The Legislature has until the end of the month to pass or reject several key health bills, making this week a turning point for some reforms related to the new federal health law.
Among the measures heading for a final floor vote are bills that would regulate health insurance rates and set up an “exchange” through which consumers would buy insurance under the federal law.
The legislative session is set to end Aug. 31, so lawmakers must act on the pending legislation, or the bills will die.
“I’ve not seen a year with such a combination of significant health care legislation that could be potentially passed and signed,” said Anthony Wright, executive director of Health Access California, a statewide consumer and labor advocacy coalition.
Several of the bills are generating controversy. A bill that would set up California’s health insurance exchange, the virtual marketplace of health insurance options required in 2014 under the federal law, passed the Assembly on Friday. The bill, authored by Sen. Elaine Alquist, D-Santa Clara, is scheduled to go back to the Senate and be voted on with a companion bill.
Insurers are against both bills, as are several Republican lawmakers, without amendments that would limit taxation on insurers and require more legislative oversight. They argue that the bills set up a new bureaucracy with broad powers to tax them and create disadvantages for smaller health plans in the exchange.
“Our concern is that (the bill) sets up very broad authority and powers,” said Charles Bacchi, executive vice president of the California Association of Health Plans. “We believe if they make wrong decisions, it could result in fewer choices for consumers.”
Health insurers are also fiercely opposed to several bills that propose various forms of rate regulation, an issue that gained traction earlier in the year after Anthem Blue Cross proposed a 39 percent rate increase on 800,000 individual California policyholders.
Power over rate increases
The rate-hike proposals include a bill by Sen. Mark Leno, D-San Francisco, that would require insurers to justify rate increases, and one by Assemblyman Dave Jones, D-Sacramento, that would give state regulators the power to approve or deny rate hikes.
Gov. Arnold Schwarzenegger has proposed a separate plan that would require health care insurers to hire actuaries to review their proposed premium increases.
Bacchi, referring to the Jones bill, said rate regulation diverts attention from the need to curb medical costs. “Health care costs are going up enough,” he said, “without having to create overly burdensome and expensive new government bureaucracies to handle this.”
The California Medical Association and the California Hospital Association join the insurers in their opposition, arguing that if the insurers are squeezed, they’re likely to turn around and squeeze doctors and hospitals through lower reimbursement rates.
“We think the solution to the problem has already been approved as part of federal health care reform: mandating that plans meet a minimum medical loss ratio,” said Andrew LaMar, spokesman for the physicians group, referring to the requirement that insurers spend at least 80 percent of their revenue on patient care.
Coverage of vaccinations
Separately, the medical association is backing a bill that would require insurers to pay the full cost of acquiring and administering vaccinations, a potential mandate the health insurers oppose.
The California Hospital Association, which represents the state’s hospitals, is supporting a bill that would extend deadlines for some hospitals to seismically retrofit their buildings and is opposing a bill that would require hospitals to disclose the cost and quality of procedures.
But the main focus is on bills that would direct the state on how to manage the new health law.
“The 800-pound gorilla staring us all in the face is health care reform legislation, but there’s still so much unknown because regulations haven’t been drafted on the federal level,” said Jan Emerson, spokeswoman for the hospital group. “We’re on the precipice of some major changes to our health care system, but how that plays out on the state level is not yet fully understood.”
Countdown on health care bills
Here are some of the key health care bills that the Legislature must act upon before the session ends Aug. 31: