Senate Standing Committee on Health

Good afternoon. We will call to order the joint informational hearing of Senate and Assembly committees on health. Very thankful to Senator Dr. Weber Pierson for her incredible leadership on the Senate side as our Chair of Senate Health.

And this is a focus on the cost of uncertainty, health coverage, access and affordability amid federal Instability over the last two decades, federal policy changes have reshaped California's health insurance landscape.

Our state was able to capitalize on that framework laid by the Affordable Care act to expand coverage, strengthen consumer protections and bring our uninsured rate to historic lows. Families gained peace of mind. Providers gained stability. Our health care infrastructure remained operational and intact. But those gains are now under threat.

The rollback of federal policies risk reversing hard won progress and to make care more accessible and affordable. And for many Californians that accessibility and affordability was already in question. More than half of Californians are worried about out of pocket expenses, long term care and monthly premiums. Concerns that now surpass anxiety about housing, groceries, transportation or utilities.

When people are this worried about costs, they change their behavior and in this case they change their behavior around health care choices. That means that people will make life and death decisions. Nearly 6 in 10 Californians report skipping or postponing care in the past year because of cost.

And 4 in 10 of them say their condition worsened as a result. This is what uncertainty looks like on the ground. And ongoing federal instability compounds existing financial stress. This is not just about politics or finger pointing.

This is about whether a mother fills her child's inhaler prescription, whether seniors schedule a follow up appointment, whether a family keeps coverage as their premiums rise. Today we will hear from consumers, experts and stakeholders about what is at stake.

Our responsibility is clear to understand how federal and state and consequential state decisions translate into real world consequences for Californians and to explore what we as a state can do to protect access and affordability. California has led before in protecting consumers health coverage. In this moment of instability we must be prepared to lead again.

I will now pass it over to my co Chair for this hearing, Senator Dr. Weber Pierson.

Well want to welcome everyone to this hearing and want to thank Chief Chair, Member, Assembly Member Bonta for doing this joint hearing with the Senate because we understand that even though we are in two separate houses, we are all dealing with the same issues and repercussions of what is happening at the federal level.

So I want to thank her and the staff on the Assembly for their partnership and want to thank of course the staff on the Senate side of the Health Committee for helping put this together.

You know, under the Affordable Care act and California's Health for all policies, California had realized health coverage rates as high as 94%, which is absolutely amazing.

And while we all know that health insurance doesn't guarantee that all groups will have better health outcomes, yet evidence does show that improvement in access via insurance reduces financial risk and provides those with the least access prior to coverage the most benefits in order to be able to have improved health outcomes.

As a health care provider, I know that health coverage is foundational, but we still need to do more to ensure that access for all is appropriate, timely and affordable to ensure the best health care outcome for all Californians, regardless of their zip code.

And this is why it is so very frustrating in this moment that under this federal Administration that we are going backwards in terms of our access instead of forward. During a time when we really need to be putting our efforts for expansion and a more focus on preventative care.

We in California are now trying to fight and figure out how we can maintain and how we can minimize many of these cuts. You know, I remember during this past election cycle when we were promised as Americans that there would be no cuts to Medicaid.

And yet at this point, this country is facing a trillion dollar cuts, mostly to Medicaid and other health programs, to Fund tax cuts for the wealthy. Because of these federal actions, about 16,000 people are projected to suffer preventable deaths.

Two million patients will lose their physicians, 3,800 thousand women will not get their mammograms, and more than a million will be saddled with even more medical debt. Federal policies will result in significant losses of resources that health care providers need to deliver care. We are now in a situation where we have to do more with even less.

And this is why this panel today is so important to lay the foundation of where we are, what we foresee on the horizon, so that as we start after this listening to bills and dealing with budget, we at least have the basics on our foundation.

Having a conversation about how these cuts will be impacting our healthcare providers and most importantly, our healthcare patients and families and businesses across California is extremely critical at this time. And I'm looking forward to hearing the recommendations on how we as legislators can respond to do our best to try to preserve health care access for all.

Once again, I want to thank my good friend Chair Bonta, and I will turn it back over to her to begin this presentation.

Thank you, Senator. I would ask if there are any Committee Members who have any opening remarks that they'd like to make at this time. Assemblymember Addis.

Chair. First of all, let me say thank you to the Madam Chairs. It's such a pleasure to be here with both of you and thank you to you and your staffs for arranging this hearing. And I obviously chair the Health Budget Subcommitee of which Chair Bonta is a part of.

And we worked extensively across last year to try to address what we thought was going to be coming this year. We didn't quite know the harm that we were going to face this year, but we knew that it would be something and so worked extensively last year, particularly on the financial challenges and the insurance challenges.

