BILL ANALYSIS
AB 1314
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Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 1314 (Jones) - As Amended: April 13, 2009
SUBJECT : Medi-Cal: health care coverage.
SUMMARY : Requires the California Health and Human Services
Agency (CHHSA), in consultation with consumers, health care
providers, and other health care stakeholders, to develop a plan
to enact comprehensive reforms to the California health care
system and to provide the plan and statutory recommendations to
the Legislature no later than April 1, 2010. Specifically, this
bill :
1)Requires CHHSA to develop a plan in consultation with
consumers, health care providers, and stakeholders to include
strategies to accomplish all of the following:
a) Expand health care coverage for low- and moderate-income
children and adults, including assistance for those who are
most unable to afford to pay for their own coverage,
through a shared responsibility approach that includes
contributions from individuals, employers, and the
government;
b) Reduce the number of uninsured persons in the state;
c) Maximize federal funds for health care coverage and
ensure that California receives federal funds at the
maximum allowable level to match all available state and
local expenditures for health care;
d) Establish appropriate provider fees to leverage federal
resources and maximize state and local revenues for health
care;
e) Revise and increase provider payments to ensure adequate
access to primary and specialty health care for persons in
state and local sponsored health care programs;
f) Reward health care providers for quality care and
enhanced performance;
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g) Secure funding and establish reimbursement mechanisms to
support a vigorous and accountable health care safety net
and delivery system;
h) Improve fee-for-service health care delivery systems in
state and local health care programs to better coordinate
and manage health care services, emphasize timely primary
and preventive care, and reduce the use and overuse of
high-cost emergency and hospital inpatient services; and,
i) Improve coordination and efficiency of state and local
health care programs and mental health care programs.
2)Requires CHHSA to provide the plan required by this bill and
statutory recommendations to the Legislature no later than
April 1, 2010.
EXISTING LAW establishes various state and federally funded
programs to provide health benefits to low-income children,
their parents or caretaker relatives, pregnant women, elderly,
blind or disabled persons, nursing home residents, refugees who
meet specified eligibility criteria, medically uninsurable
persons, and other special populations.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
necessary to ensure that California is positioned to move
forward and make progress on reforming the state's health care
system. The author points to the health reform efforts
currently underway in Congress, and promoted by President
Barack Obama, with the involvement of a diverse and
wide-ranging set of stakeholders. The author states that many
observers believe that there will be federal action in this
area which may come as soon as the summer of 2009. The author
argues that whatever federal efforts are undertaken, there
will be a critical role for states in implementing and
responding to the federal framework. At the same time, in the
absence of federal reform this year, California must be ready
to move forward in 2010 to make progress in addressing the
critical challenges facing the health care system, without
further delay. According to the author, this bill is intended
to signal the state's intention to address health care reform
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no later than 2010 and to engage the Schwarzenegger
Administration in working with stakeholders to develop a
starting framework for reform discussions.
2)BACKGROUND . Many state and federal health care reform efforts
have focused on coverage - what to do about the uninsured.
The current discussions at the federal level, and in many
states, have increasingly also focused on the interrelated
issues of coverage, cost and quality and the growing awareness
that the health care delivery system - not just the health
care coverage system, needs reform. Still, most long-term
observers recognize that in order to address cost, efficiency
and quality, major progress will need to be made in reducing
the number of uninsured persons. Reducing and eliminating the
number of persons without health care coverage is an essential
element in addressing many of the inefficiencies and costs in
the current system, including those that result from
uncompensated health care costs and cost-shifting to other
purchasers because of services provided to uninsured and
underinsured persons; inadequate access to timely primary,
preventive, and specialty health care for many people; and,
the use of expensive emergency and inpatient services that
might otherwise be avoided through improved and timely access
to care.
