BILL ANALYSIS
SB 840
Page 1
Date of Hearing: July 3, 2007
ASSEMBLY COMMITTEE ON HEALTH
Mervyn Dymally, Chair
SB 840 (Kuehl) - As Amended: June 27, 2007
SENATE VOTE : 23-15
SUBJECT : Single-payer health care coverage.
SUMMARY : Creates the California Healthcare System (CHS), a
single payer health care system, administered by the California
Healthcare Agency, to provide health insurance coverage to all
California residents. States that CHS would become operative
when the Secretary of Health and Human Services determines the
Healthcare Fund has sufficient revenues to implement this bill.
Specifically, this bill :
1)Establishes CHS in state government, to be administered by the
California Healthcare Agency, an independent agency under the
control of the Healthcare Commissioner (Commissioner).
2)Prohibits any health care service plan or health insurance
policy, except for CHS, from being sold in California for
services provided by CHS.
Governance
3)Provides for a Commissioner, appointed by the Governor and
confirmed by the Senate, to be the chief officer of CHS and to
administer all aspects of the California Healthcare Agency.
4)Gives the Commissioner broad powers to establish CHS budget,
goals, standards, and priorities; set rates; and, perform
other duties as specified; and
5)Establishes conflict-of-interest rules for the Commissioner.
6)Requires the Commissioner to oversee the establishment of
several boards and committees, including:
a) The Healthcare Policy Board (Board), to set system goals
and priorities, determine the scope of services provided,
and determine when a change in premium structure is needed;
b) The Office of Patient Advocacy, headed by a patient
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advocate;
c) The Office of Health Planning, to plan for the short-
and long-term health needs of California;
d) The Office of Health Care Quality, to support the
delivery of high quality care and promote provider and
patient satisfaction;
e) The Healthcare Fund within the State Treasury, to be
administered by a director appointed by the Commissioner;
f) The Public Advisory Committee, to advise the Board on
all matters of health insurance system policy;
g) The Payments Board, to establish and supervise a uniform
payments system and compensation plan for providers and
managers; and,
h) Partnerships for Health, to improve health through
community health initiatives, support the development of
innovative means to improve care quality, promote
efficient, coordinated care delivery, and educate the
public, as specified.
7)Directs the Commissioner to carry out numerous duties,
including establishing health care regions; overseeing the
establishment of real and virtual locally-based integrated
service networks, as specified; creating a systematic approach
to measuring and managing care quality; ensuring that state
purchasing power achieves the lowest possible prices for CHS
without adversely affecting needed pharmaceutical research;
assessing projected revenues and expenditures to assure the
financial solvency of the system; negotiating and setting
rates, fees, and prices; implementing eligibility standards;
establishing an enrollment system; and reporting to the
Legislature and Governor annually.
8)Establishes in the Office of the Attorney General an Office of
the Inspector General for CHS with broad powers to
investigate, audit, and review the financial and business
records of individuals and entities that provide services or
products to the system and are reimbursed by the system.
9)States that the operative date of this bill, except for
provisions related to the California Healthcare Premium
Commission (CHPC), shall be the date that the Secretary of
Health and Human Services notifies the Legislature that he or
she has determined that the Healthcare Fund will have
sufficient revenues to fund the costs of implementing this
bill. Requires CHS to be operative within two years of the
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operative date of this bill. Prohibits any state entity from
incurring any transition or planning costs prior to the
operative date of this bill.
10) States that the activities of the CHPC are not subject to
#9) above, and that provisions in this bill related to CHPC
become operative on January 1, 2008.
11) Provides that the transition to CHS be funded from a loan
from the General Fund (GF) and from other sources, including
private sources, identified by the Commissioner.
12) Requires the Commissioner to:
a) Assess health plans and insurers for care provided by
CHS if private coverage extends into the CHS' operational
time;
b) Implement a means to assist persons displaced from
employment as a result of the CHS;
c) Appoint a transition advisory group whose duties include
recommending how to integrate health care delivery services
and responsibilities of several state departments into CHS;
d) Establish up to ten CHS regions composed of contiguous
counties grouped according to utilization patterns, health
care resources, health needs, geography, and population;
and,
e) Appoint a regional planning director for each region to
administer health insurance regions with duties as
specified.
13) Requires regional medical officers to administer all
aspects of the regional office of health care quality with
duties as specified.
14) Requires each region to have a regional health planning
board consisting of 13 members appointed by the regional
planning director in order to advise and make recommendations
to the regional planning director on all aspects of regional
health policy.
Funding
15) Requires the Commissioner to maintain, a reserve fund to
cover unforeseen costs.
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16) Requires that moneys currently held in reserve by state,
city, and county health programs and federal moneys for health
care held in reserve in federal trust accounts be transferred
to the state health care reserve account (reserve account)
when the state assumes financial responsibility for health
care under this bill that is currently provided by those
programs.
17) Authorizes the Commissioner to adjust payments to
providers and managers that fail to meet contractual
performance standards.
18) Requires the Commissioner, if he or she determines that
statewide revenue trends indicate the need for statewide cost
control measures, to convene the Board to discuss the need for
cost control measures and immediately report to the public.
