WHEREAS, Over the first two years of full implementation of the federal Patient Protection and Affordable Care Act (Public Law 111-148) (Affordable Care Act), Californias uninsured rate decreased by halfthe largest percentage point decline in the uninsured rate of any statefrom 17.2 percent in 2013 to 8.6 percent in 2015, according to the United States Census Bureau, with the federal Centers for Disease Control and Prevention indicating a further fall to 7.1 percent in the first nine months of 2016; and

WHEREAS, This decline, from 6.5 million uninsured individuals in 2013 to 3.3 million uninsured individuals in 2015, is a historic accomplishment that reaches across all income levels, geographic regions, and ethnic groups in California; and

WHEREAS, In June 2016, nearly 3.7 million individuals received coverage through the Affordable Care Acts Medicaid eligibility expansion; and

WHEREAS, Over 13 million children and adultsapproximately one-third of the populationnow receive health care coverage through the Medi-Cal program in California; and

WHEREAS, Since the California Health Benefit Exchange, also known as Covered California, opened its doors, it has cumulatively enrolled 2.5 million people into health care coverage; and

WHEREAS, Currently, nearly 1.4 million people are enrolled in health care coverage through Covered California, with approximately 90 percent receiving federal subsidies; and

WHEREAS, The lifeblood of these coverage expansions in California is the federal funding received through the Affordable Care Act; and

WHEREAS, Californias strong consumer protections for health care coverage, access to comprehensive health coverage, including reproductive health care services, and vigorous regulatory system are threatened by the American Health Care Act under consideration in Congress; and

WHEREAS, The American Health Care Act will result in the elimination of all federal funding for Planned Parenthood, a reduction of tax credits and an increase in premiums for many low- and moderate-income Californians, the elimination of cost-sharing subsidies, a repeal of the Medicaid entitlement to coverage, the elimination of enhanced federal funding for new enrollment in Medi-Cal in 2020 resulting in a massive shift of costs to the state, more uninsured Californians, and fewer Californians receiving affordable coverage; and

WHEREAS, The American Health Care Act under consideration in Congress provides $600 billion in tax cuts primarily to upper-income individuals, implements an age tax that allows insurers to charge an older person five times the amount charged to a young adult, and proposes that income-based premium subsidies would be replaced by age-based subsidies that hurt moderate-income individuals and makes insurance unaffordable for all but the least healthy; and

WHEREAS, Millions of Americans rely on the essential provisions of the Affordable Care Act, including, among others, premium tax credits, cost-sharing subsidies, and easily comparable comprehensive coverage; and

WHEREAS, Since the Affordable Care Act was passed in March 2010, the United States private sector added over 15,000,000 jobs and set a record for consecutive months of job growth; and

WHEREAS, Health care policy is extremely complex because it involves the lives and well-being of hundreds of millions of Americans, impacts the national economy in innumerable ways, and involves complex laws and regulations, insurance markets, and consumer protections; now, therefore, be it

Resolved by the Senate of the State of California, That the Senate affirms its strong support for the Affordable Care Act and calls upon the United States Congress to reject any effort to repeal the Affordable Care Act unless it is simultaneously replaced with an alternative program that meets the standards clearly and consistently articulated by President Trump: that not one American will lose coverage and that coverage will be more affordable and of higher quality for all Americans; and be it further

Resolved, That the Senate urges Congress to not jeopardize the health of millions of Americans by pushing through irresponsible policy in late-night hearings, but instead allow for comprehensive public review, including evaluations by the Congressional Budget Office and relevant policy committees, so that Americans have the opportunity to offer input and have their concerns heard; and be it further

Resolved, That the Secretary of the Senate transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, to the Majority Leader of the Senate, to each Senator and Representative from California in the Congress of the United States, and to the author for appropriate distribution.

WHEREAS, Over the first two years of full implementation of the federal Patient Protection and Affordable Care Act (Public Law 111-148)(Affordable Care Act), (Public Law 111-148) (Affordable Care Act), Californias uninsured rate decreased by halfthe largest percentage point decline in the uninsured rate of any statefrom 17.2 percent in 2013 to 8.6 percent in 2015, according to the United States Census Bureau, with the federal Centers for Disease Control and Prevention indicating a further fall to 7.1 percent in the first nine months of 2016; and

WHEREAS, This decline, from 6.5 million uninsured individuals in 2013 to 3.3 million uninsured individuals in 2015, is a historic accomplishment that reaches across all income levels, geographic regions, and ethnic groups in California; and

WHEREAS, In June 2016 2016, nearly 3.7 million individuals received coverage through the Affordable Care Acts Medicaid eligibility expansion; and

WHEREAS, Over 13 million children and adultsapproximately one-third of the populationnow receive health care coverage through the Medi-Cal program in California; and

WHEREAS, Since the California Health Benefit Exchange, also known as Covered California, opened its doors doors, it has cumulatively enrolled 2.5 million people into health care coverage; and

WHEREAS, Currently, nearly 1.4 million people are enrolled in health care coverage through Covered California, with approximately 90 percent receiving federal subsidies; and

WHEREAS, The lifeblood of these coverage expansions in California is the federal funding received through the Affordable Care Act; and

WHEREAS, California has among the strongest Californias strong consumer protections for health care coverage in the country and our coverage, access to comprehensive health coverage, including reproductive health care services, and vigorous regulatory system is threatened by proposals being pursued by President Trump and Congressional leaders that would allow insurance companies to sell products across state lines or would preempt state consumer protections; are threatened by the American Health Care Act under consideration in Congress; and

