The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Recent Amendments to AB 8

Posted by Alan on September 8, 2007

Assembly 8 (Nunez) is being amended to reflect the state of current negotiations continue between the Governor’s and Legislative Leadership’s staffs. The California Progress Report has an excellent summary of the bill written by Health Access Executive Director Anthony Wright.

Two of the most signficant changes to note concern affordability of coverage and expansion of small group health insurance reforms. Previously AB 8 required all employees of companies choosing to participate in the state-run California Cooperative Health Insurance Purchasing Program (Cal-CHIPP) to purchase coverage through the pool unless they were insured under another plan. The recent changes now enable an employee to decline coverage if the worker’s share of the premium would exceeded five percent of the worker’s income. This change was high on the agenda of unions and some consumer groups. AB 8 also provides that employees insured in the state pool who earn less than 300% of the Federal Poverty Level (appromiately $60,000 for a family of four) could not be required to pay more than five percent of their income in premiums.

The other signficant change expands the current small group health insurance rules to employers with 100 full-time employees, down from 250 employees in earlier drafts of AB 8.  This addresses the fear of some that, by heavily regulating groups of greater than 100 employees it would encourage those with lower-claims to self-insure. (Self-insurance becomes more viable with the size of a business and is more appealing to companies with low claim rates).  This in turn would leave higher-cost groups in the insured pool, driving up premiums. The changes to AB 8 should reduce this concern, although not entirely eliminate it.

Does any of this matter? With just a few days left for a vote on AB 8 it is growing increasingly unlikely that a compromise will be reached in time. In fact, there is a rumor circulating in Sacramento that Democrats will bring AB 8 (and perhaps Senate Bill SB 840 (Keuhl), the single-payer bill, to a vote knowing the Governor will veto it — regardless of how close negotiators are to a deal. Since neither bill is likely to receive a Republican vote this would allow Democrats to strengthen their claim to be the champions of health care reform as an election year approaches.

I’m of the belief that the Governor would use his veto message as an opportunity to call a special session focused on health care reform. This would be done either in coordination with the Leadership (to put pressure on recalcitrant Republican Legislators) or to maintain his dominant position in the process. For a clue to his motivation, keep an eye on whether the Leadership amends AB 8 again before the symbolic vote. If there are significant changes, it’s a sign the Governor is on board with the dance. If they vote on the bill as is, it’s more likely the parties are seeking a negotiating advantage at the other’s expense. The result, of course, is the same. The good news, however, is that a special session would give those excluded from the current closed-door negotiations a chance to thoroughly review, and hopefully amend, AB 8.


2 Responses to “Recent Amendments to AB 8”

  1. Alan said

    The negotiations are between the Governor’s staff and the Speaker’s staff. I assume the staff of the President Pro Temp is involved, too. They’re talking to folks to and hearing from a lot of interested parties, but the decision making is all being done in the negotiation sessions. Contrast that to a public hearing where there’s an open dialogue among lawmakers and others with differing perspectives. For example, in the individual market, a requirement that carriers issue coverage to virtually all applicants without a provision requiring all consumers to buy coverage will result in higher premiums. Guaranteed. It’s happened everywhere else, it will happen in California. When the discussions are limited and in private, others can only guess as to why negotiators would head down this path. If the discussions are in the open, then everyone knows everyone is hearing and considering the same information.

    Private negoations aren’t inherently evil. They’re usually a part of the legislative process. The key, however, is for these private talks to be just one part of the process, not the entire process.

  2. Rita Gibson said

    So this means that we aren’t at the table at all. Are just the democrat supporters and unions in the back room negotiating?

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