Jerry Brown Veto Seeks Stronger Ties between California Health Law and Federal Act

The Sacramento Bee, by Kevin Yamamura –

October 2, 2012: Gov. Jerry Brown vetoed legislation Sunday requiring California health insurers to cover all individuals regardless of medical condition, citing a technical flaw rather than opposition to the most popular part of the federal health care overhaul.

The Democratic governor was concerned that Senate Bill 961 and Assembly Bill 1461 would force health insurers to carry out the federal Patient Protection and Affordable Care Act in California even if federal leaders dramatically change the law, such as eliminating the requirement that everyone carry insurance or pay a penalty.

He wanted a stronger tether to the federal act, whose fate may depend on the November presidential election.

“Without the strong foundation that federal law provides, a state-level mandate on insurers alone could encourage healthy people to wait until they got sick or injured before purchasing coverage,” Brown wrote in his veto message. “This would lead to skyrocketing premiums, making coverage more unaffordable.”

The two vetoed bills would have required insurers and health plans to cover all individuals, often called “guaranteed issue.” That protection had support from 85 percent of Americans in a March New York Times/ CBS News poll despite a plurality that disapproved of the entire health care act.

The governor supported the ideas in Senate Bill 961 and Assembly Bill 1461, but wanted more thorough language tying the measures to ongoing changes in the federal Affordable Care Act, said Diana S. Dooley, his Health and Human Services secretary.

Dooley appeared Monday morning with legislative authors and supporters to discuss the range of health care bills Brown acted on – and mostly signed. But Brown’s vetoes appeared to dampen the advocates’ enthusiasm. Proponents said lawmakers could enact new laws later to respond to any federal changes.

“These bills contain the most meaningful provisions of the president’s Affordable Care Act,” said Sen. Ed Hernandez, D-West Covina, author of SB 961 and chairman of the Senate Health Committee. “And by vetoing these bills, the governor has unnecessarily set back part of our ability to implement part of the ACA.”

Dooley disagreed, saying there remains enough time before health care expansion in 2014 to address Brown’s concerns. President Barack Obama and federal lawmakers set parameters in the 2010 Affordable Care Act, but California still must enact laws enabling the state to carry out the national changes.

During the final month of legislative session, insurers raised concerns about a scenario in which they would have to cover sick individuals at low rates while healthy individuals could avoid insurance if federal leaders eliminate the individual mandate. The state bills did not leave enough flexibility to account for changes in the Affordable Care Act, the California Association of Health Plans said.

The health care industry remains influential in Sacramento and has contributed at least $650,000 to Brown’s tax initiative, Proposition 30. That includes $250,000 from Kaiser Permanente, $150,000 each from Blue Shield of California and Dignity Health, and $100,000 from Anthem Blue Cross.

Another part of the legislation would have prohibited insurers from charging higher prices for smokers, one of the few rate exceptions allowed in the Affordable Care Act. Anti-smoking and health organizations generally support insurance protections for smokers under the belief that higher costs would drive them away from cessation programs and early disease treatment.

The insurance industry opposed that idea, saying it would force nonsmokers to subsidize tobacco users. But Dooley said Brown supports keeping rates the same for smokers and nonsmokers.

Brown signed other health care bills in the final month of the session, including legislation that establishes a bare-minimum list of “essential” benefits insurers must provide in California. Anthony Wright of Health Access California said that helps prevent consumers from signing up for “junk insurance” that excludes various treatments in the fine print.

Source: John & Rusty Report via Cal Choice