Legislative Wrap-Up: 2014 Bills Signed/Vetoed by the Governor

HEALTH ACCESS UPDATE: Friday, October 10, 2014

2014 LEGISLATIVE WRAP-UP: GOVERNOR BROWN SIGNS KEY PATIENT PROTECTIONS INCLUDING SB964(HERNANDEZ) ON TIMELY ACCESS TO CARE
* Other bills of note signed include SB18(Leno/Hernandez) to accept foundation and federal funding for community groups to help Medi-Cal enrollees with renewals; SB1052(Torres) on disclosing formularies; SB1053(Mitchell) on contraceptive coverage; SB1182(Leno) on disclosing large group claims data; and more.

* Key bills vetoed include SB1124(Hernandez) on limiting Medi-Cal estate recovery; AB2088(Hernandez) on avoiding junk coverage; and SB1094(Lara) on hospital merger oversight. Consumer groups vow to continue efforts next year.

* Full bill list below of fate of 2014 legislation that made it to the Governor’s desk.

The 2014 legislative session came to an end last week. The Governor’s deadline to sign or veto bills has come and gone; Governor Jerry Brown had until September 30th to sign or veto bills presented to him by the legislature.

After several years of significant legislative work to pass dozens of bills to put in place the key component of the Affordable Care Act in California law, it was the administrative work to implement and improve health reform that took center stage. That said, several key health consumer bills of note were passed and signed into law by Governor, even as some priority bills were vetoed as well.

The new law SB964(Hernandez) has perhaps most direct impact on the biggest number of consumers on one of the highest-profile issues of the year–the question of whether Californians, once covered, can get care. SB964 will increase oversight of timely access and network adequacy of all health plans, thus benefitting over 21 million Californians. In this year where California was successful in enrolling millions into coverage under the Affordable Care Act, new scrutiny focused on whether patients had timely access to care once enrolled in Medi-Cal managed care, which has long been criticized for lack of adequate access, or Covered California or other commercial plans offering “narrow networks.” SB964, sponsored by Health Access California requires the Department of Managed Health Care to do annual reviews for timely access and network adequacy for all plans, with reviews done separately for Medi-Cal managed care and the individual market so that consumers in Medi-Cal and Covered California have the guarantee that they can get needed care when they need it.

The Governor also signed two other bills to help access to care for those insured. SB 1052(Torres) requires the development of a standard drug formulary template which health plans and insurers must use to display their drug formularies and to post their formularies on their Internet Web sites. This bill also requires the California Health Benefit Exchange (Covered California) to provide links to the formularies. SB1053(Mitchell) was also signed and willeliminate cost sharing for FDA approved female contraceptives that are generic or preferred brands and allows substitution of non-preferred contraceptives, unless a therapeutic equivalent contraceptive is provided by the plan with no cost sharing.

To help consumers keep their coverage, SB 18 (Leno/Hernandez) provides the State $6 million from the California Endowment to fund Medi-Cal renewal assistance by community based organizations, drawing down $6 million in matching federal funds as well. This is the first ever renewal period since the process and rules changed under the ACA. Consumer advocates worked hard to pass this bill to ensure people eligible for Medi-Cal – many who have never had Medi-Cal before – got the necessary help to renew and maintain their health coverage. Thanks to the California Endowment and the Governor for his signature of SB 18, the State now has the necessary resources to ensure people who are eligible for Medi-Cal are able to successfully renew and maintain health care coverage.

On cost, quality and transparency, the Governor signed SB1182 (Leno), which requireshealth plans and insurers to share claims data or other detailed data to very large purchasers that have 1,000 or more enrollees or that are multiemployer trusts with at least 500 members. AB1962(Skinner) was also signed and would make transparent what dental-only plans spend, as a percentage of premium, on patient care by requiring specialized dental-only plans to disclose a “medical loss ratios” as for medical coverage.

For the remaining uninsured, SB 1276(Hernandez) by Western Center on Law and Poverty updates the Hospital Fair Pricing law enacted in 2006 after a five battle and sponsored by Health Access California. SB1276 defines a reasonable payment plan as monthly payments that are no more than 10% of income after essential living expenses and allows underinsured individuals with high health costs (over 10% of income) to receive the hospital fair pricing discount even if they receive a discounted rate on their cost sharing from their health plan or insurer.

