Anthem Blue Cross withdraws rate hikes, for now...
Thursday, April 29, 2010
California consumers got some relief today. Insurance Commissioner Steve Poizner announced that Anthem Blue Cross of California has withdrawn their rate filings, after a review of an independent actuary has revealed various problems, including arithmetic errors and double-counting.
The rate hikes of up to 39% were controversial, the subject of a white-hot presidential spotlight during the health reform debate.
It's great that California ratepayers got a reprieve from outrageous rate hikes by Anthem Blue Cross of California.
But more than rate relief, this withdrawal of the rate hike proposals show why we need regulators to have active oversight over the insurance industry. This review was done under existing law, which provided very limited authority, and it was still able to find basic problems in arithmetic and double-counting.
Oversight and regulation matter. This shows why more extensive oversight is needed, some of which is in the federal health reform that passed, and additional rate review proposals that are pending at both the state and federal levels.
Federal health reform (and pending state implementation) would create health insurance exchanges, where people buying coverage as individuals could join and benefit from group purchasing to negotiate for better prices and value. There are also pending proposals at both the state and federal levels to have rate review and approval authority, especially in the period before 2014 when the exchange come into full effect. * At the federal level, California Senator Feinstein has a proposal to regulate rates at the federal level, especially for states that don't have a rate review process. * California is one of those states that does not have rate review, but there are pending bills. Assemblyman Dave Jones has a rate approval bill, AB2578. State Senator Mark Leno has a bill for insurers to disclose their rate methodology, SB1163.
We need these continued reforms, so when Anthem Blue Cross resubmits rate hike proposals, there's a process to properly review them.
Earlier today, Governor Schwarzenegger gave a big speech at UC-Davis Cancer Center here in Sacramento, unveiling his approach to implementing health reform in California.
As we reported on Twitter (at www.twitter.com/healthaccess), he embraced the reform. He called himself a "longtime fan and big believer" in health reform. (Some will remember that hasn't always been the case, but...) He even took credit for health reform (with some justification), saying that his 2007 effort on health reform was "the model" for federal reform. "It is a good law," he said emphatically.
In particular, he wants California to establish a new high-risk pool to cover those denied for pre-existing conditions, alongside our current small and struggling pool, MRMIP, which has a waiting list. Tomorrow is the deadline that Governors had to tell the federal government if they wanted to run their own program or simply let the federal government do it for us.
The Governor also endorsed the implementation of a variety of insurance regulations in the federal law, and the creation of an health insurance exchange. That's notable because despite the fact that it's not a requirement this year, both Assembly Speaker Perez and Senate President Pro Tem Steinberg have bills to create the exchange--which would be good for Californians. Now all the key leaders are endorsing moving ahead, which means the negotiation is really about the details. The Governor also said he is willing to consider a special session to do this work if necessary, although the current bills are all moving along in regular session.
There weren't tons of details--we'll be watching carefully: the news was the Governor's renewed enthusiasm and attitude about implementing health reform. Some outlets have noted the importance of having the nation's most prominent Republican Governor move ahead in this way.
As HHS Secretary Kim Belshe said, "No state is better positioned to make health reform deliver... California is ready to act. This Governor is ready to lead." We look forward to working to fulfill the promise of reform for Californians.
It's often said that sunshine is the best disinfectant -- and that may well be the case regarding this surprise development: Lisa Girion of the Los Angeles Times reports that two of the nation's largest insurers -- WellPoint and Blue Shield of California -- have agreed to end the practice of rescission.
WellPoint is the Indiana-based parent corporation of Anthem Blue Cross of California, which has grown notorious lately for its proposed 39% rate increase for individual policyholders, and for a story reported last week by Reuters that WellPoint had systematically targeted breast cancer patients for investigations of fraud, and subsequent rescissions.
Some breast cancer patients had their policies yanked from them, or rescinded, as they were mid-treatment.
The announcements also come as Congress and the Obama administration prepare to crack down on rescissions. Said Angela Braly, CEO of WellPoint, the "goal is to make reform work for our members and for the country."
Since 2004, the LA Times says, at least 5,000 Californians had their insurance policies rescinded by the state's five largest health insurers — Anthem Blue Cross, Blue Shield, Health Net, Kaiser and PacifiCare. That includes about 3,500 policies regulated by the Department of Managed Health Care and another 1,600 policies regulated by the Department of Insurance.
We've blogged a lot about how health reform fight moves to the state. But it continues in Congress as well. In particular, California's two Senators are continuing the fight for rate review.
Senator Feinstein had called on WellPoint/Anthem Blue Cross to drop plans for the rate hike on Californians (one that has been delayed pending an independent investigation for the California Department of Insurance) most recently during a speech on the floor of the U.S. Senate last Friday:
The Health Insurance Rate Authority Act of 2010, authored by Senator Feinstein and co-sponsored by Senator Boxer, would give the U.S. Secretary of Health and Human Services the authority to review and reject unfair premium rate increases in states where Insurance Commissioners do not have the authority or capability to do so. This is especially key for states like California, which do not have rate review, and important for the period between now and 2014, before the exchanges are functional and can use their negotiating power.
This bill is something that Senator Feinstein is looking to move, so stay tuned...
ASSEMBLY BUDGET SUBCOMMITTEE REJECTS MANY HEALTH CUTS, FOR NOW * CA Assembly Budget Subcommittee Responds to Advocates Testimony & Turnout * Legislators Express Opposition to Governor's "Trigger" Cuts * Mid-Year Status Reporting for Kids Rejected by Subcommittee * Tougher Eligibility for Low-Income Folks is Rejected as Violation of Health Reform * Also Rejected: Additional Medi-Cal Benefit Cuts; Elimination of Coverage for Recent Legal Immigrants; Sunset of Prescription Drug Discount Program; and More.
HEALTH CUT PROPOSALS FACE OPPOSITION IN ASSEMBLY BUDGET SUBCOMMITTEE: Gov. Arnold Schwarzenegger’s proposed “trigger” budget cuts got shot down Monday by the Assembly Budget Subcommittee No. 1 on Health and Human Services, which deemed them to be either essential services or violations of federal health reform.
The governor planned to make the drastic round of trigger cuts in the 2010-2011 budget year if his demands for $6.9 billion in added federal funding were not met.
But members of the Assembly Budget Subcommittee rejected the administration’s three worst-case-scenario proposals that are included as part of the Department of Health Care Services budget. The Subcommittee, chaired by Assemblyman Dave Jones (D), voted down three sections of the budget cuts:
* A radical reduction in Medi-Cal eligibility for very low-income Californians, so that Medi-Cal services would be yanked from a total of 2.2 million people. Assembly members noted, however, that all experts were in agreement that this proposal violated provisions of the Patient Protection and Affordable Care Act signed into law by President Obama on March 23, 2010.
* An elimination of Medi-Cal benefits that includes essential durable medical equipment such as wheelchairs, feeding tubes, prosthetics and hearing aids. In addition, this portion of the governor’s trigger proposal would deny low income people medical equipment such as diabetic test strips, wound care supplies, tracheotomy care and more. These cuts would affect more than 223,000 Californians, and would come on top of last year’s elimination of dental care, speech therapy, chiropractic, acupuncture, optician/optical lab services, podiatry, psychology and audiology services. After hearing impassioned testimony from dozens of groups, the subcommittee voted against eliminating the new round of benefits the governor put on the chopping block.
* The Assembly members, who included Wes Chesbro, Jim Beall Jr., Hector De La Torre, Brian Nestande and Bill Emmerson in addition to Chairman Dave Jones, also voted to restore $10 million in funding to community clinics through the Early Access to Primary Care Program. Following the close of budget negotiations, Schwarzenegger unexpectedly stripped that funding from the 2008-2010 budget bill. Among those testifiying as to the illogic of this cutback was Beth Capell of Health Access, who pointed out that California should be ramping up, not shutting down, capacity in anticipation of the year 2014, when health care reform expands access to care.
The subcommittee heard moving testimony from many Californians who had benefited from the access to medical supplies and services through the Medi-Cal program. One woman, Inez Black of Hayward, told the committee she had largely recovered from brain damage thanks to the help of occupational, cognitive and physical therapy provided through Medi-Cal benefits that the governor now wants to cut. “I’m living proof that the therapy works,” Black told lawmakers. Your money is so well spent and I am so grateful.”
