the last two weeks of August.
Yesterday a number of health reform implementation bills moved off the suspense file and out of Appropriations Committees. Bills will be heard on the floor of the second house (Assembly bills will be heard on the Senate floor, and Senate bills will be heard on the Assembly floor) for votes before heading to the Governor’s desk by the end of August. If the bills are passed, the Governor has the month of September to either sign or veto the measures.
At stake are bills that would draw down new federal funds, from a grant for rate review to a new Medicaid waiver that is hoped to bring down an additional $2 billion into our beleaguered health care system and safety-net. Other measures would institute new consumer protections and new rules and oversight over insurers.
Bills that Move to the Assembly Floor
* PUBLIC OPTIONS: SB 56 (Alquist) would authorize county-organized health plans and other health benefits programs to form joint ventures in order to create integrated networks of public health plans that pool risk and share networks. This will provide better public health insurance options for consumers.
* MEDI-CAL-WAIVER: SB 208 (Steinberg) renews California’s Medi-Cal financing waiver, drawing down up to $10 billion in federal funding. This would allow the state to begin phasing in expansions of public programs to build the bridge to full health reform implementation.
* SINGLE-PAYER HEALTH SYSTEM: SB 810 (Leno) establishes the authority (but not financing) for a state administered Single Payer health care system.
* BENEFIT STARDARDIZATION: SB 890 (Alquist) to reform the individual insurance market, has been amended to set basic benefit levels and categorize health plans to allow consumers to compare plans based on the actuarial value, so that they can have some idea of how much of their medical costs they may need to pay out of pocket.
* HEALTH INSURANCE EXCHANGE: SB 900 (Alquist) is one of 2 bills that will establish the health insurance Exchange as required by the federal health reform law. This bill will cover the governance of the Exchange and will be critical in facilitating access to insurance as well as federal subsidies when they become available in 2014.
* YOUNG ADULT COVERAGE: SB 1088 (Price) would implement federal requirements that employers extend dependent coverage to dependents up to age 26.
* RATE REVIEW: SB 1163 (Leno) would require insurers to provide information about coverage denials, premium increase, and insurer rate filings to be reviewed by the state and released to the public. The bill would also require insurers to notify consumers in writing of denials or rate increases, these notifications must include clear justifications and rate increase notifications must be sent at least 180 days prior to the change taking effect.
Bills that Move to the Senate Floor
* HEALTH INSURANCE EXCHANGE: AB 1602 (Perez), the companion bill to SB 900, establishes the operations of the Health Insurance Exchange in California.
* MATERNITY COVERAGE: AB 1825 (De La Torre) requires all health insurance plans to cover maternity care.
* 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.
* PREVENTATIVE CARE: AB 2345 (De La Torre) requires insurers to eliminate cost-sharing for some preventive services such as pap smears, mammograms, other cancer screenings, and immunizations; continues to permit co-pays and deductibles for managing asthma, diabetes, heart disease, and other chronic conditions.
* RESCISSIONS: AB 2470 (De La Torre) would eliminate rescissions by establishing standard information and health history questions used by health insurers on application forms, and requires insurers to complete medical underwriting and review for accuracy before issuing an individual a health plan contract or policy.
* RATE REGULATION AND APPROVAL: AB 2578 (Jones) would require approval by the Department of Managed Health Care or the Department of Insurance of an increase in the amount of premium, co-payment, coinsurance, deductible, or other charges under a health plan.
Some bills were held in Appropriations Committees, and thus are stalled for the year and legislative session. Among those that died are AB 2878 (Monning) would have established the Office of the California Health Ombudsman to educate consumers on their rights and responsibilities with respect to health care coverage, AB2287 (Monning) to help draw down federal funds for community transformation to encourage prevention, and SB1200(Leno) to facilitate timely access to care for children at school. Despite these setbacks, the vast majority of bills of interest to health care consumers passed Appropriations and are now pending floor votes.
The next two weeks will be crucial in determining the extent of our ability to implement and improve upon health reform here in California. While this legislation generally has the support of many consumer and community organizations, several of these bills continue to face strong opposition from the insurance industry and other lobbyists.
For more information about these bills, contact the author of this report, Linda Leu, Policy Analyst, Health Access California, at lleu@health-access.org.
This weekend, more than 1,000 insurance lobbyists and executives are converging in Seattle to pressure the National Association of Insurance Commissioners (NAIC) to undercut important new rules intended to control costs and make health insurance more affordable for families and businesses. Bobby Calvan at the Sacramento Bee has the story.