WHEREAS, The American Health Care Act will result in the elimination of all federal funding for Planned Parenthood, a reduction of tax credits and an increase in premiums for many low- and moderate-income Californians, the elimination of cost-sharing subsidies, a repeal of the Medicaid entitlement to coverage, the elimination of enhanced federal funding for new enrollment in Medi-Cal in 2020 resulting in a massive shift of costs to the state, more uninsured Californians, and fewer Californians receiving affordable coverage; and

WHEREAS, The American Health Care Act under consideration in Congress provides $600 billion in tax cuts primarily to upper-income individuals, implements an age tax that allows insurers to charge an older person five times the amount charged to a young adult, and proposes that income-based premium subsidies would be replaced by age-based subsidies that hurt moderate-income individuals and makes insurance unaffordable for all but the least healthy; and

WHEREAS, Millions of Americans rely on the historic protections established under essential provisions of the Affordable Care Act, including, among others, the prohibition against refusing coverage to a person with a preexisting condition, the ability of a parent to add or keep children and young adults under 26 years of age on the parents health care coverage, and the prohibition against lifetime limits on coverage; premium tax credits, cost-sharing subsidies, and easily comparable comprehensive coverage; and

WHEREAS, Since the Affordable Care Act was passed in March 2010, the United States private sector added over 15,000,000 jobs and set a record for consecutive months of job growth; and

WHEREAS, It is well understood that health Health care policy is necessarily extremely complex because it involves the lives and well-being of countless hundreds of millions of Americans, impacts the national economy in innumerable ways, and involves highly technical medical procedures, complex laws and regulations, insurance markets, and practices; and consumer protections; now, therefore, be it

Resolved by the Senate of the State of California, that the Senate affirms its strong support for the Affordable Care Act and calls upon the United States Congress to reject any effort to repeal the Affordable Care Act unless it is simultaneously replaced with an alternative program that meets the standards clearly and consistently articulated by President Trump: that not one American will lose coverage and that coverage will be more affordable and of higher quality for all Americans; and be it further

Resolved, That the Senate urges Congress to not vote on any measure that would repeal and replace the Affordable Care Act without first allowing an exhaustive and jeopardize the health of millions of Americans by pushing through irresponsible policy in late-night hearings, but instead allow for comprehensive public review, including evaluations by the Congressional Budget Office and relevant policy committees, so that Americans have the meaningful opportunity to offer input and have their concerns heard; and be it further

Resolved, That the Secretary of the Senate transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, to the Majority Leader of the Senate, to each Senator and Representative from California in the Congress of the United States, and to the author for appropriate distribution.

WHEREAS, Over the first two years of full implementation of the federal Patient Protection and Affordable Care Act (Public Law 111-148)(Affordable Care Act), Californias uninsured rate decreased by halfthe largest percentage point decline in the uninsured rate of any statefrom 17.2 percent in 2013 to 8.6 percent in 2015, according to the United States Census Bureau, with the federal Centers for Disease Control and Prevention indicating a further fall to 7.1 percent in the first nine months of 2016; and

WHEREAS, This decline, from 6.5 million uninsured individuals in 2013 to 3.3 million uninsured individuals in 2015, is a historic accomplishment that reaches across all income levels, geographic regions, and ethnic groups in California; and

WHEREAS, In June 2016 nearly 3.7 million individuals received coverage through the Affordable Care Acts Medicaid eligibility expansion; and

WHEREAS, Over 13 million children and adultsapproximately one-third of the populationnow receive health care coverage through the Medi-Cal program in California; and

WHEREAS, Since the California Health Benefit Exchange, also known as Covered California, opened its doors it has cumulatively enrolled 2.5 million people into health care coverage; and

WHEREAS, Currently, nearly 1.4 million people are enrolled in health care coverage through Covered California, with approximately 90 percent receiving federal subsidies; and

WHEREAS, The lifeblood of these coverage expansions in California is the federal funding received through the Affordable Care Act; and

WHEREAS, California has among the strongest consumer protections for health care coverage in the country and our vigorous regulatory system is threatened by proposals being pursued by President Trump and Congressional leaders that would allow insurance companies to sell products across state lines or would preempt state consumer protections; and

WHEREAS, Repeal of the Affordable Care Act without a strong replacement would necessitate devastating budget cuts in California, resulting in broad and deep economic harm across all geographic areas of the state, all socioeconomic strata, and countless industries; and

WHEREAS, Numerous studies predict that repeal measures could cost California over $20 billion in annual federal funding; and

WHEREAS, According to the Labor Center at the University of California at Berkeley, partial repeal of the Affordable Care Act could lead to the loss of 209,000 jobs in California, including tens of thousands of jobs in the most economically depressed regions of the state; and

WHEREAS, Repeal of the Affordable Care Act would constitute a regressive tax increase on millions of Americans; and

WHEREAS, Millions of Americans rely on the historic protections established under the Affordable Care Act, including, among others, the prohibition against refusing coverage to a person with a preexisting condition, the ability of a parent to add or keep children and young adults under 26 years of age on the parents health care coverage, and the prohibition against lifetime limits on coverage; and

WHEREAS, Since the Affordable Care Act was passed in March 2010, the United States private sector added over 15,000,000 jobs and set a record for consecutive months of job growth; and

WHEREAS, It is well understood that health care policy is necessarily extremely complex because it involves the lives and well-being of countless Americans, impacts the national economy in innumerable ways, and involves highly technical medical procedures, regulations, insurance markets, and practices; now, therefore, be it

