Key Health Care Consumer Protections to Prevent Unfair Out-of-Pocket Costs Advance to Final Floor Votes

  • SB137 (Ed Hernandez), to require updated, standardized & accurate health plan provider network directories, passed out of Assembly Appropriations Committee.
  • AB533 (Bonta), to stop “surprise” billing from out-of-network doctorsAB339 (Gordon) to prevent unfair cost-sharing for specialty drugs, and AB1305 (Bonta) to limit out-of-pocket costs for individuals in family plans, passed out of Senate Appropriations Committee.
  • SB248 (Roger Hernández), a bill to prevent large employers from offering “junk insurance,” fixing an ACA loophole,  passed the full Assembly and is now heading to the Governor’s desk.
  • #Health4All Update: SB4 (Lara), to allow undocumented California to shop for health coverage in Covered California, seeking a Section 1332 federal waiver to remedy their exclusion in the ACA, also passed out of Assembly Appropriations.

Yesterday, the Appropriations Committees of the California Senate and Assembly met to decide the fate of hundreds of bills, including several designed to protect health care consumers.

Though the chief purpose of the Appropriations Committees review of bills on the “suspense” file is to evaluate the bills in terms of fiscal impact on the state budget, the outcome also reflects the results of delicate negotiations, finicky amendments and careful number crunching. Yesterday some bills were held, but many passed. Of the 309 Assembly bills considered in Senate Appropriations and 129 Senate bills considered in Assembly Appropriations, most will move on for final consideration on the floor by the September 11 deadline. The Governor would have until October 11 to sign or veto the bills.

For details on bills sponsored or supported by Health Access see our updated Bill Matrix

Health Care Consumer Bills Clear Major ‘Suspense Day’ Hurdle

While some health and other bills were held by the Appropriations Committees, which means they stalled for the year, most of the key consumer protection measures advanced. See the updated Bill Matrix on the Health Access website to track which bills were held, amended, or passed as is.

Following passage through the Appropriations Committees, the following Health Access-sponsored bills on limiting unfair out-of-pocket costs will move forward for full consideration on the Assembly and Senate Floors:

  • SB137 (Hernandez) would address the common insurance industry practice of posting inaccurate, out-of-date, and misleading provider directories. Consumers need accurate and updated directories to shop for plans, and once enrolled to know where to go for care without getting hit with a surprise out-of-network bill that could be hundreds of dollars more. The bill is co-sponsored by California Pan-Ethnic Health Network, Consumers Union, and Health Access California. (See separate SB137 fact sheet.)
  • AB339 (Gordon) would require insurers to cover medically necessary prescription drugs and limit cost-sharing on high cost specialty drugs and other needed medications. The bill ensures coverage for medically necessary prescription drugs; constrains placing most or all of the drugs to treat a condition on the highest cost tiers of a formulary; requires formularies to be based on clinical guidelines and peer-reviewed scientific evidence as well as drug costs; places monthly cap on specialty drug cost sharing; and more.  Drug costs would be capped at $250 per month for most coverage or $500 per month for bronze plans, far lower than the current limits of $6,600 for a single prescription. This bill would make those costs more manageable, preventing discriminatory benefit design. Since Covered California recently adopted many of these protections, including monthly caps on drug costs, the bill has new momentum to extend these patient protections throughout the state (see separate AB339 fact sheet).
  • AB533 (Bonta) would put an end to the “surprise bills” patients encounter when out-of-network providers provide care within in-network facilities. Patients unfairly get surprise medical bills from out-of-network doctors when they go to an in-network hospital, imaging center, or other facility. The bill would ensure that patients who do the right thing and stay in-network will not get charged extreme out-of-network out-of-pocket costs that imperil family finances. The bill is gaining momentum despite the opposition from some doctors’ groups (see separate AB533 fact sheet).
  • AB1305 (Bonta) would ensure that an individual in a family plan only has to pay up to the individual out-of-pocket maximum (around $6,600) rather than the family out-of-pocket maximum (over $13,200). This ensures individuals are not penalized with higher medical expenses just because they are part of a family plan (see separate AB 1305 fact sheet).
  • Another Health Access-sponsored bill, AB248 (Roger Hernández), to prevent unfair out-of-pocket costs, is further along in the legislative process. This bill, which would extend protections against “junk insurance” to those benefits offered by large employers, passed the full Assembly on a concurrence vote and is on its way to Governor Brown for a signature or veto.


