Public Agency Takes Up Political Hammer

by David Gorn

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The board of the California Health Benefit Exchange voted last week to oppose a bill that would establish a basic health plan and to urge the lawmakers behind AB 52, which would regulate rate increases by insurers, to exempt the exchange from that law.

The board also voted to direct staff to work with legislators on four other bills that deal with the exchange -- including two laws that directly refer to the exchange in their identifying titles.

All of the votes were 3-0, with member Robert Ross absent and chair Diana Dooley abstaining.

"I will not be voting to take any position on any bills today," Dooley said at the introduction of the agenda item. "The administration has not taken a position on any of these bills, so I won't, either."

Interim exchange board director Pat Powers said the agenda item was prompted by concern from two members, Kim Belshé and Susan Kennedy, who felt the half-dozen bills would have "a direct impact on the exchange."

Kennedy took the lead on the first item, rate regulation bill AB 52 by Assembly member Mike Feuer (D-Los Angeles).

"I don't understand how the Health Benefit Exchange can negotiate and set rates, and then have another entity come in and undo it," Kennedy said. "I see two bites of the apple as detrimental to our job."

Feuer was not present at the meeting, which was held during legislative recess. Ed Hernandez (D-West Covina), who authored SB 703, the bill to launch a Basic Health Program in California, also was not in attendance. In fact, no authors of any of the disputed legislation were there.

Janice Rocco from the Department of Insurance asked the board to hold off on any negative declarations until they had time to hear more about them.

"I would ask you to defer judgment, that we have conversations between you and your staff," Rocco said. "If we treat the exchange differently [by exempting it from rate regulations], that would have huge unintentional consequences."

Belshé said she was sorry to be entering the debate on such a late date, but that it was necessary.

"It's not clear to me what time we really have," Belshé said. "This is the time when bills and problems are fixed, so as one board member, I'm concerned we don't have a lot of time. I don't see why Medi-Cal was exempted and the exchange was not."

The debate continued for some time, so Dooley raised the possibility of forming a subcommittee to deal with legislative issues. Belshé said that would take too long, given that the bill could conceivably clear the Appropriations Committee and head to the floor by the time the exchange board met again.

"If the board were prepared to have another meeting at the beginning of August, then maybe," Belshé said. "The issue I'm raising is this fundamental compatibility."

As for the Basic Health Program, which promises lower premium rates for low-income Californians, Kennedy was not keen on giving up as many as 800,000 people from the exchange pool.

"This one in particular, taking 800,000 people away, it's disastrous for the exchange, in my view," Kennedy said. "I would say, if it doesn't help the exchange, I would oppose it."

The board voted to oppose the Basic Health Program unless it is amended to become a two-year bill. It voted to push the authors of AB 52 to exempt all insurance sold through the exchange from regulation. And it asked staff to offer input into four other bills: AB 792 by Susan Bonilla (D-Concord), AB 714 by Toni Atkins (D-San Diego), AB 1083 by Bill Monning (D-Carmel) and AB 1296 (Bonilla).



Melissa Jones
I agree with Kennedy. Lots more needs to be explained with these bills. The Exchange is supposed to provide affordable health plans. If your income is "small," you go into Medi-Cal or get a subsidy making an Exchange plan affordable. Why is there a need for a separate program that would remove people from the Exchange, making the Exchange pool smaller and everyone else's premiums go up? I don't like the idea of low-income people getting to pay less without proving they don't waste money on excesses like cable or are not collecting money under the table. This is why premiums should come directly from paychecks, meaning we need single payer, at least that would solve part of the problem while reducing administrative costs and premiums being used to fatten administrators' pockets. And let First 5 directly subsidize premiums for the undocumented with all their tobacco tax revenue, rather than wasting all that revenue for their employees' high salaries and on suspect programs.

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