3)CALIFORNIA'S UNINSURED . According to the California
HealthCare Foundation (CHCF), over the past 20 years, the
percentage of uninsured Californians under age 65 has
continued to rise as employer-sponsored health insurance has
declined. CHCF reported that between 1987 and 2007,
employer-sponsored coverage in California declined by almost
8%. Although CHCF found that increased enrollment and
eligibility for Medi-Cal (California's Medicaid program), and
growth in individually purchased coverage, partially offset
the decline in employer-sponsored coverage, more than 20% of
Californians under age 65 remained uninsured during some part
of 2007. CHCF found that from 2000 to 2007, the likelihood of
being uninsured rose for all age groups, except children aged
20 and under, and the near elderly, those aged 55-64. During
this period, CHCF reports that the largest increase of
uninsured persons has come in the 45 to 54 age group. The
problem, though national, is more prominent in California,
which has a lower percentage of individuals with
employer-sponsored coverage and a higher proportion of
uninsured. California has the eighth largest proportion of
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uninsured in the nation. Because of California's large
population, the number of people without insurance during some
part of the year - 6.6 million - is the highest of any state.
Of the uninsured in California, 5.3 million were adults and
1.3 million were children. CHCF reported findings also
reveal: 16% of California's uninsured are children and 70% of
uninsured children are in families where the head of the
household has a year round, full-time job; workers in private
businesses of all sizes are experiencing an increased
likelihood of being uninsured, although the percentage of
uninsured workers is most pronounced in businesses with fewer
than ten employees; and, 69% of uninsured families in
California have incomes below $50,000; 38% have family incomes
below $25,000; and, 54% of the uninsured have annual incomes
below 200% of the Federal Poverty Level (FPL) ($18,310 for a
family of three in 2009).
4)SUPPORT . Health Access California supports this bill and
writes in support that if health reform succeeds at the
federal level, California will be faced with the challenge of
implementing the state's share of that reform. According to
Health Access, if it fails, California will be left with
nearly seven million uninsured and millions who are
underinsured in a broken system that fails to produce health
care outcomes comparable with countries such as Slovenia.
JERICHO: A Voice for Justice supports this bill (prior
version) and strongly supports the objective of expanding
health care coverage to low and moderate income children and
adults and reducing the number of uninsured persons in the
state. The California Primary Care Association supports this
bill (prior version) as legislation that works toward
providing health coverage for more California residents.
5)RELATED LEGISLATION .
a) SB 1 (Steinberg), pending in the Senate, would: i)
Expand Medi-Cal and Healthy Families Program (HFP)
eligibility to cover all children regardless of immigration
status with family incomes at or below 300% FPL; ii)
Establish a HFP Buy-In Program for children in families
with incomes above 300% FPL; iii) Establish various
presumptive eligibility programs; and, iv) Streamline
enrollment and retention with the goal of keeping more
children covered.
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b) SB 56 (Alquist), pending in the Senate, would create the
California Health Benefits Service Program within the
Department of Health Care Services for the purpose of
expanding cost-effective public health coverage options to
the uninsured and purchasers of health insurance, including
individuals, families, employers, and other health plan
sponsors.
c) SB 92 (Aanestad), pending in the Senate, would establish
the Healthcare Restoration Act (Act), and would use tax
credits, health savings accounts, reinsurance products,
tort reform, and electronic medical records to make reforms
to California's health care system. The Act also makes
significant changes to Medi-Cal.
d) SB 810 (Leno), pending in the Senate, would establish
the California Healthcare System to be administered by the
newly created California Healthcare Agency under the
control of a Healthcare Commissioner appointed by the
Governor and subject to confirmation by the Senate. SB 810
would make all California residents eligible for specified
health care benefits under the California Healthcare
System, which would, on a single-payer basis, negotiate for
or set fees for health care services provided through the
system and pay claims for those services.
6)PREVIOUS LEGISLATION .
a) AB 1 X1 (Nunez) of 2007 would have enacted the
California Health Care Reform and Cost Control Act and
created the California Cooperative Health Insurance
Purchasing Program (Cal-CHIPP), a state health care
purchasing program to provide coverage to specified
employees, individuals eligible for new expanded public
coverage, and individuals who would have been newly
eligible for a tax credit to defray health insurance costs.