The new health reform law includes a provision (on "medical-loss ratios") that requires insurance companies to spend on patient care at least 80 percent of health plan premiums collected from individuals and small employers and 85 percent of premiums paid by large employers. The insurance companies are trying to protect their profits and divert premium dollars away from patient care by having non-medical costs, such as lobbying, profits, executive pay and administration, defined as “medical” under this new regulation.
Health Access California has sent Elizabeth Abbott, our director of administrative advocacy, as one of only a handful of designated consumer advocates at the NAIC, to counter the insurance industry attempts at weakening health reform and oversight. California's Insurance Commissioner Steve Poizner has a voting representative at the meeting; also in attendance are representatives of the Department of Managed Health Care of the Schwarzenegger Administration.
Why is this seemingly obscure regulation important? If the insurers win, they’ll be able to deny people needed care and be able to reclassify the administrative costs of that denial as medical in nature. The insurers fought the law, and we can't let them undermine the oversight through attempts at weakening the regulations.
“It is clear that health insurance companies are sparing no expense to weaken this new law and the protection it promises to America’s consumers,” Rockefeller said. “Health insurance companies and their allies have been furiously lobbying the NAIC to write the medical-loss ratio definitions in a way that will allow them to continue doing business as they did before the passage of health reform. The resources health insurance companies are throwing into their effort to weaken the medical-loss ratio appear almost limitless.”
(California Senators Barbara Boxer and Dianne Feinstein both signed onto a follow-up letter with Senators Rockefeller and Franken in support of a strong medical loss ration definition.)
The health insurance industry wants to expand the definition of allowable medical expenses to include costs that are not directly related to the delivery of care and have not historically been classified as medical. Instead of reducing costs and improving the efficiency of their operations, they simply want to change how certain expenses are classified so they don’t really have to alter business practices. Already, WellPoint, the nation’s largest private health insurance company by enrollment and operator of Blue Cross plans in 14 states, including California, has reclassified $500 million in administrative costs as medical expenses.
The medical-loss ratio standards in the Affordable Care Act are critical to curbing the worst of the health insurance industry’s consumer abuses, controlling rising premium costs, and increasing the value of premiums paid by private and public customers.
The California Program on Access to Care (CPAC) released the results of their “Ethnic Health Assessment Project,” an examination of the specific health needs of California’s 4 largest minority groups.
At the behest of the Tri-Caucus of the California Legislature, CPAC studied health needs and opportunities for health equity in African Americans, Asian Americans and Native Hawaiian and Pacific Islanders, Latinos, and American Indians and Alaska Natives.
Senator Gil Cedillo, chair of the Latino Caucus, commented that these reports should actually be referred to as the “Majority Report” as Latinos, Asian and Pacific Islanders, African Americans, and American Indians combined actually make up 56% of the population of California.Assemblymember Mike Eng encouraged attendees to hold legislators accountable for incorporating the needs of minority communities into health policy, he said that ignoring these health inequities and failing to meet the health needs of these communities is a “civil wrong by omission”.The 4 reports each contain staggering findings about the health disparities faced by these populations.For example, Latinos are more than twice as likely to be uninsured than any other ethnic group in California.
CPAC makes 4 key policy recommendations that will help to address these disparities.They are:
Promote Healthy Diets and Physical Activities to Reduce Obesity and Diabetes
Design Mental Health Outreach to Address Overall Health Access Foundation
Improve Neighborhood Safety to Reduce Violence
Diversify the Health Care Workforce to Improve Access to Care
These recommendations must be included not just as ancillary programs, but as considerations in shaping health care systems for an increasingly diverse population.The new Health Reform Law provides many opportunities to implement some of these policy recommendations, and as we move forward with implementation here in California, we look forward to holding our legislators accountable for integrating the needs of communities of color into the structural frameworks of our health care system.
Our Director of Administrative Advocacy, Elizabeth Abbott, was at the MRMIB meeting last week. She reports that they dealt with two items:
* Drug Benefit Design of the Pre-Existing Condition Insurance Plan (PCIP). MRMIB staff proposed a four-tier enrollee co-pay system under the new program as follows: Generic drugs--$5 Brand-name drugs on formulary--$15 Brand-name drugs not on formulary--$45 Special drug regimen drugs that also require prior authorization and step therapy--$15
Board member Sophia Chang commented that she believed $45 for a co-pay was too high; she recommended that it be reduced to $30. The board approved the co-pay structure with Ms. Changs adjustment.
* Initial Designation of Vendors for Negotiation of Contract Terms. The board announced that they were entering into negotiation with two companies, Maximus and HealthNow. Lesley Cummings asked for representatives from each company in the audience to stand. The board asked for comments from the audience.
We'll provide more updates about the PCIP when we get them...
We've been remiss in not highlighting the last two editions of the Health Wonk Review, which compiles some of the best commentary from the web around health policy, including this blog.