19) Provides that cost control measures may include: changes
in the health insurance system or health facility
administration that improve efficiency; changes in the
delivery of health care services that improve efficiency and
care quality; postponement of introduction of new benefits or
benefit improvements; postponement of introduction of new
benefits or benefit improvements; adjustment of health care
providers budgets to correct for inappropriate utilization,
deficiencies in care quality or fraud; limitations on the
reimbursement of system managers and upper level managers;
limitations on health provider reimbursement; limitations on
aggregate reimbursements to manufacturers of pharmaceutical
and durable and nondurable medical equipment; deferred funding
of the reserve account within the Fund; imposition of
copayments or deductible payments according to certain
guidelines, including that no copayments be established for
preventive care; imposition of an eligibility waiting period
if the Commissioner determines that people are immigrating to
the state for the purpose of obtaining health care through the
system.
20) Authorizes the Commissioner, if cost control measures are
not sufficient to meet revenue shortfalls, to recommend other
measures including increased premium payments.
21) Permits the imposition of copayments and deductibles
beginning in the third year of the system's operation. Limits
the deductible and copayment to $250 per person and $500 per
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family each year. Prohibits any deductible or copayment for
Medi-Cal eligible persons. Excludes from these limits
copayments for treatments by a specialist without a referral
from a primary care provider. Permits the Commissioner to
establish copayment amounts for treatments by a specialist
without a referral.
22) Permits the postponement of new benefits or benefit
improvements, deferred funding of the reserve account, waiting
periods, or premium increases to only occur on a statewide
basis and only with the concurrence of the Commissioner and
Board.
23) Requires, when the state Budget has not been enacted by
June 30th of any year, that moneys in the reserve account be
used to implement this bill. Requires the state Controller,
if those reserve funds are exhausted, to make one or more GF
loans not to exceed an undetermined amount to the Healthcare
Fund.
24) Directs the Commissioner to annually prepare a system
budget that specifies a limit on total annual expenditures and
establishes an allocation for each health care region that
covers a three-year period.
25) Requires the Commissioner to limit the growth of spending
on a statewide and regional basis by reference to average
growth in state domestic product across multiple years,
population growth, and other factors.
26) Directs the Commissioner to annually set the total funds
to compensate managers and providers.
27) Allows providers who choose to be compensated by CHS to
choose whether to be reimbursed as fee-for-service providers
or salaried providers in health care systems. Prohibits
health care providers who accept any payment from the system
from billing a patient for any covered service.
28) Allows integrated health care systems to choose to be
reimbursed on the basis of a capitated budget, as specified.
29) Requires fee-for-service providers to choose
representatives to negotiate rates with the CHS; requires that
providers employed by, or under contract with, health care
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systems be represented by their employers or contractors for
rate negotiation with CHS. Requires fee-for-service providers
to be paid within 30 business days of filing claims.
30) Requires CHS to set binding rates for providers, if an
agreement on provider reimbursement is not reached according
to a timetable, as specified.
31) Requires regional planning directors to negotiate
operating budgets with regional health care entities.
32) Requires unions representing employees in health care
systems to represent the employees in negotiations with the
regional planning directors.
33) Requires that compensation for health system employees,
which was determined through employer-union negotiations
before implementation of this bill, be determined by CHS-union
negotiations on implementation.
34) Allows margins generated by health facilities operating
under a CHS operating budget, except those margins gained
through inappropriate limits on access to care or compromises
in the quality of care, to be retained and used to meet the
healthcare needs of the population.
35) Directs the Commissioner to establish budgets for
prescription drugs and medical equipment, to support research
and innovation, and to support training and education of
providers.
36) Limits administrative costs on a system-wide basis to 10%
of system costs within five years of completing the transition
to the CHS and to 5% of system costs within 10 years.
37) Requires the Commissioner to adjust the CHS budget so that
aggregate spending in the state on health care does not exceed
spending under this division by more than 5%.
38) Prohibits a health care provider who accepts any payment
under CHS from billing a patient for any covered service.
CALIFORNIA HEALTHCARE PREMIUM COMMISSION (CHPC)
39) Establishes the CHPC, composed of 21 members, including
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eleven elected and appointed state officials, three health
economists, and seven representatives of business, labor, and
non-profit universal health care and taxation policy
organizations.
40) Requires the CHPC to develop an equitable and affordable
premium structure that will generate adequate revenue for the
Healthcare Fund and ensure stable and actuarially sound
funding for the health insurance system that satisfies the
following criteria:
a) Be means-based and generate adequate revenue to
implement this bill;
b) To the greatest extent possible, ensure that all income
earners and all employers contribute a premium amount that
is affordable and that is consistent with existing funding
sources for health care in California;
c) Maintain the current ratio for aggregate health care
contributions among the traditional health care funding
sources, including employers, individuals, government, and
other sources;
d) Provide a fair distribution of monetary savings achieved
from the establishment of a universal health care system;
e) Coordinate with existing, ongoing funding sources from
federal and state programs;
f) Be consistent with state and federal requirements
governing financial contributions for persons eligible for
existing public programs; and,
g) Comply with federal requirements.
h) Include an exemption for employers and employees who are
subject to a collective bargaining agreement and
participate in a Taft-Hartley Trust Fund that pays the
employer and employee share of the premium to the
Healthcare Fund.