Resolved by the Senate of the State of California, that the Senate affirms its strong support for the Affordable Care Act and calls upon the United States Congress to reject any effort to repeal the Affordable Care Act unless it is simultaneously replaced with an alternative program that meets the standards clearly and consistently articulated by President Trump: that not one American will lose coverage and that coverage will be more affordable and of higher quality for all Americans; and be it further

Resolved, That the Senate urges Congress to not vote on any measure that would repeal and replace the Affordable Care Act without first allowing an exhaustive and comprehensive public review, including evaluations by the Congressional Budget Office and relevant policy committees, so that Americans have the meaningful opportunity to offer input and have their concerns heard; and be it further

Resolved, That the Secretary of the Senate transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, to the Majority Leader of the Senate, to each Senator and Representative from California in the Congress of the United States, and to the author for appropriate distribution.

 THIRD READING  

Bill No: SR 26

Author: Hernandez (D) and De León (D)

Amended: 3/9/17

Vote: Majority

SENATE HEALTH COMMITTEE: 7-1, 3/13/17

AYES: Hernandez, Atkins, Leyva, Mitchell, Monning, Newman, Roth

NOES: Nielsen

NO VOTE RECORDED: Nguyen

SUBJECT: The Patient Protection and Affordable Care Act

SOURCE: Author

DIGEST: This resolution affirms the California State Senate’s strong support for the federal Patient Protection and Affordable Care Act (ACA), calls upon Congress to reject any effort to repeal the ACA unless it is simultaneously replaced with an alternative program that meets the standards articulated by President Trump that no American will lose coverage, and that coverage will be more affordable and of higher quality for all Americans. Urges Congress to allow a comprehensive public review, including evaluations by the Congressional Budget Office (CBO) and relevant policy committees.

ANALYSIS: Existing law establishes, through the ACA, several provisions to make health insurance coverage available to Americans, including increased federal matching funds for an expansion of the Medicaid program for low-income non-disabled adults under age 65, advanced premium tax credits and cost-sharing subsidies for low-to-moderate income individuals purchasing coverage through exchanges, an “individual mandate” to obtain health coverage or pay a tax penalty, and a requirement that health plans “guarantee issue” coverage in the individual market.

This resolution:

1. Makes multiple legislative findings related to the ACA and the American Health Care Act (AHCA), including:
   1. Over 13 million children and adults—approximately one-third of the population—now receive health care coverage through the Medi-Cal program in California;
   2. Currently, nearly 1.4 million people are enrolled in health care coverage through Covered California, with approximately 90% receiving federal subsidies;
   3. California’s strong consumer protections for health care coverage, access to comprehensive health coverage, including reproductive health care services, and vigorous regulatory system is threatened by the AHCA under consideration in Congress;
   4. The AHCA will result in elimination of all federal funding for Planned Parenthood, a reduction of tax credits and an increase in premiums for many low and moderate income Californians, the elimination of cost sharing subsidies, a repeal of the Medicaid entitlement to coverage, and the elimination of enhanced federal funding for new enrollment in Medi-Cal in 2020, resulting in a massive shift of costs to the state, more uninsured Californians, and fewer Californians receiving affordable coverage; and,
   5. The AHCA under consideration in Congress provides $600 billion in tax cuts primarily to upper income individuals, implements an “age tax” that allows insurers to charge an older person five times that of a young adult and proposes that income-based premium subsidies would be replaced by age-based subsidies, which hurts moderate income people and makes insurance unaffordable for all but the least healthy.
2. Affirms the Senate’s strong support for the ACA and calls upon the United States Congress to reject any effort to repeal it unless it is simultaneously replaced with an alternative program that meets the standards clearly and consistently articulated by President Trump: that not one American will lose coverage and that coverage will be more affordable and of higher quality for all Americans.
3. Urges Congress to not jeopardize the health of millions of Americans by pushing through irresponsible policy in late night hearings, but instead allow for comprehensive public review, including evaluations by the CBO and relevant policy committees, so that Americans have the opportunity to offer input and have their concerns heard.

Background

1. The ACA is the most transformative legislative action the U.S. health care system has seen in over 40 years. The passage of the ACA meant sweeping changes to health care coverage in this country, including establishing more generous eligibility rules and federal funding for Medi-Cal program, providing federally-funded premium and cost-sharing subsidies offered through Covered California (California’s health benefit exchange), and imposing new requirements on health insurers that made it easier for individuals with preexisting conditions to obtain coverage. The coverage expansions alone led to 20 million newly insured individuals in this country, including over 5 million Californians. President Trump and the Republican leadership of the 115th Congress quickly announced their intentions to “repeal and replace” the ACA within days of the November 2016 election.
   

California has a history of strong consumer protections in its health insurance market; enacting some even before the ACA required them. However, prior to the ACA, the individual insurance market was not generally available to older individuals or individuals with preexisting conditions. If such individuals did have access to insurance, they paid much higher premiums than younger or healthier individuals or had coverage for preexisting conditions temporarily excluded from their insurance benefit. Additionally, health insurers could limit coverage by applying annual and lifetime limits on benefits, even to Californians with employer-based coverage. California lawmakers passed at least 50 laws to harmonize California law with the ACA and establish Covered California, and implement the expansion in Medi-Cal. Given the many challenges to the ACA since its inception, California lawmakers suspended many of the pre-ACA consumer insurance protections as a contingency should the ACA be altered.

