Proposal to Offer $30-Per-Month Plans to Some 700,000 Californians Advances in Key Committee Vote

SACRAMENTO – The California Assembly’s Health Committee today approved health care legislation authored by State Senator Ed Hernandez, D-West Covina, to provide basic coverage to low-income families for as little as $30 a month.

    Senate Bill 703, which creates a Basic Health Plan, would provide coverage to more than 720,000 qualifying uninsured California residents, according to estimates. It would provide health care coverage for monthly payments that are lower than any other option under the new federal health care law slated to take effect in 2014.

    The committee’s approval signifies another key win for the measure, which now heads to the Assembly Appropriations Committee. In May, the State Senate passed the bill 25-14.

    “The Assembly has recognized the importance of this opportunity to set an example for the nation and enact a Basic Health Plan that will provide comprehensive, high-quality health plans to low-income residents,” said John Ramey, Executive Director, Local Health Plans of California. “This is an opportunity for three quarters of a million California residents to receive the health care they need and deserve.”

    A recent study on the feasibility of the basic health plan option in California, conducted for the California Health Care Foundation (CHCF) assumes that 70 percent of the eligible individuals would enroll in BHP, creating an enrollment of about 723,000 participants.

    Based on the Healthy Families program, eligible participants would receive coverage for monthly payments of about $30 per month, lower than any other option under the federal health care law. The BHP will offer equal to or better benefits available in the state health benefit exchange – but for less cost and exclusively for individuals with incomes between 133% and 200% of the federal poverty level. These are individuals that will be required by the federal law to buy insurance but who may have difficulty being able to afford the price of a policy offered by the Exchange.

    Senator Hernandez noted that the legislation will help the exchange. “This program will reduce risk by making coverage more affordable and at providing a better job insuring a population that would probably not otherwise be able to afford health insurance,” he told the committee.

    No state funds will be used for the program. To finance the BHP, California will receive 95 percent of the federal money that otherwise would have been used for subsidies for the Exchange. The CHCF study concludes that federal subsidies and subscriber premiums would be sufficient to cover the cost of BHP and to raise provider payments 20 to 25 percent over current Medi-Cal provider reimbursement rates at no extra cost to the General Fund.

    California has the largest total number of people without insurance -6.8 million – according to a December 2010 Employee Benefit Research Institute report. Over the past two decades, California has seen a surge in the percentage of uninsured, as employer-sponsored coverage has decreased. Between 1987 and 2009, the segment of the non-elderly population covered by insurance provided through an employer continued to slide from 65 percent to 52 percent.

    Supporters of the bill include: the Congress of California Seniors; SEIU California; Molina Healthcare; the California Association of Public Hospitals; and Planned Parenthood, as well as nonprofit health plans that operate in the state’s most populated counties.

    Local Health Plans of California is an association of non-profit, local health plans that are contracted by the state. They serve to improve access to quality health care for more than 2.7 million women, children, aged and disabled statewide who qualify for Medi-Cal and Healthy Families benefits.