STANDING ROOM ONLY: Among those testifying against the cuts were disability rights activists, the California Primary Care Association, the California Immigrant Policy Center, the California Retailers, Rite Aid, Abbott Laboratories, Congress of California Seniors, the California Medical Association, the California Pan-Ethnic Health Network, Children Now, the 100% Campaign, the American Cancer Society, advocates for foster care youth, Planned Parenthood, AARP, the Unitarian Universalist Legislative Ministry and many more.
Even the administration’s representative, Toby Douglas of the Department of Health Care Services, acknowledged the severity of the governor’s “trigger” proposals, saying, “These are terrible proposals…they will have terrible impact on our beneficiaries.” And another administration official was not surprised when mid-year eligibility requirements for children on Medi-Cal was rejected by the subcommittee. The cynical proposal, designed to drop 475,000 low-income children from services because their parents likely would not be able to keep up with the paperwork, likely would have violated "maintenance of effort" requirements in both the economic recovery act and the new federal health reform law.
Still, the governor and legislature do face another massive budget deficit, and some measures to help patch the hole were adopted. The Subcommittee on Monday passed a proposal to extend a Medi-Cal Managed Care Plan fee used to help draw down matching federal funds to support Healthy Families. Without making a final decision, the panel left open for discussion a 10 percent reduction in payments to public and private hospitals in 2010-2011. They also agreed to extend for one more year a delay in California’s discount drug program – while at the same time eliminating a section of the Governor's proposal that would have set a date for a sunset of the program before it ever started.
The subcommittee also rejected the governor’s proposal to eliminate Medi-Cal for legal immigrants who were in California less than five years. Assemblyman Nestande reminded those attending the hearing that “We understand the needs out there but of course we all realize it’s a tough economic environment” for state budgetary purposes.
The subcommittee also [CORRECTION: left open for discussion the Governor's proposal to] ax Medi-Cal Family Planning Services that receive a 9 to 1 federal match, meaning $9 comes back to the state from Washington for every $1 California spends on the program. A UC San Francisco study concluded in 2002 that the Family PACT program had prevented 205,000 unwanted pregnancies.
NEXT STEPS FOR THE BUDGET: However, there’s no guarantee that the full Assembly Budget Committee will follow the recommendations of the subcommittee. No decision on the budget is final until the budget is passed by the Legislature and signed by the Governor.
The governor himself may alter some of his budget and trigger proposals in the May revision that is scheduled to be unveiled on Friday, May 14. Separate hearings will be going on in the state Senate before the two houses join their budget proposals in a conference committee.
Anthem Blue Cross is postponing a rate increase of up to 39% until further notice, executives at parent company WellPoint say. In an article by Duke Hefland of the Los Angeles Times, WellPoint did not give any indication it was backing off the rate hike altogether. Rather, the Indiana corporation said it was responding to the request of regulators, awaiting completion of an independent actuarial review at the California Department of Insurance.
Although consumers with individual policies took the delay -- the second since Anthem Blue Cross notified rate payers their premiums would increase by double-digits -- as a good sign, the insurer only has to give its customers another 30 day-notice before it can implement the rate hikes.
That is, if it passes the test of showing actuaries that the insurer actually spent at least 70% of customers' premium dollars on medical expenses for individual policy holders.
There's been a lot of attention to the comments of Sue Lowden, who is running as the Republican frontrunner for the U.S. Senate seat now held by Senate Majority Leader Harry Reid in Nevada. At a town hall meeting, when describing her alternative to the health reform bill that passed, Lowden talked about going back to the world where patients would "barter" with their doctor. In a follow up interview, she didn't back down from this quaint notion, and in fact talked about "taking a chicken to the doctor."
But Lowden clearly meant what she said, and deserves the ridicule. But there's a serious debate here that should not be overlooked. One is that some folks really do want to just go back to the good old days, as if medicine hasn't advanced and gotten more complicated and expensive in the process. Harkening back to history isn't a good way to deal with our current and future challenges in health care.
Let's take away the (admittedly humorous) statements about "chickens" and even "bartering." It is equally ridiculous to suggest that individual consumers are in a position to bargain with their doctor. Yet it is an article of faith among some politicians that the real solution to increasing health care costs is to shift the costs onto individuals, have them pay cash, which would "empower" them to bargain for a good price.
For those who raise the fear that reform would make health care like a trip to the DMV, it's strange to argue that health care should really be more like a trip to a used car salesman. Not only would that be needlessly stressful to have to bargain (especially at a time when you were sick), but the individual has little market power. Those who have been the best at negotiating have been large purchasers, like big employers or CALPERS, that negotiate on behalf of hundreds of thousands of people, that have the staff wherewithal to examine the data, make comparisons, and challenge insurer statements.
This is a relevant debate right now. As part of implementating federal health reform, there are bills to set up a new health insurance exchange, AB1602(Perez) and SB900(Alquist/Steinberg), in the California legislature. It is critical that this new exchange use its bulk purchasing power as an "active purchaser," to bargain on behalf of the millions that will get coverage through the exchange, for the best price and value.
So there's two different visions. One is an exchange that negotiates for the best cost and quality. Another is to simply let any insurer sell anything, and let individual consumers fend for themselves, and get deal on their own, with chickens or whatever else--frankly, it's less of a free market than a flea market, letting the buyer beware.
In this continued health reform debate, in Nevada and here in California, we shouldn't be chicken in our efforts to defend consumers.
HHS Secretary Kathleen Sebelius wasted no time in sharply admonishing the CEO of WellPoint Inc. for the insurers' practice of dumping breast cancer patients, and refusing to pay for their care.
In a letter sent to CEO Angela Braly, Sebelius reminded the highly compensated executive ($13-plus million last year) that this sort of practice is soon to be outlawed by the new federal health reform law.
"I hope you will consider these women and their families as you work to end this harmful practice," Sebelius wrote.
"Hold onto your health plans," writes the San Francisco Chronicle editorial page editors. Because apparently we consumers are in for a wild ride -- one in which health plans try everything under the sun to boost their profits under the new rules.
Right away, the Chron fingers WellPoint, the parent company of Anthem Blue Cross of California, as an example of insurers likely to commit bad behavior:
"One of the earliest offenders was WellPoint, one of the country's largest insurance companies. Under the new health care law, insurers must spend 80 percent of premium dollars on medical care. In January - well ahead of the reform's passage - WellPoint began reclassifying some of their administrative expenses as "medical spending." The company even bragged about it to its investors.
Meanwhile, the Department of Health and Human Services and the National Association of Insurance Commissioners haven't even finished writing the definition of "medical spending" as it will exist under the health care reforms. So this is clearly a pre-emptive move by WellPoint, to make its own classification. It's unfair and unseemly. And if WellPoint's allowed to get away with it, every other health insurer will do the same."
An exclusive article by Murray Haas of Reuters documents how Anthem Blue Cross routinely and systematically identifies breast cancer cases among its policyholders and pulls their medical coverage out from under them.
Not only does the article expose the appalling practice of how Anthem Blue Cross uses an algorhythm to search its computer databases for breast cancer cases, it reveals ways in which the WellPoint Inc. subsidiaries actually block breast cancer patients from getting help.
Read it here. Women who'd paid their premiums faithfully and on time suffered dearly .
The callousness of WellPoint and Anthem Blue Cross of California calls for thorough, immediate investigation, prosecution, penalties and the stiffest of regulation.
In a statement released today, Health Care for America Now, a partner of Health Access and a national grassroots coalition working toward successful implementation of health reform, reacted to the appalling news that the 14 Blue Cross Blue Shield Plans owned by WellPoint Inc. have been systematically targeting women stricken with breast cancer:
In a remarkable 4,200-word account published today, Reuters reported that WellPoint developed and used computer software to automatically trigger fraud investigations of breast cancer patients so the insurer could search for phony excuses to dump them. WellPoint is the nation’s largest health insurance company with 33.7 million members, most of whom are in Blue Cross plans in California, New York, Georgia, Kentucky, Maine, Connecticut, Indiana, Wisconsin, Nevada, New Hampshire, Colorado, Missouri, Ohio and Virginia. Meanwhile, WellPoint’s board is rewarding Angela Braly, WellPoint’s CEO, for this behavior. The company paid Braly $13.1 million in 2009, up 51 percent from the year before.
