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Think Tank

California Lawmakers Considering Separate Marketplace for Vision Insurance

The California Legislature is considering a plan to establish a statewide marketplace for vision insurance that would be separate from but linked to Covered California.

AB 1877, by Assembly member Ken Cooley (D-Rancho Cordova), calls for the state to create a vision care access council that would contract with insurers to provide stand-alone coverage for vision care. The council and its processes would be modeled after the state’s new health insurance exchange and would seek to establish links to Covered California.

Now before the Senate Appropriatons Committee, the bill calls for funding for the new exchange to come from vision insurers, not the state.

We asked stakeholders about the pros and cons of Cooley’s proposal. We got responses from:

Re-Opening Door to Vision Coverage

AB 1877 is an important piece of legislation to ensure that newly insured Californians have access to a vital aspect of health care — vision care. To facilitate access to vision care plans by persons who desire such coverage, AB 1877 is drafted to integrate closely with Covered California while remaining separate and distinct as required by federal law.

In 2012, Covered California recognized the importance of stand-alone vision plans for both adults and children as an opportunity to increase utilization and emphasize preventive care. Covered California adopted policies to allow stand-alone vision care plans to be offered as supplemental benefits through the health care exchange.

Unfortunately, federal guidelines published in March 2013 prohibit state-based exchanges from directly offering ancillary insurance products, like adult vision care, unless certain conditions are met.  Specifically, this guidance stated that these products can only be offered by separate state programs that share resources and infrastructure with a state exchange. These restrictions forced Covered California to reverse course and remove stand-alone vision coverage from the exchange market, as well as require pediatric vision coverage to be offered only through full-service plans. Without AB 1877, Covered California consumers do not have access to a competitive platform to purchase affordable, stand-alone, adult or family vision coverage.

AB 1877, the California Vision Care Access Council Act, will open admission to vision care products in conformity with the most updated federal guidance. The bill creates the California Vision Care Access Council (VCAC) as a separate and distinct program under the governance structure of the California Health Benefit Exchange. The VCAC will be funded solely through voluntarily participating California vision health care plans. Additionally, it assigns the VCAC the job of linking Covered California consumers to a state-hosted marketplace for affordable, unsubsidized vision care coverage. AB 1877 establishes specific standards and requirements for carriers who seek to participate in the vision care marketplace. Under this bill, the VCAC will continuously review and monitor providers to ensure participating carriers are in compliance with their responsibilities and requirements.

AB 1877 will re-open the door to adult vision care products for those seeking them by establishing a structure which conforms to the newly enunciated federal guidance.

Bill Could Duplicate Coverage, Premiums

The statewide marketplace for vision insurance envisioned by AB 1877, authored by Assembly Member Ken Cooley (D-Rancho Cordova) has the potential to improve access to various “stand alone” vision plans. To the degree the California Vision Access Council that would be created would do that, we support the effort.

However, a fundamental flaw with this concept that our organization wrote about in a California Healthline “Think Tank” nearly two years ago remains unaddressed. The stumbling block is the fact that two 2012 bills — AB 1453 (Bill Monning, D-Carmel) and SB 951 (Ed Hernandez, D-West Covina) established the minimum “benchmark” for essential health benefits as the Kaiser Foundation Health Plan Small Group HMO 30 plan.  Although not obvious without drilling down in its details, that plan includes coverage (without copayment, no less) for the eye examination services a stand-alone plan typically provides. Indeed standard medical insurers must provide this coverage and are unable to divest themselves of the responsibility.

Therefore, those insurers must reasonably receive and control the related premium and, if applicable, any federal subsidy, meaning if people were to enroll in a stand-alone plan in addition to health insurance that is now required by law, they would be duplicating — and paying duplicate premiums for — those examination services.

It’s actually worse for children. On top of the eye examination services covered by medical insurance, the “benchmark” plan for the pediatric vision benefit also requires coverage for glasses and contact lenses. So a stand-alone plan in this case would wholly duplicate already covered services.

Lawmakers need to work on an exception that allows voluntary refusal of vision coverage from standard medical insurance along with an exemption from the related premium that permits Covered California to divide any subsidy that goes toward the related premium (assuming that would not conflict with any CMS guidance or regulations). Unless and until that exception is established, creating the California Vision Access Council would put the state in the position of giving a “patina of credibility” to a process that encourages citizens to pay extra for something for which they have already paid. That probably isn’t something the state wants to do.

Having acknowledged the potential benefits of the outlined program at the outset, however, we remain hopeful the needed changes can be made and the “vision” of Assembly member Cooley for this marketplace can be achieved in a way that will maximize its likelihood of success.

Vision Care Essential for All Californians

While many preventive services are now considered essential and available to insured Californians, there’s a glaring omission under Covered California. Eye exams are a proven preventive health measure that can help improve health outcomes and control health care costs, yet adults who select coverage through the state’s health care exchange don’t currently have access to vision care plans. That’s especially surprising for parents who purchase through Covered California since vision care is included as an essential health benefit for children.

For many adults, an eye doctor is the only health care professional they see each year. Because of this, in addition to protecting your vision and eye health, eye doctors are often the first to spot signs of chronic health conditions, including diabetes 34% of the time, high blood pressure 39% of the time and high cholesterol 62% of the time.

A recent study conducted by HCMS Group showed that patients whose conditions were detected through an eye exam visited the emergency room less frequently, were less likely to be admitted to a hospital for their condition and required fewer medications to control their condition, improving their well-being and reducing their health care costs.

Further, since productivity losses related to health problems cost U.S. employers $1,685 per employee per year, early detection also is a vital economic incentive.

It’s clear that a solution is needed to close this vision care coverage gap for adults.

Assembly Bill 1877, proposed by Assembly member Ken Cooley, would create a web portal linking Covered California enrollees to vision care plan options. Colorado and Hawaii already have made a link to this coverage available on their exchanges, and Californians deserve the same access to critically needed eye care.

There would be no cost to state taxpayers for the program, and it would give hundreds of thousands of California adults the opportunity to purchase an affordable vision plan. In fact, AB 1877 would likely save the state money through earlier detection of chronic health problems. 

It is a worthy solution that deserves attention.

Optometrists Support Better Access to Coverage

When they return to session this week, state lawmakers will consider AB 1877, which would establish the California Vision Care Access Council within state government. The bill would require the council to establish a marketplace for the purchase of vision plans through Covered California. The California Optometric Association supports AB 1877 because it is good for the public.

California has an interest in ensuring its citizens have access to eye exams and glasses because simply stated — if an individual cannot see clearly, it can impair their ability to work, drive or read. Poor vision greatly hinders a person’s ability to live a productive and successful life. Additionally, eye exams are an important screening tool for systemic diseases like diabetes, high blood pressure and high cholesterol. Early detection of these conditions saves money and lives.

AB 1877 is a step toward creating better access. The measure was recently amended to ensure the council also will be able to offer adult vision coverage provided by full-service qualified health plans that are already in the exchange. This will provide the important ability for doctors of optometry to treat a medical eye condition that is detected during an eye exam and help to quell what has become a serious and expensive problem of sending patients to multiple medical providers. As health care reform is fully implemented, we hope all health plans will cover the treatment of eye disease by doctors of optometry to improve coordination of patient care.

AB 1877 would move us toward better access to care for patients, which is a top priority for COA and its providers. However, we maintain that it is of critical importance that full-service health plans fully integrate optometric services to provide continuity of care inside and outside the exchange.