And want to thank both chairs as well as the entire budget team and both the Assembly and the Senate, because one of the most important things that I think we did last year was create a new Fund to help stabilize insurance premiums for the lowest income people in covered California to the tune of $190 million.

But what we heard in our hearing yesterday, our budget sub one hearing yesterday, is that the gaps that we're facing are more to the tune of 8 and 9 billion dollars from HR1 to health care overall in Calif. And so we've been working diligently both through the policy side and the budget side to try to come up with a health care plan in California that is going to meet the most need with what is now the least amount of dollars that we've had in a long time.

In probably the history of California, we've never seen cuts and rollbacks quite like these. We've been in times where we've been able to lean in and increase health care and will e the 94% of people that had coverage before going into what's happening with HR1.

And I've said before, I think we should be very proud to be able to have 94% of Californians with health coverage. But we're now in a situation where we may not be able to continue that and really do need voices from the field.

And I'm very glad to be hearing folks coming forward today to give us their recommendation. And I know there's a number of bills moving through the Legislature, Legislature policy bills.

We were just talking about the number that may be coming to the health policies, dozens of bills coming to the health policy Committee to try to address this situation. And so I really just want to say thank you to the chairs for working in such a collaborative way between policy and budget.

I think we have a phenomenal team and I'm honored to be here with you. But also know that There's a lot of strong work that we're going to do ahead together. So thank you,

Assemblymember Dr. Patel.

Thank you, Chair Bonta, and thank you, Chair Dr. Akilah Weber Pierson for bringing us together for this very important informational hearing. As we know, the concern of the day, of the moment, of the year is the actual cost of all this uncertainty. We're here today because we're at a critical turning point in healthcare coverage in California.

As Chair Bonta remarked, for two decades our state has led the nation in expanding health care coverage, achieving historic lows of uninsured rates of even as low as 5.9% in 2024.

However, all of this progress is now under immediate threat from federal policy shifts with the expiration of vital subsidies as well as threats to our workforce as well as our hospital systems. The short term impacts are of course, around the affordability crisis.

We are facing a cliff with the expiration of these enhanced premium tax credits Covered California enrollees are facing an average of 97% increases in their monthly premiums. But even more concerning than that is the long term impact of systemic instability for our health care systems.

HR1 threatens to dismantle our safety nets that we rely upon for those between work, between jobs. While facing uncertainty, they're now facing the uncertainty of accessing health care. This isn't just a loss of health care coverage from, you know, from their wallets, but it's an economic drain that spirals and stacks.

Since 2005, family health premiums have grown 129%, far outpacing both wages and inflation. And I want to thank our legislators here and the Committee staff for putting together an excellent white paper to help provide us the background.

What we're looking at in this system is to make sure we're hearing or in this hearing, we're looking to hear from key stakeholders within the community about what we can do as a legislator to try to turn this around and protect Californians and the progress we've made for health care access in California. Thank you,

Senators, any opening remarks?

Thank you so much, Madam Chair, and really thank you for organizing this important hearing today.

I come as Chair of Senate Labor Committee to this discussion and want to say how important it is for us to be looking at the costs of health care and all of the uncertainty and what pressures that puts on Californians, particularly those who are the lowest wage earners, who are the most vulnerable and who are susceptible to not just health care insecurity, but also housing insecurity, food insecurity and so many things that make our community and our residents healthy in the state of California.

I come from a background of union organizing, in particular in the low wage sector, particularly in sectors that are held by black and brown workers. And I want to tell you health care is always the number one issue.

We talk a lot about higher wages, but it's often the health benefits that are the topic of discussion when you are talking about ways to improve the lives of working people. One, because when health care costs more, employers pay less. And then those low wage employers don't provide health care at all.

And that means that the California taxpayers are the ones who have to shoulder the burden. And we know early research is showing that 20% of employers in this state rely on Medi Cal as their health care provider, which means the people of California are carrying the freight on that health care cost.

We know our budget and our system is overburdened and underfunded. To have an opportunity to talk about some of these impacts are really important.

And because I represent South Central Los Angeles, I would be remiss to not talk about some of our clinics who have reached out about today's hearing and wanted me to share from UMA Health Clinic in the middle of South LA that they are starting to see Medi Cal reimbursements get denied, particularly in their dental area.

That affects children and our seniors. And they also are looking at thousands of patients that they are seeing that will not be re enrolling at the end, starting at the end of last year. And now the current freeze is going to impact thousands more.