HCAN released the following statement from Ethan Rome, the group’s executive director:
“WellPoint’s Blue Cross-Blue Shield companies’ disregard for human life to maximize profits is immoral and outrageous. The Reuters report shows an unconscionable pattern of denying needed health care to line the pockets of wealthy executives and shareholders.
“Today’s disclosure provides more evidence of why Congress needed to pass national health reform in the first place, and it also shows why we need to curb the extraordinary influence of insurance companies so they don’t interfere with enforcement of the new law. We need the forthcoming federal regulations to shine a light on the insurance companies and hold them accountable for their bad practices.”
SENATE HEALTH COMMITTEE MOVES BILLS TO LAUNCH STATE'S HEALTH REFORM * Pair of Bills By Chair Elaine Alquist Allows California to Swiftly Move Forward * Insurers Urged to Offer More Consumer-Friendly Policies on the Individual Market * Apples-to-Apples Comparison Shopping in Individual Market is Closer to Reality * Vice Chair Strickland's Challenge to Expansion of Medi-Cal is Voted Down
KEY SENATE BILLS PASS SENATE HEALTH COMMITTEE: On Wednesday, California continued its march toward making health reform meaningful here as a pair of bills authored by Senate Health Committee Chair Elaine Alquist and Senate President Pro Tem Darrell Steinberg won committee approval.
These and other key consumer protection measures all passed on a 5-0 vote. Due to sickness and/or scheduling conflicts, all three Republicans and one Democrat on the committee were absent, thus requiring a unanimous vote from the remaining five Democrats in order for bills to proceed.
SB 900 (Alquist/Steinberg) sets up a new insurance exchange that actively uses its negotiating power to seek out the best deals for individual and small group policyholders. SB 890 (Alquist/Steinberg) standardizes and simplifies the health insurance market so that consumers better understand their choices and can make apples-to-apples comparisons.
SB 900 is similar to AB 1602, authored by Speaker John Perez, which the Assembly Health Committee passed on Tuesday. The measures are expected to be reconciled further along the legislative process, as the flagship measures to deliver on federal health reform's promise, and create a fair, consumer-friendly exchange as a market where consumers could shop for the best policies at the best prices would be fulfilled.
In introducing her bill, Senator Alquist said, "This establishes the exchange as an active purchaser that will try to get the best possible deal for consumers shopping for individual policies." She said the exchange would be administered by a board of legislative and gubernatorial appointees that would meet in public every two months. The board will be held accountable for its decisions, Alquist said.
Health Access advocate Beth Capell said it is estimated that between three and nine million Californians would get coverage through the exchange. The exchange will ensure that people are charged for health insurance on a sliding scale, so those who make less will be charged less, and those with higher incomes will pay prices according to a sliding scale as well. It is envisioned that this fundamental building block of health reform in California would be consumer-friendly enough to attract small businesses into the exchange.
An exchange might reduce the number of uninsured in California -- currently estimated at 8.2 million -- to roughly 2-3 million. "We are hopeful that the exchange will help create a real culture of coverage in California," Capell told committee members.
Alquist's SB 890 aims to standardize the range of policies that are available to individual consumers so that "apples-to-apples" comparisons could be made. The bill standardize the market, from the current "confusing maze of over 100 products" where consumers have little ability to determine the differences between plans.
"This would be the first step in beginning to implement health care reform," Alquist said. "We need to restructure for Californians the market in which they buy their own insurance." As many as 2.5 million Californians, or 7% of all Californians, shop and pay for their own insurance in the growing individual market, which has been largely unregulated
SB890 received broad support from a range of stakeholders, including Health Access California, Kaiser Permanente, Congress of California Seniors, California Medical Association, California Hospital Association, and many others.
Insurers and brokers raised concerns with both bills. A common refrain was to wait until the federal government issued more clarifying regulations. An ongoing issue spotlighted by the insurers was about any provision that went beyond the federal law.
Nevertheless, California is moving along at establishing federal health care reform at a quick clip. The state is well-poised to make swift and certain progress at reform, in part due to extensive policy work done in 2007, when California nearly passed its own version of reform before Governor Schwarzenegger's "the Year of Reform" was squelched.
In other important action:
* The Senate Health Committee also passed legislation by Senator Mark Leno (D) to require health plans and insurers to disclose information justifying premium rate hikes and the methodology and frequency of their coverage denials to consumers. Leno's bill, SB 1163, would also require insurers to disclose impending premium increases 180 days before they go into effect -- rather than the 30-day notice current law requires. Leno noted that increases in premiums have far out-paced actual increases in medical costs. In 1960, he said, health insurance premiums made up 5% of the Gross Domestic Product; in 2000, that proportion grew to 13% of the GDP; in 2010, it grew to 17.3% of the GDP; -- and by the year 2025, if that rate of growth were not stopped, health insurance premiums would make up 25% of the GDP. "It is completely unsustainable," the senator said.
* SB 1283, by Senate President Pro Tempore Darrell Steinberg (D) also passed with a 5-0 vote out of committee on Wednesday. The bill would require a closer examination of the Department of Managed Health Care's progress at responding to consumer complaints, grievances and appeals of denial of coverage. A consumer testified that when an autistic child needed prompt medical treatment and was denied it by Blue Shield, the grievance process was so slow and ineffective as to take nine months instead of the legally required seven-day process. Steinberg's bill would allow consumer advocates to examine whether the Department is following the letter of the law of the 1999 Patient Bill of Rights that Health Access and a broad consumer coalition established. Health Access advocate Beth Capell told committee members: "We need to revisit a law we put into place a decade ago and get families the care they need when they need it -- and not see them subjected to Dickensian delays."
* SB 1088, authored by Senator Curren D. Price Jr. (D), was passed by the committee.. The legislation would build a bridge to uninterrupted insurance coverage for young adults up to age 26 who are on their parents' policy as students of a four-year university. Prior to federal health reform, a university graduate would be dropped as a dependant from a policy.
* Another bill by Senator Leno would require insurers to provide timely access to care to children at school. SB 1200 clarifies existing law to make certain that health plans cover children with chronic conditions such as asthma while they are in school.
* During most bill deliberations on Wednesday, lobbyists for the insurance industry were hard-pressed to argue why they might oppose the bills. In the wake of federal health reform, last year's oft-repeated, pro-industry opposing argument -- that any additional mandate would simply add to insurance company costs, and ultimately spread higher costs to all policyholders -- lost its punch. With reforms now the law of the land, the California Association of Health Plans, Health Net, Anthem Blue Cross and industry special interest groups were being very watchful of any changes to the California individuals market.
* And the partisan position that opposed federal health care reform lost ground as well on Wednesday. Senator Mark Wyland, standing in for Vice Chair Tony Strickland (R) presented an opposition bill that protested against the expansion of Medi-Cal -- as called for by federal health reform -- as too costly. But Capell pointed out that allowing people with incomes up to 133% of the poverty level to qualify for Medi-Cal also brought with it the promise of $124 billion in federal funds for California in the next decade. She and other opponents made clear that the the federal government was paying for 100% of the cost of newly eligible patients, and even after some phasing down until 2020, the federal government would provide a higher 9 to 1 marching rate. That pretty much took the steam out of the protest bill, which failed to pass by a 0-5 vote.
Many of these bills are now headed to the relevant Appropriations Committees for review. For more information, contact Health Access California.
ASSEMBLY HEALTH COMMITTEE LAYS CRUCIAL GROUNDWORK FOR HEALTH REFORM * CA Assembly Health Moves Several Bills to Line State Up With Federal Health Reforms * Groundwork is Laid for a State-Run Exchange, Expanded Medi-Cal, High-Risk Pool * AB 2244 Passes, Protects Kids from Discriminatory Pricing Based on Health Status
In a "deadline" week, the California Assembly Health Committee on Tuesday passed a package of health care consumer protection measures, which lay down some basics for making federal health reform real in California.
CHILDREN FIRST, PLEASE: One prominent bill was AB 2244, by Assemblyman Mike Feuer (D). The bill, sponsored by Health Access on behalf of its coalition members, "phases in several key provisions for children," Feuer told the committee.
The rollout of the Patient Protection and Affordable Care Act signed by President Obama on March 23 begins with children. Insurers will no longer be able to deny coverage to children with pre-existing conditions, and they will also have to rescind pre-existing condition exclusions for children already covered by their family policies.
