BILL ANALYSIS
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VETO
Bill No: SB 56
Author: Alquist (D)
Amended: 8/17/10
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
SENATE FLOOR : 21-12, 1/28/10
AYES: Calderon, Corbett, Correa, DeSaulnier, Ducheny,
Florez, Kehoe, Leno, Liu, Lowenthal, Negrete McLeod,
Oropeza, Padilla, Pavley, Price, Simitian, Steinberg,
Wiggins, Wolk, Wright, Yee
NOES: Aanestad, Cogdill, Cox, Denham, Dutton, Harman,
Hollingsworth, Huff, Runner, Strickland, Walters, Wyland
NO VOTE RECORDED: Alquist, Ashburn, Cedillo, Hancock,
Maldonado, Romero, Vacancy
ASSEMBLY FLOOR : 50-26, 8/23/10 - See last page for vote
SENATE FLOOR : 22-10, 8/25/10
AYES: Alquist, Blakeslee, Calderon, Cedillo, Corbett,
Correa, Ducheny, Florez, Hancock, Kehoe, Leno, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price,
Romero, Simitian, Steinberg, Wolk, Wright
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NOES: Aanestad, Ashburn, Cogdill, Dutton, Emmerson, Huff,
Runner, Strickland, Walters, Wyland
NO VOTE RECORDED: Denham, DeSaulnier, Harman,
Hollingsworth, Oropeza, Wiggins, Yee, Vacancy
SUBJECT : Health plans: joint ventures
SOURCE : Author
DIGEST : This bill permits a health plan that is
governed, owned, or operated by a county board of
supervisors, a county special commission, a
county-organized health system, or a county health
authority, or the County Medical Services Program, to form
joint ventures for the joint or coordinated offering of
health plans to individuals and groups
Assembly Amendments clarified the authorization of for
health benefits programs to form joint ventures consistent
with contractual relationships, revised various findings,
and stated that the County Medical Services Program may
elect a third-party administrator to provide health
coverage under a joint venture.
ANALYSIS : Existing law:
Existing law:
1. Creates various public health benefits programs
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
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
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California Department of Insurance.
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.
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 geographic managed care model, currently
limited to San Diego and Sacramento counties, where
competing commercial health care plans provide
services.
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. Gives a CMSP governing board the power to participate in
such a joint venture, provided that it is funded
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separately from the program and does not impair its
financial stability. Permits a CMSP governing board, if
it elects to participate in such a joint venture, to
contract with a third-party administrator to provide
coverage under the joint venture.
2. Permits the joint ventures to consist of either:
A. Contractual relationships entered into in order to
pool risk or share networks, or both; or,
B. Contractual relationships entered into in order to
provide for the joint offering or marketing of health
plans to individuals and groups.
3. Requires participating health plans, in forming joint
ventures, to seek to contract with designated public
hospitals, county health clinics, primary care clinics,
and other traditional safety net providers.
4. Requires joint ventures to meet all the requirements of
the Knox-Keene Health Care Service Plan Act of 1975.
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 the Department of Managed Health Care, as the previous
bills did.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Assembly Appropriations Committee,
one-time fee-supported special fund costs to the Department
of Managed Health Care in the range of $200,000 to $500,000
(health plan fees) to license two to five joint ventures
established pursuant to authority created in this bill.
SUPPORT : (Verified 8/23/10)
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
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.
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 56 without my signature.
This bill is unnecessary, as there is nothing in
existing law that prohibits a county organized health
plan, local initiative or other public entity from
entering into a joint venture and seeking licensure
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with the Department of Managed Health Care.
Furthermore, this bill does not solve the underlying
problem for why these entities have been unsuccessful
expanding their business in the past.
For these reasons, I cannot sign this bill."
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Coto, Davis, De La Torre, De
Leon, Eng, Evans, Feuer, Fong, Fuentes, Galgiani, Gatto,
Hall, Hayashi, Hernandez, Hill, Huber, Huffman, Jones,
Lieu, Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, V.
Manuel Perez, Portantino, Ruskin, Salas, Saldana,
Skinner, Solorio, Swanson, Torlakson, Torres, Torrico,
Yamada, John A. Perez
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Conway, Cook, DeVore, Fletcher, Fuller, Gaines, Garrick,
Gilmore, Hagman, Harkey, Jeffries, Knight, Logue, Miller,
Nestande, Niello, Nielsen, Silva, Smyth, Audra
Strickland, Tran, Villines
NO VOTE RECORDED: Furutani, Norby, Vacancy, Vacancy
CTW:nl 10/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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