1. Decline in uninsured from ACA. California has seen a remarkable decline in the number of people without health insurance coverage. Most notably, the percentage of Californians under age 65 without insurance declined from 22% in 2011 to 8.6% in 2015 (from 7.3 million in 2011 to 2.9 million in 2015). California experienced the largest percentage point decline in the uninsured rate of any state, according to the U.S. Census Bureau. The decline in uninsured as a result of the ACA also crosses the major race/ethnic and income groups in California.
   
2. The AHCA. Below is a summary of some of the major provisions of the proposed law to “repeal and replace” the ACA:

• Planned Parenthood – Specifies a one-year freeze on mandatory federal funding (Medicaid, CHIP, social service block grants) going to “prohibited entities” describing Planned Parenthood.
• Medicaid Expansion – After January 1, 2020, the enhanced 90% matching rate would only apply to expansion-eligible individuals already enrolled in Medicaid as of December 31, 2019, and do not have a break in eligibility for more than one month after that date. After January 1, 2020, the State could only enroll newly eligible individuals at the State’s traditional FMAP for that individual. (California’s traditional matching rate is 50%).
• Medicaid Per-Capita Allotments – Eliminates the federal guarantee of Medicaid matching funds by capping federal Medicaid funding through a per capita cap for five population groups, starting in 2020.
  
• Medicaid – Repeals hospital presumptive eligibility authority. Reverts the mandatory Medicaid income eligibility level for poverty-related children back to 100% of federal poverty level. Specifies that eligible children could be covered in CHIP. Repeals the 6% point bonus in the federal match rate for community-based attendant services and supports, and returns to prior law without the 6% bonus.
• Medicaid EHBs – Repeals the requirement that EHBs must be provided in certain Medicaid plans on December 31, 2019.
• Disproportionate Share Hospitals (DSH) – Repeals DSH cuts in non-expansion states in 2018. Repeals DSH cuts in Medicaid expansion states in 2020.
• Patient and State Stability Fund – Provides for a fund to reduce costs for patients and to stabilize State markets. The fund would provide $15 billion in 2018 and 2019 and $10 billion annually for 2020 through 2026. Funding is allocated for the first two years based mainly on healthcare spending in the individual market and to a lesser extent on other factors like the state uninsured rate below 100% federal poverty level (favoring non-expansion states) and the amount of plans participating in state exchanges.
  
• ACA Cost-Sharing Subsidies – Repeals cost-sharing subsidies for individuals purchasing individual coverage in exchanges, beginning in 2020.
• Continuous Coverage – For Benefit Year 2019, implements a 12-month look back period to assess whether an applicant went without coverage for greater than 63 days. If such a break in coverage occurred, there will be a flat 30% late-enrollment surcharge applied to their base premiums for 12 months. The surcharge is the same for all those having such a break (it does not vary by health status). The surcharge applies for special enrollment applicants in Benefit Year 2018.
• Actuarial Value (AV) – Repeals the AV levels that correspond to metallic levels of coverage under the ACA. The ACA establishes four levels of coverage (bronze, silver, gold and platinum) based on the concept of “actuarial value,” which represents the share of health care expenses the plan covers for a typical group of enrollees.
• Age Rating – Changes age-rating bands to 5:1 (they are 3:1 under the ACA) and permits states to set their own age bands.
• Current ACA Premium Subsidies – Repeals current ACA premium subsidies beginning in 2020. In the meantime, revises calculation of individual or family income contribution to premiums so it considers both household income as well as age. Allows current subsidies to be applied to catastrophic plans and certain plans not sold through Exchanges. Prohibits subsidies’ application to plans that cover abortion services.
• Refundable Tax Credits – Creates an advanceable, refundable tax credit for the purchase of state-approved, major medical health insurance and unsubsidized COBRA coverage. Credits are newly means tested and are available in full to those making $75,000 per year ($150,000 for joint filers). They phase down by $100 for every $1,000 in income higher than those thresholds. Credits are “additive for a family” and capped at $14,000. They are indexed at CPI plus 1%.
• Small Business Tax Credit – Repeals beginning in 2020. Makes the tax credit unavailable 2018-2020 for plans providing coverage of elective abortion.
• Individual Mandate – Reduces the penalty to zero for 2016 and beyond.
• Employer Mandate – Reduces the penalty to zero for 2016 and beyond.
• Cadillac Tax – Modifies the effective date to delay it to 2025. The Cadillac tax will not apply for any taxable period beginning after December 31, 2019, and before January 1, 2025.
• Health Savings Accounts (HSA), Other Taxes – “Effectively repeals” the over-the-counter medicine tax as of 2018 tax year and lowers HSA distribution tax to pre-ACA levels as of December 31, 2017. Repeals limits on contributing to FSAs as of December 31, 2017. Restores the pre-ACA medical deductibility percentage beginning in 2018. Repeals the additional the additional 0.9% percent Medicare tax beginning in 2018. Repeals the net investment tax beginning in 2018.
• Device Tax – Repeals for taxable years beginning after December 31, 2017.
• Pharma Tax – Specifies that the tax would not apply for years beginning after December 31, 2017.
• Insurer Tax – Repeals the health insurance tax beginning after December 31, 2017.
• Insurer Remuneration – Repeals the limit on the deduction of a covered health insurance provider for compensation attributable to services performed by an applicable individual starting in 2018.
• HSAs – Sets basic limit at least $6,550 in the case of self-only coverage and $13,100 in the case of family coverage beginning in 2018. Both spouses would be able to make catch-up contributions, among other policies.