There was another health care clinic in my community that shared the story of a young man named Diego. 35 years living with his wife. He suffers with chronic rheumatoid arthritis, cartilage disease, and suffers from knee pain and has difficulty walking. And he has diabetes. His extended coverage was taken away January 12026.

That only leaves him emergency room coverage. I have a whole stack of these kinds of testimonies that are coming in and I know many of you do too. And so I just want to say how important this hearing is. I look forward to the information that will be shared.

And I know working with all of you on this dais who cares so much about this topic to make sure that we ensure every Californian is protected.

Thank you, Senator Smallwood-Cuevas. Any additional opening comments? Senator Rubio, thank you.

Just really quickly, I just want to first of all thank the Assembly and our leaders here, our chair and the Senate for bringing us together. I think sometimes it's important that we hear the same information together. As we know we all have bills in different houses.

But I think just generally, I just want to just kind of echo what everyone said. But you know, Healthcare is the foundation to everything. And I just have to say our communities are struggling tremendously with everything, the uncertainty of it all. But Healthcare is one of those issues that continues to be top of mind for families.

And I know because if families are not able to go to work with good health, everything else falls apart. As an educator, I can share with you how many times we have students that have their teeth falling off or they're really hurting one way or the other because their parents can't afford health care.

Again, I won't belabor the point, but our communities need this discussion. Our health care providers in our communities need this discussion. I want to thank everyone for bringing us together. It is important that we see what's coming down from the Federal Government.

It is important that we see the impacts because I think sometimes we have a very difficult time explaining to our community where the connections are. And it is one of the scariest times for our communities.

And so I just want to make sure that they know that we're here to be their voice and make sure that we share ideas from the Senate to the Assembly, which is critically important. So thank you, Madams Chairs, times two.

Thank you with that. Very excited to be able to have all of our great thinking together. We are honored to be joined by a number of panelists today who are sharing their information and perspectives with us, many of whom have traveled to join us today, and we want to respect their time and hours.

We request each of the panelists to stick to the allotted time so we can hear from everyone and have time for some dialogue. We plan to provide time for Member questions after each panel and we will allow public comment after all the panel will have concluded.

I'd like to invite up our first panel where we will cover the changing federal regulatory landscape and how the state is responding. I will ask each panelist to introduce themselves as part of their testimony and we will begin just to kick it off with Dawn Joyce, the senior vice President of Impact Health Policy Partners. Please begin.

One more time. There you go.

Good afternoon and thank you for the honor of joining you today. My name is Dawn Joyce, and I'm a Senior Vice President with IMPACT Health Policy Partners.

We're a nonpartisan firm that focuses specifically on federal health policy and have had the opportunity to provide federal policy analysis to the California Legislature, state agencies and partners here since the early days of the Affordable Care Act. Are my slides up?

Please begin the slide presentation. Just to the panelists, the magic words in this green room are please begin slides.

Please begin slides. Thank you. We've been asked today to please share an overview, a federal overview of the Affordable Care act, its impact, and the current threats to it. The Patient Protection and Affordable Care act is one of the most impactful pieces of federal legislation since the inception of Medicaid and Medicare in 1965.

Two primary areas of impact are one, expanded coverage and two, policies to help ensure that that coverage is meaningful. Prior to the passage of the ACA, more than 50 million individuals in our country were uninsured, including more than 6 million here in California.

The bill cut that rate in half from 16% to 7.7 and as we heard just moments ago, even lower here in California.

It did so with very generous federal funding as states originally adopted Medicaid expansion that was covered 100% with federal dollars that ratcheted down to 90% where it was intended to stay on an ongoing basis moving forward.

As you know, that came under threat last year with considerations through budget reconciliation cuts to that were not included despite the other vast cuts to Medicaid. It's important to keep that in mind as we look at a potential budget reconciliation 2.0.

The ACA also expanded access to private coverage through the creation of ACA marketplaces, including both the federal marketplace and the state marketplace covered California here in that it increased affordability by offering premium subsidies of two different types of one, access to premium subsidies to lower the cost on a monthly basis and two, cost sharing subsidies to help individuals who are uninsured or who are insured actually utilize that coverage to access care, which we know is otherwise a barrier.

When Congress subsequently adopted enhanced premium tax credits, they expanded who was eligible and also lowered how much any individual or family needed to pay on a monthly basis. That more than doubled the number of individuals who accessed coverage through our marketplaces through the ACA. It rose from 10 million to 24.3 at the peak.

Those are the EPTCs that we're familiar with that were not renewed at the end of last year that are very much a subject of debate currently. Additionally, the ACA included policies to specifically help make that health coverage that was expanded meaningful so that it could access certain benefits.

