Nunez, Perata Merge Health Care Reform into One Package
Assembly Speaker Fabian Nunez (D-Los Angeles) and Senate President Pro Tem Don Perata at a Capitol news conference on June 21 announced that they have merged the Assembly Member’s AB 8 and the Senator’s SB 48 into one measure, an amended AB 8 now co-authored by both men.
CTA-supported AB 8 cleared the Assembly on June 7 and is scheduled for a Senate Health Committee hearing on July 11.
The compromise legislation dubs the new plan “The California Cooperative Health Insurance Purchasing Program (Cal-CHIPP)” and makes it effective in 2010.
In its new form, AB 8 guarantees that insurers will issue health care policies for every person in the individual market who does not have serious medical conditions.
The bill will also create a high-risk pool for individuals with serious medical conditions. Funding for this pool will come from a “broad assessment” on health plans. The legislation does not mandate individual coverage, however.
Families and children with incomes less than three times the Federal Poverty Level who are offered employer-sponsored insurance will see their premiums subsidized.
All businesses – even small businesses – are required to participate. The bill requires all businesses to create IRS Section 125 plans to shelter employee health insurance premiums from state and federal taxes.
The bill empowers the Managed Risk Medical Insurance Board (MRMIB) to adjust the employer fee to ensure the system’s fiscal solvency.
The measure also impacts insurers by requiring them to extend small group rules to mid-sized employers who have between 51 and 250 workers, and the bill phases out “rate bands” that currently affect mid-sized groups.
To help contain costs, the legislation mandates that the MRMIB ensure that the health plans working with the pools implement preventive care, chronic disease management, standardized billing, and other cost-containment practices. The Board must also negotiate with Medi-Cal managed care plans.
Under terms of the measure, the state Health and Human Services Agency is charged with developing fitness, wellness, and health promotion programs, as well as “pay-for-performance” standards for state programs.
The agency is also required to assure “best-practice” standards for chronic diseases and to monitor the progress of implementation.
CTA’s State Council of Education, the organization’s policy-making body, adopted a “watch” position on the original version of AB 8, and the organization is reviewing the new language in the bill.