Agents Call for Changes to ABX1-1

Two of California’s largest insurance agent organizations have combined forces to seek urge the State Senate to amend Assembly Bill X1-1, the health care reform package produced by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez. Passed by the Assembly on December 17, 2007, the legislation is scheduled for a hearing before the Senate Health Committee on January 16th.  Governor Schwarzenegger and Speaker Nunez have already started the process of qualifying the ballot measure needed to finance the bill’s provisions. ABX1-1 takes effect only if the funding initiative gains voter approval. It is expected to be on the November 2008 ballot.

The California Association of Health Underwriters (CAHU) and the National Association of Insurance and Financial Advisors-California (NAIFA-California) asked Senators to “take the time to get the legislation right.” Noting the compleixity of revamping the state’s health care system, the agents issued a statement claiming “Comprehensive health care reform is too important, and the stakes for Californians are too high, to push this legislation through without needed changes.”

Agents are asking for changes to how a state-run purchasing pool would operate. Of specific concern is the bill’s driving of residents receiving a tax credit to subsidize their premiums into the pool. Agents want there to be a level playing field. “The state doesn’t require food stamp recipients to shop only at government-run grocery stores. Similarly, Californians receiving tax credits to help pay premiums should not be forced to shop only at a government-run health insurance store.”

The agents are also urging Senators to define the minimum benefits package all residents would need to obtain. Additionally, agnts are asking the Senate to confirm the financing mechanism will actually meet the funding needs of the reform package. Specifically, they express the concern that a substantial portion of funding relies are tied to payroll taxes. Agents noted that wages don’t increase at the same rate as medical costs, meaning, over time, the financing will be inadequate to cover state health care obligations.