Also passing Assembly Appropriations yesterday was SB4(Lara), a bill to allow all Californians to buy health coverage (using their own money) through Covered California, including undocumented immigrants who are currently excluded from using state-based exchanges under the Affordable Care Act. The bill would seek a waiver from the federal government, available through the ACA in 2017, to allow undocumented immigrants to use the same marketplace tools as everyone else. While the bill would not provide affordability subsidies (or otherwise use any federal funds, since exchanges like Covered California are now self-funded), it would allow Covered California to help families with mixed immigration status to get coverage and figure out coverage options for the entire family, even if some are subsidized and others not. The bill would remove not just an unjust symbol of exclusion but the practical enrollment barrier of undocumented Californians having to go outside of Covered California to a broker to sign up in the same plan as their family members.


Bills that passed the Appropriations Committees on Thursday will be voted on the Senate and Assembly Floor, as early as Monday. Bills that were not amended are likely to be voted on in quick order, while bills that were amended coming off suspense will be voted on once the amended version of the bills are in print. There may be further floor amendments for some of these bills. After the second house votes, the first house must concur in any amendments made in the second house: This often happens on the next day or even the same day. September 11th is the last day for any bill to be passed out of the Legislature. The Governor then has a month to sign or veto bills.


The Special Session on Public Health, which is happening concurrent with the regular session but under a slightly different timetable, is hearing a package of tobacco control bills aimed to reduce smoking and save lives. The following Senate tobacco control bills passed the full Senate today, including  bills to raise the smoking age to 21; regulate e-cigarettes as tobacco; increase licensing fees for selling tobacco; allow localities to raise tobacco taxes; and more.These bills have moved to the Assembly and are expected to be heard in the Assembly Public Health and Developmental Services Committee next week (Date TBD). The Assembly version of these bills passed the Assembly Public Health and Developmental Services Committee last week and will be heard in Assembly Finance next week (Date TBD).

Introduced earlier this week was the flagship legislation of the package, to raise the tobacco tax $2 a pack, ABx2 16 (Bonta/Thurmond) and its companion, SBx2 13 (Pan/Hernandez). Despite the hurdles of getting a 2/3 vote for any tax, there is considerable momentum for such an increase—especially since much of the revenue would go to improving access to care in Medi-Cal.

Since the last time California updated its tobacco tax in the 1990s, 48 states—all except Missouri, have raised theirs. California’s tobacco tax is now below average, falling to 35th in the nation this July when states like Kansas and Louisiana have raised theirs. A Field Poll this week showed that 67% of Californians support such a tobacco tax proposal (learn more here). Advocates are pushing for a vote in the next two weeks, before the legislators leave the Capitol after September 11.

 Contributors to this blog include Sawait Hezchias-Seyoum, Anthony Wright, and Judi Hilman.

New Field Poll Shows Strong Support for ACA and Health Access Policy Priorities, Including #Health4All

The 2015 Cal Wellness-Field Health Policy Survey shows California voters strongly support the Affordable Care Act (ACA) and its implementation in California. Some highlights:

Strong support for the ACA: 62% now support the ACA, outnumbering opponents (33%) nearly two to one. For the first time, majorities of voters living in all regions of the state, all races and ethnicities, and all age groups support the law, which has dramatically expanded health coverage to Californians.

Positive outlook on California’s implementation of the ACA: Over 2/3 of voters think California’s implementation of the ACA has been successful. In addition, increasing majorities believe the state has been successful in achieving six of seven specific goals of the law, including:

  • encouraging more previously uninsured residents to get coverage;
  • expanding Medi-Cal to extend health insurance to more low-income residents
  • providing consumers with more insurance choices
  • obtaining the federal funds needed to implement the law
  • establishing a one-stop place where consumers can go to shop for health insurance online; and
  • providing insurance buyers with better consumer protections.

Voters are less confident about whether the state has been successful in meeting the ACA’s goal of limiting rate increases that insurance companies charge their customers. Forty two percent of voters feel the state has been successful in meeting this goal, and 44% do not.

Medi-Cal is important to voters and their families: Nearly two in three voters (63%) believe the Medi-Cal program is important to themselves and their families. The proportion of voters describing Medi-Cal as very important has increased sixteen points over the past four years, from 29% in 2011 to 45% this year. This is indicative of the increase in Medi-Cal enrollment, which now covers 1 in 2 California children and 1 in 3 adults in California.

  • Nearly all current Medi-Cal recipients (91%) think the program is very important, as do 79% of those with an annual household income of less than $20,000.
  • Large majorities of those who receive coverage through Medi-Cal show the strongest support for the program. Latinos (66%), Asian Americans (61%) and African Americans (55%) also describe the program as being very important to them.