41) Requires the CHPC, on or before January 1, 2010, to submit
a detailed recommendation for a premium structure to the
Governor and the Legislature, and, at least 90 days prior to
that submission, to make a draft recommendation available for
public comment.
GOVERNMENT PAYMENTS
42) Requires the Commissioner to seek necessary approval so
that all current federal payments for health care are paid to
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CHS, which would then assume responsibility for all benefits
and services paid by the federal government with those funds.
43) Requires the Commissioner to seek all necessary waivers or
agreements so that all current state payments for health care
are paid directly to CHS.
44) Requires the Commissioner to establish formulas for
equitable contributions to CHS from counties and other local
government agencies.
45) Provides that the CHS be secondarily responsible for
providing care to the extent that the federal, state, or
county programs are not transferred to the CHS.
46) Requires the CHS to incorporate Medi-Cal and Medicare
payments, including premiums, copays, and deductibles, to the
extent that the Commissioner obtains authorization to do so.
47) Requires the Commissioner to seek all reasonable means to
secure a repeal or waiver of any provision of federal law that
preempts any part of this bill and, in the event that
preemption is not waived, requires the Commissioner to
promulgate conforming regulations.
48) Requires that employees, entitled to health benefits under
a contract that under federal law preempts provisions of this
bill, seek benefits under that contract before receiving
benefits from CHS.
Subrogation
49) Requires, until the time that the roll of all other payers
for health care have been terminated, that health care costs
be collected from collateral sources when services are
provided under a private insurance policy or other collateral
source.
50) Defines "collateral sources" to include insurance
policies, health plans, employers, employee benefit contracts,
government benefit programs, judgments for damages, and any
liable third party, and to exclude a federally preempted
contract or any service prohibited from subrogation by federal
law.
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Eligibility
51) Deems all California residents eligible for CHS, and bases
residency on physical presence in the state with the intent to
reside.
52) States that it is the intent of the Legislature for CHS to
provide health care coverage to state residents who are
temporarily out of the state.
53) Provides that visitors to the state who receive care under
CHS will be billed for all services rendered.
54) Deems individuals who are eligible for health benefits
from California employers but working in another jurisdiction
to be eligible for benefits under CHS if they make certain
payments.
55) Requires that individuals who arrive at a health facility
unable to document eligibility because of physical or mental
conditions be deemed eligible for services under CHS.
56) Requires the Commissioner to establish an eligibility
waiting period and other criteria needed to ensure the fiscal
stability of CHS if there is an influx of people into the
state for the purposes of receiving medical care.
Benefits
57) Allows any eligible individual to receive services under
CHS from any willing professional health care provider.
58) Provides that covered benefits include all care determined
to be medically appropriate by the consumer's health care
provider.
59) Provides that covered benefits include, but are not
limited to, all of the following:
a) Inpatient and outpatient health facility services;
b) Inpatient and outpatient professional health care
provider services by licensed health care professionals;
c) Diagnostic imaging, laboratory services, and other
diagnostic and evaluative services;
d) Durable medical equipment including prosthetics,
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eyeglasses, and hearing aids and their repair;
e) Rehabilitative care;
f) Emergency transportation and necessary transportation
for health care services for disabled in indigent persons;
g) Language interpretation and translation for health care
services;
h) Child and adult immunizations and preventive care;
i) Health education;
j) Hospice care;
aa) Home health care;
bb) Prescription drugs listed on the formulary;
cc) Mental and behavioral health care;
dd) Dental care;
ee) Podiatric care;
ff) Chiropractic care;
gg) Acupuncture;
hh) Blood and blood products;
ii) Emergency care products;
jj) Vision care;
aaa) Adult day care;
bbb) Case management and coordination to ensure
services necessary to enable a person to remain in the
least restrictive setting;
ccc) Substance abuse treatment;
ddd) Care of up to 100 days in a skilled nursing
facility following hospitalization;
eee) Dialysis;
fff) Benefits offered by a bona fide church, sect,
denomination, or organization whose principles include
healing entirely by prayer or spiritual means;
ggg) Chronic disease management;
hhh) Family planning services and supplies; and,
iii) Early and periodic screening, diagnosis, and
treatment, as specified, for persons less than 21 years of
age.
60) Permits the Commissioner to expand benefits beyond the
minimum outlined above when expansion meets the intent of this
bill and can be sufficiently funded;
61) Excludes the following services from coverage by CHS:
a) Health care services determined by the Commissioner and
chief medical officer to have no medical indication;
b) Services primarily for cosmetic purposes, as specified;
c) Private rooms in inpatient health facilities; and,
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d) Services of a provider or facility that is not licensed
by the state.
62) Prohibits copayments and deductibles for preventive care
or when prohibited by federal law.
63) Makes state residents in a family whose income does not
exceed 200% of the federal poverty level (FPL) eligible for
no-cost Medi-Cal and entitles them to not less than the full
scope of benefits available under the Medi-Cal program, as
provided on January 1, 2008.
