BILL ANALYSIS Ó
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THIRD READING
Bill No: AJR 12
Author: Solorio (D)
Amended: As introduced
Vote: 21
ASSEMBLY FLOOR : 77-0, 06/27/11(Consent) - See last page
for vote
SUBJECT : Strengthening Medicare and Repaying Taxpayers
Act of
2011
SOURCE : Author
DIGEST : This resolution makes specified legislative
findings and declarations regarding H.R. 1063, (the federal
Medicare Secondary Payer Enhancement Act of 2011) and
requests that the Congress and the President of the United
States enact the measure.
ANALYSIS : Existing federal law:
1.Establishes the Medicare program which provides health
care regardless of income or health status to individuals
ages 65 and older and for younger people with permanent
disabilities.
2.Establishes that Medicare is precluded from paying for a
beneficiary's medical expenses when payment has been made
or can reasonably be expected to be made under a workers'
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compensation plan, an automobile or liability insurance
policy or plan (including a self-insured plan), or under
no-fault insurance, also referred to as "secondary
payer."
3.Establishes "conditional payments" or Medicare payments
for services for which another payer is responsible, made
under certain circumstances, as specified, or because the
intermediary or carrier did not know that the other
coverage existed.
4.Establishes that Medicare has a priority right of
recovery over any other entity to the proceeds of any
settlement. To the extent that Medicare has made any
conditional payments, Medicare will recover those
payments pursuant to federal law.
5.Establishes that the burden of future medical expenses in
workers compensation cases may not be shifted to Medicare
and that Medicare's interest must be considered in
workers' compensation settlements, when future medical
expenses are a component of the settlement.
This resolution states:
1.California residents who are eligible for the Medicare
Program periodically seek compensation for personal
injuries that are the liability of other parties and seek
benefits through California's worker's compensation
system.
2.California is periodically found liable for industrial
injuries to individuals who are eligible for the Medicare
Program and, as an employer, California pays benefits to
those injured individuals under the worker's compensation
system.
3.The way the secondary payer law is currently being
administered with respect to claims involving individuals
who are eligible for the Medicare Program has caused
considerable delay and unfairness in the settlement of
those claims.
4.The delays in the settlement of claims and the
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uncertainty of the scope of responsibility of the
Medicare Program as the secondary payer has increased
settlement costs, and the delay and uncertainty caused by
the Medicare secondary payer law has increased costs to
the state and to local jurisdictions.
5.The federal Strengthening Medicare and Repaying Taxpayers
Act of 2011 has been introduced in Congress, has
bipartisan support, and is supported by a broad spectrum
of organizations with an interest in ensuring that the
Medicare secondary payer law is administered fairly and
efficiently to the benefit of the Medicare Trust Fund and
individuals and payers who have an interest in the prompt
settlement of claims for damages or benefits.
Background
According to a primer published by the Kaiser Family
Foundation, Medicare, established in 1965, is a social
insurance program that provides health and financial
security for individuals ages 65 and older and for younger
people with permanent disabilities. Medicare provided
health insurance coverage to 47 million people in 2010: 39
million people ages 65 and older and eight million people
with permanent disabilities who are under age 65. The
program helps to pay for many important health care
services, including hospitalizations, physician services,
and prescription drugs. Individuals contribute payroll
taxes to Medicare throughout their working lives and
generally become eligible for Medicare when they reach age
65, regardless of income or health status. Of California's
population, 13 percent (approximately 4.8 million) are on
Medicare. According to a chart published by the Department
of Industrial Relations, Workers' Compensation division,
two percent (11,000 out of 531,000 claims) of claims in
2009 were from individuals over 65 years of age.
Medicare comprised an estimated 12 percent of the federal
budget and more than one-fifth of total national health
expenditures in 2010. Medicare is a federally funded
program (through general federal revenues, payroll taxes,
and premiums paid by beneficiaries) and in general, state
General Funds do not support the program administration or
health services provided to Californian's on Medicare.
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FISCAL EFFECT : Fiscal Com.: No
SUPPORT : (Verified 7/5/11)
Acclamation Insurance Management Services
Allied Managed Care
Pacific Compensation Insurance Company
Small Business California
ARGUMENTS IN SUPPORT : This resolution is supported by
workers' compensation and liability insurance carriers
because they believe the federal legislation will bring
clarity and certainty to the process by which Medicare
seeks to enforce its rights under Medicare Secondary Payer
laws. According to proponents, under the current system
Medicare beneficiaries and third parties are having
significant problems settling industrial liability and
workers' compensation claims because they cannot determine
the amount owed to Medicare in a timely manner. The
carriers assert that this current situation wastes limited
judicial and other resources and needlessly delays
settlements, and that H.R. 1063 will address these
problems.
ASSEMBLY FLOOR : 77-0, 06/27/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Gordon, Gorell, Huffman
CTW:nl 7/6/11 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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