Workforce Training, Stop-Loss Bills OK'd

by David Gorn

The Assembly Committee on Health last week passed SB 20 by Sen. Ed Hernandez (D-West Covina), a bill that proposes to repay physician-training loans for doctors who choose to practice in medically underserved areas.

"This bill is a modest attempt at [addressing] one of our biggest dilemmas -- not enough staff to care for the existing patients," Hernandez said.

"Much has been [said] about the physician shortage in this state," said Eduardo Martinez, staff coordinator of the medical school section for the California Medical Association. "But more accurately, California has a maldistribution of physicians, generally favoring coastal areas and inland areas near some urban cores. And this maldistribution is precisely the problem this bill hopes to solve."

The money comes from an existing fund, created from health insurance organization fines and currently used by the Major Risk Medical Insurance Program. SB 20 now goes to Assembly Appropriations.

The Assembly Committee on Health last week also approved another Hernandez bill, SB 161, the stop-loss insurance coverage measure.

"This ensures that small employers who choose to offer employees health benefits, what's called self-insurance, are truly self-insured," Hernandez said.

Stop-loss insurance protects small employers and self-funded health plans from catastrophic losses. 

The bill was amended before the hearing to accommodate health insurers who felt the individual attachment point restriction -- that is, the predetermined loss limit -- was too high. Originally, the attachment point was set at $90,000 and now the new attachment point has been set at $35,000 for the first two years.

"I believe this is a very reasonable bill, as evidenced by the number of groups removing their opposition," Hernandez said. "This bill will protect the integrity of the small group insurance market, both in and out of Covered California (the state's health benefit exchange), by limiting adverse selection."

Andrew Kiefer, senior manager of government affairs for Blue Shield of California, said the bill is a good compromise.

"You have the accumulation of sick people and the congregation of healthy people, you have disparate markets and disparate pricing," Kiefer said.  "What this bill does is [to] ensure you don't have a land rush for the healthy lives in the fully insured market. And it protects the choice for all small businesses that want to provide insurance for their employees."

Hernandez said the bill's ramifications go beyond its immediate effect -- that it will contribute to the success of the Affordable Care Act.

"To me, the absolute, most important issue at hand is the success of the [health benefit] exchange," Hernandez said. "I really believe, if we had no attachment points whatsoever, that there could be unintended consequences where you're going to be shifting healthy lives out of that exchange … So [in terms of] the success of the exchange, I think this is an important part of that whole equation."

In all, Hernandez authored six bills that all were approved July 2 by the Health committee, including SB 138, to ensure privacy protections for young dependents on someone else's health insurance coverage. That bill now heads to Assembly Appropriations.


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