Delivery of care
64) Allows all licensed and accredited health care providers
in the state to participate in CHS. Prohibits a provider from
refusing to care for a patient solely on the basis of
discrimination that is prohibited by the Fair Employment and
Housing Act.
65) Allows individuals to select a primary care provider, and
allows women to select an obstetrician-gynecologist in
addition to a primary care provider.
66) Requires individuals enrolling in integrated health care
systems to retain membership for at least one year after an
initial three month evaluation period during which they can
withdraw at any time.
67) Requires patients to have a referral from a primary care
or emergency care provider, or obstetrician-gynecologist, to
see a specialist, but not to see a dentist. Permits a patient
to see a specialist without a referral if the patient agrees
to pay the cost of care, or a copayment, if implemented by the
Commissioner. Allows a patient to appeal the denial of a
referral through the dispute resolution mechanism established
by the Commissioner.
68) Allows a specialist provider to serve as a patient's
primary care provider if patient and the specialist provider
agree, and the specialist provider agrees to coordinate the
patient's care.
69) Permits the Commissioner to establish financial
arrangements with medical providers in other states and
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foreign countries in order to facilitate coverage for
California residents who are temporarily out of the state.
70) Permits a patient, during the first six months of CHS
operation, to see a specialist provider without referral, if
the patient had been receiving care from that specialist prior
to CHS.
71) Assigns the director of the Office of Health Planning
various duties, including establishing performance criteria
for health care goals, assisting health care regions in
developing operating and capital budgets, and estimating the
health care workforce and facilities required to meet the
needs of the population.
72) Requires the Office of Health Care Quality to be headed by
the chief medical officer and to establish processes for
measuring the quality of care delivered in the health
insurance system.
73) Assigns various duties to the chief medical officer,
including establishing evidence-based standards of care for
the CHS and implementing systems to measure quality of care
and correct quality of care problems.
74) Requires the patient advocate, in consultation with the
chief medical officer, to do all of the following:
a) Establish a grievance system;
b) Establish an independent medical review system to act as
an independent, external process to provide timely
examinations of disputed health care services and coverage
decisions, as specified;
c) Publicize information concerning the rights of
enrollees, including the right to request an independent
medical review; and,
d) Expeditiously review requests for independent medical
reviews and to immediately notify enrollees whether the
request has been approved.
.
EXISTING LAW does not provide a system of universal health care
coverage for California residents. Existing law provides for
the creation of various programs to provide health care services
to persons who have limited incomes and meet various eligibility
requirements. These programs include the Healthy Families
Program administered by the Managed Risk Medical Insurance Board
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(MRMIB), and the Medi-Cal program administered by the Department
of Health Care Services (DCHS). Existing law provides for the
regulation of health care service plans by the Department of
Managed Health Care and health insurers by the Department of
Insurance.
FISCAL EFFECT : According to the Senate Appropriations Committee
analysis:
Fiscal Impact (in thousands)
Major Provisions 2007-08
2008-09 2009-10 Fund
State/county net savings
($1,000,000) ($2,800,000) GF/county
Transition loan
$ 6,000 GF
An actuarial analysis of a prior version of this legislation by
the Lewin Group found that the total health spending for
California residents under the current system to be about $184.2
billion for 2006, and that the single payer program would
achieve universal coverage while reducing total spending in the
state by a net $7.9 billion. This savings is realized by
reducing administrative costs within the current system and
savings from bulk purchasing of prescription drugs and durable
medical equipment. The Lewin analysis anticipates a substantial
increase in utilization as a result of universal coverage and
access but finds that this increased utilization is more than
offset by savings of roughly $20 billion in administrative
savings and $5.2 billion in bulk purchasing savings. SB 840
would constrain growth in future spending to match growth in the
state gross domestic product which is expected to be about 5.14%
annually through 2015. By 2015, health care spending under the
single payer program would be about $68.9 billion less than
currently projected ($343.6 billion). Total savings over the
2006 through 2015 period would be $343.6 billion. Savings to
state and local governments over this ten year period would be
about $43.8 billion.
This bill requires the universal system to be operational no
later than two years after it is determined there are sufficient
resources to implement the program. This bill provides authority
for a loan from the GF to finance transitional costs. The
Committee estimated this cost to be $6,000,000 in the first year
and by the second year the transition should be self sustaining.
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COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
needed because existing law has led to a highly fragmented
health insurance and delivery system that is administratively
complex and that annually diverts billions of dollars in
health care spending from direct health care services to
administrative costs and that provides care based on income
and insurance status rather than medical need. According to
the author, intricate and complicated interactions with public
and private health insurance programs, providers, and
regulatory agencies are confusing and time-consuming for
consumers and providers alike.
The author believes that existing law provides no mechanism for
stabilizing the growth in health care spending that is quickly
outpacing growth in gross domestic product. Absent budgeting
capabilities, growth in health care spending is rapidly
surpassing our ability to afford current levels of benefits or
to add new benefits related to technological improvements.
