BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 56|
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THIRD READING
Bill No: SB 56
Author: Alquist (D)
Amended: 1/11/10
Vote: 21
SENATE HEALTH COMMITTEE : 7-4, 4/22/09 (prior version of
the bill)
AYES: Alquist, Cedillo, DeSaulnier, Leno, Negrete McLeod,
Pavley, Wolk
NOES: Strickland, Aanestad, Cox, Maldonado
SENATE APPROPRIATIONS COMMITTEE : 6-3, 1/21/10
AYES: Kehoe, Corbett, Leno, Liu, Price, Yee
NOES: Cox, Denham, Walters
SUBJECT : Health plans: joint ventures
SOURCE : Author
DIGEST : This bill authorizes and facilitate the creation
of joint ventures among publicly owned and operated health
coverage programs, such as County Organized Health Systems
and local initiatives, to provide health care coverage to
uninsured individuals and purchasers of health insurance.
ANALYSIS : Existing law:
Existing law:
1. Creates various public health benefits programs
CONTINUED
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administered by the Department of Health Care Services,
the Managed Risk Medical Insurance Board, and various
local entities, including County-Organized Health
Systems (COHS) and local initiatives (LIs).
2. Provides for the licensing and regulation of health care
coverage plans by the Department of Managed Health Care
(DMHC) and sets requirements on health care coverage
plans pertaining to the mandatory provision of specified
basic services, financial stability, adequacy of
provider networks, and cost-sharing.
3. Provides for the regulation of health insurers by the
California Department of Insurance (CDI).
4. Provides for three types of managed health care delivery
to Medi-Cal beneficiaries in California: the Two-Plan
model, COHS, and geographic managed care (GMC).
A. The Two-Plan model, where the county contracts
with a public, non-profit local initiative, created
by the county, and a commercial plan, selected
through a competitive bidding process. California's
8 LIs contract with their counties to provide health
care coverage for California's Medi-Cal and Healthy
Families populations. They are Alameda Alliance for
Health, Contra Costa Health Plan, Health Plan of San
Joaquin, Inland Empire Health Plan, Kern Family
Health Care, L.A. Care Health Plan, San Francisco
Health Plan, and Santa Clara Family Health Plan.
Several of the LIs have expanded to offer coverage to
In Home Supportive Services (IHSS) workers, children
who are not eligible for other state-sponsored health
care coverage, and Medicare beneficiaries.
B. A COHS, where the county board of supervisors
appoints a governing board to operate the system.
There are five COHS that operate in Orange, Merced,
Monterey, Santa Cruz, San Mateo, Napa, Yolo, Solano,
Sonoma, San Luis Obispo, and Santa Barbara counties.
C. The GMC model, currently limited to San Diego and
Sacramento counties, where competing commercial
health care plans provide services.
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5. Provides for the County Medical Services Program (CMSP)
that provides coverage for adults between the ages of 18
and 64 with incomes at or below 200 percent of the
federal poverty level in 34 counties. Individuals with
incomes above 200 percent of the federal poverty level
may be eligible for coverage with a share of cost.
This bill:
1. Permits health plans that are governed, owned, or
operated by a county board of supervisors, a county
special commission, a COHS, or a county health
authority, or CMSP, to form joint ventures to create
integrated networks of public health plans that pool
risks, share networks, or jointly offer health plans to
individuals and groups.
2. Requires the participating health plans, in forming a
joint venture, to seek contracts with designated public
hospitals and other local safety net providers.
3. Requires joint ventures created pursuant to the
authority in this bill to meet the requirements of the
Knox-Keene Act.
Comments
SB 973 (Simitian) and SB 1622 (Simitian) of 2007-2008
contained provisions similar to this bill. SB 973 was
vetoed by the Governor, who said that he agreed with the
concept of the bill, but could not support such a piecemeal
approach to health care reform. SB 1622 was held in the
Senate Appropriations Committee. AB X1 1 (Nunez) of 2008
also contained similar provisions. It died in the Senate
Health Committee. This bill retains provisions that relate
to the creation of joint ventures by COHS and LIs, but does
not require the formation of a stakeholder committee or a
program within Department of Health Care Services to
facilitate their creation. It also does not require the
joint ventures to be licensed as health care service plans
by DMHC, as the previous bills did.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
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Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13
Fund
DMHC licensing up to $200 ongoing
costs unknown Special*
of one joint venture but potentially in the
hundreds of thousands of
dollars
DMHC licensing fee (up to $25)ongoing revenues
unknown, Special*
revenue per joint venture but not sufficient to cover
DMHC licensing costs
*Managed Care Fund
SUPPORT : (Verified 1/27/10)
American Federation of State, County and Municipal
Employees
California Communities United Institute
California Labor Federation
Congress of California Seniors
Consumers Union
Health Access, California
Local Health Plans of California
Sailors' Union of the Pacific
Service Employees International Union
United Nurses Associations of California/Union of Health
Care
Professionals
ARGUMENTS IN SUPPORT : The American Federation of State,
County, and Municipal Employees (AFSCME) states that this
bill will provide consumers and employers with better
choices when it comes to purchasing health insurance
coverage, and will provide major savings and benefits to
consumers and employers over time. AFSCME states that the
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bill will provide access to good value, comprehensive
coverage choices for both uninsured and underinsured
residents, and for small employers, who have limited
resources to pay for health insurance coverage for their
workers. AFSCME states that this bill will provide a
competitive check on the private health coverage market.
CTW:nl 1/27/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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