BILL NUMBER: SB 56	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 5, 2009
	AMENDED IN SENATE  APRIL 2, 2009

INTRODUCED BY   Senator Alquist

                        JANUARY 20, 2009

   An act to add Section 1347 to, and to add Chapter 1.6 (commencing
with Section 155) to Part 1 of Division 1 of, the Health and Safety
Code, relating to health benefits.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 56, as amended, Alquist. California Health Benefits Service
Program.
   Existing law creates various health benefits programs administered
by the Managed Risk Medical Insurance Board and the State Department
of Health Care Services.
   The bill would create the California Health Benefits Service
Program within the State Department of Health Care Services for the
purpose of expanding cost-effective public health coverage options to
the uninsured and purchasers of health insurance. The bill would
require the department to perform various duties, subject to the
availability of sufficient private donations, as determined by the
Department of Finance, relative to creation of joint ventures between
certain county-organized health plans and various other entities.
The bill would require these joint ventures to be licensed as health
care service plans and, subject to the availability of sufficient
private donations, as determined by the Department of Finance, would
create a stakeholder committee, as specified. The bill would also
authorize the Director of Managed Health Care to provide regulatory
and program flexibilities to facilitate licensing of specified
entities providing coverage pursuant to the bill.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  (a) The Legislature finds and declares as follows:
   (1) Due to the economic downturn, hundreds of thousands of
Californians are joining the ranks of the uninsured or are looking to
publicly financed programs for their health care coverage.
   (2) Compared to persons with health care coverage, the uninsured
are less likely to have a regular source of care, are likely to delay
seeing a doctor, and are less likely to receive preventive health
care services.
   (3) Based on recent data collected by the Kaiser Family
Foundation, health care costs continue to rise at a faster rate than
general inflation and average wage growth.
   (4) President Obama has pledged to seek the adoption of major
health care reforms at the national level, which are likely to
include, at a minimum, additional funding for states as well as
increased flexibility for states in how they administer their health
care systems.
   (b) In light of these findings, it is the intent of the
Legislature to enact and implement comprehensive reforms in the state'
s health care delivery system by 2012 that will accomplish all of the
following:
   (1) Ensure that all Californians have access to affordable, high
quality health care coverage.
   (2) Ensure that the responsibility for providing and paying for
health care coverage is equitably shared between employers,
individuals, and government.
   (3) Help contain the long-range rate of growth of health care
costs.
   (4) Reform insurance underwriting and rating practices by reducing
the use of medical status or conditions as criteria for the offering
or rating of individual insurance products.
   (5) Improve the health status of Californians and reduce health
disparities over time.
   (6) Ensure fair and adequate payments to health care providers who
provide services under the state's publicly funded health care
programs.
   (c) It is further the intent of the Legislature to enact specific
reforms by 2010 that will help provide a foundation for any
successful health care reform in California, and that will accomplish
all of the following:
   (1) Ensure that all children in the state have access to
affordable, high quality health care coverage.
   (2) Encourage greater use of electronic medical records and other
health information technology by health care providers.
   (3) Make comparative health care cost and quality data more
readily available to consumers and purchasers.
   (4) Make it easier for individuals and small employers to shop for
and compare the benefits and costs of competing health plans.
   (5) Allow all workers to set aside money to pay for health care
coverage on a pretax basis.
   (6) Begin to draw down federal funds that are available for
covering low-income adults and families.
   (7) Reduce the use of medical underwriting in the individual
health insurance market, cap health care service plans' and insurers'
administrative costs and profits, and establish minimum benefit
standards for health plans offered in the state.
   (8) Allow health plans and employers to offer incentives for
enrollees to enroll in and use preventive health care programs that
will improve their health.
   (9) Address health care workforce shortages and better prepare
persons for careers in the health care delivery system.
   (10) Facilitate the formation of public insurer entities,
including through better integration of county local initiatives and
organized health systems.
  SEC. 2.  Chapter 1.6 (commencing with Section 155) is added to Part
1 of Division 1 of the Health and Safety Code, to read:
      CHAPTER 1.6.  CALIFORNIA HEALTH BENEFITS SERVICE