AB 1 X1 failed passage in the Senate Health Committee.
b) AB 8 X1 (Villines) of 2007 proposed multiple, diverse
strategies to address health care costs and access,
including: tax incentives and government programs to
promote and facilitate consumer-directed health care and
employer-sponsored insurance; allowing the sale of
out-of-state health plans and policies not subject to any
California law or regulation; and, increasing Medi-Cal
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provider reimbursement rates and creating an income tax
credit for physicians who provide unreimbursed care for the
uninsured. AB 8 X1 failed passage in the Assembly
Health Committee in November 2007.
c) AB 1 (Laird and Dymally) and SB 32 (Steinberg), two
similar bills introduced in 2007, would have expanded
Medi-Cal and HFP eligibility to cover all children
regardless of immigration status with family incomes at or
below 300% FPL and made other changes to expand coverage
for low-income children. Both bills passed the Legislature
but were not sent to the Governor.
d) AB 2 (Dymally) of 2007 would have revised and
restructured the California Major Risk Medical Insurance
Program (MRMIP), which provides subsidized individual
health care coverage for medically uninsurable persons. AB
2 was vetoed by Governor Schwarzenegger who indicated that
issues affecting MRMIP should be addressed in the context
of broader reform.
e) AB 8 (Nunez) of 2007 would have established Cal-CHIPP as
a state purchasing pool administered by the Managed Risk
Medical Insurance Board (MRMIB), to negotiate and contract
with health plans and health insurers to provide health
insurance for employees (and their dependents) of employers
who elected to pay a fee to the state in lieu of making
expenditures for health care for their employees equal to a
specified percent of wages paid by the employer. AB 8 was
vetoed by Governor Arnold Schwarzenegger.
f) SB 48 (Perata) of 2007 would have established the Health
Insurance Connector as a health insurance purchasing pool
administered by MRMIB, and would have required employers to
spend a designated amount on health care for employees or
elect to have that health coverage provided through the
Connector. SB 48 was amended to deal with another subject.
g) In 2007, Assembly Republicans introduced a 17 bill
package of proposed reforms that included access to health
savings accounts, decreased regulation of insurers, fewer
insurance mandates, and a state insurance exchange for
individuals, expanded state tax deductions for medical
expenses, and combined health and workers compensation
insurance policies. Two of the bills were passed by the
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Assembly, AB 1559 (Berryhill), Chapter 712, Statutes of
2007, which expands nursing education programs, and AB 1304
(Smyth), related to seismic upgrades of hospitals, which
was not heard in Senate Health Committee at the request of
the author.
h) In 2007, Senate Republicans introduced a series of bills
and a reform plan that would have relied on tax incentives,
redirection of existing health program funding and
increased availability of community and primary care
clinics to expand access to health care.
i) SB 840 (Kuehl) of 2007 would have created the California
Healthcare System, a single-payer health care system,
administered by the California Healthcare Agency
established by SB 840. SB 840 was vetoed by Governor
Schwarzenegger.
j) SB 1014 (Kuehl) of 2007 would have funded the health
care system proposed in SB 840 (Kuehl) through income,
self-employment, and payroll taxes. No vote was taken on
SB 1014 in the Senate Revenue and Taxation Committee.
aa)SB 840 (Kuehl) of 2006, a single-payer bill, was vetoed by
Governor Schwarzenegger. In his veto message, the Governor
argued that SB 840 would result in an extraordinary
redirection of public and private funding and a vast new
bureaucracy, and that the preferable approach would be to
promote personal responsibility and to build on the private
and public systems already in place.
bb)SB 921 (Kuehl), introduced in 2003, would have established
a single-payer health care system in California. SB 921
passed the Senate and the Assembly Health Committee and
died in the Assembly Appropriations Committee.
cc)SB 2 (Burton), Chapter 673, Statutes of 2003, enacted the
Health Insurance Act of 2003, a "pay-or-play" approach, to
provide health coverage to employees (and in some cases
their dependents) who do not receive job-based coverage and
who work for large and medium employers. SB 2 was repealed
by Proposition 72, a voter referendum on the November 2004
ballot.
REGISTERED SUPPORT / OPPOSITION :
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Support
California Communities United Institute (prior version)
California Primary Care Association (prior version)
California Society of Clinical Social Work (prior version)
Health Access California
JERICHO: A Voice for Justice
Opposition
None on file.
Analysis Prepared by : Deborah Kelch / HEALTH / (916) 319-2097