AB 2244 goes beyond federal law in not just preventing denials, but limiting discriminatory charges for "pre-existing conditions" for children as well. The bill phases in "modified community rating" so that insurers are limited to charging plus or minus 20% for a child's health status. The price difference would be phased to plus or minus 10%, and then to no different charges allowed by 2014.
The bill had the support of the Congress of California Seniors, Consumers Union, the 100% Campaign, the California School Employees Association and others. Speaking out in opposition were the California Association of Health Plans and the California Association of Life and Heallth Insurance Companies, saying they believed AB 2244 was "premature."
The opposition by insurers was not a surprise. Just days after Obama signed the landmark law, insurance companies tried to interpret the new rights for children very narrowly. Not so, said the feds. This woule take the next step. In the Assembly Health Committee, the vote was pretty clear: "11 Ayes" and 6 "Nos". The measure now goes to the Assembly Appropriations Committee.
MAKING MEDI-CAL AVAILABLE TO MORE CALIFORNIANS: AB 1595, authored by Dave Jones (D) lined California's income eligibility requirements right up with the new federal law. Under federal reform by January 2014, Medi-Cal, which is administered by the Department of Health Care Services, will offer Medi-Cal coverage to all adults who earn up to 133% of the federal poverty levels -- even adults without children. The income ceiling would be $14,404 for individuals and $29,326 for a family of four.
Funding for the expansion of Medi-Cal will come from Washington, which will provide 100% of the cost of newly eligible starting in 2014 for the first three years. Then the percentage starts to taper off a bit so that, by 2020, the federal government is sending 90% of the cost of newly-eligible Medi-Cal patients. Health Access is in support of the measure, which passed out of committee with 10 votes. Also in support are the 100% Campaign, the Western Center of Law and Poverty, and the American Federation of State, County and Municipal Employees.
THE CALIFORNIA PATIENT PROTECTION AND AFFORDABLE CARE ACT: Assembly Health Committee members adopted Speaker John A. Perez's central bill, AB 1602, which is more or less the leader of the package. AB1602 "makes several sweeping changes," said Perez (D). Among them are creating the California Health Benefit Exchange, where individuals and small businesses can purchase health care coverage. The measure also prohibits group of individual health care plans from establishing lifetime or unreasonable annual limits of the dollar value of benefits. Carriers will also be required to provide preventative services, outlaws denying people coverage for pre-existing conditions and extends dependent coverage to young adults up to age 26. "Let's be clear," Perez told the committee. "Federal health reform is now the law of the land and California will implement it fully." He described the bill as "by necessity a work in progress as we still need an enormous amount of guidance" on implementation from the U.S. Department of Health and Human Services. The bill won 12 votes in its favor.
MATERNITY COVERAGE, ONCE AGAIN: California insurers have been dropping maternity coverage steadily for years now. Just four or five years ago, 82% of policies [CLARIFIATION: offered in the individual market] included maternity coverage and now only 19% do. Arguing in favor of AB 1825, Assemblywoman Bonnie Lowenthal (D) said, "We can't wait another four years to see what happens." She presented AB 1825 for her colleague, Assemblyman Hector De La Torre, who authored the bill. Health Access, the California Medical Association and many other groups supported the bill, which requires every individual or small group health insurance policy to cover maternity services. Insurers had been dropping the coverage from plans in an effort to make them more affordable and sell more policies. Several organizations, however, have criticized this practice as part of an overall trend of gender discrimination by insurance companies. AB 1825 passed with 12 "aye" votes and 6 "nos."
FEDERAL HEALTH REFORM TO RESHAPE GOVERNOR'S BUDGET PROPOSAL * Assembly Budget Subcommittee Hears Testimony Against Cuts to Healthy Families * Several Testify Against Schwarzenegger's Harshest Scenarios for Children's Health * New Federal Health Reform Renders Governor's "Trigger" Proposals Illegal
The subcommittee specifically focused on some of the programs and services Schwarzenegger threatened to eliminate in his "trigger" scenario, a proposal that would be "triggered" should the nearly $7 billion in additional federal funds that the Governor budgeted not materialize.
While agency heads were noncommital about how the governor's budget fits with national health reform, saying they were still studying the matter, advocates stepped up to state clearly where the federal health reform prevents specific cuts.
LAYING DOWN THE LAW: Elizabeth Landsberg of Western Center of Law and Poverty told the subcommittee that, under the new law signed by President Obama, certain programs were protected from being dismantled or scaled back. These include Healthy Families, which insures nearly 1 million children in California from families that pay premiums according to their income, the AIM program for infants and mothers, and even the MRMIP high risk pool health insurance of last resort for those who are denied coverage in the individual insurance market. Beth Capell of Health Access added, "These would plainly violate the MOE," in reference to a "maintenance of effort requirement" included in the new federal law that requires programs to provide the same level of services as before the reform passed into law.
A few weeks ago, Arizona became the first state to shut down its CHIP program -- the same federal-state children's health insurance program as Healthy Famillies -- through state legislation. But Arizona lawmakers overshot their authority. The federal Centers for Medicaid Services "has indicated that this is in violation of federal health care reform," a subcommittee staff report stated.
Amid the analysis of federal health reform requirements, a Department of Finance representative for the Administration suggested that the governor's "trigger" proposals to eliminate these and other programs "are not budget proposals, although they may be in the May revise." Jones indicated that statement was contrary to everything the governor said previously.
Even the Legislative Analyst's Office representative said the trigger proposals "violate federal law." Leslie Cummings, executive director of the Managed Risk Medical Insurance Program, said "there's so much I can't claim to know definitely yet."
The Assembly Budget Subcommittee ended up, by a 4-1 vote (with one not voting), REJECTING the following budget proposals: * Eliminating the Healthy Families program; * Reducing eligibility in Healthy Families from 250% to 200% of the federal poverty level; * Increasing premiums in the Healthy Families program * Eliminating the vision benefit in Healthy Families * Eliminating Prop 99 Funding for AIM
Besides running Healthy Families and AIM, the Managed Risk Medical Insurance Board (MRMIB) also administers the Major Risk Medical Insurane Program (MRMIP), the high-risk pool for those denied by private insurers for "pre-existing conditions." Funding proposals were left open, as more information becomes available about the implementation of federal reform in this area.
As always, no budget decision is final until a full a final budget is signed into law.
The hearing focused only on the programs in MRMIB. Next week, Monday, April 26th, at 1:30pm, the Assembly Budget Subcommittee is scheduled to look at proposed Medi-Cal cuts. FYI, Medi-Cal enrollment eligibility has already been protected from cuts under an MOE, as a condition of getting additional Medicaid dollars in the federal recovery act. However, neither the enhanced Medicaid dollars nor federal health reform prevents state governments from cutting certain Medi-Cal benefits or provider rates. The hearing would be a time for health advocates to express their opposition to such Medi-Cal cuts.
Rather than talking about how to implement and improve health reform, and working so it most benefits Californians, some candidates for U.S. Senate and Governor here in California are talking about repealing it, or legally challenging it, or otherwise.
* Do they want to repeal the small business tax credits that will make employee coverage more affordable? * Or the $250 rebate to America’s seniors who have fallen into the Medicare Part D ‘donut’ hole pay for prescription drug coverage? * Do they want to repeal the ban on insurance companies dropping people from coverage when they get sick? * Or the prohibition on insurance companies denying coverage to children with pre-existing conditions? * Do they want to repeal the ban on insurance companies placing lifetime caps on coverage or the ban on restrictive annual limits on coverage? * Or the new, independent appeals process that ensures consumers have an avenue to appeal decisions by their health insurance plan? * Do they want to repeal the temporary high-risk pool that will provide immediate access to Americans who are uninsured because of a pre-existing condition? * Or do they want to repeal the requirement that health plans allow young people to remain on their parents’ health insurance plan up to their 26th birthday?
Good questions, for reporters to ask all candidates for office this year.
* In their rhetoric, more legislators are using the concern about rising health care costs to make their arguments on pending bills. Sen. Mark Leno (D) presented a bill Wednesday that would require youths through age 18 to wear sports safety helmets on ski and snowboard slopes. Serious head injuries are expensive and can require lenghty hospitalization, he said, and, yes, those big hospital bills will somehow get spread around into everyone's health insurance premiums.
