BILL ANALYSIS Ó
AB 298
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Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 298 (Pan) - As Amended: April 17, 2013
Policy Committee: PERSSVote:5-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reestablishes, until January 1, 2015, the Rural Health
Care Equity Program (RHCEP) and extends the benefit provided by
that program to all state employees and retired annuitants
living in rural areas, as specified.
FISCAL EFFECT
According to the Department of Human Resources, reinstatement of
the program for 2011 would result in additional GF costs of
approximately $20 million from enactment to sunset on January 1,
2015
COMMENTS
1)Purpose . According to the author, many state workers who live
in rural areas of California or live outside of the state do
not have access to an HMO and are forced to pay higher costs
for healthcare using a Preferred Provider Organization (PPO).
These costs are a barrier to working families and their
ability to access affordable healthcare, often times causing
these families to put off necessary health procedures due to
cost, leading to greater health problems in the future. The
RHCEP provides subsidies that offset the higher health care
costs paid by individuals in these rural areas. The subsidy
is equal to the difference between the lowest PPO premium and
the weighted-average HMO premium. The author notes,
additionally, the state will reimburse for an employee or
dependent's out-of-pocket expenses, such as deductibles and
co-insurance costs.
2)Background . The State of California offers its employees and
AB 298
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retirees a number of health plan options including at least
one low-cost Health Maintenance Organization (HMO) plan. In
some rural areas of California there are no HMO plans
available to state employees and retirees, requiring residents
in these areas to use one of the higher cost health care
options. Recent budget actions eliminated the program.
3)Previous legislation .
a) AB 2608 (Chesbro) of 2010, is similar to this bill.
This bill was held on this Committee's Suspense File.
b) ABX4 12 (Evans), Chapter 12, Statutes of 2009,
eliminated the RHCEP for all active state employees with
the exception of Bargaining Unit (BU) 5 (Highway Patrol)
employees, who were allowed to continue to have access to
this program, pursuant to their active bargaining
agreement, until the expiration of that agreement on July
2, 2010.
c) AB 1389 (Budget Committee), Chapter 751, Statutes of
2008, eliminated the RHCEP payments to state annuitants.
d) SB 1168 (Chesbro), Chapter 642, Statutes of 2006,
extended the operation of the RHCEP to January 1, 2012, and
specified that the program is only operative to the extent
funding is provided through the annual budget act or
another statute.
e) SB 514 (Chesbro), Chapter 743, Statutes of 1999,
established the RHCEP to provide subsidies and
reimbursements for health care costs incurred by state
employees and annuitants that live in rural areas of
California.
1)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081