The author notes that health care providers spend increasing
amounts of time navigating the porous network of public and
private health insurance programs. For example, the
University of California - San Francisco Children's Hospital
works with nearly 80 different health insurance policies and
public programs each with its own benefits package, formulary
schedule, and rate of co-payments and deductibles. One medical
group practice serving 70,000 patients works with 6,000
different health insurance plans.
The author states that 20 to 30% of the health care dollar is
spent on administration (excluding profit). Businesses,
unions, and other institutions that provide health insurance
are particularly harmed under the fragmented system. While
health insurance premiums are rising unpredictably, often by
as much as 20% in one year, employers, large and small,
unions, and even powerful purchasers such as the California
Public Employee Retirement System, are no longer able to
stabilize health care costs or benefits through negotiations.
According to the author, our current system fragments and
dilutes the purchasing power of Californians with regard to
pharmaceuticals and medical equipment. We are paying about
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50% more than Europeans, Australians, Japanese, and Canadians
for the same drugs produced by the same companies. This could
be changed if California implemented bulk purchasing of
pharmaceuticals and medical equipment under this bill. The
author reports that the United States leads the world in
health care spending at about $5,000 per person per year on
average, more than twice the average in other industrialized
countries. Despite our high level of spending, the U.S. ranks
37th in population-based health outcome measurements according
to the World Health Organization, well below the rankings of
all other industrialized nations. This is true because a
large portion of the $5,000 is not going to health services
and because nearly 20% of the population has no health
insurance. The author believes this bill corrects both of
these problems.
2)BACKGROUND . According to the California HealthCare
Foundation, an average of 6.6 million Californians were
uninsured over the three year period of 2003-2005. California
has the largest number of uninsured residents in the United
States and the seventh largest proportion of uninsured in the
nation (20.8% of the population). Of those, 5.3 million were
adults and 1.3 million were children. Fifty-five percent of
Californians have employment based coverage, 16% get coverage
through Medicaid, and 8.7% purchase coverage through the
individual insurance market.
The Foundation also reports that employer based coverage in
California from 1987-2005 declined from 64.6% to 54.7%, with
government sponsored coverage increasing from 15.7% to 18.7%,
individually purchased coverage increasing from 6.8% to 8.7%
and the percentage of uninsured increasing from 17.6% to
21.4%. The California Healthcare Foundation reports the
median employer premium contribution in California firms
offering coverage in 2005 as a percentage of payroll was 7.7%.
Thirty-eight percent of the uninsured in California have incomes
below $25,000 annually, and 54% of the uninsured have annual
incomes below 200% FPL. Fifty-seven percent of the uninsured
are Latino and Latinos are much more likely to be uninsured
than any other ethnic group. However, unlike Latinos and
African Americans, whose high rates of being uninsured have
either held steady or slightly declined for the last five
years, the likelihood of being uninsured is now growing for
Whites and Asians.
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3)UNINSURED CHILDREN . According to the California HealthCare
Foundation, an average of 1.3 million children in California
have remained uninsured over the three year period 2003 -
2005. Children comprise 20% of the state's total uninsured
population, and 71% of California's uninsured children are in
families where the head of household works full-time, full
year. Over half of all uninsured children were eligible for
either HFP or Medi-Cal, but remained unenrolled. The balance
of uninsured children were ineligible for these programs,
largely due to income limitations or immigration status.
4)SUPPORT . Supporters argue that despite incremental reforms
enacted over the last decade, it has become clear that our
heath care system cannot be fixed using partial measures that
do not address its structural problems. Supporters note that
six million Californians are uninsured today, most of whom are
in working families, and that millions more are underinsured.
They cite statistics that half of all bankruptcies in the U.S.
are related to medical costs and that three-fourths of those
bankrupt families had health insurance coverage at the time
they became ill or injured. Supporters believe this bill
corrects the underlying problems of inefficiency, waste and
partial coverage. According to supporters, all Californians
lose when emergency rooms are overcrowded with uninsured
patients, when billions of dollars are wasted on
administrative costs, and when insurance premiums become
unaffordable and benefits are reduced. Supporters argue that
we need a health care system that works for everyone, that
treats everyone equally, and that provides the security of
knowing that no Californian will ever lose their access to
health care because they have lost their job, have a
pre-existing condition or simply cannot afford it. Supporters
contend that long waiting times in Canada reflect differences
in per capita spending, not a problem inherent in a single
payer system; they report that Canada spends roughly $2,000
per person, while CHS will be funded at approximately $6,000
per person.
According to supporters, the single payer system proposed in
this bill increases personal choice, because in the current
system, patients are limited to lists of providers selected by
an insurance company, while CHS allows Californians to choose
any licensed primary care provider and dentist. Furthermore,
CHS is a not-for-profit system, so "profits" remain within the
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health system, improving services, research and provider
reimbursement. Supporters argue that impartial studies show
that California can fully insure all its residents for $8
billion less than what is spent on health care today in the
state.