Half of voters have visited the Covered CA website: About half of voters under age 65 (48%) say they have personally visited the state’s Covered California website, the place where consumers and small businesses can shop for health insurance online. Last year, only 36% reported having visited the website.

Voters still concerned about affordability and the cost of healthcare: Almost four in ten voters (39%) say that the amount they and their family pay for health care increased over the past year. This compares to 48% who report their health care costs remaining about the same, and 8% who report a decline.

  • Voters who get coverage from their employer or who purchased their coverage independently are somewhat more likely to say their health costs rose over the past year.
  • Another four in ten (42%) say it’s difficult for them to pay for their health care, while 55% say these costs are not too or not at all difficult to pay. Uninsured voters are much more likely than insured voters to report this.
  • Insured voters say insurance deductibles and the monthly cost of paying for insurance itself are among the most difficult things to pay.
  • The proportion of people reporting cost increases or difficulties in paying for health care have declined in recent years. For example, the 39% of voters who reported increases in their health care costs over the past year is 11 percentage points lower than what was reported in 2013, when half said this was the case. Similarly, the proportion of voters who say it is difficult for them to pay for their health care declined 10 points from what voters reported two years ago.

California Voters Support Health Access policy priorities: In addition to #Health4All, the Field Poll shows there is strong voter support for a number of Health Access’ policy priorities.

  • Accurate Provider Directories: More than three in four voters (78%) favor increasing government oversight over insurance companies to ensure that their listings of doctors and health providers is up-to date. Our SB 137 (co-sponsored with CPEHN and Consumers Union), which will hold health plans and insurers accountable for accurate provider directories, is headed for a floor vote in the Assembly.
  • Increase Tobacco Tax: Voters strongly support increasing the state cigarette tax by more than a two-to-one margin (67% to 30%). Bills to do just this, ABx2 16 (Bonta/Thurmond) and SBx2 13 (Pan/Hernandez) were introduced earlier this week as part of the Special Session.

For more details about the 2015 Cal Wellness–Field Health Policy Survey, see: Part One and Part Two.

Senate Appropriations Committee Hears Key Health Access Bill and Special Session Tobacco Control Legislation

Yesterday, the Senate Appropriations Committee heard Health Access sponsored bill, AB 533 (Bonta) on “surprise billing” and select special session tobacco control bills.

AB 533 (Bonta), which would protect consumers from surprise bills from out-of-network doctors when a consumer does the right thing by going to an in-network hospital, lab or imaging center was not voted on in committee, however, Health Access, the American Cancer Society and AARP testified in support of the bill before the bill was referred to the Senate Appropriations Suspense.

The following special session tobacco control bills were also heard:

• SB X2 8 (Lieu) – would require all schools to be tobacco free.
• SB X2 7 (Hernandez) – would increase the age of sale for tobacco products to 21.
• SB X2 5 (Leno) – would add e-cigarettes to existing tobacco products definition.
• SB X2 10 (Beall) – would establish an annual Board of Equalization (BOE) tobacco licensing fee program.

All of the tobacco control bills, with the exception of SB X2 8 (Lieu), passed with a party line vote of 5-2, with Democrats voting aye and Republicans voting no. SB X2 8 (Lieu) passed with a vote of 5-0, with democrats in support and republicans not voting.

SB X2 6 (Monning), which would close loopholes in smoke-free workplace laws, including hotel lobbies, small business, break rooms, and tobacco retailers, was not heard by the Senate Appropriations Committee today because it was referred directly to the Senate Floor from policy committee last week.

SB X2 9 (Mcguire), which would allow local jurisdictions to tax tobacco, was also not heard by the Senate Appropriations Committee, but for a different reason; There are no costs associated with the bill.

Today the Assembly Public Health and Developmental Services Committee will hear the following special session Assembly tobacco control bills (the Assembly bills are identical to the senate bills):

• AB X2 6 (Cooper) which would add e-cigarettes to existing tobacco products definition
• AB X2 7 (Stone) – would close loopholes in smoke free workplace laws, including hotel lobbies, small business, break rooms, and tobacco retailers.
• AB X2 8 (Wood) – would increase the age of sale for tobacco products to 21.
• AB X2 9 (Thurmond and Nazarian) – would require all schools to be tobacco free.
• AB X2 10 (Bloom) – would allow local jurisdictions to tax tobacco.
• AB X2 11 (Nazarian) – would establish an annual BOE tobacco licensing fee program.

For further information on tobacco-related bills, see Save Lives CA’s helpful overview. Health Access is a proud member of this coalition. 