1. Congressional hearings on the AHCA. On Wednesday, March 8, 2017, the House Energy & Commerce and Ways & Means Committees concurrently convened to mark-up respective committee prints of the AHCA, after only being revealed on the Monday prior. According to observers of the hearings, a key point of contention during both committee mark-ups was the lack of CBO score on the AHCA, as well as the broader process at-hand. It is anticipated that the House Budget Committee will combine the Committees’ portions into a single reconciliation package during the week of March 13th, and a full Floor vote will take place on March 23rd, which is the 7th anniversary of the passage of the ACA.
   

Comments

Author’s statement. According to the author, prior to the enactment of the coverage expansions under the ACA, over 40 million Americans (including 7 million Californians) were uninsured. The consequences of a lack of insurance are dire. Uninsured people are more likely to receive too little medical care and receive it too late; dying sicker and sooner. The ACA transformed the health care system by dramatically reducing the number of uninsured through the expansion of Medicaid, making premium and cost sharing subsidies available for people purchasing coverage in health care exchanges, and making it easier for individuals with pre-existing conditions to obtain comprehensive coverage.  Lives have been saved because medical treatment has been provided at the right time in the right setting. The so-called “repeal and replace” alternative being advanced by Republicans in Congress has been described as a massive windfall for the richest Americans at the expense of health coverage for low income Americans, and will increase the rates of uninsured Americans. The President has promised to cover everyone with better and cheaper coverage. The pending proposal falls far short of this promise and will destroy the gains made under the ACA.  This resolution calls upon the President and Congress to engage in thoughtful deliberative policymaking and ensure that not one American will lose coverage, and that coverage will be more affordable and higher quality as promised.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 3/13/17)

Advancement Project California

AFSCME Council 57

Alameda Health Consortium

Americans for Democratic Action-Southern California

Alzheimer’s Greater Los Angeles

California Calls

California Labor Federation, AFL-CIO

California Physicians Alliance

California Rural Legal Assistance Foundation

Children’s Defense Fund – California

Children Now

Community Clinic Association of Los Angeles County

Community Clinic Consortium – Contra Costa and Solano Counties

Community Health Partnership

Congress of California Seniors

Courage Campaign

Equality California

Essential Health Access

Having Our Say Coalition

Health Access California

Inland Empire Coverage and Health Initiative

Lutheran Office of Public Policy – California

National Health Law Program

NICOS Chinese Health Coalition

Professional & Technical Engineers, Local 21, AFL-CIO

Project Inform St. Anthony’s San Francisco

Service Employees International Union Local 1000

The Children’s Partnership

The Greenling Institute

UDW/AFSCME Local 3930

United Ways of California

Vision Y Compromiso

Western Center on Law & Poverty

OPPOSITION: (Verified 3/17/17)

None received

ARGUMENTS IN SUPPORT: The California Labor Federation writes that the AHCA is a disaster for Californians because it would repeal much of the provisions of the ACA and cause millions of Californians to lose their health coverage, cut billions of federal dollars from the state’s budget, and lead to increased health costs for everyone. In addition, the bill retains the 40% on job-based benefits that undermines the foundation of health care coverage in this country. The AHCA amounts to a massive tax giveaway to corporations and the wealthy paid for by taking away coverage from working people and their families and increasing costs for everyone. This plan is a leap in the wrong direction and will undo years of progress California has made to insure the uninsured and improve health care quality and affordability. SEIU Local 1000 writes that there were over 75 hearings and 100 amendments relating to the ACA in the house and in the Senate 25 consecutive days of debate. They are deeply concerned with the lack of analysis concerning the ACA repeal proposal and this resolution is a necessary step to letting Congress know the importance of the ACA and the substantial harms in California and across the country from expediting the repeal process.

Prepared by: Teri Boughton and Scott Bain / HEALTH /

3/13/17 14:03:56

**** END ****

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: SR 26

SUBJECT: The Patient Protection and Affordable Care Act

SUMMARY:

Affirms the California State Senate’s strong support for the federal Patient Protection and Affordable Care Act (ACA), calls upon Congress to reject any effort to repeal the ACA unless it is simultaneously replaced with an alternative program that meets the standards articulated by President Trump that no American will lose coverage, and that coverage will be more affordable and of higher quality for all Americans. Urges Congress to not vote on any measure that would repeal and replace the ACA without first allowing a comprehensive public review, including evaluations by the Congressional Budget Office and relevant policy committees. Makes legislative findings on the impact of the ACA in reducing the number of uninsured, the number of people receiving coverage under the provisions of the ACA, and the impact of the proposed American Health Care Act on the state and the number of Californians receiving health coverage.

Existing law: Establishes, through the ACA, several provisions to make health insurance coverage available to Americans, including increased federal matching funds for an expansion of the Medicaid program for low-income non-disabled adults under age 65, advanced premium tax credits and cost-sharing subsidies for low-to-moderate income individuals purchasing coverage through exchanges, an “individual mandate” to obtain health coverage or pay a tax penalty, and a requirement that health plans “guarantee issue” coverage in the individual market.