To help the remaining uninsured in Fresno, the Governor signed AB 2731(Perea) which will allow Fresno County to spend $5.5 million for indigent healthcare by deferring their county maintenance of effort requirement for local streets and roads. The Fresno County Board of Supervisors must now take action to reverse a decision to undo their safety-net program.

Consumer, community, senior, and low-income advocates were very disappointed in some key vetoes, but vowed to continue the work next year, and saw hope for progress in the Governor’s veto messages.

SB 1124 (Hernandez) would have limited Medi-Cal estate recovery to long-term care, so those getting Medi-Cal managed care services would not find that their family home had a claim on it after death. Over 40 states follow this practice, allowing Medi-Cal to be a true safety-net for medical care without putting the family’s assets at risk. “Estate recovery” amounts to about $500 per month in liens for those over age 55. It arbitrarily seeks assets from a small slice of lower-income families who are trying to do the right thing by getting covered and owning a home. Advocates vowed to continue to work to fix this policy that penalizes low-income families taking personal responsibility by building savings while signing up for coverage. The Governor’s veto message suggested addressing this issue in the budget process next year, which advocates will do so Californians can get the coverage they need without any fear of any financial repercussions for their family. Advocates have appreciated the testimonies from impacted Californians, and continue to seek those stories for the continued effort.

Health Access California-sponsored bill AB 2088 (Roger Hernandez), which would have made limited benefit policies supplemental to comprehensive coverage sold to large employers was also vetoed. This consumer protection already exists in the individual and small employer market; the bill closes a loophole for larger employers to possibly avoid compliance with the full intent of the ACA. Employees who accept employer coverage are barred from subsidies in Covered California even if that coverage provides less than 60% minimum value. Advocates are disappointed by the AB2088 but will continue next year to work to limit this “junk” coverage and ensure employees get comprehensive coverage.

The veto of SB 1094(Lara) on Attorney General oversight over hospital sales and mergers was also a disappointment to consumer groups, labor, and Planned Parenthood alike. SB 1094 would have enhanced the Attorney General’s oversight of nonprofit hospital mergers and acquisitions. It sought to extend the review period from 60 days to 90 days. It also would have given the Attorney General authority to enforce conditions of hospital transactions. This bill was sponsored by the Attorney General.

Below (and on our website) is a longer bill list of the key health legislation (all supported by consumer groups including Health Access California) acted upon by Governor Brown in the past month:

BILLS SIGNED BY THE GOVERNOR

Ø Insurance Consumer Protections

OVERSIGHT OF HEALTH PLAN NETWORK ADEQUACY: SB964 (Ed Hernandez) requires the Department of Managed Health Care (DMHC) to do annual reviews of all health plans for timely access and network adequacy and that reviews be done separately for Medi-Cal managed care and the individual market so that consumers in Medi-Cal managed care and Covered California get timely access to necessary care. Sponsored by Health Access California.

SB959 (Ed Hernandez) is the clean-up bill for the individual and small group market reform legislation to implement the ACA enacted in 2012 and 2013.

SB1052 (Torres) would standardize plan formularies so that consumers know which plans cover which drugs at what costs. This measure applies to the individual and employer coverage markets.

SB1053 (Mitchell) eliminates cost sharing for FDA approved female contraceptives that are generic or preferred brands and allows substitution of non-preferred contraceptives, unless a therapeutic equivalent contraceptive is provided by the plan with no cost sharing.

Ø Medi-Cal

FOUNDATION & FEDERAL FUNDS FOR MEDI-CAL RENEWAL: SB18 (Leno) provides $6 million to the State from the California Endowment to fund Medi-Cal renewal assistance Sponsored by Health Access California and Western Center of Law and Poverty.

SB1089 (Mitchell) is a clean-up measure to AB 396 (Chapter 394, Statutes of 2011) which established a voluntary program to allow the State, on behalf of counties and the California Department of Corrections and Rehabilitation, to draw down Federal Medicaid funding for hospital inpatient and inpatient psychiatric services for Medicaid eligible detained juveniles at no cost to the State.