A witness testifying in favor of the bill, SB 880, authored by Sen. Yee, described how, as an 18-year, she went at a smallish snowboard jump at too slow of a speed and her board flew up in the air and crashed down on her head, knocking her unconscious. She was in a coma on life support for three-and-a-half weeks, lost sensation on her left side and needed years of therapy to recover. Now she visits schools to share her story as a cautionary tale.
Leno told his colleagues: "One-half of all skiing deaths are caused by head injuries. If we pass this bill and require safety helmets, we will decrease the number of expensive serious head injuries, thereby reducing health care premiums for everyone."
SB 880 passed, 6 to 2, and heads now to the appropriations committee.
* In the same Senate Health Committee hearing Wednesday, Sen. Dave Cox (R) argued in favor of SB 1109, which would go after tobacco tax funds for preschool activities for children ages 0 to 5. Cox passionately declared that the Proposition 10 revenue would be better spent on anything but the "First Five" programs for California preschoolers that the voters approved.
His strongest argument? "If kids don't have health care, the music circles and play groups won't make much difference," Cox said. "Circle time, movie nights, yoga, play groups...none of that makes sense. Not when the money could be used for health care."
His bill failed, however, due to strong opposition testimony as to the benefits California's little ones are getting firing up their synapses with the lessons that the First Five programs provide.
* Sen. Alan Lowenthal (D) was presenting his bill, SB 1169, a simple one, to require insurance companies to give tracking numbers to treatment authorizations for mental health. The idea is to make it easier for people and providers to settle claims by making them easier to track through the insurance system.
"Tracking is not a revolutionary idea," said a supporter of the bill. "If we make a hotel reservation, we get a confirmation number in case the hotel clerk says you have no room reserved. UPS uses tracking numbers...."
Insurance lobbyists, however, gave their usual objection: If you impose any more bureaucratic or paperwork requirements , the costs will end up going up for consumers. In other words, premiums will rise for everyone.
But Lowenthal backed the insurers into a corner, figuratively, by revealing he knew insurers already had a tracking number system. The hitch was that the companies wanted that tracking system to be internal -- not known to anyone outside the firm.
Why not share? asked Lowenthal. If you do, he said, then you can't go on saying "'Things get lost...we can't find your claim or authorization.' That won't have to happen anymore."
If you can believe it, the health insurance industry's argument Tuesday against restricting rate hikes to once a year was that an incremental sprinkling of increases every few months would help consumers deal with sticker shock.
Of AB 2042, a bill to limit insurance companies to just one premium increase annually, a lobbyist for health plans said: "This only ensures that consumers will receive a bigger rate increase once a year." In his view, multiple "adjustments" in a year's time -- that is, in addition to "the one-time annual global increase in our premiums" -- would serve to soften the blow.
Members of the Assembly Health Committee, chaired by Assemblyman Bill Monning, weren't buying the upside-down logic. AB 2042 by Assemblyman Mike Feuer (D) passed out of the committee on Tuesday on a 10-5 vote.
"There ought not be frequent increases in the course of a year," Feuer told his colleagues. "Once is enough." Another argument was that consumers need predictability in their premiums, that it's impossible to plan an annual family budget if the rates go up mid-year.
The measure applies to policies sold on the individual market to people without group coverage or job-based coverage. In California, the individual market has been especially lucrative and is growing as more people lose benefits stability in these recessionary times.
Anthem Blue Cross dominates the individual market in California, with about 800,000 customers and little regulation. The insurance company's recent notice to policy holders of an impending 39% rate hike gained notoriety as national health reform picked up speed and became the law of the land.
“This measure complements the recent federal health reforms by ensuring that health insurers are prohibited from raising their rates multiple times per year," said Feuer. "If insurers raise rates when their subscribers aren’t expecting an increase, cash-strapped families could be forced to give up their coverage.”
Feuer announced the bill after the Assembly Health Committee held an oversight hearing examining the proposed rate increases of several health insurers. In addition to Anthem Blue Cross' 39% hike scheduled to go into effect May 1, it was learned that several other health insurers have raised their subscribers’ premium rates in the 30 to 40 percent range.
With public outrage growing over the practice, consumers began speaking up about having to endure premium hikes two/three times a year or more in the individual policy market.
Consumers Union's Betsy Imholz testified in favor of AB 2042, on Tuesday and Health Access is a sponsor of the legislation. Labor groups also back the measure.
California families need reform not just at the federal but at the state level. Given these tough economic times, we can't let insurers jack up health premiums whenever they feel like it.
For me and many others, the blog was a go-to source for both the latest update on process and good analysis on substance. As someone who had literally written the book on the health care crisis in America, Jonathan Cohn provided both the knowledge of complicated health policy wonkery, and the savvy of a reporter to decipher and explain the political process--but without the corrosive cynicism so often employed in his profession. He's also just a nice person, with good values and a sense of fairness, even to those with whom he disagrees.
As he describes in his farewell post, his reporting also performed an important function at the magazine The New Republic, exorcising the past mistake of publishing the discredited Betsy McCaughey's false yet devastating attack on the Clinton health reform proposal in 1993. The New Republic's productive role in the past year's health reform debate provided a kind of karmic balance.
I was honored that Jonathan asked me to contribute to the new blog he was starting up a year and a half ago. Beyond this and other blogs that focused on California policy and politics, I appreciated having a forum to weigh in on the federal fight. In my couple-dozen contributions, I tried to speak from experience, and provide a perspective of a Californian, of a veteran of previous reform fights, of an organizer not inside the Beltway echo chamber. I hope I was successful.
I actually am sad that The Treatment won't continue. I know from experience that a blog can be very demanding time-wise, and there's no doubt that with the law's passage, there may be a drop-off in interest.... But there's a lot of work is just beginning, at the Department of Health and Human Services; in 50 state Capitols; at state regulators; in the courts; and in the communities around the country. Here at the Health Access Blog, we'll continue to try to cover some of this here in California, but we have our own time and staff constraints as well.
Until then, thanks to Jonathan for his dogged work and reporting, and his virtual hospitality for my work. Here's a compilation of my TNR reports from how the health care debate was playing out in California:
The Obama Administration also today released guidance, through a letter from the Centers for Medicare and Medicaid Services (CMS) to the states, on early expansion of Medicaid. Themore details on the state option to implement a Medicaid program for low-income populations (up to 133% FPL). States can elect to begin covering this population effective April 1, 2010, until 2014 when the requirement for all states will begin.
That's the day when Medicaid expands: January 1, 2014. California should have a goal, that on day one, we get over a million of the newly-eligible onto coverage. With the federal government picking up the full cost for the first three years, there's every reason to maximize those federal dollars to provide the most help for the most people.
How do we do it with the deficit in the state general fund? Maybe we don't it this year, but we plan for when the economy comes around between now and 2014. Maybe we look at the county dollars that are now spent on providing care to those under the poverty level, and see if there's a way to have those resources matched by these newly available federal funds.
So even given the severe budget crisis that California is under, we should look at the CMS letter, and see if there are creative ways to bring in dollars and begin to expand coverage, so we can be ready for January 1, 2014.
A lengthy debate over a package of bills encompassing California Forward’s proposal for state budget reform ended Monday with Senator Denise Ducheny (D), chair of the Senate Budget and Fiscal Review Committee, granting the committee a couple of weeks to study the ideas before coming to a decision.
“We need time to process these ideas and see if there are pieces of this we want to put up for a vote on the (Senate) floor,” Ducheny said.
At times during the hours-long hearing, the debate grew lively and informal, with as many as three people – a presenter and two senators -- talking over each other at the same time. There were plenty of opinions and analyses of the proposal.
California Forward, an organization backed by prominent nonprofit foundations in the Golden State, had been working for some time to draw up a package of reforms to help California improve state governance by streamlining the state budget process.
Key parts of the proposal include:
• A reduction of the two-thirds, super-majority requirement needed before the Legislature could pass a budget. (This proposal does not lower the threshold for taxes.) Ducheny and others acknowledged that rounding up two-thirds of the Legislature’s vote was so difficult that it often led to deal-making, trade-offs and budget gimmickry. It also tended to give more power to the hold-outs not in the majority. “It just seems weird that a small number of people can dictate what the larger number of people can do,” Ducheny said.
• A requirement for “pay-go,” or identifying a secure funding source before any new programs are adopted by the Legislature or Administration.
• A requirement that the gubernatorial budget proposal contain more information so Californians would know exactly where their tax dollars are going.
