State Expansions: California
In December 2007, after nearly a year of tough negotiations to pass a comprehensive health reform bill, Governor Schwarzenegger and Assembly Speaker Fabian Nunez agreed on The Health Security and Cost Reduction Act (ABX1 1). On December 17, at the tail end of a special session, the California General Assembly passed the bill. The bill stalled in the Senate in mid-January.
If enacted, ABX1 1 would have:
- Expanded Medicaid (called Medi-Cal in California) for children, parents, and childless adults;
- Provided individuals and families with incomes up to 400 percent of poverty with subsidies and tax credits for private coverage;
- Created a statewide purchasing pool to bargain for employers and individuals buying coverage;
- Prohibited insurers from denying coverage to people based on their health status; and
- Required virtually all individuals to obtain health insurance coverage (with some exceptions for people who cannot afford coverage).
Proposed financing mechanisms for the plan included state and federal funds, an increase in the tobacco tax (by $1.50), a tax on hospitals, and an assessment on employers who do not offer health coverage to their employees (on a sliding scale from 1 to 6.5 percent of payroll). Advocates are looking to pass elements of the proposal this year, as a foundation for reform, and continue moving forward in the 2009-10 legislative session.
California is now facing a serious budget deficit and, unfortunately, has moved to cut Medi-Cal in significant ways. Medi-Cal provider reimbursement rates were cut by 10 percent, which may restrict access to health care services for many of the program’s enrollees. For more information on the budget’s impact on health care programs in California, see Health Access California’s Analysis: 2008-09 Health Services Budget.
However, many positive steps to reform health care remain on the legislative agenda. The Senate will consider a bill (SB 1440) that will require insurers to spend $0.85 of every dollar they collect in premiums on patient care, and another bill (SB 1522) that will standardize private insurance products and create a minimum standard of coverage. Assemblymen have also introduced bills to respond to the problem of insurers revoking private coverage from policyholders: AB 1945 would require insurers to obtain state regulators’ approval before rescinding a policy.
In the meantime, implementation of the Healthy San Francisco plan is moving forward. The plan to cover all uninsured people in the city is funded in part by assessments on employers. Local employers filed suit against the city, alleging that the law violates ERISA, but the most recent court decision has allowed the city to go forward with the plan, including the collection of employer contributions. For more information, see Appeals Court Says San Francisco’s Pay or Play Law Can Go into Effect (Families USA, January 2008).
California Expansion Resources
California in the News
- California Legislature Enacts No Major Health Care Overhaul but OKs Some Key Changes (Los Angeles Times, September 4, 2008)
- Health Insurance Bills Head to Governor (San Francisco Chronicle, September 4, 2008)
- Thousands of California Children Are in Danger of Losing Health Insurance (Los Angeles Times, August 24, 2008)
- Medi-Cal Cuts Would Raise Other Health Costs, Study Finds (Sacramento Bee, August 15, 2008)
- Health Insurance Ambition Narrows (Los Angeles Times, August 4, 2008)
- Private Hospitals Join San Francisco Health Care Plan (San Francisco Chronicle, July 11, 2008)
- Healthy San Francisco Still Working out Kinks (San Francisco Chronicle, July 2, 2008)
- Healthcare Groups Turn against Schwarzenegger Budget Plan for California (Los Angeles Times, June 26, 2008)
- California legislators revive plans to expand healthcare insurance (Los Angeles Times, June 3, 2008)
- 1,200 people to have canceled healthcare coverage restored (Los Angeles Times, May 16, 2008)
- Lessons From California (The American Prospect, April 21, 2008)
- 26 to get back health coverage taken away (San Francisco Chronicle, April 18, 2008)
- Anthem Blue Cross sued over rescissions (Los Angeles Times, April 17, 2008)
- Report critical of Schwarzenegger’s plan on Medi-Cal re-enrollment (Sacramento Bee, April 17, 2008)
- State drafts rules to regulate emergency room payments (Los Angeles Times, April 1, 2008)
- Top U.S. court backs S.F. health care (San Francisco Chronicle, February 22, 2008)
- State analyst offers own formula to target budget shortfall (Los Angeles Times, February 21, 2008)
- Governor to sign $1 billion in cuts: Medi-Cal patients, schools, agencies take biggest hit (San Diego Union-Tribune, February 16, 2008)
- California Senate Panel Rejects Health Coverage Proposal (New York Times, January 29, 2008)
- State budget woes, health care expansion on lawmakers' agendas (Associated Press, January 13, 2008)
- Judges Tell San Francisco It Can Begin Health Plan (New York Times, January 10, 2008)
- Núñez Bids $2-a-Pack Cigarette Tax to Pay for Health Care (San Francisco Chronicle, November 6, 2007)
- Schwarzenegger, Democratic Leaders Close to Deal on Health Care Reform (San Francisco Chronicle, September 23, 2007)
- Poll Shows Strong Support for Schwarzenegger’s Health Care Plan (San Francisco Chronicle, September 21, 2007)
- Special Sessions Ordered (Sacramento Bee, September 12, 2007)
For general resources on state expansions, see Other Resources.
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