SB1341 (Mitchell) would require that the Statewide Automated Welfare System (SAWS) has the ability to make use of the Medi-Cal rules housed in the IT system, CalHEERS, jointly operated by the California Health Benefits Exchange and the Medi-Cal program.

Ø Cost/Quality Transparency

SB1182 (Leno) requires health plans and insurers to share claims data or other detailed data with very large purchasers that have 1,000 or more enrollees or that are multiemployer trusts.

SB1340 (Hernandez) would eliminate gag clauses in contracts between types of health care providers and health plans or insurers.

AB1792 (Gomez) would require the Department of Finance to report on the cost of public assistance received by employees of California employers.

AB1962 (Skinner) would make transparent what dental-only plans spend, as a percentage of premium, on patient care. It requires specialized dental-only plans to disclose a “medical loss ratios” as for medical coverage. The bill is sponsored by the California Dental Association.

Ø Hospital Oversight and Consumer Protections.

SB1276 (Ed Hernandez) updates the Hospital Fair Pricing law which Health Access California sponsored in 2006 and which says that low-income uninsured and underinsured cannot be charged more than the higher of Medicare or Medi-Cal. SB1276 defines a reasonable payment plan as monthly payments that are no more than 10% of income after essential living expenses and allows underinsured individuals with high health costs (over 10% of income) to receive the hospital fair pricing discount even if they receive a discounted rate on their cost sharing from their health plan or insurer. Sponsored by Western Center on Law and Poverty.

Ø Prevention

SB912 (Mitchell) would eliminate the sunset on the current requirement that vending machines in state buildings include 35% healthy food and drinks. Sponsored by California Pan-Ethnic Health Network.

Ø Other Bills

SB20 (Hernandez) would revise the open enrollment dates for the individual market to conform to current federal guidance, which is November 15-February 15. SUPPORT.

SB1004 (Hernandez) would change the definition of hospices to eliminate the requirement that patients forego curative treatment. SUPPORT.

SB1034 (Monning) would eliminate waiting periods due to pre-existing conditions, conforming California law to federal law with respect to waiting periods for health insurance. SUPPORT.

AB2731 (Perea) would allow Fresno County to spend $5.5 million for indigent healthcare by deferring the county’s maintenance of effort requirement necessary to receive state funding for local streets and roads.

BILLS VETOED BY THE GOVERNOR

Ø Insurance Consumer Protections

JUNK INSURANCE FOR LARGE EMPLOYERS: AB2088 (Roger Hernandez) while not banning limited benefit plans, makes them supplemental to comprehensive coverage. California’s Insurance Code allows the sale of “insurance” that provides very limited benefits with a minimum actuarial value of less than 60%. This bill extends this consumer protection to large employer coverage, closing a loophole for employers to possibly avoid compliance with the full intent of the ACA. Sponsored by Health Access California.

Ø Medi-Cal

LIMIT ON MEDI-CAL ESTATE RECOVERY: SB1124 (Hernandez) would have limited Medi-Cal estate recovery to long-term care. California is one of only ten states that impose estate recovery on more than long term care services, where the state, for those over 55, recovers the cost of all medical care from the estate of an individual after death. This has discouraged some from signing up for Medi-Cal coverage. Co-sponsored by Western Center on Law and Poverty (WCLP) and California Advocates for Nursing Home Reform.

SB1002 (De Leon) would have better aligned Medi-Cal and CalFresh reporting periods in order to streamline benefit delivery and improve low-income Californians’ access to federally funded health and nutrition benefits.

AB2325 (Speaker Perez) would have created a Medi-Cal medical interpreter program.

Ø Hospital Oversight and Consumer Protections.

SB1094 (Lara) would have enhanced Attorney General oversight of nonprofit hospital mergers and acquisitions. It extends the review period from 60 days to 90 days. It also gives the Attorney General authority to enforce conditions of hospital transactions. This bill is sponsored by the Attorney General.

SB204 (Corbett) would have required the Board of Pharmacy to survey pharmacists and electronic health record vendors to determine utilization of standardized prescription directions for use adopted pursuant to Board regulations.

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