This resolution:

1. Makes the following legislative findings:
   1. Over the first two years of full implementation of the ACA, California’s uninsured rate decreased by half—the largest percentage point decline in the uninsured rate of any state—from 17.2% in 2013 to 8.6% in 2015, according to the United States Census Bureau, with the federal Centers for Disease Control and Prevention indicating a further fall to 7.1% in the first nine months of 2016;
   2. This decline, from 6.5 million uninsured individuals in 2013 to 3.3 million uninsured individuals in 2015, is a historic accomplishment that reaches across all income levels, geographic regions, and ethnic groups in California;
   3. In June 2016 nearly 3.7 million individuals received coverage through the Affordable Care Act’s Medicaid eligibility expansion;
   4. Over 13 million children and adults—approximately one-third of the population—now receive health care coverage through the Medi-Cal program in California;
   5. Since the California Health Benefit Exchange (Covered California) opened its doors it has cumulatively enrolled 2.5 million people into health care coverage;
   6. Currently, nearly 1.4 million people are enrolled in health care coverage through Covered California, with approximately 90% receiving federal subsidies;
   7. The lifeblood of these coverage expansions in California is the federal funding received through the ACA;
   8. California’s strong consumer protections for health care coverage, access to comprehensive health coverage, including reproductive health care services, and vigorous regulatory system is threatened by the American Health Care Act (AHCA) under consideration in Congress;
   9. The AHCA will result in elimination of all federal funding for Planned Parenthood, a reduction of tax credits and an increase in premiums for many low and moderate income Californians, the elimination of cost sharing subsidies, a repeal of the Medicaid entitlement to coverage, and the elimination of enhanced federal funding for new enrollment in Medi-Cal in 2020, resulting in a massive shift of costs to the state, more uninsured Californians, and fewer Californians receiving affordable coverage;
   10. The AHCA under consideration in Congress provides $600 billion in tax cuts primarily to upper income individuals, implements an “age tax” that allows insurers to charge an older person five times that of a young adult and proposes that income-based premium subsidies would be replaced by age-based subsidies, which hurts moderate income people and makes insurance unaffordable for all but the least healthy;
   11. Millions of Americans rely on the essential provisions of the ACA, including, among others, premium tax credits, cost-sharing subsidies, and easily comparable comprehensive coverage;
   12. Since the ACA was passed in March 2010, the United States private sector added over 15,000,000 jobs and set a record for consecutive months of job growth; and,
   13. Health care policy is extremely complex because it involves the lives and well-being of hundreds of millions of Americans, impacts the national economy in innumerable ways, and involves complex laws and regulations, insurance markets, and consumer protections.
2. Affirms the Senate’s strong support for the ACA and calls upon the United States Congress to reject any effort to repeal it unless it is simultaneously replaced with an alternative program that meets the standards clearly and consistently articulated by President Trump: that not one American will lose coverage and that coverage will be more affordable and of higher quality for all Americans.
3. Urges Congress to not jeopardize the health of millions of Americans by pushing through irresponsible policy in late night hearings, but instead allow for comprehensive public review, including evaluations by the Congressional Budget Office (CBO) and relevant policy committees, so that Americans have the opportunity to offer input and have their concerns heard.

FISCAL EFFECT:

Non-fiscal

COMMENTS:

1. Author’s statement. According to the author, prior to the enactment of the coverage expansions under the ACA, over 40 million Americans (including 7 million Californians) were uninsured. The consequences of a lack of insurance are dire. Uninsured people are more likely to receive too little medical care and receive it too late; dying sicker and sooner. The ACA transformed the health care system by dramatically reducing the number of uninsured through the expansion of Medicaid, making premium and cost sharing subsidies available for people purchasing coverage in health care exchanges, and making it easier for individuals with pre-existing conditions to obtain comprehensive coverage.  Lives have been saved because medical treatment has been provided at the right time in the right setting. The so-called “repeal and replace” alternative being advanced by Republicans in Congress has been described as a massive windfall for the richest Americans at the expense of health coverage for low income Americans, and will increase the rates of uninsured Americans. The President has promised to cover everyone with better and cheaper coverage. The pending proposal falls far short of this promise and will destroy the gains made under the ACA.  This resolution calls upon the President and Congress to engage in thoughtful deliberative policymaking and ensure that not one American will lose coverage, and that coverage will be more affordable and higher quality as promised.
2. Background. The ACA is the most transformative legislative action the U.S. health care system had seen in over 40 years. The passage of the ACA meant sweeping changes to health care coverage in this country, including establishing more generous eligibility rules and federal funding for Medi-Cal program, providing federally-funded premium and cost-sharing subsidies offered through Covered California (California’s health benefit exchange), and imposing new requirements on health insurers that made it easier for individuals with preexisting conditions to obtain coverage. The coverage expansions alone led to 20 million newly insured individuals in this country, including over 5 million Californians. President Trump and the Republican leadership of the 115th Congress quickly announced their intentions to “repeal and replace” the ACA within days of the November 2016 election.
3. Major provisions of the ACA. The ACA provided new funding and established new requirements with the goal of expanding health insurance coverage. Some of these requirements include:

Major Medicaid Provisions

Major Health Insurance Coverage Reforms

Major Insurance Market Reforms

California has a history of strong consumer protections in its health insurance market; enacting some even before the ACA required them. However, prior to the ACA, the individual insurance market was not generally available to older individuals or individuals with preexisting conditions. If such individuals did have access to insurance, they paid much higher premiums than younger or healthier individuals or had coverage for preexisting conditions temporarily excluded from their insurance benefit. Additionally, health insurers could limit coverage by applying annual and lifetime limits on benefits, even to Californians with employer-based coverage. California lawmakers passed at least 50 laws to harmonize California law with the ACA and establish Covered California, and implement the expansion in Medi-Cal. Given the many challenges to the ACA since its inception, California lawmakers suspended many of the pre-ACA consumer insurance protections as a contingency should the ACA be altered.

