On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (ACA). The ACA requires most U.S. citizens and legal residents to have health insurance. It requires employers with 50 or more full-time employees to provide specified health insurance coverage and creates state-based American Health Benefit Exchanges. A health insurance exchange is a set of government-regulated and standardized health care plans, through which individuals can purchase health insurance.
Recently Governor Jerry Brown called a special session of the Legislature to pass legislation to begin implementing the ACA. The Assembly Health Committee took up the first two bills last week.
The first bill, Assembly Bill 1 X (AB 1X) would add up to 1.4 million more people to the Medi-Cal rolls. Passage of this bill would result in a significant increase in future state General Fund obligations at the expense of funding for existing programs.
Medi-Cal recipients have more trouble finding primary and specialty care physicians, and because Medicaid pays physicians a little more than 50 percent of what private insurers do, more doctors refuse to accept Medicaid. According to a 2011 survey by the California HealthCare Foundation, 23 percent of adults have reported difficulty in finding a primary care doctor who will accept Medi-Cal. The addition of up to 1.4 million new enrollees will only make the provider shortage worse and increase delays for those receiving services.
The second bill, Assembly Bill 2 X (AB 2X) passed during Thursday’s floor session. It locks a requirement for individual health insurance policies and plan contracts to be sold regardless of the applicant's health status into the ACA. This formula will drive up inflation in the cost of health care and make it unaffordable for many Californians.
1 in 5 Americans smoke and even though the ACA allows states to permit health plans and insurers to charge higher premiums to smokers, AB 2X has banned health insurers from doing so, thereby forcing non-smokers to subsidize the health insurance costs of smokers.
In 2012, the Governor expressed concern that premiums would skyrocket result if state law was not tied to change if the Federal ACA changed. This bill completely ignores the Governor’s wishes.
The ACA is supposed to take effect on January 1, 2014. The legislature must apply common sense and fiscal restraint in implementing this bill. If the legislature continues down this path with ACA, the fiscal health of our state is in jeopardy.