Covered California Board Meeting: Highlights from August 20, 2015

This Covered California board meeting featured a discussion of a vision benefit proposal and agents’ payments and responsibilities, both for action next month; the release of rates for 2016, an update on the redesigned navigator program; and a hearty welcome to new Board member and former Senator and Democratic Party Chair Art Torres (see his bio).

Executive Director’s Report

  • New rates for 2016 calendar year: Preliminary rate filings show an average rate increase of around 4%, which is lower than historical norms. Where there is greater market competition, as in Los Angeles, we find a smaller increase in rates (1.8%).  Covered CA Executive Director Peter Lee urged consumers to shop for better rates and network access in 2016–folks switching to the lowest cost plan could see a decrease of 5 or even 10% in premiums. Our Beth Capell noted that while previously these rates were opaque and unknowable, Covered CA is now publishing the “Kelly Blue Book” of preliminary rates (subject to regulatory review). This good news (see extensive press coverage) affirms Covered CA’s leadership as an active purchaser exchange that maximizes value for consumers through standardized benefits.  All told, Covered CA’s says its negotiations with the plans saved consumers $200 million for the 2016 plan year. State regulators (mostly at the Department of Managed Health Care (DMHC) are reviewing the rate filings. Consumers Union and other consumer advocates will submit comments on the rates.
  • Health Care Quality Reporting: The 2016 plan year will be the first where consumers will be able to weigh quality ratings on a 5-point scale (not 4-points) based on satisfaction scores of actual Covered CA enrollees. After that, quality ratings will be based on both satisfaction scores and clinical measures of quality—though the latter will be calculated by CMS. Covered CA looks at a number of quality measures when it selects plan for participation (see this blog’s featured slide), including integration and coordination of care, managing chronic diseases, addressing health disparities, and prevention and wellness programs. In the comments portion, several advocates highlighted the importance of oversampling and other approaches to improving health equity. California LGBT HHS Network Director Kate Burch urged Covered CA to look at how the Office of Patient Advocate handles reporting quality measures: If consumers want more detail they can dig deeper on a given measure.
  • Navigator Grant Program Update Post-Redesign: Lee described a much redesigned navigator grants program as federal funding for it is replaced by funding based on premium assessments. Of the more than 100 organizations that applied for the $10 million in funding set aside for targeted enrollment and retention activities, 69 navigator entities (supporting 1,755 certified enrollment counselors)) have been selected.
  • Difficulties with enrollment processes and timely response to hearing decisions: Lee responded to a comment letter from Health Consumer Alliance outlining the many lingering issues faced by consumers, including difficulties with enrollment, too many open or unresolved tickets, implementation of ALJ (Administrative Law Judge’s) decisions, and errors with tax forms by re-affirming Covered CA’s commitment to addressing such issues. Lee has formed a workgroup to address these problems.
  • Positive Coverage of Covered CA: Lee called our attention to a NY Times editorial saying California is proving health reform is not only working but offering a model for the nation. According to the pharmaceutical industry-sponsored National Health Council, Covered CA has thus far done a good job on patient-centeredness, but could do better with transparency on out of pocket costs (see report). Further progress on this front, notes Lee, will have to wait until the 2017 calendar year.

Policy Items (Recommendations for Formal Board Action in Early October)

  • Adult Vision Benefit through Covered CA: Covered California is considering offering a link to be able to purchase vision coverage–essentially a portal to individual vision services providers–despite concerns raised by Western Center on Law and Poverty, Health Access, and other partners that such an offering could erode the Covered CA brand by or possibly mislead consumers by connecting them to a non-negotiated, non-standardized benefit of unknown value. For LEP (Limited English Proficiency) consumers the vision services offering could bring additional confusion, says Doreena Wong of Asians Advancing Justice.  Another concern, raised by Jen Flory of Western Center on Law and Poverty, is that consumers shopping for vision services may be directed away from the regular enrollment process and not come back to the site to complete their primary enrollment in a Qualified Health Plan.  The Health Plan Advisory Committee will continue work on this proposal for final action by the Board in October.  After that the roll out of the vision services portal could potentially move very fast. Over time this program can evolve toward the preferred active purchasing approach to procurement.
  • Insurance agents’ payment and responsibilities, including the interface with Medi-Cal. Starting in January 2016 the definition of small groups will change from the current 1-50 to 1 to 100, but the commission structure for the 1-50 groups will remain the same. Agents enrolling any businesses in the 51-10- range till be 5%. Agents’ involvement in Medi-Cal enrollment will be the main topic for the August 28 meeting of the Plan Management Advisory Committee. That so many Medi-Cal enrollees and potential enrollees are from mixed status families makes this an extra critical area of concern.

