Health Insurance Bills Head To Governor

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A significant number of health care bills is headed to the governor’s
desk, but industry watchers say the changes promised in the proposed
legislation are a far cry from comprehensive policy reform.

Under the proposals passed over the weekend by state lawmakers,
people would see greater protections if their health insurer
retroactively canceled their coverage, and doctors would be prevented
from charging patients for unreimbursed emergency-room treatment.

Health insurers would be required to devote 85 percent of their
premium dollars to medical care, as well as provide maternity and
broader mental health coverage.

Some elements of the bills echo Gov. Arnold Schwarzenegger’s 2007
broad overhaul proposals, which failed in the Legislature early this

"Despite the stalling of health care reform, we have taken some
major steps this year. It’s pretty clear the governor will sign some
and veto others," said Anthony Wright, executive director of Health
Access, a health care consumer advocacy coalition.

The Republican governor’s camp was less generous, saying that
Schwarzenegger has denounced a piecemeal approach to revamping the
state’s health care system.

"The Legislature has failed for a second year in a row to address
the crisis in our health care delivery system," said Daniel Zingale,
senior adviser to the governor, adding that lawmakers failed to propose
industry changes Schwarzenegger championed and modified bills in ways
that might make them less likely to get his signature.

For example, Zingale said, the governor supports an outright ban on
what is called balanced billing – when patients are billed for the
disputed difference between what doctors charge and insurers pay – but
disagrees with the portion of the balanced billing legislation by
Senate President Pro Tem Don Perata, D-Oakland, that establishes a
minimum physician payment rate.

Schwarzenegger, who has vowed not to sign any bills into law until
the Legislature passes a budget, has until Sept. 30 to sign or veto any
bills sent to his desk, or they automatically become law. The governor
has said he will veto bills, even without a budget, to prevent that
from happening.

A bill to require insurers to spend at least 85 percent of premium
revenue on patient care also was a key part of Schwarzenegger’s failed
overhaul effort.

But it’s unclear whether the governor will sign the bill without
other elements in his overhaul package, such as a requirement that all
Californians have health insurance. "The governor has said in the past
he didn’t want to do this in piecemeal fashion," Zingale said.

Insurers strongly oppose the medical-cost-ratio bill by Sen. Sheila
Kuehl, D-Santa Monica, arguing that it doesn’t address the problem of
rising medical costs and could even increase premiums.

And a bill for single-payer universal health care, also by Kuehl, is
all but assured a veto. Also likely to be vetoed, based on the
governor’s history, are bills that require insurers to provide
maternity benefits and expand the range of mental illnesses that must
be covered.

Consumer groups were more encouraged by the legislation and the protections the measures could provide.

"There’s a range of bills on the governor’s desk, from significant
protections to more moderate proposals. As a group, they represent a
significant step forward in health care reform," said Jerry Flanagan, a
health advocate for Consumer Watchdog.

Flanagan’s group has pushed for a bill by Assemblyman Hector De La
Torre, D-South Gate (Los Angeles County), that would require insurance
plans to prove a member intentionally lied on an application before
retroactively revoking a policy, a practice known as rescission.

The California Association of Health Plans, which represents the
industry, has opposed the bill, saying the standard to prove members
willfully lied is impossibly high. While the governor has supported the
concept of the bill, Zingale could not say whether he would support the
legislation headed to his desk.

To governor’s desk

The following are some of the key insurance-related bills passed by the state Legislature and headed to the governor’s desk:

— AB1945 (Assemblyman Hector De La Torre, D-South Gate (Los Angeles
County)): Requires plans to prove a member intentionally lied on his or
her application before retroactively canceling a policy.

SB1440 (Sen. Sheila Kuehl, D-Santa Monica) Mandates that insurers spend
at least 85 percent of premium revenue on patient care, an effort
designed to reduced profit and overhead.

— SB981 (Senate
President Pro Tem Don Perata, D-Oakland): Prevents noncontracted
emergency-room physicians from billing patients for the difference
between their fee and what the patient’s insurance plan pays.

Source: Chronicle research

E-mail Victoria Colliver at [email protected].

Consumer Watchdog
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