* Jaan Sidorov of Disease Management Care Blog hosted an air-travel themed edition earlier this week, which is comprehensive and probably has something of interest for anybody.
For a whole package of cogent analysis, wonkery and understanding next steps after the Affordable Care Act, The American Prospect has a whole special report on "Fulfilling the Promise of Health Reform"--language that we have used as well to decribe the challenges and opportunities that the new law provides. Contributions come from everyone from Jonathan Cohn to Jacob Hacker to Paul Starr to Tim Jost to Judy Feder. The whole package is worth reading.
The report by the Medicare Trustees this week was a big deal, showing that the new federal health law will extend the solvency of Medicare by 12 years. The federal health reform did this not by cutting guaranteed essential benefits--as some in Washington continue to suggest--but by making the reforms for a more streamlined and efficient health care system.
President Obama took the opportunity in his radio address/podcast this week to spotlight the improvements to Medicare in the new federal law:
Many people celebrated today because of the judicial decision on Prop 8, others were relieved about the announcement that the oil leak in the Gulf of Mexico seems fully contained. President Obama had his birthday.
But the celebration today for those immersed in health care, and in state budget issues, was the U.S. Senate vote to end debate on a measure to provide aid to states, including through enhanced funding through Medicaid. This adjustment (to what is known as the FMAP formula) provides some additional funds for state budgets, including California's.
Both the Governor's and the Democratic proposal were relying on these funds. In fact, they were relying on more, but the amount got scaled back in order to attract the votes of GOP Senators from Maine and Massachusetts. Hopefully there may be other attempts, maybe after the election, to provide additional assistance.
House Speaker Nancy Pelosi, California's own, tweeted that she'll bring the House into session during the summer break next week, to pass the Senate aid bill, so the money can start to flow and help not just our state budgets, but our economy.
Assembly Speaker John Perez and Senate President Pro Tem Darrell Steinberg both released a unified "California Jobs Budget," which will serve as their basis for negotiations with the Governor and legislative Republicans.
The overall architecture seeks to solve a $17.9 billion deficit with $8.3 billion in cuts, $4.1 billion in federal funds, and other solutions including $4.5 billion in revenues. The revenues include: * closing an oil severance tax loophole ($600 million in the budget year, $1.2 billion annually), * delays the implementation of new corporate tax breaks agreed to in last year's budget showdown ($2.1 billion in the budget year; the delay would be for two years--voters will have their says about repealing the tax breaks outright under Prop 24 this November), * a "tax swap" that would reduce the sales tax and increase the income tax. The proposal is described as a tax reduction while being a revenue generator mostly based on the deductibility of the state income tax under the federal tax code. It makes the income tax less progressive, while at the same time reducing the sales tax which is regressive itself. (The swap generates $1.8 billion in the budget year, $3.3 billion annually afterwards).
On the specific issues, the Budget Conference Committee met today and went through a range of specific remaining health issues, including:
* To implement the Medi-Cal waiver, the budget proposal adds staff to ensure that quality care is provided, including 26 staff at Department of Health Care Services (DHCS). It also adds 13 new staff at DMHC (DMHC) to review network adequacy, fiscal solvency and other issues related to shifting seniors and people with disabilities into Medi-Cal managed care plans (including 5 additional positions at the HMO Help Center) to be funded out of an adjustment in HMO licensing fees. This compromise got a unanimous vote in support.
* The proposed hospital rate cut of 10% was rejected for both public hospitals and for private hospitals, but a hospital rate freeze was adopted instead, alongside a requirement to convert to DRG payment coding by 2014 (as required by federal reform anyway, and which supports the important reform to no longer pay for "never events"--or egregious avoidable errors.) In addition, these hospitals may benefit from a separate federal negotiation over a provider fee.
* Items that were line-items vetoed last year got some partial restorations: * Community clinic funding, which was zeroed out in last year's budget, had a small restoration. The Assembly, angered by the Governor's line-item veto of these programs, had wanted to restore the programs by $25 million, but the compromise was to go to $10 million, with $2.5 million each to Indian health, migrant health and two other categories: Prostate cancer: $1 million (conference compromises) item veto last year * Cancer programs would get a little additional funding. The Every Woman Counts breast cancer screening and followup program is proposed to get an addition $20.1 million, following up from a line-item veto by the Governor last year. A prostrate cancer treatment program for low-income men would get an additional $1 million to help work through a waiting list. * Maternal and Child Health programs would get $5 million restored (from the $12 million line-item vetoed). $3 million would go to the Adolescent Family Life program, and $2 million to the Black Infant Health fund.
These decisions, as well as earlier legislative committee decisions to reject the worst of the Governor's cuts to Medi-Cal and other programs, are not final until a budget agreement is reached, and that is dependent on both federal funds and new revenues.