Covered CA meetings will resume October 8—the September meeting is cancelled, though most of the advisory committees (Plan Management, Marketing/Outreach, and Small Business/SHOP) will meet in September and generally on a monthly basis (see full meeting schedule).


Office of Health Equity Releases Plan to Promote Health & Mental Health Equity

This blog was written by Kate Burch, Director of the California LGBT HHS Network.

Last week the Office of Health Equity (OHE) released Portrait of Promise: The California Statewide Plan to Promote Health and Mental Health Equity, a demographic report and strategic plan addressing how socioeconomic factors impact the health of California’s diverse communities. One of the offices within the California Department of Public Health (CDPH), the OHE was established in 2012 to align state resources to “achieve the highest level of health and mental health for all people, with special attention focused on those who have experienced socioeconomic disadvantage and historical injustice.” This report is the result of thousands of hours of research and analysis, input from community leaders and subject-matter experts, and many rounds of community outreach and debate.

While considering both the upstream and downstream causes of health outcomes and health disparities, OHE identifies the upstream factors as the appropriate focus for policy interventions to address health inequities. About half of a society’s health outcomes are a result of the upstream determinants of health, including air quality, housing quality, transportation access, employment, income, neighborhood safety, violence and crime prevention, education, access to healthy food, linguistically appropriate services, protection against institutionalized racism, and other environmental and socioeconomic factors. The advantage of focusing policy interventions on the upstream determinants of health is so that changes can have a population-level impact.

Portrait of Promise contains demographic analyses on the root causes of health disparities in California, addressing factors such as wealth and poverty, race and ethnicity, access to healthy food, geographic trends, education level, housing issues, access to transportation, pollution, insurance rates and access to health care, neighborhood safety, hate crimes, and discrimination. The report also notes the limitations in current data, including the notable lack of available data on sexual orientation and gender identity, small sample sizes which leads in turn to unstable data when disaggregated for certain ethnicities, and small sample sizes for mental health data.

In addition to the attractive charts and graphs showing demographic analyses, Portrait of Promise includes strategies to begin addressing health and mental health inequities. The three main strategies are assessment, communication, and addressing infrastructure.

OHE has identified key interventions for organizations that are health partners (including fields such as education, housing, transportation, land use planning, etc.), agencies in the health field, and community organizations. The appendix has a detailed list of goals broken out by strategy and target audience, as well as a list of activities and resources that CDPH can utilize to implement the plan. As a follow up to this report, OHE will prepare focused issue briefs that explore research on the nature of a given problem and identify possible solutions.

CDPH currently has a Health in All Policies task force that works with a wide range of state agencies and local governments to help ensure that health considerations are embedded in traditionally non-health-related decision-making processes. The California Reducing Disparities Project, another project within CDPH, seeks to address mental health disparities faced by historically disadvantaged populations in California. OHE has begun well – with consistent outreach for stakeholder input and their close coordination with CDPH’s other projects addressing health disparities. We look forward to seeing how Portrait of Promise adds to the conversation and informs all of our work for health equity.

Special Session on Healthcare – Informational Hearings

This week, the Legislature held two informational hearings as part of the 2015-16 Second Extraordinary Session on healthcare. These hearings were convened to help lawmakers, and the public, understand approaches to structuring a Managed Care Organization (MCO) tax and the state of Medi-Cal funding more broadly. The current MCO tax only applies to health plans that participate in Medi-Cal and these plans largely get their money back, with federal matching funds, through their capitated payments. New federal rules require the MCO tax to be broad-based, meaning it needs to apply to all health plans and not just those that participate in Medi-Cal.

Senate Hearing on the MCO Tax

Yesterday, the Senate Committee on Public Health and Developmental Services Committee held an informational hearing on the MCO tax, focusing specifically on the differences between a flat and tiered tax structure. California’s current MCO tax generates about $1.1 billion in non-federal revenue per year and is used to draw down additional federal funds and offset state general fund costs for Medi-Cal. The current MCO tax expires in July 2016 and a new taxing structure that meets federal requirements needs to be in place by then. In addition to preventing a $1 billion shortfall in the Medi-Cal program when the current MCO tax expires, the Administration also wants to use revenues from the MCO tax to fund restoration of the 7 percent cut to In-Home Support Services (IHSS) providers, which help nearly 500,000 seniors and people with disabilities with assistance so they can remain in their homes.

Senator Ed Hernandez, Chair of the Committee, said it is very important for the state to come up with a new MCO tax this year. Vice Chair Mike Morrell expressed skepticism and reservations about imposing any new taxes, fees, or costs on health plans.