5)OPPOSITION . Opponents argue that single-payer systems promise
but do not guarantee access to those who need it most. They
claim statistics from countries that have implemented
single-payer systems underscore the point that when the
government funds health care, access is limited by budget
constraints and care is therefore rationed. According to
statistics cited by opponents: more than 1.3 million Canadians
(out of a total population of 26 million) are waiting for
medical services, including 212,990 who are waiting for
surgical procedures; 45% of Canadians who are waiting for
services describe themselves as being in pain; Canadian
patients wait an average of six weeks after referral from a
primary care physician to see a specialist, and then wait
another 7.3 weeks on average before they receive treatment;
and 63% of Canada's x-ray equipment is out of date. Opponents
also argue that a danger of single-payer systems is that they
tend to delay covering the latest medical technology, often at
the expense of patients. According to opponents, when
compared with Canada, on a per capita basis, the U.S. has ten
times as many MRI units, eleven times as many cardiac
catheterization units, and three times as many open-heart
surgery units. Opponents report that a recent Canadian
Medical Association survey found that 49% of the respondents
said they would welcome an approach that would mix private
health care into their public health care system.
According to opponents, this bill will result in a
multi-billion-dollar-tax increase on Californians due to the
costs of transitioning to a new system and the ongoing costs,
which opponents do not believe will be less than our current
system. Opponents believe the bulk of the administrative
costs, which proponents of the bill hope to save, will not be
eliminated under a single-payer system. These include the
costs of claims payment, utilization review, disease and care
management programs, the development of drug formularies, and
customer service functions, which make up the majority of what
is commonly called "administration." Opponents state that none
of these functions are wasteful or inefficient and none can be
ignored under a single-payer system.
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6)PREVIOUS LEGISLATION .
a) SB 840 (Kuehl) of 2006, a single payer bill similar to
this bill, was vetoed by the Governor. In his veto
message, the Governor argued that SB 840 would result in an
extraordinary redirection of public and private funding and
a vast new bureaucracy, and that the preferable approach
would be to promote personal responsibility and to build on
the private and public systems already in place.
b) SB 921 (Kuehl), introduced in 2003, would have
established a single payer health care system in
California. SB 921 passed the Senate and the Assembly
Health Committee and died in the Assembly Appropriations
Committee.
c) SB 2 (Burton), Chapter 673, Statutes of 2003, enacted
the Health Insurance Act of 2003, a "pay or play" approach,
to provide health coverage to employees (and in some cases
their dependents) who do not receive job-based coverage and
who work for large and medium employers. SB 2 was repealed
by Proposition 72, a voter referendum on the November 2004
ballot.
5)RELATED LEGISLATION .
a) AB 1 (Laird and Dymally) and SB 32 (Steinberg), two
similar bills, expand Medi-Cal and HFP eligibility to cover
all children with family incomes at or below 300% FPL.
Establish a HFP Buy-In Program for children in families
with incomes above 300% FPL. Establish various presumptive
eligibility programs. Streamline enrollment and retention.
AB 1 is currently before the Senate Health Committee. SB
32 is currently before the Assembly Health Committee.
b) AB 8 (Nunez) establishes the California Cooperative
Health Insurance Purchasing Program (Cal-CHIPP) as a state
purchasing pool administered by MRMIB, to negotiate and
contract with health plans and health insurers to provide
health insurance for employees (and their dependents) of
employers who elect to pay a fee to the state in lieu of
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making expenditures for health care for their employees
equal to a specified percent of wages paid by the employer.
Excludes very small and low income employers. Extends
coverage to parents and children under 300% FPL through
Medi-Cal and HFP; covers children regardless of immigration
status. Includes health insurance market reforms, uniform
benefit designs and specific cost containment strategies.
AB 8 is currently before the Senate Health Committee.
a) SB 48 (Perata) would have established the Health
Insurance Connector as a health insurance purchasing pool
administered by MRMIB and required employers to spend a
designated amount on health care for employees or elect to
have that health coverage provided through the Connector.
Mandated that all employed persons have health insurance
either through their employer or purchased on their own.
The mandate covers all workers and their families.
Extended coverage to parents and children under 300% FPL
through Medi-Cal and HFP. Included health insurance
reforms in the state purchasing program and numerous cost
containment strategies. SB 48 has been amended to another
subject.
b) SB 1014 (Kuehl) funds the health care system envisioned
in this bill through income, self-employment, and payroll
taxes. SB 1014 passed the Senate Health Committee and is
currently before the Senate Revenue and Taxation Committee.
c) Other proposals to expand health care coverage
statewide, including to uninsured adults, have also been
announced this year. These include the following:
i) The Governor's proposal establishes a pay or play
coverage program where employers (except those with less
than 10 employees) who do not provide health coverage for
their workers can pay a fee (4% of payroll) to cover
their workers through a state-administered purchasing
program. Requires every individual to have and show
proof of health insurance. Provides subsidies on a
sliding scale to persons with incomes 100-250% FPL
through the state purchasing program. Increases Medi-Cal
provider rates. Imposes fees on physicians (2% of
revenues) and hospitals (4% of revenues). Includes
health insurance market reforms and specified cost
containment strategies. The Governor has not designated
a legislative vehicle or provided the Legislature with
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proposed bill language to implement his proposal.
