Los Angeles, CA — A joint health care proposal announced today by California Assembly Speaker Fabian Nunez and Senate Leader Don Perata is an improvement because it no longer requires individuals to buy private coverage, but the joint measure still does not ensure that health coverage will be affordable to consumers and businesses.
“Today’s version is better than previous bills that would have required individuals to buy private health insurance but it still fails to rein in the insurance industry excesses that make health care unaffordable for millions of Californians and their employers,” said Jerry Flanagan of FTCR. “If the Legislature and the Governor are unwilling to implement real reform by extending Medicare-style coverage to everyone, any reform at a minimum must guarantee access to coverage regardless of past health conditions, regulate what insurers are allowed to charge, cap out-of-pocket costs, and provide access to the same coverage legislators receive.”
Affordability. Insurance premiums are increasing two to three times faster than medical costs because insurers are keeping more of our money for overhead and profit. A reform plan must fairly limit what insurers can charge for coverage and require them to defend their increases just as auto, home and many other insurers currently do. Assembly Dave Jones (D-Sacramento) has proposed such regulation in AB 1554 which recently passed the Assembly.
Guaranteed Issue. The new bill would allow health insurers to refuse to sell coverage at any price to individuals with serious illness, a category that insurers will help define and could end up including many minor conditions or past illnesses. The only options for those individuals would be a high-risk state pool that currently charges more and offers less coverage. Governor Schwarzenegger has said he would support a plan that requires insurers to sell coverage to all Californians.
Junk Insurance Ban. Some bare-bones coverage currently sold as “insurance” does not cap out-of-pocket costs (co-pays and deductibles) leaving patients with hundreds-of-thousands of dollars in medical bills when they get sick. Annual out-of-pocket costs must be capped at $7,500 for individuals and $10,000 for families.
Community Rating. Self-employed people and other individuals who buy coverage do not have the same protections provided to small employers with 2 or more workers. Such protections limit insurers to base rates only on broad age categories, geographic regions, limited categories of family status, and bar insurers from charging more based on pre-existing medical conditions.
Comprehensive Coverage. The new bill would require health plans to offer 3 “uniform benefit” insurance policies with little guarantee of access to basic necessities like disease prevention, prescription drugs, and treatment for chronic diseases. FTCR has advocated for allowing all Californians access to the same nonprofit comprehensive health coverage available to the Governor and legislators through the California Public Employees Retirement System (CalPERS).
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FTCR is California’s leading public interest watchdog. For more information, visit us on the web at www.ConsumerWatchdog.org.