Katherine Wilson of CHCF gave an overview of California’s health insurance industry. The LAO’s Felix Su discussed the trade-offs between a tiered and flat MCO  tax, in terms of revenue stability and who bears the tax burden. DHCS Director Jennifer Kent and Nick Louizos of the California Association of Health Plans talked about the modeling they’ve done in search of a new MCO tax structure. The presenters generally agreed that it is challenging to find an approach that is broad-based and appropriately accounts for plan size (in terms of overall enrollment) and participation in Medi-Cal. There was also debate about when a solution needs to be reached, given that the current tax expires next year. The Administration and many legislators would like to resolve this issue now, rather than wait until the current tax expires. Others think this issue can be handled next year. Hearing materials, including a background piece, slide presentations, and the LAO’s analysis of a tiered vs. tax flat structure, are available here.

Assembly Hearing on Medi-Cal

Today, the Assembly Public Health and Developmental Services Committee held an informational hearing on “Supporting and Enhancing California’s Medi-Cal Program.” Mari Cantwell, Chief Deputy Director at DHCS provided an update on the Medi-Cal program and the improvements that are planned under the pending 1115 waiver renewal. Thanks to ACA expansion and other changes, Medi-Cal has an additional 4 million enrollees and pays for over half the births in California. The state needs to make sure there is a delivery system in place to serve the program’s 12 million enrollees. A panel representing providers (hospitals, doctors, community clinics and dentists) emphasized the need to bring up provider rates in order to improve access to Medi-Cal. They also discussed talked about how the loss of the MCO tax ($1.1 billion, along with the federal funds we wouldn’t be able to leverage) would be detrimental to the Medi-Cal program. The panel also mentioned other sources for funding, including the tobacco tax.

A stakeholder panel representing health care workers and health care consumers elaborated on how the tobacco tax can help. Michelle Cabrera from SEIU noted that income inequality contributes to the fact that 1 in 3 Californians rely on Medi-Cal for healthcare. If we want to reduce reliance on Medi-Cal, then we need to ensure our public policies provide opportunities for people to move out of poverty. Linda Nguy of Western Center on Law and Poverty discussed the need to hold Medi-Cal managed care plans and providers accountable for providing care. Anthony Wright, Executive Director at Health Access, said that when it comes to access to Medi-Cal, “part of the answer is money, and part of the answer is accountability.” In addition to restoring cuts to provider rates, Wright clarified, we also need stronger oversight over Medi-Cal managed care plans so they can fulfill the promise to deliver care to patients through adequate networks, timely access standards, and accurate provider directories.

The CA Budget and Policy Center has a helpful blog post about the special legislative session on health:


Close-up on AB 533 (Bonta): Protecting Consumers from Surprise Medical Bills

Consumers know they can save money and limit their out-of-pocket costs by going to an in-network provider.  Too often, however, consumers who do the right thing by going to an in-network hospital or facility end up getting a surprise bill by a doctor who turns out not to be in-network. According to a recent survey by Consumers Union, nearly one in four Californians have received a surprise medical bill after a hospital visit or surgery with the price they are asked to pay an out‐of‐network rate when they thought the provider was in‐network.

These surprise or “gotcha” bills can add up to hundreds, even thousands of dollars, driving some patients into medical debt. The consumer is stuck paying the bill for care they needed, and had every reason to think, was in-network. Or worse yet, the consumer does not pay because they don’t think they owe the money and then the consumer gets taken to collections and their credit is ruined.

Sometimes it is an anesthesiologist who administers anesthesia, a radiologist who reads an X-ray, or a pathologist who analyzes test results. This practice, also known as “balance billing,” is all too common in California. What is worse, because the consumer inadvertently got care out of network, not a dime counts toward the Affordable Care Act’s annual out of pocket maximum of $6,600.

AB 533 (Bonta), sponsored by Health Access California, would protect patients who visit an in-network hospital or facility but then get a “surprise bill” from an out-of-network doctor, one they probably never met or did not choose. While Californians in managed care plans cannot be “balance billed” for care provided in the emergency room, AB 533 prohibits surprise billing for care provided in all facilities, impacting 22 million Californians.

Under AB 533, if consumers do the right thing by visiting in-network hospitals or facilities, they will pay in-network charges and co-pays for all the providers they encounter in their visit. The total amount of cost sharing will also count toward their out of pocket maximum.

AB 533 has received bipartisan support and will be heard in the Senate Appropriations Committee later this month. It is opposed by the California Medical Association and other groups representing doctors.

