Pre-Existing Condition Reform Passes Committee

The Senate Committee on Health yesterday passed SB 961 by Ed Hernandez (D-West Covina), which would change the individual health insurance market in California, in part by halting insurer denials based on pre-existing conditions. It is similar to a bill — AB 1461 by Bill Monning (D-Carmel) — approved by the Assembly health committee one day earlier.

Both measures are designed to conform to the federal Affordable Care Act, Hernandez said, in advance of many other states.

“While some of you may not support the Affordable Care Act, it is currently the law of the land,” Hernandez said yesterday in introducing the measure. “And California continues to serve as a model for the rest of the nation.”

About two million Californians currently are covered under individual plans, Hernandez said. “While California has a long history of consumer protection in the group markets, that has not been the case for the individual market,” he said. “This will affect plans both inside and outside the exchange. We have been working closely with Assembly member Monning as we move forward to reform the individual market.”

Opposition to the bill was mild. “We have an oppose-unless-amended position on the bill,” according to Nick Louizos, director of legislative affairs for the California Association of Health Plans. “I would like to say, it has been an open and fair process thus far. And generally our industry has not opposed bills to conform with ACA law.”

But insurers have a problem with a community rating system in the bill, Louizos said, if it is not tied to an individual mandate, which is currently being debated in the Supreme Court.

“States that have enacted similar legislation have seen negative impacts to their markets,” Louizos said. “If reform is going to succeed, healthy people have to buy coverage.” And that would be threatened if the Supreme Court invalidates the individual mandate, he said.

The bill was approved on a 6-2 vote.

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