Passage of AB 8 Will Do More Harm Than Good
September 10, 2007

The League of Women Voters of California has announced its opposition to AB 8 (Núñez), a health care reform bill that builds upon the employer-based system of coverage. As the legislative session comes to an end for 2007, legislators need to hear why AB 8 is not the solution to California s health care crisis.

ACTION NEEDED: Please phone or fax your state Senator and Assembly Member as soon as possible and urge them to vote NO on AB 8.

Also, share this message with your friends and colleagues. Local League and ILO presidents: Forward this alert to your League s members ASAP. Then phone the offices of your League s representatives and follow up with an official League letter.

The vote on the Senate floor may occur on Monday or Tuesday, so this message is extremely time sensitive. If the bill is passed by the Senate, it must return to the Assembly for a concurrence vote.

POINTS TO MAKE:

• Every Californian should have affordable, quality, comprehensive health care. Unfortunately, AB 8 does not achieve that goal, and in fact would do more harm than good for the people of California.
• AB 8 will not do enough to control the rising costs of premiums and out-of-pocket expenses. It will leave many people with no options for affordable health care.
• Millions of Californians will still lack insurance under AB 8.
• The individual mandate that has been proposed by the Governor would require individuals to pay a $5000 deductible before their insurance company would pay for any health care. If such a mandate is amended into AB 8, the bill would be even more harmful to Californians.

BACKGROUND: AB 8 (Núñez) is an incremental approach to health care reform. It mandates that employers must spend 7.5 percent of Social Security wages on health care (including insurance coverage or other benefits). Instead of providing insurance coverage to their employees, employers may instead elect to pay a similar amount into a purchasing pool, the California Cooperative Health Insurance Purchasing Program (CalCHIPP).

Employees would be required to accept insurance coverage offered by their employer unless they could demonstrate other coverage. Those with incomes below 300 percent of the federal poverty level would receive subsidies if premiums and out-of-pocket costs were greater than 5 percent of income. (300 percent of the poverty level is approximately $60,000 for a family of four.) Very recently the bill was amended to exempt those above 300 percent of the poverty level from accepting coverage if their costs were greater than 5 percent of their income. Thus, while AB 8 would relieve them of potentially unaffordable costs, they would remain uninsured or be forced to seek coverage in the individual market.

The bill expands eligibility for public insurance programs for children and some adults and includes a number of insurance market reforms.

However, when AB 8 is compared to the LWVC's Evaluation Criteria for Health Care Reform Proposals, there are significant problems with the bill in several areas: cost control, affordability, lack of universal coverage, and the possibility of an individual mandate.

Control of costs is a critically important issue in any health care reform. The strategies proposed in AB 8 are not sufficiently robust to protect consumers from escalating premiums and other out-of-pocket costs.

While the recent exemption for some individuals above 300 percent of the poverty level (mentioned above) appears to address the issue of affordability, it does so by leaving these people uninsured. This is not a satisfactory solution.

A fundamental issue is that AB 8 is not universal. Because it is focused on reforms in the employer-based system, there are many people who will not be aided by this legislation. In addition, given the new exemption, the numbers of uninsured Californians estimated to become insured by the bill likely will be reduced.

We also have grave concerns that an individual mandate will be included in the bill. We are firmly opposed to such a strategy, which could force Californians with income over 300 percent of the poverty level to purchase coverage with a $5000 deductible before their insurance company would pay for any health care. Additionally, we are deeply concerned that such a major change may occur just before a vote without adequate input from consumer advocates.

LEAGUE POSITION: The League of Women Voters believes that a basic level of quality health care at an affordable cost should be available to all residents.

View our position here.

FOR MORE INFORMATION:
Contact LWVC Health Care Program Director Barbara Storey .
Background information on health care reform efforts in California is available at the LWVC health care reform Web page.

KEEP US INFORMED: Send us an e-mail at advocacy@lwvc.org to let us know what action you have taken and any responses you have received.