Health Care Costs, Expanding Coverage Expected To Figure in 2006 Legislative Session

As the curtain rises on a new legislative session in Sacramento this week, the players — all accustomed to a certain amount of improvisation along with the scripted parts — approach the new year with a little less than the usual amount of confidence in their ability to predict the outcome. Especially when it comes to health care legislation.

A few factors contribute to this new atmosphere. Gov. Arnold Schwarzenegger (R) will be trying to rebound from the defeat of ballot measures he supported in the November 2005 special election. His relationship with the Legislature — which ranged from wary to confrontational in the first part of his administration — will almost certainly change. That metamorphosis contributes to the sense of unpredictability.

Adding another element of uncertainty to the mix, this is an election year.

“There are a couple major issues that are fairly easy to identify in the next legislative session,” Dan Carson, director of the health division in the state Legislative Analyst’s Office, said. “How to deal with the uninsured and the hard to insure will continue to be a focal point as will the rising cost of health care. After that, there are probably a million smaller issues we could talk about, but those will be the biggies.”

Addressing Health Care-Related Costs

Among the bills addressing health care-related costs the Legislature is expected to consider in 2006 are three Assembly bills.

AB 75, by Assembly members Dario Frommer (D-Glendale) and Wilma Chan (D-Oakland), takes on new life after the twin failures of prescription drug relief initiatives in the November 2005 special election. Frommer and Chan propose a drug discount program that would help low- and moderate-income Californians without insurance, as well as those with high out-of-pocket costs.

AB 977, by Assembly member Pedro Nava (D-Santa Barbara), would require a public process for the Department of Insurance and the Department of Managed Health Care to review and approve out-of-pocket costs for consumers.

AB 774, also by Chan, would provide patients basic consumer financial protections and protect self-pay hospital patients from being charged more than insured patients.

Expanding Health Insurance Coverage

In addition, the Legislature is expected to consider bills to help expand health insurance coverage.

For example, SB 437, by Sen. Martha Escutia (D-Norwalk), is the second incarnation of the Healthy Kids bill that Schwarzenegger vetoed last year. Virtually identical to a 2005 bill by Chan, Escutia’s bill would expand and protect health insurance coverage for children, as part of an effort to ensure that every child in the state could be covered.

The governor has said that he agrees with the sentiment but that the state had no way to pay for it.

Accompanying SB 437 on its journey this year will be an ambitious tobacco tax ballot initiative, including a provision to provide funding for a statewide Healthy Kids program. The fate of SB 437 might be vitally linked to the tobacco tax initiative, which started out as two campaigns.

The California Hospital Association and the newly formed Coalition for a Healthy California first launched separate tobacco tax initiatives, each calling for a new surcharge of $1.50 per pack of cigarettes. Now, CHA and the coalition of eight groups ranging from the American Cancer Society to The Children’s Partnership, have agreed on a single proposal for a $2.60 surcharge. The money would provide health insurance for uninsured children, help counteract tobacco’s impacts on health care, especially by funding emergency departments and fund anti-smoking programs.

Moving into its second year, SB 840 by Sen. Sheila Kuehl (D-Santa Monica) would create a publicly financed universal health system. Although the bill is considered a long shot, at the very least it will raise the issue for debate in the Legislature and probably turn the heat up on the administration to come up with a plan of its own.

AB 711, also by Chan, would require the expansion of Healthy Families to cover parents of children covered by the program.

In addition, AB 1401, by former Assembly member Helen Thomson (D-Davis), might not come up until late in the year, but it probably will surface, especially if other how-to-handle-the-uninsured bills don’t make much progress. Passed in 2002 and ending in September 2007, the bill revised provisions of California’s COBRA regulations to allow for easier acquisition and longer retention of health coverage for people not covered by an employer.

“Although this one doesn’t sunset until 2007, I wouldn’t be surprised to see it back on the floor a year earlier,” Carson said.

Conferences Could Indicate Future Actions

Two statewide conferences are scheduled next month to help policy makers and business leaders get a sense of where health care issues are headed this year. First, CHA has invited Schwarzenegger as well as S. Kimberly Belshé, secretary of the Health and Human Services Agency, Sandra Shewry, director of the Department of Health Services; and David Carlisle, director of the Office of Statewide Health Planning and Development, to speak at its 2006 Health Policy Legislative Day on Feb. 22 in Sacramento.

Later that week, the University of California-Irvine‘s Paul Merage School of Business will host the 2006 Health Care Forecast Conference. Although national in scope, much of the 15th annual forecast conference will deal with implications for California of issues including the uninsured, rising costs and past and pending mergers of large health insurance companies.

Some of this atmosphere of uncertainty stems from anticipation. Many health care players are waiting for the Schwarzenegger administration to roll out its health care strategy for the state.

“The governor is on record as saying he’ll put something forth and I think most people are expecting it early in the year,” Carson said. “How all that plays out will have an impact on legislative decisions.”

Related Topics

Health Care Costs Insight Insurance Medi-Cal