ii) The Senate Republican plan relies on tax incentives,
redirection of existing health program funding and
increased availability of community and primary care
clinics to expand access to health care. Proposes to
seek voter approval to redirect existing tobacco tax
revenues away from existing programs to children's
coverage. Reduces Medi-Cal benefits to make them more
like what employed persons have in their job-based
coverage. Increases Medi-Cal provider rates over eight
years. Reduces regulation of carriers to allow greater
flexibility in the health insurance market.
iii) The Assembly Republican plan included 17 bills that
emphasized access to health savings accounts, decreased
regulation of insurers, fewer insurance mandates, a state
insurance exchange for individuals, and expanded state
tax deductions for medical expenses, and combined health
and workers compensation insurance policies. Eight of
these bills were not heard at the authors' request. Of
the remaining bills, two were passed by the Assembly, AB
1559 (Berryhill), which expands nursing education
programs, and AB 1304 (Smyth), which related to seismic
upgrades of hospitals.
1)AUTHOR AMENDMENTS . The author proposes to amend this bill in
Committee as follows:
a) To clarify contributions from cities and counties, on
page 32, lines 32-33, delete "city, and county health
programs" and insert "health programs, city and county
contributions as determined by the Commissioner pursuant to
subdivision (c) of section 140240".
b) To clarify that referrals will not be required for
routine vision care, on page 66, line 2, after "dentist"
insert "to see an ophthalmologist or optometrist for
routine vision examinations."
2)QUESTIONS AND COMMENTS .
a) After this bill is operative for two years, the
Commissioner is permitted to institute copayments and
deductibles that are limited to $250 per individual and
$500 per family.
i) To clarify that providers may be able to collect
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these from patients, on page 40, line 27, after "service"
insert "except for copayment and deductible amounts
specified by the Commissioner".
ii) The author should also specify whether the $250 and
$500 limits are intended to be the upper limit for the
deductible and copayment combined or whether they apply
separately to the deductible and copayment.
b) To clarify that providers may be compensated as
fee-for-service providers or as employees or contractors of
health care systems, on page 40, line 32, delete "salaried
providers in" and insert "providers employed by, or
contracted with, ".
c) To clarify that during the first six months of CHS'
operation, no copayment shall be required when a patient
sees a specialist without referral, if the patient had been
receiving care from that specialist prior to the initiation
of CHS, on page 66, line 12, after "referral" insert "or
copayment".
REGISTERED SUPPORT / OPPOSITION :
Support
California Nurses Association (sponsor)
California School Employees Association (sponsor)
California Teachers Association (sponsor)
Access to Independence
Alameda County Public Health Department
Alameda Health Consortium
Alameda-Contra Costa Transit District
Alliance for Democracy - San Fernando Valley Chapter
Alliance of Retired Americans - West Side Chapter Los Angeles
Altschuler Clinic - A Center for Weight Loss and Wellness
American Association of University Women
American Civil Liberties Union
American Federation of State, County and Municipal Employees
American Federation of State, County, and Municipal Employees
Retirees, Chapter 36
American Federation of Teachers California Federation of
Teachers
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American Federation of Television and Radio Artists
American Nurses Association California
Applied Research Center
Association of California Caregivers Resource Centers
Breast Cancer Action
Butte County Health Care Coalition
Board of Supervisors of Marin County
California Advocates for Nursing Home Reform
California Alliance for Retired Americans
California Association of Health Plans
California Association of Public Authorities for In-Home
Supportive Services
California Catholic Conferences
California Church IMPACT
California Faculty Association
California Federation of Teachers
California Foundation for Independent Living Centers
California Healthcare Institute
California Labor Federation
California Pan-Ethnic Health Network
California Physicians Alliance
California Professional Firefighters
California Public Health Association - North
California Public Interest Research Group
California Retired Teachers Association
California Senior Legislature - State of California
California Teamsters Public Affairs Council
Castro Valley Democratic Club - Resolution
Central Labor Council of Butte & Glenn Counties
City and County of San Francisco Department on the Status of
Women
City of Berkeley - City Clerk Department
City of Capitola
City of Santa Barbara - Office of the Mayor
City of Santa Cruz - City Clerk's Department
City of Santa Cruz - Mayor and City Council
City of West Hollywood - Resolution of the City Council
Coalition for Humane Immigrant Rights of Los Angeles
CoHousing Partners
Commission on the Status of Women
Committees of Correspondence for Democracy & Socialism
Communications Workers
Community Clinic Consortium
Community Collaborative for Youth
Community Homeless Alliance Ministry
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Congress of California Seniors
Consumer Attorneys of California
Consumer Federation of California
Consumers Union
Davis Joint Unified School District
Davis Office Systems
Dean Democratic Club of Silicon Valley
Democratic Action Club of Chico
Democratic Central Committee of Santa Barbara County
Democratic Club of Santa Maria Valley
Democrats of the High Desert
Demos Democratic Club of Hayward
Dental Health Foundation
Effective Assets
