Health Care Reform Bill Moves Forward, Compromise (Apparently) Doesn’t.

The Assembly Health Committee today passed ABX1-1 (Nunez), the Democratic Leadership’s health care reform plan, along to the Assembly Appropriation Committee while holding back the Republican reform package, ABX1-8 (Villines). It took nearly three hours and 60 witnesses to get to this preordained destination, but they got there.

That’s what happened legislatively, but politically there was lot more going on. For example:

1. While Speaker Fabian Nunez, the lead author of ABX1-1, committed to several changes to the bill, none seemed aimed at narrowing the gap with Governor Arnold Schwarzenegger. Instead they focused on concerns of his fellow Democrats, some technical issues, and even a broadly supported provision that was inadvertently left out of the bill. If progress towards a compromise with the Governor was moving forward, I would have expected to see more substantial changes.

2. The Governor sent a spokesperson from the Department of Health and Human Services to testify on the bills, not the Agency Secretary, Kim Belshe. The spokesperson spoke highly of the hard work and leadership shown by the Democratic Leadership. She praised some of the provisions in ABX1-1 that brought it closer to the Governor’s position than previous Democratic bills. Then she listed several concerns the Administration had with the bill, chief among them the broad exemption it contains from the requirement that all California residents have health care coverage. What was not given was a progress report on negotiations. Nor any enthusiastic statement that the parties were making terrific progress. Instead it sounded like substantial, difficult differences remain.

3. Speaker Nunez did succeed in rounding up most of his political supporters behind ABX1-1. This could not have been easy and is a testament to his political skill. While they expressed some reservations, it is clear that with some modest tweaking, Labor and it’s progressive allies will fully endorse the bill. However, they made very clear that they’d gone about as far as they could on some issues, especially the exemption from the requirement that all residents have health care coverage. This may indicate there’s not a lot more give in the Speaker’s position on an individual mandate. 

So, on one hand, the Governor’s spokesperson made clear the Administration considers the current exemption unacceptable. On the other hand, the Speaker’s allies made clear the current exemption was as far as they could go. What’s the sound of no hands clapping? I don’t know, but my guess is it doesn’t sound like victory.

Comprehensive health care reform is not dead (contrary to what I predict will be the tone of most news articles tomorrow). The political gain to the Governor and the Democratic Leadership from reaching a deal is enough to keep things moving forward for weeks, if not months.

Yes, a health care reform bill moved forward today. However, I don’t think the chances of comprehensive health care reform did.

Legislative Analysis of ABX1-1 and Running Notes on the Hearing

The Assembly Health Committee is underway. For those who might be listening I thought you might like to see the analyses of the bills prepared by the Committee’s staff. Here is the ABX1-1 (Nunez) Staff Analysis  and the ABX1-8 (Villines) Staff Analysis. (As a reminder for those without a program, ABX1-1 is the Democratic Legislative Leadership’s health care reform plan and ABX1-8 is the package put forward by the Assembly Republican Caucus.

What follows are notes and observations I’m posting during the hearing. I’ll write more about the meaning of what’s happening in a later post.

3:10:As was pre-ordained, the legislation is going to pass. The Committee is hearing witnesses on the bill now, but it’s clear this is a formality. In fact, it sounds like many of the Comittee members have left the room, leaving a smaller group of Legislators to hear testimony from the public. So far it appears the only amendments being made are fairly technical in nature which would suggest more negotiations will be required.

3:30: A win for Speaker Nunez: a lot of consumer groups and unions are lining up behind ABX1-1 (not all of them, but the majority). There was some question as to whether Labor and their allies would support the bill. It appears they are, although most are calling for amendments to, among other things, better define minimum coverage, warn against tightening the exemption to the requirement that all Californians obtain health care coverage, and the need to clarify how the state will pay for the reforms. There are other concerns being expressed (for example, broadening eligibility to enroll in the purchasing pool), but the key news here is that the Speaker’s supporters have not deserted him.

