Geographic Regions Set at Six, But Only for Now

Floor votes in the Assembly and Senate yesterday approved the first bills of the special session on health care. The bills would eliminate pre-existing conditions as a means for denying health insurance coverage. They also would establish new geographic rating regions to help determine variable rates by area in California, one provision in the bills that recently has become contentious.

The Assembly passed ABX1-2 by Assembly member Richard Pan (D-Sacramento) on a 53-25 vote. The Senate passed its version of the bill, SBX1-2 by Ed Hernandez (D-West Covina), where the vote was 26-10-1.

Most of the objections raised yesterday on the Senate and Assembly floors to the two bills came from Republicans who oppose the Affordable Care Act. No one raised objections to the number of geographic rating regions, but that’s one detail in both bills that’s still wide open to change.

The bills call for six geographic rating regions now, expanding to 13 regions in 2015. Neither of those numbers march up exactly with the 19 regions favored by insurers and the exchange, nor the 18-region plan proposed by the Department of Insurance. But that may change soon.

Right now the federal government guidance is for a maximum of seven rating regions,” Hernandez said, adding that he expects that federal guidance to change soon, opening the door to a greater number of rating regions.

“And it looks like we are moving it up to the 19 regions,” Hernandez said. “This will all come back in concurrence.”

The California Association of Health Plans and the Department of Insurance have taken an oppose-unless-amended position on the bills. A final decision on the rating regions could be made by the end of March and then amended into the bills.

Both floor votes followed party lines, with Republicans taking exception to the uncertain nature of the final bill language, and to the Affordable Care Act, in general.

“There’s been a lot of debate about this so-called Affordable Care Act,” said Assembly member Tim Donnelly (R-Twin Peaks). “Really it’s the Unaffordable Care Act. … Physicians take an oath to first do no harm. I believe this will do harm to every Californian.”

Assembly member Holly Mitchell (D-Los Angeles) said that criticism might be a little broad.

“I often stand in front of this body and find myself saying the same thing,” Mitchell said. “We should focus on what this bill actually does.”

What it does primarily, according to bill author Pan, is align state law with federal law by eliminating pre-existing conditions for coverage denial.

Pan said changes in the long run will help curb the cost of medical care.

“People are using the system now. People do get sick, and when they don’t have coverage, they often wait to get care, and it’s often more expensive care,” he said. “That [high cost] is already in the system. By getting them coverage, we’re hoping to save that money.

“We’re getting them the care that’s needed and that will save their lives,” Pan said, “but also in the long run, we’re lowering those costs, and bending the cost curve.”

SBX1-2 now heads to the Assembly and ABX1-2 goes to the Senate.

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