1. Decline in uninsured from ACA. California has seen a remarkable decline in the number of people without health insurance coverage. Most notably, the percentage of Californians under age 65 without insurance declined from 22% in 2011 to 8.6% in 2015 (from 7.3 million in 2011 to 2.9 million in 2015). California experienced the largest percentage point decline in the uninsured rate of any state, according to the US Census Bureau. The decline in uninsured as a result of the ACA also crosses the major race/ethnic and income groups in California.
   
2. The AHCA. Below is a breakdown of the proposed law to “repeal and replace” the ACA, broken down by the House Committees that will hear each set of provisions:

Energy and Commerce Committee:

• Prevention and Public Health Fund (PPHF) – Repeals PPFH appropriations for fiscal year 2019 and beyond and rescinds unobligated FY 2018 funds.
• Community Health Centers – Adds $422 million in funding for FY 2017.
• Planned Parenthood – Specifies a one-year freeze on mandatory federal funding (Medicaid, CHIP, social service block grants) going to “prohibited entities” describing Planned Parenthood.
• Medicaid Expansion – After January 1, 2020, the enhanced 90% matching rate would only apply to expansion-eligible individuals already enrolled in Medicaid as of December 31, 2019 and do not have a break in eligibility for more than one month after that date. After January 1, 2020, the State could only enroll newly eligible individuals at the State’s traditional FMAP for that individual. (California’s traditional matching rate is 50%).
  
• Medicaid Per-Capita Allotments – Eliminates the federal guarantee of Medicaid matching funds by capping federal Medicaid funding through a per capita cap for five population groups, starting in 2020. Uses each State’s spending in FY 2016 as the base year to set targeted spending for each enrollee category (elderly, blind and disabled, children, non-expansion adults, and expansion adults) in FY 2019 and subsequent years for that State. Each State’s targeted spending amount would increase by the percentage increase in the medical care component of the consumer price index for all urban consumers from September 2019 to September of the next fiscal year. Starting in FY 2020, any State with spending higher than their specified targeted aggregate amount would receive reductions to their Medicaid funding for the following fiscal year. Includes data and reporting provisions, with a temporary increase to the federal matching percentage for these purposes (Oct. 1, 2017-Oct. 1, 2019). Provides for audits in specified years.
  
• Medicaid – Repeals hospital presumptive eligibility authority. Reverts the mandatory Medicaid income eligibility level for poverty-related children back to 100% of federal poverty level. Specifies that eligible children could be covered in CHIP. Repeals the 6% point bonus in the federal match rate for community-based attendant services and supports, and returns to prior law without the 6% bonus.
• Medicaid EHBs – Repeals the requirement that EHBs must be provided in certain Medicaid plans on December 31, 2019.
• Disproportionate Share Hospitals (DSH) – Repeals DSH cuts in non-expansion states in 2018. Repeals DSH cuts in Medicaid expansion states in 2020.
• Additional Medicaid Provisions – Includes certain provisions regarding the consideration of lottery winnings in MAGI; the limitation of effective date for retroactive Medicaid benefits to the date of application; and requiring individuals to provide documentation of citizenship or lawful presence before obtaining coverage.” Also repeals state authority to elect to substitute a higher home equity limit that is above the statutory minimum in law
• Medicaid Eligibility Redeterminations – Requires States with Medicaid expansion populations to redetermine expansion enrollees’ eligibility every six months, instead of annually. Provides a temporary 5% FMAP increase to States for activities directly related to complying with this requirement.
• Patient and State Stability Fund – Provides for a fund to reduce costs for patients and to stabilize State markets. The fund would provide $15 billion in 2018 and 2019 and $10 billion annually for 2020 through 2026. Funding is allocated for first two years based mainly on healthcare spending in the individual market and to a lesser extent on other factors like the state uninsured rate below 100% FPL (favoring non-expansion states) and the amount of plans participating in state exchanges. After the first two years, funding is set by the Administrator based on “cost, risk, low income uninsured population, and issuer competition.” In 2020, the bill would phase in a state matching formula, presumably to help assist states that use money to build this own program.

The fund can be used by states for the following purposes:

• 1. Provide financial assistance, high-risk individuals who do not have access to health insurance coverage in the individual market;
  2. To help incentivize stable premiums;
  3. To lower insurance costs in the individual and small group markets;
  4. To promote participation in state insurance markets;
  5. To provide access to preventive, dental, vision, and mental health services;
  6. To pay providers; and,
  7. To reduce cost sharing and premiums.
• ACA Cost-Sharing Subsidies – Repeals cost-sharing subsidies for individuals purchasing individual coverage in exchanges, beginning in 2020.
• Continuous Coverage – For Benefit Year 2019, implements a 12-month look back period to assess whether an applicant went without coverage for greater than 63 days. If such a break in coverage occurred, there will be a flat 30% late-enrollment surcharge applied to their base premiums for 12 months. The surcharge is the same for all those having such a break (it does not vary by health status). The surcharge applies for special enrollment applicants in Benefit Year 2018.
• Actuarial Value (AV) – Repeals the AV levels that correspond to metallic levels of coverage under the ACA. The ACA establishes four levels of coverage (bronze, silver, gold and platinum) based on the concept of “actuarial value,” which represents the share of health care expenses the plan covers for a typical group of enrollees.
• Age Rating – Changes age-rating bands to 5:1 (they are 3:1 under the ACA) and permits states to set their own age bands.