In that the ACA mandated coverage of 10 essential health benefits. Prior to this, many individuals who purchased coverage directly did not have access to mental health care or maternity care, et cetera.

What you're seeing on this slide is the inclusion of those 10 essential health benefits in those insurers also could not place lifetime limits nor annual limits, which previously were very commonplace. Additionally, and a key topic currently at the federal level, the ACA provided access without cost sharing to preventative services, as mentioned here, which are crucial to health.

These are pieces though insurance has to cover those if they're recommended by certain federal bodies. Acip, ustftf.

We can talk more about that if there are in that though what is currently happening is that there are moves to the HHS Secretary has removed individuals from those committees and advisory bodies and replaced them with individuals who question the integrity of science and the recommendations of vaccines.

You've done important work here in California to ensure that we continue to have access to that, but it's not guaranteed in the federal body. As you think about the threats that are currently in place to the all of the advancements made under the Affordable Care Act, I like to categorize them in three areas.

One HR one or the one big beautiful Bill. You're very familiar with that 900 plus billion dollars of cuts that will lead to vast losses in terms of medical coverage and also coverage in the marketplaces. The Congressional budget office estimates 10 million.

The other two are regulatory changes that are currently underway that we'll probably hear more from Covered California that are seeking to make less valuable plans available through our marketplaces and elsewhere. And then there's just a broader effort currently to dismantle remove federal funding that we have relied on and it will lead to vast coverage losses.

And happy today to answer questions after this as well as following the hearing. Thank you.

Thank you. And we'll proceed with Jessica Altman.

Thank you. Good afternoon Chairs and Committee Members. My name is Jessica Altman. I'm the Executive Director of Covered California. I provided slides only as background, so do not put my slides up please. I want to thank you for the opportunity to be here and really for hosting this incredibly important and timely discussion.

An estimated 1 in 6 Californians has at some point been covered through Covered California. These are small business owners and employees, gig workers, early retirees, farmers and farm workers, and other low and middle income Californians who really by definition have no other options for affordable coverage.

And when it comes to our consumers, we know that cost and affordability matter. Roughly 4 in 10 of our enrollees earn under 200% of the federal poverty level, or around $31,000 a year for an individual.

And in a recent survey we did of our Members, 47% said they didn't have enough to make ends meet, and about 20% reported food insecurity covered.

California is proud to be uniquely amongst marketplaces, an active purchaser, meaning we use our role as a marketplace to keep premiums as low as possible, ensure choice among consumers, and improve quality and value across plans.

We negotiate rates with carriers, we set contractual requirements that promote utilization and value, and we use financial incentives to hold carriers accountable and drive improvement in health and wellness. We work in close partnership with sister departments like HCAI and DMHC and and in tandem with our fellow public purchasers, CalPERS and DHCS.

Collectively, we three purchasers cover 45% of Californians, and we align our purchasing power to drive systemic changes in the areas of quality, affordability and value for consumers.

In recent years, and empowered by favorable federal policies and the support of this body, we have provided the greatest level of affordability since our inception and as highlighted in opening statements, reached record enrollment and record low uninsured rates in the state, all while achieving measurable improvements in key measures of health care quality.

Yet, unfortunately, recent federal actions are working against these same goals and achievements. As a Marketplace under the ACA, we are subject to federal law and rules and HR1 and new rules will have sweeping impacts. And alongside the now expired enhanced premium, tax credits are expected to lead to substantial declines in Enrollment.

By limiting eligibility and enrollment opportunities, adding new administrative burden on consumers, and increasing costs, to give just a few examples of many, we will see a shorter open enrollment period starting this year, the Federal Government no longer considers gender affirming care to be an essential health benefit.

Consumers will face more required red tape getting and keeping coverage, and next year over 120,000 legal immigrants such as refugees and asylees will no longer be eligible for any federal financial assistance through marketplaces.

One thing HR1 of course did not do was extend enhanced premium tax credits, and they did expire on December 31, providing two and a half billion dollars in annual savings to our consumers when they were in place, which they no longer are.

We estimated consumers would on average see their monthly costs nearly double, a 97% increase on average, and that as many as 400,000 marketplace enrollees in California could lose coverage over time due to this loss of affordability and premium costs themselves are higher because of the impact of on the market and the risk pool of these changes.

Now, open enrollment did close on January 31st and we are very closely tracking the impacts and what we're seeing in the data. Over 1.9 million Californians did sign up for coverage thus far, a 3% decline in enrollment compared to the same time last year. But there is more to be seen and more to the story.