One other interesting element: it appears the assurances the California Hospital Association negotiated with the Governor in exchange for their support of a four percent tax on hospital gross revenues are not in ABX1-1. So there’s still some drafting to do on that account or the hospitals will pull their support. This would make it much more difficult to pass the bill this month and the financing initiative next November. 

3:40: The spokeswoman for the Department of Health and Human Services just testified representing the Administration. While praising several elements of the bill she did express several “significant” concerns. Her strongest language focused on the exemption to the mandate that individuals buy coverage. She described it as undermining the mandate and pretty much called it unacceptable Clearly, the Governor is not on board with ABX1-1.

3:50: Blue Shield’s spokesperson noted that, while the industry supports efforts to make improvements, the changes Committee is considering are dangerous. He only had time to give one example: guarantee issue will only work in conjunction with a strong, effective mandate to purchase coverage.

 4:00: An Association of California Life and Health Insurance Companies spokeswoman opposed the bill for a long laundry list of reasons. She asked the Committee to remove the small group reforms which are in ABX1-1, but not in the Governor’s proposal. She noted the required Medical Loss Ratio provision is drafted in a way which would be disastrous for the marketplace, again recommending the bill be amended to accept the Governor’s approach on the issue. She also warned against giving the state-run purchasing pool in the marketplace. There was more, but I couldn’t keep up. I’ll try to find something on their web site and post it later.

4:15: The Blue Cross spokesman only had a minute to explain why they opposed the bill. The only points he was able to make is that, if ABX1-1 were to pass, 892,000 of Blue Cross’ individual members would face substantial rate increases due to the bills ineffective enforcement of the requirement residents have health care coverage. He also said more than 500,000 of their individual members would have to change health plans as their current coverage would be unlikely to meet the definition of acceptable minimum coverage. A short time later the Kaiser Permanente spokesman stated that ABX1-1 exempts roughly 50 percent of the individual market from the mandate to buy coverage. (I think I heard that right). He recommended California consider an exemption more along the lines of that enacted in Massachusetts.

4:20:After 60 visits the Committee passed ABX1-1 on a party line vote. The bill will now move on to the Appropriations Committee. The Committee is now listening to a presentation on ABX1-8 (Villines), the health care reform plan put forward by the Assembly Republican Caucus.

4:45: The Assembly Republican bill is being strongly attacked most often along three main lines: 

  1. ABX1-8 permits out-of-state carriers to sell in California. Critics point out these carriers would not need to meet California regulations, putting in-state carriers at a disadvantage and endangering California consumers;
  2. AX1-8 promotes HSAs in several ways. Critics contend HSAs, as high deductible plans, results in consumers failing to obtain preventive care. (Clearly the HSA community has some educating to do.)
  3. AX1-8 allows carriers to offer mandate free plans. Critics claim these mandates are important and should be required.

4:50: ABX1-8 just failed to pass the Committee, effectively killing the bill.

So that’s the way it went. No surprises. And not much progress as I’ll discuss in a later post.

California Health Care Reform: Online

Everything related to health care reform is subject to change. However, there’s a couple of critical events coming up and, I believe, there’s a way to listen in on what’s happening online and in real time:

The Assembly Health Committee will hear ABX1-1 (the Democratic leader’s proposal), ABX1-2 (the Governor’s plan) and ABX1-8 (the Assembly Republican’s offering) on Wednesday, November 14th beginning at 1:30 pm. I believe you’ll be able to hear the session by going to the California State Assembly web site. Click on the “Broadcast Room List” (it’s under the state seal) and click on the Committee Room 4202 list. No guarantees it’ll be there, but that’s your best bet to hear what happens as it happens.

The Assembly will convene on Monday, November 26th, presumably to consider whatever comes out of the Assembly Health Committee. You can also listen to this session by going to the California State Assembly web site, clicking on the “Broadcast Room List”and then clicking on the “Assembly Chamber” link.

Stay tuned.