• An option to develop a two-year budget cycle for California, rather than the current one-year budget that doesn't take full account of the impact of actions into the future.
• Financial penalties for legislators for each day the budget is late past a June 25th deadline. Lawmakers would get pay cuts and lose per diem allowances if they don’t agree on a deal by the deadline. Senator Mark Leno (D) warned that the threatened penalties could backfire, encouraging legislators to hastily adopt even less responsible state budgets. Likening the scheme to a “quid pro quo” system, Leno said, “It’s not so much that you vote for this or you won’t get paid. It’s that you vote for this and you will get paid. I think that’s the dynamic that would be in place.”
Several legislators appeared to be in favor of modifying the two-thirds vote requirement that currently exists for a budget to be passed.
Said Leno: “There are 47 states in the nation without this requirement. City councils, boards of supervisors, local school boards – none of them require the supermajority. What is the public policy argument that keeps California from adopting a 60 percent majority vote?”
Ducheny said she favored a 55% majority vote to pass the state budget. “In truth, the two-thirds requirement has caused us to do things in trade-offs that were not sound public policy,” she said. “That’s why we borrowed so much. That’s why we rely on gimmicks so much.”
Senator Robert Dutton (R) of Southern California said tying the Legislature up in knots in state budget negotiations year after year has prevented lawmakers from addressing the true, deep problems that California faces in job loss and loss of competitiveness.
“We’re going to have to do a lot better than we’ve done,” Dutton said, invoking a pet phrase, “We’ve got champagne tastes and a beer pocketbook. There’s not one thing we are doing today to help jobs, the economy and programs.”
Many groups tended to like specific elements of the proposals and but were concerned about other parts. Several conservative-oriented groups--the Howard Jarvis Taxpayers Association, the California Taxpayers Association, the California Manufacturers Technological Association--supported parts of the package.
Among the last to speak on the proposal was Jean Ross, executive director of the California Budget Project. Ross’ assessment was that the proposal was too flawed to go forward, in part because it fostered a lack transparency and accountability, and added additional complexity and constraints to our already confusingly large constitution. “As so many here today have already said,” Ross told the committee, “the devil is in the details.”
Senator Ducheny wondered if some of these reforms had to be written in the state Constitution, rather than done in statute, so as to reform the process without handcuffing future legislatures to respond to unforseen circumstances.
Explaining health reform in less than five minutes...
Thursday, April 08, 2010
Here's a quick video from the Center for American Progress on how health reform really works. It's gets into the broad architechture of reform (how this impacts consumers in the three ways people get coverage: employer-based health care, public coverage programs like Medicaid and Medicare, and buying insurance as individuals), as well as why it is important and how it is paid for, and all in less than five minutes.
Tuesday's hearing of the Assembly Health Committee gave a glimpse into the ways Anthem Blue Cross not only squeezes consumers, but providers as well.
We've all heard by now that Anthem Blue Cross of California has in its hip pocket a double-digit premium hike to whip out for individual-policy holders come May 1. And that Anthem's parent, WellPoint Inc. of Indianpolis, blessed its CEO, Angela Braly, with a 51% raise in compensation (with some lesser execs getting up to 75% boosts). That was just last Friday.
We can't say we're surprised -- though we are amazed at the utter brazenness of it all.
The other half of the financial equation that fattens Anthem and WellPoint at the expense of consumers and corporate responsibility is revealed by how they manage to collect money by shorting providers -- doctors and others who provide medical care.
Members of the Assembly Health Committee got their glimpse of Anthem Blue Cross' methodology on Tuesday when Dr. Marsha McKay, of the modest Sonora Pass town of Twain Harte, explained to committtee members how she can no longer provide treatment to all of her patients because Blue Cross fails to reimburse her even for the cost of supplies.
Take vaccinations, for example. An MMR vaccine costs Dr. McKay $59 to buy for her patients. Blue Cross refuses to reimburse her more than $57.61 for that same vaccine, nickle-and-diming her practice. The doctor charges a $25 fee to administer the vaccine, and Blue Cross only reimburses her $11. She can get another $3 from Medicare, but .... well, add up the math. She says she falls up short.
A combination DTaP vaccine that covers diphtheria, tetanus and pertussis costs Dr. McKay $40.90 to buy for her patients. It's given to kids 11 and up to boost the immunity of vaccines given in early childhood. Blue Cross pays her only $28 for this $40.90 vaccine. The IPV is an injected polio vaccine. Dr. McKay buys it at a price of $31.80; Blue Cross reimburses her $29.50 per dose.
Dr. McKay told Assembly members that Tuolumne County is an underserved area. Recently there was a small pertussis outbreak in Twain Harte, a place with a healthy dose of historical literary value but little widespread wealth. "I wonder if lack of access to vaccines was a contributing factor," Dr. McKay told lawmakers.
She's taken to sending her young patients in need of vaccination to the local health department. Because she can no longer afford to allow Blue Cross to add to her pile of medical debt. That's the local doctor's pile of medical debt -- not the usual, by now legendary, consumer medical debt we are used to hearing about.
Anthem Blue Cross, the middleman between care and coverage, is making a game of squeezing both sides. They have only a short amount of time to keep this game going. We should all look forward to the day when federal health care reform starts to put a stop to this egregious practice.
ASSEMBLY HEALTH COMMITTEE PASSES BILLS ALIGNING STATE WITH HEALTH REFORM * CA Assembly Health: Kids in Medi-Cal Won't Be Forced to Re-Enroll Every 6 Months * Hospital Fee Funding Deal to Draw Down More Federal Funds Seeks an Extension * Mental Health Parity Bill Passes in CA Assembly Health -- as It Already Has in DC
HEALTH REFORM CONTINUES IN THE STATE CAPITOL: The California Assembly Health Committee on Tuesday passed a number of measures that align the state's policies closer with provisions outlined in the landmark federal health reform law.
CONTINUOUS KIDS COVERAGE: Foremost, the committee, chaired by William Monning (D), voted to pass AB 2477 to allow children on Medi-Cal to stay covered for a year before their families would have to renew eligibility paperwork. A proposal by the Governor would have required families to renew their children's coverage every six months, with the impact that some parents would miss their deadlines and the children would no longer be covered. The proposal is one of the governor's ideas for saving the state money--at the expense of the health of Californians.
Assemblyman Dave Jones (D), sponsor of AB 2477, a bill supported by Children Now and the 100% Campaign, Health Access, and other coalition partners, wrapped up his arguments in favor of the measure by saying simply, "Vote for our kids!"
Since the historic federal law signed by President Obama requires states to maintain the same level of eligibility they had before the federal reform passed, California risked losing substantial federal funds if it adopted Schwarzenegger's proposal. Semi-annual eligibility review would have posed an unfair burden on families struggling in the recession, frequently on the move and working primarily to put food on the table, Jones said.
With the committee in agreement, AB 2477 now moves to the Assembly Appropriations Committee, where its fiscal impact on the state will be assessed.
MENTAL HEALTH PARITY: Assembly Health Committee members also voted to pass a bill by Assemblyman Jim Beall (D) to require health plans to cover mental illness as they do physical illness. Current California law dictates that only serious mental illnesses be covered, and Beall's AB 1600 extends coverage to other mental illnesses as well.
Again, the provision mirrors what President Obama signed into law. Beall argued that failing to cover mental conditions, including substance abuse and drinking alcohol to excess, cost California's health care system, government and industry too much money in lost productivity and late intervention.
Beall said the bill will also correct some of the discriminatory practices of health insurance companies, which argued that AB 1600 would cost too much money. Health Access' legislative advocate said the bill is consistent with federal health reform, which would also extend mental health parity to the small group market and the individual insurance market by 2014. AB 1600 heads next to the Assembly appropriations committee.
EXTENSION OF PROVIDER TAX ON HOSPITALS TO DRAW DOWN MORE FEDERAL FUNDS: The Assembly Health Committee also considered a measure, AB1653 (Jones), to extend for another six months a three-year deal struck with hospitals through which they pay fees in order to draw down additional matching federal funds.
Lawmakers voted in favor of the measure, which was supported by several hospital associations and is needed to help hospitals cover the voluminous cost of caring for the uninsured in emergency rooms.
The current hospital fee arrangement, which is still pending at the federal level, would collect $2.3 billion a year in order to attract $1.1 billion in matching funds from Washington. Noone spoke up in opposition to the measure, which will next go before the Assembly Appropriations Committee.