On last night's Mad Men, set in 1964, a minor character said, after bemoaning civil rights legislation, stated, "If they pass Medicare, they won't stop until they ban personal property."
On Twitter (search for Medicare and #MadMen), health reform opponents and supporters both loved the line, although I think the opponents didn't get the irony. After all, despite the claims of opponents of that era, the passage of Medicare 45 years ago this weekend did not usher in communism, but rather an important program that is popular and crucial to this day.
When Health Access and numerous other organizations celebrated the 45th Anniversary of Medicare this past Saturday, we noted not just its success, but marked the big advance of earlier this year, with the passage of the Affordable Care Act--the biggest health coverage expansion since Medicare. The Affordable Care Act improves Medicare, by closing the donut hole, removing cost-sharing for preventative services, and extending the life of the program.
Above is a picture from Friday's event (with cake!) in Sacramento, with members of Health Access, Congress of California Seniors, Older Women's League, Lutheran Office of Public Policy, and others, including a representative from the office of Rep. Doris Matsui. Other events were held in the Bay Area and Los Angeles.
I look forward to 90th birthday of Medicare, which will be the 45th anniversary of the federal Affordable Care Act, when it will be a vital part of the nation's social contract, and we look upon some of the opponent's claims as the scare tactics that they were.
We've reported on the pending negotiations between the state and federal government around a Medi-Cal waiver, setting the rules and defining the resources available for the program that now covers over 7 million Californians, and will cover two million more under health reform.
Health Access California, which has been a named participant in the Medi-Cal Waiver Stakeholder Advisory Committee and several technical workgroups, has had top three goals we are looking from the waiver: 1) A bridge to health reform, in terms of early enrollment and expansion of coverage; 2) Bringing in new resources to the state of California and particularly funding for the safety-net, so it can survive and prosper under reform; and 3) Providing consumer protections for those in Medi-Cal, especially seniors and people with disabilities who are having their care shifted;
On Jan. 1, 2014, at least two million Californians will become newly eligible for Medi-Cal; but this is not to say that they will magically be enrolled when the ball drops in Times Square. Without carefully laying the proper groundwork, this and other provisions of health reform law won't have their full impact.
How to best make this transition for Medi-Cal, which currently serves more than seven million Californians -- including low-income children, parents, seniors and people with disabilities -- is just one of the key goals through the current negotiations between the state and federal governments over the program's next five years. The stakes are high on these and other issues, all considered as part of discussions around a new Medicaid waiver.
In addition to being ready to expand the program, the waiver is the key vehicle for bringing in new federal funds for California's beleaguered and overstretched safety net of health care providers. After years of running the Medicaid program with the lowest per-patient spending in the country, the state of California is currently requesting an additional $2 billion a year for the next five years from the federal government. Those resources would help our public hospitals and other key providers weather the storm of budget cuts and start to prepare for the many changes under health reform.
Some of those resources will be used to expand county-based initiatives to provide a medical home to low-income adults who now don't qualify for Medi-Cal. The state has proposed that starting next year counties be able to use a portion of the dollars they already spend on indigent care to draw down these new federal funds. Even more exciting than getting hundreds of thousands of Californians care for the first time, these county-based efforts can -- if done right -- serve as a bridge to reform, having all these folks ready to get full Medi-Cal coverage in January 2014.
We need to go further and set an explicit goal to have more than a majority --over one million -- of those newly eligible Californians enrolled on day one. Given that the federal government will pick up 100% of the costs for these newly insured for the first three years, the state of California has every incentive to get people in the door as soon as possible. We would be leaving money on the table in Washington, D.C., if we don't. To prepare, we should implement early expansions of programs that can be shifted to Medi-Cal and start pre-enrolling people early as well. It's an exciting opportunity, but only if we take advantage of it.
The waiver also seeks to change the way care is delivered for some, most particularly seniors and people with disabilities. One proposal would shift such vulnerable populations into more "organized delivery systems," including Medicaid managed care plans. While there is certainly room for improvement for these patients, particularly on coordinating care if it's done right, we need to ensure that the health plans are ready to care for this new population. We need to ensure that doctors' offices can accommodate people with disabilities and that health plans have the adequate number of specialists to meet these patients' specific needs. We need to ensure the transition is smooth for the patient, with no interruptions in care. We are urging that the final waiver include stronger consumer protections for these patients who need them the most.
In short, the waiver is full of both opportunities and challenges. The new federal health law opens new possibilities and potential, and we must make sure that through the waiver, the next five years of Medi-Cal helps fulfill its promise.
with a background as a consumer advocate and community organizer on many issues, including health issues for the last ten years in California and New Jersey.