El Cerrito Democratic Club
Equality California
Family Resource Network of Santa Cruz County
First Congregational Church of Long Beach
First 5 Children and families Commission, Marin
Friends Committee on Legislation of California
Grass Valley Friends Meeting of the Religious Society of
Friends
Gray Panthers
Gray Panthers - Berkeley - East Bay
Greater Lodi Area Democrats
Green Party of California
Green Party of Alameda County
Green Party of Butte County
Health Access California
Health Care for All Californians
Health Care for All - Marin
Health Care for All - San Gabriel Valley
Health Care for All California - Santa Barbara
Health Care for All Santa Cruz City
Health Care for All Sonoma County
Health Care for All South Bay/Long Beach
Health Officers Association of California
Howard L. Berman - Congress of the United States House of
Representatives
Independent Employees of Merced County
Independent Living Center - San Gabriel Valley
Independent Living Sciences of Northern California
Insure the Uninsured Project
Interfaith Council of Contra Costa County
JERICHO
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Kramer Translation
Lake County Democratic Club
Lambda Letters Project
Latino Coalition for a Healthy California
Latino Health Access
Latino Health Alliance
Latino Issues Forum
League of Women Voters, California
League of Women Voters, Diablo Valley
League of Women Voters, Fremont, Newark, and Union City
League of Women Voters, Humboldt County
League of Women Voters, Long Beach Area
League of Women Voters, North and Central San Mateo County
League of Women Voters, Oakland
League of Women Voters, Palos Verdes Peninsula/San Pedro
League of Women Voters, San Joaquin County
League of Women Voters, Santa Barbara
League of Women Voters, Santa Cruz County
League of Women Voters, Southwest Santa Clara Valley
LifeLong Medical Care
Los Angeles Free Clinic
Los Angeles Unified School District
Lutheran Office of Public Policy - California
Manteca Democratic Club
Mexican American Legal Defense and Educational Fund
Mendocino Coast Democratic Club
Midway Democracy Club
National Alliance for the Mentally Ill - San Gabriel Valley
National Asian Pacific American Women's Forum
National Association of Broadcast Employees and Technicians
National Association of Social Workers (NASW)
National Association of Working Women
Newsom & Fitzpatrick Medical Group, Inc.
Oak Grove Educators Association
Oakhurst Democratic Club
Oakland Education Association
Older Women's League of California
Organization of SMUD Employees
Pacific Palisades Democratic Club
P-Conn-Tie Hot Ties
Planned Parenthood Affiliates of California
Planned Parenthood of Mar Monte
Planned Parenthood of San Diego and Riverside Counties
Planned Parenthood of Shasta-Diablo
Progressive Christians Uniting
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Rainbow Coalition - West Contra Costa
Richmond Greens Steering Committee
Sacramento for Democracy
Sacramento Japanese United Methodist Church United Methodist
Women
San Bernardino Public Employees
San Diego County Water Authority
San Francisco for California
San Francisco for Democracy
San Francisco Labor Council
San Joaquin County Commission on Aging
San Jose - Evergreen Community College District
San Luis Obispo County Employees Association
San Mateo County Central Labor Council
Santa Barbara Friends Meeting
Santa Rosa City Employees Association
Santa Clarita Valley $CV Clean Money for Better Government
Senior Advocacy Council
Service Employees International Union
Service Employees International Union, Local 1877
Service Employees International Union, United Healthcare
Workers
Sierra Friends Center
Sober Living Network
Sourcingmag.com
South Bay Center
South Hayward Parish
South of Market Project Area Committee
South Pasadena Activists
Southern California Public Health Association
State of California Commission on the Status of Women
St. Mary's Center
Stockton Unified School District
Strawberry Creek Lodge Tenant's Association
Sutter County Democratic Central Committee
Torrance Democratic Club
UE Western Regional Council - United Electrical, Radio and
Machine Workers of America
United Electrical, Radio and Machine Workers of America, UE
Local 1421
United Food and Commercial Workers Union
United Nations Association - USA & UNESCO Santa Barbara County
Chapters
United Nurses Association of California/Union of Heath Care
Professionals
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United Methodist Women
Valley Interfaith Council, Board of Directors of San Fernando
Valley
Valley Women's Club
Wellstone Democratic Renewal Club
West LA Democratic Club
Western Center on Law and Poverty
Western States Council
Women For: Orange County
Women's Foundation
Women's International League for Peace and Freedom
Women Organized to Win
Opposition
America's Health Insurance Plans
Association of California Life & Health Insurance Companies
Blue Cross of California
Blue Shield of California
California Association of Dental Plans
California Association of Health Plans
California Association of Health Underwriters
California's Benefits Specialists
California Chamber of Commerce
California Family Council
California Farm Bureau Federation
California Healthcare Institute
California Manufacturers & Technology Association
California Medical Association
California Resource Institute
California Right to Life Committee, Inc.
Cal-Tax
Capitol Resource Institute
Greater Riverside Chambers of Commerce
Health Net
Howard Jarvis Taxpayers Association
Insurance Brokers and Agents of the West
Kaiser Permanente
National Association of Insurance and Financial Advisors of
California
National Federation of Independent Business
Modesto Chamber of Commerce
Thousand Oaks-Westlake Village Regional Chamber of Commerce
United Chambers of Commerce of the San Fernando Valley
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Analysis Prepared by : John Gilman / HEALTH / (916) 319-2097