KEEP UP THE FIGHT: Many other bills are scheduled for votes in the next week, and insurance companies are already sending in their letters of opposition, on everything from rate regulation to limits on charging children with pre-existing conditions.
ALERT: SEND YOUR ORGANIZATIONAL LETTERS OF SUPPORT: These bills need organizational letters of support ASAP. Please send letters to the bill's author, the chairs of the relevant Health Committees, Senator Elaine Alquist and/or Assemblyman Bill Monning, and members of the relevant policy committee that will review the legislation.
Insurers are sharing their wish-lists with the Legislature, and so we need consumer, community, and constituency organizations to voice the people's view. Submit letters in support of these specific bills, listed on our website. Contact Health Access for sample letters on some of these bills.
HEALTH REFORM DEBATE SHIFTS TO IMPLEMENTATION BILLS IN CA LEGISLATURE
* California Effort Begins to Implement & Improve Federal Health Reform * Health Committees in Assembly and Senate to Consider Bills in Next Few Weeks * Today's Assembly Health Committee to Vote on Bill to Help Kids Stay on Coverage * Groundwork is Laid for a New Exchange; New Insurer Accountability on Rates; Etc. * ALERT: Organizational Support Letters Needed to Support Key Reform Bills!
* Read Our Health Access Blog! Join Us on Facebook! Follow Us on Twitter!
HEALTH REFORM HAS JUST BEGUN: Two weeks ago, President Barack Obama signed into law a historic health reform package, one that would reform the worst abuses of the insurance industry, secure coverage for those that have it, and provide new and affordable options for those that don't. One week ago, President Obama approved a "reconciliation" package of improvements to the health reform, the first of many that will be considered in the months and years ahead.
The work to implement and improve health reform at the state level starts today, with state legislation being considered today and over the next few weeks in health policy committees. A series of bills critical to easing California into a smooth transition to health reform is moving through the process.
This afternoon, the Assembly Health Committee, chaired by Assemblyman Bill Monning, will consider several bills, including AB2477 (Jones). The bill will allow for continuous eligibility for children in Medi-Cal, without threatened mid-year status reports that would prevent kids from staying on coverage. This would start to align our eligibility requirements with those of federal health reform.
Most of the other bills are basic consumer protections that would increase accountability for the insurance industry. In some cases, the federal law requires states to act, within certain parameters; other proposals would implement some aspects of health reform early, and in other cases would build on federal health reform but go further. Some bills are up as early as next week in committee, which means organizational letters of support would be due in the next day or two.
One such bill for next week is AB 2042 (Feuer), which would prevent health insurance companies from raising rates more than once per year. This unfair practice is not unheard of. It's bad enough that Anthem Blue Cross refuses to budge on its outrageous up-to-39% annual increase scheduled for May 1, but they also announced that they may increase their rates over the course of the year. The bill would provide ratepayers some security in being able to predict their health care costs over the course of a year.
There are many other bills coming up in the next week, and insurance companies are already sending in their letters of opposition, on everything from rate regulation to limits on charging children with pre-existing conditions.
ALERT: SEND ORGANIZATIONAL LETTERS OF SUPPORT: These bills need organizational letters of support ASAP. Please send letters to the bill's author, the chairs of the relevant Health Committees, Senator Elaine Alquist and/or Assemblyman Bill Monning, and members of the relevant policy committee that will review the legislation.
Insurers have already started to get in their opposition letters, and so we need consumer, community, and constituency organizations to submit their letters in support of these specific bills. Contact Health Access for sample letters on some of these bills; a full list of health reform related bills is listed below.
PENDING BILLS TO IMPLEMENT AND IMPROVE HEALTH REFORM Below is a list of health consumer bills currently in the California State Legislature that are intended to implement and improve certain provisions in the federal health reform law and prepare the state for other provisions contained in the law. This list is regularly updated and can be found at www.health-access.org.Creating a Consumer-Friendly & Transparent Individual Insurance Market & Exchange
* AB 1602 (Bass) CALIFORNIA PATIENT PROTECTION & AFFORDABLE HEALTH CHOICES: Would create the California Cooperative Health Insurance Purchasing Exchange (Cal-CHIPE) and expand dependent coverage in private insurance to age 26.
* SB 900 (Alquist) CREATING A CALIFORNIA HEALTH INSURANCE EXCHANGE: Would establish the California Health Insurance Exchange within the California Health and Human Services Agency to make health coverage available and create the California Health Insurance Exchange Fund to be governed by a board appointed by the Legislature.
* SB 890 (Alquist) IMPLEMENTING FEDERAL HEALTH REFORM: Creates rules in the individual market similar to those for Medi-Gap so that insurers cannot cherry-pick individuals based on health risk status. Sets standard of basic health care services for DOI products as well as DMHC products.
Providing Access for Those with Pre-Existing Conditions
* AB 2244 (Feuer) ASSURING KIDS COVERAGE: Requires guaranteed issue, eliminates all pre-existing condition exclusions and phases in modified community rating for children under age 19 in the individual market.
* AB 2470 (De La Torre) REGULATING RESCISSIONS AND MEDICAL UNDERWRITING: Would require regulations to be created that establish standard information and health history questions used by health insurers on application forms, and required insurers to complete medical underwriting and review for accuracy before issuing an individual a health plan contract or policy.
* SB 227 (Alquist) SECURING FUNDING FOR MRMIP, CA’S “HIGH-RISK” POOL: Creates fee on insurers to support California’s high risk pool for those denied for pre-existing conditions.
Continuing and Expanding Coverage
* SB 1088 (Price) ALLOWING YOUNG ADULTS TO STAY ON THEIR PARENTS’ COVERAGE: Would require group health plans to allow young adults to continue on coverage as a dependent up to age 27, however employers are not required to contribute to the cost of coverage for those dependents 23 or older.
* AB 2477 (Jones) KEEPING CHILDREN ON MEDI-CAL COVERAGE/CONTINUOUS ELIGIBILITY: Would adopt rules to expand continuous eligibility in Medi-Cal to children 19 years of age and younger.
Regulating Insurance Company Rates
* AB 2578 (Jones) REQUIRING APPROVAL FOR RATE HIKES: 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.
* SB 1163 (Leno) PROVIDING SUNSHINE ON PRICE GOUGING: Would require health plans to provide, in writing, specific reasons for denial of coverage or for charging higher than the standard rates for coverage.
* SB 316 (Alquist) ENSURING PREMIUM DOLLARS GO TO PATIENT CARE/MEDICAL LOSS RATIO: Would require health plans to provide written disclosure of the medical loss ratio (the ratio of premium costs to health services paid) whenpresenting a plan contract or policy for sale to an individual purchaser or to groups of 50 or fewer individuals.
* AB 2042 (Feuer) PROHIBITING MID-YEAR RATE HIKES: Insurers and HMOs cannot change or increase premiums, cost sharing or benefits more often than once a year.
Setting Minimum Standards
* AB 786 (Jones) SETTING BASIC INSURANCE MARKET STANDARDS: Would sort health insurance policies into a number of categories, based on benefit comprehensiveness and cost-sharing. Would set a minimum standard that requires coverage of doctor and hospital care and an overall limit on out-of-pocket costs, thus eliminating deceptive “junk” insurance.
* AB 1825 (De La Torre) ENSURING MATERNITY CARE: Would require most health plans to cover maternity services.
* AB 1600 (Beall) REQUIRING MENTAL HEALTH PARITY: Would require most health plans to provide coverage for the diagnoses and treatment of a mental illness.
Additional Consumer Protections
* SB 56 (Alquist) FACILITATING A PUBLIC HEALTH INSURANCE OPTION: 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, subject to the requirements of the Knox-Keene Act.
* AB 2110 (De La Torre) PROVIDING PREMIUM GRACE PERIODS: Would extend the grace period for premium payments from 10 or 31 days up to 50 days for most plans regulated by the Department of Insurance.
Health Access California has a long and proud tradition as an independent state coalition here in our state, without a national parent. Our policy decisions are made by Californians, for Californians.
But we are pleased to have good, strong connections with national groups that provide useful assistance and resources, including information and linkages with DC-based groups and with other state consumer advocates across the country. During this past health reform effort, these connections were essential in our efforts to integrate the on-the-ground field work with national advocacy.
