Thursday, April 22, 2010

California Health Care Bills Pass Legislative Hurdle

The Senate Health Committee yesterday passed out two bills that will help implement federal health care reform at the state level. They are the California Senate’s first measures to address the skyrocketing rate increases in the individual health insurance market (SB 890), and establish a health care exchange (SB 900).

SB 890 would stabilize the individual health insurance market and help Californians buy the best type  of insurance suited to their needs. It would also be broader in scope than the recently enacted federal law.

By standardizing the individual insurance market, SB 890 would allow consumers to clearly compare health plans based on similarity, coverage and price. Currently, anyone who wants to purchase an individual insurance policy is presented with more than 100 options, causing confusion and making it almost impossible to make an appropriate choice.

Consumers would be given the freedom for the first time to switch to an equal or lower priced plan after one year, either within their health plan or to another health plan. Currently, consumers can only switch plans after 18 months, and only within their plan.

SB 900 would establish the California Health Insurance Exchange. A main feature of federal health reform legislation is the establishment a state level health insurance exchanges that will enable individuals to comparison shop for health coverage, facilitate their enrollment in coverage, and administer tax subsidies for low- to moderate-income people.

SB 900 would require insurers to offer five plan levels -- Platinum, Gold, Silver, Bronze and Catastrophic. This would give people a broader choice of individual plans that is more extensive than federal law, which only requires plans to offer a Silver and Gold plan.


  1. Do you know the target start date? Thanks, Joe D

  2. SB 890:

    The bill would require plans to, on and after July 1, 2011, discontinue
    offering and selling benefit plan designs other than the standards benefit
    plan designs, but would require plans and insurers to renew benefit
    plan designs issued prior to that date until July 1, 2012.

    The bill would require the commission to develop a standardized
    enrollment questionnaire to be used by all plans and insurers when
    offering and selling individual coverage, but would prohibit plans and insurers
    from requesting or obtaining health information from applicants
    eligible for guaranteed issuance of coverage on and after January 1,

    This bill would require health insurance policies issued, amended, or
    renewed on or after January 1, 2011, to provide coverage for medically
    necessary basic health care services, as defined, and would prohibit
    those policies from imposing annual or lifetime limits on basic health
    care services.

    SB 900

    Existing law, the federal Patient Protection and Affordable Care Act,
    requires each state to, by January 1, 2014, establish an American Health
    Benefit Exchange that makes available qualified health plans to qualified
    individuals and qualified employers, as specified, and meets certain
    other requirements. Existing law provides for the licensure and
    regulation of health care service plans by the Department of Managed
    Health Care and the regulation of health insurers by the Department
    of Insurance. Existing law creates the California Health and Human
    Services Agency, which consists of various departments.
    This bill would establish the California Health Benefits Exchange
    (the Exchange) within the California Health and Human Services
    Agency and would require the Exchange to, among other things,
    implement specified functions imposed by the federal Patient Protection
    and Affordable Care Act in a consumer-friendly manner, enter into
    contracts with health care service plans and health insurers seeking to
    offer coverage in the Exchange, and provide a choice in each region
    of the state between 5 levels of coverage, as specified. The bill would
    authorize the Exchange to take other various actions and would require
    the Exchange to be governed by a board composed of an unspecified
    number of members appointed by the Governor and the Legislature in
    an unspecified manner. The bill would create the California Health
    Benefits Exchange Fund in the State Treasury and would authorize the
    board to use moneys in the fund, upon appropriation by the Legislature,
    for purposes of these provisions.