Close Up on A Key Consumer Protection Bill: AB 339 Prescription Drug Cost Sharing

Today many more Californians have access to health care coverage under the Affordable Care Act, however many premium-paying patients who are covered still struggle with out-of-pocket costs. Some practices by providers and health insurers unfairly burden patients with unmanageable cost-sharing, interfering with access to care people need. AB339 (Gordon), a Health Access sponsored bill moving through the California Legislature, would prevent discrimination against consumers with chronic health conditions and set standards for cost sharing for prescription drugs.

The emergence of very high cost specialty drugs led health plans and insurers to impose high copays and coinsurance on these drugs. Such drugs are often placed on the highest cost tier of a drug formulary (commonly known as the “fourth tier” or the “specialty tier”) with coinsurance of up to 20%, 30% or even 40% as opposed to a fixed co-payment. As a result, Californians with asthma, HIV/AIDS, hepatitis C, cancer, multiple sclerosis, rheumatoid arthritis or other serious conditions can face high out-of-pocket costs and may exhaust their annual out-of-pocket limit of $6,500 with a single prescription in the first month.

The point of AB339 is to get the patient out of the middle of the fight between the health plans and the drug companies by providing basic consumer protections, including a cap of no more than $250 per monthly prescription for most coverage, or $500 for products in the bronze tier.

A recent study by Kaiser Family Foundation found that median liquid assets for a family making over 100% FPL (Federal Poverty Level) is $2,564. This means that drug cost sharing that amounts to $6,500 for a single drug is literally three times as much as most people have in the bank.

Those who face very high drug cost sharing are the sickest among us: individuals with chronic health conditions such as asthma, multiple sclerosis, lupus, HIV/AIDS, and organ transplants. These individuals face numerous health care costs for doctors, lab tests and other drugs in addition to their specialty drug costs.

Studies show that when people can’t afford their prescription drugs they skip doses, split pills in half, or simply fail to pick up their prescriptions. A recent California Health Benefits Review Program (CHBRP) analysis also shows that poor adherence to prescription drug therapy for chronic conditions results in worse health outcomes, higher rates of hospitalization, and more emergency department visits. CHBRP also found that reducing cost barriers for high cost and/or specialty drugs would result in important health and quality of life improvements for people with serious, chronic conditions.

The consumer protections in AB 339 align with the standardized benefits recently adopted by Covered California for 2016 qualified health plans. AB339 would ensure millions more Californians have reliable access to needed medications— in addition to those in Covered California, millions more in employer coverage would have this protection.

AB 339 passed the Senate Health Committee on July 15, 2015 with a party line vote of 7-2.  It is scheduled to be heard next in Senate Appropriations on Monday, August 17, 2015.


Healthy San Francisco 2.0: SF Health Commission Votes to Modernize Healthy San Francisco, Mainly by Upgrading Affordability Standards

This blog was written by Rose Auguste and Judi Hilman of Health Access. Graphic courtesy of San Francisco Department of Public Health.

On Tuesday, August 4th San Francisco’s Health Commission authorized the first major upgrades to Healthy San Francisco and City Option, the main platforms for universal coverage in San Francisco, since full implementation of the Affordable Care Act (ACA). Under the resolution, adopted with unanimous support, an estimated 3,000 additional residents will be able to use their Medical Reimbursement Accounts, one of the key components of Healthy SF, to subsidize Covered California insurance up to income levels exceeding the ACA limits. These additional subsidies would be available to households up to 500% of the federal poverty level (FPL), which is equivalent to $100,450 for a family of 3. Subsidies on Covered California and most other health insurance exchanges only go up to 400% of the FPL.

Background on Healthy San Francisco

Passed in 2007, the original Healthcare Security Ordinance put San Francisco out in front of national health reform to create the first plan for universal coverage at the city level.  Led by former Board of Supervisor Tom Ammiano, the San Francisco Board of Supervisors authorized the San Francisco Department of Public Health to create a plan for universal, affordable coverage and a “medical home” (patient-centered, comprehensive, coordinated care) for all city residents.

Under this historic measure employers with twenty or more workers have a requirement to provide healthcare to their employees, though they could fulfill this obligation in three ways:

1. Provide health insurance to their workers outright.

2. Contribute to Healthy San Francisco on behalf of their workers.  Healthy San Francisco is a City-Option healthcare program in which residents can obtain comprehensive and coordinated health services in the context of a medical home.

3. Provide their workers with Medical Reimbursement Accounts (MRA). Under the MRA arrangements, workers pay out of pocket for a medical expense and then provide their employer with receipts for reimbursement, whether in whole or in part. Residents can also use their MRAs for healthcare services received through Healthy San Francisco.