   155.  (a) The California Health Benefits Service Program is hereby
created within the State 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. The
program shall do all of the following:
   (1) Identify statutory, regulatory, or financial barriers or
incentives that should be addressed to facilitate the establishment
and maintenance of one or more joint ventures between health plans
that contract with, or are governed, owned, or operated by, a county
board of supervisors, a county special commission, a county-organized
health system, or a county health authority authorized by Section
14018.7, 14087.31, 14087.35, 14087.36, 14087.38, 14087.96, or Article
2.8 (commencing with Section 14087.5) of Chapter 7 of Part 3 of
Division 9 of the Welfare and Institutions Code, as well as the
County Medical Services Program. 
   (2) Identify statutory, regulatory, or financial barriers or
incentives that should be addressed before joint ventures among these
health plans may be formed, or existing health plans or the County
Medical Services Program may expand to serve other geographic areas,
for the purposes of providing public health care services in counties
where there is not a local initiative or county-organized health
plan that contracts with the State Department of Health Care Services
or the County Medical Services Program, participating in these joint
ventures.  
   (3) 
    (2)    Report these initial findings to the
committees of jurisdiction in the Senate and Assembly on or before
November 1, 2010. 
   (4) 
    (3)    Provide technical assistance to local
health care delivery entities, including local initiatives,
county-organized health systems, and the County Medical Services
Program, to support joint ventures and efforts by these entities to
expand to serve other geographic areas and specified populations, or
to contract with providers to provide health care services in
counties where there is not a local initiative or county-organized
health plan that contracts with the State Department of Health Care
Services that opts to participate in such joint ventures, or
participation from the County Medical Services Program. 
   (5) 
    (4)    Consistent with the report and
recommendations provided pursuant to this section and consistent with
existing law, the department may enter into contracts with joint
ventures authorized pursuant to this section to provide medical
services to specified populations, as determined by the program.
   (b) Health plans that contract with or are governed, owned, or
operated by, a county board of supervisors, a county special
commission, a county-organized health system, or county health
authority authorized by Section 14018.7, 14087.31, 14087.35,
14087.36, 14087.38, 14087.96, or Article 2.8 (commencing with Section
14087.5) of Chapter 7 of Part 3 of Division 9 of the Welfare and
Institutions Code, and the County Medical Services Program, may form
joint ventures to create integrated networks of public health plans
that pool risk and share networks.
   (1) In forming joint ventures, participating health plans shall
seek to contract with designated public hospitals, county health
clinics, community health centers, and other traditional safety net
providers.
   (2) All joint ventures and health care networks established
pursuant to this section shall seek licensure as a health care
service plan consistent with the Knox-Keene Health Care Service Plan
Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2
 of this code  ). Prior to commencement of
enrollment, the joint venture or health care network shall be
licensed pursuant to that act.
   (3) No more than two joint ventures shall be established pursuant
to this section until the California Health Benefits Service Program
submits its initial findings to the Senate and Assembly pursuant to
paragraph  (3)   (2)  of subdivision (a).
   (c) (1) There is hereby created the California Health Benefits
Service Program Stakeholder Committee. The committee shall be
comprised of 10 members appointed as follows:
   (A) The Director of Health Care Services shall appoint six
members, including two representatives of local initiatives
authorized under the Welfare and Institutions Code, a representative
of county-organized health systems, a representative of the County
Medical Services Program, a representative of health care providers,
and a representative of employers.
   (B) The Senate Committee on Rules shall appoint two members,
including a labor representative and a representative of health care
consumers.
   (C) The Speaker of the Assembly shall appoint two members,
including a representative of local initiatives authorized under the
Welfare and Institutions Code, and a representative of organized
labor.
   (2) The committee shall meet at least quarterly to provide input
to the program and assist the program in carrying out its
responsibilities as outlined in this section.
   (3) The members of the committee shall serve without compensation,
and no public funds may be used to compensate members for expenses.
   (d) On or before November 1, 2010, and annually thereafter, the
department shall update the committees of jurisdiction in the Senate
and Assembly on implementation of this section and make
recommendations, as applicable, on changes necessary to implement
this section. The update shall also include progress on the purpose
of this section and recommendations on resources, policy, and
legislative changes necessary to build and implement a system of
public health coverage throughout California. The update shall
describe the projects proposed or established pursuant to this
section, including, but not limited to, the participating providers,
the groups covered, the physicians and hospitals in the network, and
the counties served.
   (e) The committee shall consult with relevant departments,
including the Department of Managed Health Care, in the
implementation of this chapter.
   (f) Nothing in this section shall be construed to prohibit any
other licensed health care service plan not mentioned in subdivisions
(b) and (c) from entering into joint ventures or contracts with the
State Department of Health Care Services to provide services in
counties in which there is not a Medi-Cal managed care health plan
that contracts with the department.
   (g) No public funds shall be used to implement the duties
described in paragraphs (1) to  (4)   (3) 
, inclusive, of subdivision (a), or to support the activities of the
committee established pursuant to subdivision (c). The department
shall implement the duties described in paragraphs (1) to 
(4)   (3)  , inclusive, of subdivision (a), and
shall convene the committee established pursuant to subdivision (c),
only upon a determination made by the Department of Finance that
private donations in an amount sufficient to fully support these
duties and activities have been deposited with the state.
  SEC. 3.  Section 1347 is added to the Health and Safety Code, to
read:
   1347.  The director is authorized to provide regulatory and
program flexibilities to facilitate new, modified, or combined
licenses of local initiatives and county-organized health systems,
and the County Medical Services Program created pursuant to this
chapter or the California Health Benefits Service Program, that seek
licensure for regional or statewide networks for the purposes of
contracting with the Managed Risk Medical Insurance Board, or for the
purposes of providing coverage in the individual and group coverage
markets. In providing those flexibilities, the director shall ensure
that the health plans established pursuant to this section meet
essential financial, capacity, and consumer protection requirements
of this chapter.