Bill to implement affordability assistance for California Health Benefit Exchange passes committee hearing – State of Reform – State of Reform

Senate Bill 944 moved out of the Senate Health Committee on March 23, following its hearing, with a 9-2 vote.

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The bill, sponsored by Sen. Richard Pan (D–Sacramento), would require Covered California to eliminate deductibles for all benefits and substantially reduce cost sharing, including copays, coinsurance, and maximum out-of-pocket costs.

Pan said the bill is a continuation of efforts taken previously by the legislature to improve the affordability of health coverage in the state. He said the bill specifically serves as a follow-up to a budget trailer bill from last year that tasked Covered California to come up with options to reduce cost sharing in plans available through the exchange. 

“This bill is about making Covered California more available and affordable … The fact is that [with] Covered California’s premiums over the last few years, the increases have been under 1 percent, and that’s because of the work that we’ve done together here in the Senate,” he said.

Pan said he is also working with Asm. Jim Wood (D–Eureka) on the mirror version of this bill, which is Assembly Bill 1878. 

Diana Douglas, representing Health Access California, spoke in favor of the bill during the hearing. She said the bill is an important addition to the premium assistance that has already been implemented by the state and federal government. She said this assistance has resulted in more Californians than ever being enrolled in the Covered California marketplace. 

“However, even with coverage, rising deductibles and copays keep care out of reach for many,” she said. 

According to the UC Berkeley Labor Center, nearly 3.2 million Californians remain uninsured in 2022, or about 9.5% of the population aged 0-64.

Douglas testified that 60% of Californians report feeling worried about out-of-pocket costs when using health insurance—a greater percentage than those worried about the cost of housing, utilities, or groceries. She said high out-of-pocket costs led to half of all Californians skipping or delaying care this past year. 

While the bill would provide the most generous assistance to lower income populations, Douglas said the bill would also extend cost sharing assistance to those in the middle income range (earning up to $75,000 per year).

Douglas also mentioned her hopes for additional federal assistance in the near future.

“We are optimistic that federal premium subsidies will be extended later this year which gives us the opportunity to finally take action to reduce the deductibles and copays that keep so many from seeking care when they need it,” she said.

Bianca Blomquist, representing Small Business Majority, also spoke in favor of the bill from the perspective of small businesses across the state. She said the bill would improve affordability for tens of thousands of low and moderate income entrepreneurs and small business owners.

“Recent federal action to make health care more affordable in California will end soon, and today the state can take action to reduce out-of-pocket costs that are hindering entrepreneurship in our state,” she said.

Blomquist cited her organization’s research which found that more than one in three small businesses report that it has been a challenge to obtain health insurance coverage for themselves and their employees during the pandemic, and 16% of these small businesses have reported they are considering reducing health care coverage in order to keep their businesses open.

“SB 944 is essential for our network because the median income for a small business owner with employees is just over the cutoff for health care subsidies … For the past 2 years, because of these federal tax credits, more small business owners have been able to access affordable health care,” she said. 

No speakers testified in opposition.

The bill ultimately passed with the two opposing votes coming from Sen. Melissa Melendez (R–Lake Elsinore) and Sen. Shannon Grove (R–Bakersfield), and was re-referred to the Senate Appropriations Committee.