Ways and Means Committee:

• Recapture of ACA Excess Advance Premium Subsidies – For tax years 2018 and 2019, requires repayment of the full amount of premium subsidies, instead of the capped amount in the ACA, regardless of income.
• Current ACA Premium Subsidies – Repeals current ACA premium subsidies beginning in 2020. In the meantime, revises calculation of individual or family income contribution to premiums so it considers both household income as well as age. Allows current subsidies to be applied to catastrophic plans and certain plans not sold through Exchanges. Prohibits subsidies’ application to plans that cover abortion services.
• Refundable Tax Credits – Creates an advanceable, refundable tax credit for the purchase of state-approved, major medical health insurance and unsubsidized COBRA coverage. Credits are newly means tested and are available in full to those making $75,000 per year ($150,000 for joint filers). They phase down by $100 for every $1,000 in income higher than those thresholds.

Eligibility is based on not having access to government or employer coverage and being a citizen, national, or qualified alien. Credits are age-adjusted as follows:

• 1. Under age 30: $2,000;
  2. Between 30 and 39: $2,500;
  3. Between 40 and 49: $3,000;
  4. Between 50 and 59: $3,500; and,
  5. Over age 60: $4,000.

Credits are “additive for a family” and capped at $14,000. They are indexed at CPI plus 1%.

• Small Business Tax Credit – Repeals beginning in 2020. Makes the tax credit unavailable 2018-2020 for plans providing coverage of elective abortion.
• Individual Mandate – Reduces the penalty to zero for 2016 and beyond.
• Employer Mandate – Reduces the penalty to zero for 2016 and beyond.
• Cadillac Tax – Modifies the effective date to delay it to 2025. The Cadillac tax will not apply for any taxable period beginning after December 31, 2019, and before January 1, 2025.
• Health Savings Accounts (HSA), Other Taxes – “Effectively repeals” the over-the-counter medicine tax as of 2018 tax year and lowers HSA distribution tax to pre-ACA levels as of December 31, 2017. Repeals limits on contributing to FSAs as of December 31, 2017. Restores the pre-ACA medical deductibility percentage beginning in 2018. Repeals the additional the additional 0.9% percent Medicare tax beginning in 2018. Repeals the net investment tax beginning in 2018.
• Device Tax – Repeals for taxable years beginning after December 31, 2017.
• Pharma Tax – Specifies that the tax would not apply for years beginning after December 31, 2017.
• Insurer Tax – Repeals the health insurance tax beginning after December 31, 2017.
• Insurer Remuneration – Repeals the limit on the deduction of a covered health insurance provider for compensation attributable to services performed by an applicable individual starting in 2018.
• HSAs – Sets basic limit at least $6,550 in the case of self-only coverage and $13,100 in the case of family coverage beginning in 2018. Both spouses would be able to make catch-up contributions, among other policies.

1. Congressional hearings on the AHCA. On Wednesday, March 8, 2017, the House Energy & Commerce and Ways & Means and Committees concurrently convened to markup respective committee prints of the AHCA, after only being revealed on the Monday prior. According to observers of the hearings, a key point of contention during both committee mark-ups was the lack of CBO score on the AHCA, as well as the broader process at-hand. It is anticipated that the House Budget Committee will combine the Committees’ portions into a single reconciliation package during the week of March 13th, and a full Floor vote will take place on March 23rd, which is the 7th anniversary of the passage of the ACA.
   
2. Support. The California Labor Federation writes that the AHCA is a disaster for Californians because it would repeal much of the provisions of the ACA and cause millions of Californians to lose their health coverage, cut billions of federal dollars from the state’s budget, and lead to increased health costs for everyone. In addition, the bill retains the 40% on job-based benefits that undermines the foundation of health care coverage in this country. The AHCA amounts to a massive tax giveaway to corporations and the wealthy paid for by taking away coverage from working people and their families and increasing costs for everyone. This plan threatens the health care for the millions of Californians who have gained coverage through the ACA and is a leap in the wrong direction and will undo years of progress California has made to insure the uninsured and improve health care quality and affordability. SEIU Local 1000 writes that there were over 75 hearings and 100 amendments relating to the ACA in the house and in the Senate 25 consecutive days of debate. They are deeply concerned with the lack of analysis concerning the ACA repeal proposal and this resolution is a necessary step to letting Congress know the importance of the ACA and the substantial harms in California and across the country from expediting the repeal process.

SUPPORT AND OPPOSITION:

Support: Advancement Project California

AFSCME Council 57

Alameda Health Consortium

Americans for Democratic Action-Southern California

Alzheimer’s Greater Los Angeles

California Calls

California Labor Federation, AFL-CIO

California Physicians Alliance

California Rural Legal Assistance Foundation

Children’s Defense Fund – California

Children Now

The Children’s Partnership

Community Clinic Association of Los Angeles County

Community Clinic Consortium – Contra Costa and Solano Counties

Community Health Partnership

Congress of California Seniors

Courage Campaign

Equality California

Essential Health Access

The Greenling Institute

Having Our Say Coalition

Health Access California

Inland Empire Coverage and Health Initiative

Lutheran Office of Public Policy – California

National Health Law Program

NICOS Chinese Health Coalition

Professional & Technical Engineers, Local 21, AFL-CIO

Project Inform St. Anthony’s San Francisco

Service Employees International Union Local 1000

UDW/AFSCME Local 3930

United Ways of California

Vision Y Compromiso

Western Center on Law & Poverty

Oppose: None received

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