Speaker of the Assembly Fabian Nunez On the Assembly Passed Health Care Reform Bill6 min read



I first unveiled a health care reform plan one year ago today. It’s been a long struggle with a lot of input and intense discussions with stakeholders across the spectrum. It was a huge undertaking to reach the historic vote taken in the Assembly this week, and while I understand several contributors on this site will never like any reform plan that isn’t single payer, the progressive community deserves to hear the reasons I think AB 1×1 deserves widespread support.

Let’s start with basic principles: Everyone should have insurance – and no one subject to a mandate should be denied by any insurer. Most of the uninsured are working people who can’t afford it – we’re making it affordable to them. We’re also helping out people in the middle who are struggling paying for their insurance. Of course, there will be back and forth over details – this is a complicated proposal after all. But we cannot forget that people are suffering now, and we need to help them. Portraying serious reform as “Christmas for the insurance industry” or “Patriot Act-lite” does nothing to advance the major changes that must be made. We don’t have the opportunity every day to change people’s lives for the better and we don’t have a lot of days to wait this time.

The Health Care Security and Cost Reduction Act and a companion statewide initiative anticipated for the November 2008 ballot will significantly reduce the numbers of the uninsured through public program expansions and increased employer participation in the health care of workers. This bill will organize and improve the health insurance market for individuals, advance innovative strategies to reduce health care costs and improve quality. The bill will also protect California’s budget through dedicated revenues that make the proposal self-financing.

Now, some specifics:

Once this proposal is implemented, 71% of California’s 5.1 million uninsured — most of whom are low-income working individuals and their families — will no longer be uninsured for health care. That includes 800,000 children.

• We establish a state-administered health care purchasing program to be administered by MRMIB.

• We ensure that California businesses compete on a level playing field by placing on the November ballot the requirement that all employers meet a minimum spending level on health care for their workers.

• We require every California resident to have and maintain health care coverage and we provide a combination of public program expansions, subsidies, tax credits and other tax breaks to make the coverage affordable.

I want to take a minute to emphasize affordability protections because I know those are of particular concern. The Act’s affordability protections include:

• Expansions of eligibility for public coverage so the lowest income Californians will have coverage with little or no cost sharing.

• Moderate income families without employer sponsored coverage will have access to refundable tax credits.

• We state legislative intent to authorize tax credits for early retirees between the ages of 50 and 64 and budget an extra $50M to pay for it.

• Employers will be required to establish Section 125 tax-free accounts so that employees can pay for health benefits on a pretax basis.

• We exempt low income people from the individual mandate entirely if they can’t get into subsidized coverage.

• Anyone, regardless of income, can seek a temporary or permanent exemption from the individual mandate based on hardship and affordability through the MRMIB.

Contrary to claims from organizations with their own agendas, AB 1x does make serious changes in the way insurance companies do business.

• We require every health plan and insurer in the state to accept anyone subject to the individual regardless of their health status or claims history.

• Carriers will be obligated to spend at least 85 cents of every premium dollar collected on health care and health benefits.

• Regulators will establish five coverage choice categories for all individual market products and carriers will have to offer benefits in each category.

• There will be one standardized HMO and one standardized PPO product in each coverage choice category so consumers can make “apples to apples” comparisons.

Other cost containment elements include programs to improve the prevention and management of high cost and chronic diseases, expanded use of electronic records and methods to reduce paperwork, limit medical errors and improve the quality of health care delivery, and comprehensive, system-wide accountability and transparent public reporting of costs and quality for all elements of the health care system, including hospitals, physicians, health professionals and health plans.

One of my top concerns during negotiations was to ensure the stability and viability of California’s safety net. In fact, we enhance it. Safety net protections include:

• A Medi-Cal rate increase to public, private and district hospitals of over $2.3 billion which will continue to grow over time.

• Counties with public hospitals will be able to keep a stable population bu developing a local coverage option for newly covered low income adults providing their health care through county and community clinic delivery systems.

• At full implementation, community clinics will receive an additional $140 million to support clinic visits for any remaining uninsured persons.

There have been on these pages charges that the financing for the plan is murky or hidden. Untrue, and somewhat frustrating when it comes from supporters of SB 840, which has no financing plan at all.

AB 1×1 has a specific financing proposal accompanying the bill. Through a companion ballot initiative anticipated for November 2008, this reform package ensures that adequate financing is in place before the reforms take effect in 2010 and that the entire package will be self-sustaining through dedicated revenues. The total financing package includes: employer and employee contributions, an across the board fee on hospital services, increased tobacco taxes, additional federal funds, and revenues returned to the state by counties for those low-income persons newly enrolled in coverage and no longer in need of county funded health care services.

It’s ironic that no move toward universal health care will ever win universal support. But this bill deserves the widest possible support. This is a far reaching bill that not even progressive Democratic governors are advancing in their states.

Of course health care is not our only challenge. It is also imperative to address the state’s budget imbalance. But the way AB 1x is funded we can tackle health care without limiting our ability to address the budget imbalance. Letting health care get worse does nothing to make the budget better.

I hope this summary is helpful in outlining the nature of our bill. Of course, the full story is available in the bill and analysis on the Assembly website. I do understand that no answer or fact will satisfy some who are willing to go through any number of intellectual contortions to suggest that the language doesn’t say what the language does. To them I can only say it would be a shame if disappointment over the chances of single payer (and I’m a supporter of single payer) detracted from the opportunity we have to do a strong measure of good for the millions of Californians who don’t have, or are having trouble affording, health care. A plan for San Francisco is one thing. A plan for Santa Monica is one thing. A plan able to get signed into law and get voter support for its funding is quite another. And that’s the remarkable success we’ve been able to achieve after a long and serious year of effort.


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