Healthy San Francisco 2.0: The “Bridge to Coverage”

As noted in the Policy Memo used to help frame last week’s decision, the upgrades approved last week go to the heart of the Affordable Care Act and its promise to make coverage affordable for all Americans. But in places like San Francisco where the cost of living is very high, 60% higher than the national average, that promise has fallen short. For too many San Franciscans (not to mention other Californians) the ACA’s one-size-fits-all affordability standards don’t go far enough in making care and coverage affordable, ultimately defeating the broader goals of reform.

There lies the significance of last week’s resolution.  Once fully implemented and assuming full federal and state cooperation, the “Bridge to Coverage” provision will allow San Francisco residents to dedicate a portion of their MRAs to subsidize their insurance in Covered California. Residents will no longer receive the exact (MRA) dollar amount from their employer; rather, they will receive an amount that makes coverage affordable to purchase health insurance.

Under the new Bridge to Coverage benefit premium assistance will cover up to 60% of premiums costs for the second-lowest cost Silver plan on Covered California—after federal subsidies are applied.  What makes the SF upgrade really stand out is the focus on practical barriers to care in the form of out-of-pocket costs.  The new program includes cost-sharing assistance to ensure that the Silver plan deductible is no more than 5% of income.

Most impressively, the re-configured MRAs cannot be used to subsidize bronze plans, the plans with the lowest (60%) actuarial value, because these plans end up shifting costs to the consumer or, even worse, discouraging the use of otherwise cost effective care.

The intent of the proposal is to leverage resources to provide premium and cost-sharing assistance to San Francisco residents purchasing on Covered California, while maintaining Healthy San Francisco for residents, including the undocumented, not eligible for ACA coverage or not able to afford it. Though not specifically endorsed by Health Access, another provision in the resolution gives employers incentives to offer wellness programs.

How Healthy SF 2.0 Came Together

The San Francisco Department of Public Health collaborated with the University of California Berkeley Center for Labor Studies to build the model for this groundbreaking proposal with support provided by the California Health Care Foundation.  Health, community clinic and labor advocates, including Health Access’s Rose Auguste, attended last week’s hearing to testify in support of the proposal.

Going forward, the San Francisco Department of Public Health will work with a third-party administrator to implement this proposal by 2016.

Only three states (Massachusetts, Vermont, and New York) also with reforms pre-dating the ACA, have similar initiatives based on augmenting the subsidies provided by the ACA (learn more here). Together with these states, San Francisco is leading the national and state-level conversation about affordability standards and whether they should reflect regional variation in the cost of living.

This is great news for San Francisco—and potentially for other high cost of living areas of California.  We believe that last week’s redesign will help strengthen San Francisco residents’ health and financial security, while stimulating a much-needed national and state-level discussion on affordability—how it should be measured, to what extent it should account for out-of-pocket costs, and how local communities can leverage the ACA but go further to achieve local priorities for reform.

For more information on San Francisco’s Healthcare Security Ordinance update, please click here.

Highlights from California Health Policy Forum Panel on Provider Information Sharing

The California Health Policy Forum held a briefing last week at the Capitol entitled, “Enabling Information Sharing Among California Health Providers: What’s Next?” involving academics, the Department of Health Care Services and community clinics.

Panelists provided an overview of the federal and state health information technology (health IT) landscape and perspectives on what’s next in health IT and HIE. All affirmed the need for better care coordination and information sharing among providers, despite the costs associated with adoption of health IT and related challenges such as confidentiality requirements or disparate electronic health record (EHR) systems that do not easily “talk” with one another.

During the Q & A, a staff person from Covered California asked what large purchasers like Covered California and CalPERS could do to encourage better information sharing among providers. As an active purchaser exchange, Covered California is dedicated to incentivizing health plan performance in this area, and in ways that should improve quality and care coordination over time. Targeted payment incentives, several panelists suggested, could be used to improve motivation among plans and providers to share clinical information more efficiently.

The Take-Home Message for Health Consumer Advocates

Despite the consensus on the importance of information sharing for care coordination and other critical health care delivery system goals, the practical barriers are real. Meaningful progress to help eliminate the real and perceived barriers to information sharing and adoption of HIE will partly depend on clarification from regulators. To the extent that barriers to information sharing relate to concerns about confidentiality and the purposes for which information is used, consumers should have a voice in future panels on this subject. See resources on the topic here. This and the simple fact that consumers have so much to gain from better information sharing, is why consumer advocates should be a part of such discussions.