For example, we were proud to be the lead partner organization in California for the Health Care for America Now! coalition, working with national groups like USAction. We have a long history working with Families USA, co-releasing reports and speaking at their annual DC conference. And we have greatly appreciated the work with Community Catalyst, on both federal health reform, and on projects that we lead in California, the Consumer Voices for Coverage effort and the Hospital Accountability Project. All of these groups are useful resources for us and our partner organizations, and their websites are useful resources for you, too, to find out more about health reform.
We thank these and other national experts, advocates and groups who have helped us in the last two years make a difference in the health reform debate. The Community Catalyst folks sent their own message of appreciation to advocates in the states as well. (I would say it's NSFW, but you would get the wrong idea.) It's even more strange when you know these people. So, with affection:
That's 51% in one year. Fifty-one percent -- even as Anthem Blue Cross of California, a subsidiary of WellPoint Inc. of Indianapolis, has refused to back down from a planned May 1 premium increase of up to 39%.
Braly's total compensation shot up to $13.1 million, from $8.7 million a year. earlier, according to a filing with the Securities and Exchange Commission. At least three other WellPoint executives got compensation increases of as much as 75%.
The hefty packages come as Anthem Blue Cross seeks double-digit rate increases for many of its 800,000 members who buy individual policies.
California customers of Anthem Blue Cross said they were shocked by the pay hike, the majority of which came in the form of $6.2 million in restricted stock, up from $2.4 million a year earlier. Braly also got a $1.5-million performance bonus, compared with $73,810 in 2008.
The Times report quotes customer Mark Weiss, a podiatrist whose Anthem policy will increase in cost by 35%, as saying, "It's unconscionable. How much more does somebody need?"
With federal health care reform on the horizon, we'll see how much longer they can get away with this.
The tweet that links to this blog post will be Health Access' 4000th.
We have taken pride that in our efforts to inform and engage people in health reform, policy, and budget issues, Health Access has supplemented our organizing, coalition building, media outreach, and public education efforts with an aggressive push as an early adopter of social media, from Twitter to blogs to Facebook.
On our Twitter account @HealthAccess, at www.twitter.com/healthaccess, we have been posting a regular stream of updates. These 4,000 tweets include retweets of updates from others, links to interesting articles, live reports from committee hearings and regulatory meetings, and commentary on legislative debate. We've been doing this since early 2009, and have built up nearly 1,350 followers. If you are getting into Twitter, you might want to check out who we are following for updates about state and federal health policy news, and our lists as well. Our first post on this Health Access Blog, at http://blog.health-access.org/, was May 2002, just about 8 years ago, and over 2,000 posts ago.
We started way back when just posting our E-mail Updates, so that they could be read not just by those to which we E-mail. We have produced over 400 such updates since 2002, averaging about 50 a year, providing comprehensive reports on health budget, legislation, and policy. You can sign up to subscribe to our Health Access E-mail Updates on the front page of our website, at http://www.health-access.org/.
Health Access started a more concerted effort to provide more daily blog reports and commentary in fall of 2006, when there was a new effort to pursue health reform at the state level. That effort under Governor Schwarzenegger got a lot of attention but ultimately fell apart, but it helped set the stage for the national conversation we have just experienced.
Finally, we have a Facebook page, at www.facebook.org/healthaccess. We've been posting photos and video from various health reform and budget events, as well as relevant newspaper clips, including those that feature our work and comments. Join the over 1333 "fans" on Facebook to access this infomation and get more updates, including reposting of our tweets, media clips, and blog posts.
Whether you are reading this post on our Facebook page, or on our blog, we invite you to get the full Health Access experience, and join on on all these platforms... each has its own benefit. In every platform, we strive to make sure you are up-to-date and have the information and tools to work to advance the goal of quality, affordable, health care for all.
One of the many heroes of health reform, California Congressman Henry Waxman, chairman of the House Energy and Commerce Committee, provides an easy explanation of the new health reform law in this new five minute video:
HEALTH REFORM'S BENEFITS FOR CALIFORNIA * Californians Thank Their Congressional Representatives for Health Reform * Federal Health Reform "Reconciliation" Package Signed Into Law Earlier This Week * Health Reform Would Significantly Benefit California and Californians
Up and down the state, Californians this week have been meeting legislators at airports as they arrive home from Washington, DC, visiting Congressional offices, and attending town halls, all to thank their Representatives for voting for and passing health reform.
From Speaker Nancy Pelosi in San Francisco to Rep. Doris Matsui in Sacramento, Congressional leaders are in turn reaching out to their constituents to tell them about the significant benefits of health reform for their districts and the state of California. As our state has one of the highest rates of uninsured, low-wage families who need help to afford coverage, workers who don't get coverage on the job, and people denied for pre-existing conditions, Californians would especially benefit from this health reform that directly addresses these issues.
On Tuesday, President Obama signed a "reconciliation" package of improvements to the base health reform proposal he approved last week. That package improved the measure for California, increasing aid to the state budget of California and improving subsidies for low- and moderate-income families to afford coverage in this high cost-of-living state.
From the House Energy and Commerce Committee and other sources, here's some analysis of the benefits of the health reform bill to California:
The law prevents the worst abuses of the insurance industry, installing consumer protections that will provide more security to all Californians. It also provide specific help to many Californians. Health reform will: * Extend health coverage to 3.8 million uninsured Californians and improve coverage for 21 million Californians with employer-based or individual health insurance, ultimately extending coverage to 94% of the population. * Guarantee that 800,000 Californians with pre-existing conditions can obtain coverage. * Protect 66,000 California families from bankruptcy due to unaffordable health care costs. * Allow 3.2 million young adults in California to obtain coverage on their parents’ insurance plans.
Over the next ten years, the state and its residents will receive new federal support for health care worth approximately $124 billion. In California, the law will: * Provide families with tax credits to purchase health care coverage and other federal health care benefits worth $106 billion. * Provide small businesses with $4.3 million worth of health care tax credits. * Fill the donut hole, saving seniors $9.3 billion in drug costs. * Provide $1.4 billion in new funding to community health centers. * Reduce uncompensated care costs for California health care providers by $2.6 billion.
**Affordability Assistance Through Middle Class Tax Credits and Medi-Cal
California residents that do not receive health care coverage through their employer will be able to purchase coverage at group rates through the new health insurance exchange.
To make this insurance affordable, the new health care reform law provides middle class families with incomes up to $88,000 for a family of four with tax credits to help pay for coverage in the exchange, so that coverage is not more than a certain (sliding scale) percentage of income.
For a family of four making $50,000, the average tax credit will be approximately $5,800. There are 7.2 million households in California that could qualify for these credits if they purchase health insurance through the exchange or, in the case of households with incomes below 133% of poverty, receive coverage through Medi-Cal. These families will receive $106 billion in tax credits and other federal health care assistance over the next decade.
** Support for Small Business to Help Purchase Coverage for Their Workers
Small businesses with 25 employees or less and average wages of less than $50,000 will qualify for tax credits of up to 50% of the costs of providing health insurance. There are approximately 775,000 small businesses in California that could qualify for tax credits for providing coverage. These businesses will receive $4.6 billion in tax cuts over the next decade.
** Help for Seniors Who Now See a Part D Donut Hole in Their Drug Coverage
There are 465,000 California seniors who have their Medicare Part D prescription drug coverage "run out" each year, dealing with a "donut hole" in their coverage. Under the new law, these beneficiaries will receive a $250 rebate in 2010, 50% discounts on brand name drugs beginning in 2011, and complete closure of the donut hole within a decade. A typical beneficiary who enters the donut hole will see savings of over $700 in 2011 and over $3,000 by 2020. Over the next decade, seniors in California who hit the donut hole will save a total of $9.3 billion.
** New Funds for Community Health Centers
There are almost 1,100 community health centers in California that provide health care to the poor and medically underserved. Nationwide, the legislation would provide $11 billion in new funding for these centers. If the community health centers in the state receive the average level of support, the 1,100 centers will receive $1.4 billion in new assistance.
** Reducing the Cost of Uncompensated Care
California hospitals and health providers incur billions of dollars in uncompensated costs for providing health care for individuals without health insurance or with inadequate insurance. By providing quality, affordable health care coverage for almost every American, the new health care reform law will reduce the costs of uncompensated care for California health care providers by $2.6 billion over the next decade.