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7.
LEGISLATION COMMITTEE
Meeting Date:
05/14/2018
Subject:
AB 3087 (Kalra): State Health Care Cost, Quality, and Equity Commission
Submitted For:
LEGISLATION COMMITTEE
Department:
County Administrator
Referral No.:
2018-17
Referral Name:
AB 3087
Presenter:
Patricia Tanquary
Contact:
L. DeLaney, 925-335-1097
Information
Referral History:
AB 3087 (Kalra)
: State Health Care Cost, Quality, and Equity Commission, is a bill that establishes the Health Care Cost, Quality, and Equity Commission (Commission), to among other functions, control in-state health care costs and set the amounts accepted as payment by health plans, hospitals, physicians, physician groups, and other healthcare providers.
The Chief Executive Officer of the Contra Costa Health Plan, Patricia Tanquary, recommends that the Committee consider recommending an "Oppose unless amended" position on AB 3087 to the Board of Supervisors.
Author:
Ash Kalra (D-027)
Coauthor
Stone (D)
Title:
State Health Care Cost, Quality, and Equity Commission
Fiscal Committee:
no
Urgency Clause:
no
Introduced:
02/16/2018
Last Amend:
05/02/2018
Disposition:
Pending
Location:
Assembly Appropriations Committee
Summary:
Creates the State Health Care Cost, Quality, and Equity Commission, an independent state agency, to control in state health care costs and set the amounts accepted as payment by health plans, hospitals, physicians, and other health care providers. Provides that funding for the Commission would be provided from specified funds. Requires the Commission to annually determine the base amounts that health care entities are required to accept as full payment for health care service. Provides certain exemptions.
Referral Update:
The text of AB 3087 is available here:
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB3087
According to the bill analysis (
Attachment A
), the author contends that while California has made major strides in providing access to health care and promoting quality care, the cost of health care remains unaffordable for many working Californians and is a significant burden among public and private employers. In California, health insurance premiums have continued to rise way past inflation, and the cost of which is putting a strain on state public funds being used to cover the cost of health care. Numerous reports have demonstrated that the costs health care in the U.S. are out-of-control, and hospital costs and physician services represent an overwhelming proportion of the projected premium dollar - 75% of the projected 2018 premium dollar.
The author notes that the reason the U.S. spends far more on health care than other nations is because of the prices. One thing all countries with universal health care have in common is that the government sets and regulates health care prices and controls overall costs throughout the system, including the commercial market. This bill addresses skyrocketing costs in California by establishing an independent Health Care Cost, Quality and Equity Commission to set reasonable base amounts that hospitals, doctors, and other providers of health care services can collect from public and private payers. For health plans, the Commission will also determine appropriate base amounts for premiums using an adjusted Medicare Advantage rate as the benchmark. Doing so will provide needed relief as all payers will be paying less for health care through lower premiums and cost-sharing without compromising on quality.
The author concludes that the high cost of health care is unsustainable and the state must take meaningful action to contain these costs.
According to the Alameda-Contra Costa Medical Association, "AB 3087 (Kalra) would establish an unelected commission of nine individuals to set physician and hospital rates for commercial health care services in California, while doing nothing to address chronically low Medicare and Medi-Cal reimbursement rates. The consequence if AB 3087 becomes law will be reduced access to care for the most vulnerable patients."
Attachment B
includes letters in opposition from the East Bay Leadership Council, Kaiser, and the Alameda-Contra Costa Medical Association.
Recommendation(s)/Next Step(s):
CONSIDER recommending to the Board of Supervisors a position of "Oppose unless amended" on AB 3087.
Attachments
Attachment A: Bil Analysis
Attachment B: Oppose Letters
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