New Enrollment is down 32% compared to last year and at its lowest level in years, new enrollment among middle income consumers declined 59% as this is a group that lost access to any federal financial support for monthly premium costs.

And more consumers have chosen low level bronze coverage to get a lower premium, but at the expense of higher deductibles and higher out of pocket costs. It really is still too early to see the full effect on our renewing consumers, the majority of our consumers. But some early warning signs are here.

Consumers similarly are switching into those Braun plans out of more generous plans and termination rates among middle income consumers are nearly double. While these numbers are stark, I want to highlight the continued leadership of California to keep coverage affordable.

The Legislature appropriated 190 million for affordability in 2026, assistance that is going to our lowest income enrollees, nearly 400,000 who are renewing at higher rates and not seeing the same outcomes. And we are doing better than the rest of the country.

In closing, I want to thank you for your leadership and know that despite federal headwinds, we are committed to making progress where progress can be made. Thank you. I look forward to your questions.

Thank you. And we'll move now to Elizabeth Lindsberg.

Thank you so much. And I will say whatever the magic words are to have my slides magically appear. Good afternoon Madam Chairs and Members. Elizabeth Landsberg with HCAI, the Department of Healthcare Access and Information.

Really pleased to be able to be here today to talk to you about what OHA, the Office of Healthcare Affordability is doing to address affordability, which is fundamentally an access issue, as many of you have noted. So this is our mission statement. Our mission is to expand access to quality and equitable affordable care for all Californians.

And I'm going to be focusing today on the Office of Health Care Affordability. But I will just note HCAI has a number of other affordability programs including Calrex, including the Hospital Charity, including enforcing hospital charity care and discount requirements, the Data Exchange Framework, which is really critical.

We've got to have providers being communicating with each other so that we're not providing duplicative services which are costly and sometimes harmful to patients. And we're also in the process of working on California's Rural Health Transformation Program.

So I'm going to talk about the three major components of oca, the Office of Health Care Affordability, and just always think it's important to start with a little bit of context. So you all have outlined the crisis of health care affordability that we are facing.

Obviously, this has been an issue that the Legislature has been grappling with for many years. So just to name one effort, eight years ago, there was a Bill that would have capped rates or set health care prices. And the industry said, no, we can't have a governmental entity set prices.

So policymakers said, well, we have to do something. So a somewhat unlikely group of folks, including consumer advocates, labor unions, provider groups, health plan purchasers came together, looked at what other states were doing and came forward with the Office of Health Care Affordability and this framework that I'm going to present to you today.

So I do think it's important to note that it's something of a compromise approach and we think a thorough approach in addressing health care affordability. So at the top, we are fundamentally trying to slow spending growth, which I think is in some ways a modest goal.

We're not talking about bringing people's premiums and co pays and deductibles down necessarily, but at least moderating the rate of health care growth, which has been growing at an average of 5% a year for many decades, while wages are barely keeping pace with inflation. We see health care really outpacing that.

So we're slowing the spending growth rate by first of all being able to measure that. So we're collecting data on total healthcare expenditures for the first time. And then there is an eight Member Healthcare Affordability Board that has the authority to set spending targets. And I'll talk more about those targets.

The board is also the office is also assessing market consolidation. And as your background paper noted, it is pretty dizzying to see both the vertical and the horizontal integration that we have health plans owning other health plans, owning medical groups owning PBMs and pharmacies and the suite deals that they may be giving one another.

When we see market consolidation, the trend is that prices go up and quality stays the same or goes down. And so we don't have the authority to block or set conditions on transactions.

But we do get a notice of a proposed merger acquisition from health plans, from hospitals, from physician organizations, and with Chair Bonta's Bill last year, AB 1415, that will also apply to private equity funds, hedge funds and management services organizations. So we think this is a really important component. We've already seen a lot of consolidation.

We need to understand what's happening with that. I really want to make the point that we're not just about slowing growth and having low cost care, but really high value, high quality care. And so I'll talk about the different work streams we have to try to promote high value care in California.

So I do want to talk a little bit about what spending targets are and what they are not. So healthcare spending targets track and evaluate the growth of healthcare spending in California. It's a measure of per person spending growth and a long term framework to allow entities the flexibility to manage growth that best fits them.

But the spending targets are not themselves price caps that has that. That approach was rejected by the Legislature. So spending targets really try to focus on consumer affordability. And the spending targets that were adopted by the health, the California Health Care Affordability Board are based on median family income and the growth that we see there.

OCHA has very much an all in approach. Right. We have to have every part of the health care system playing its role. So spending targets apply to health plans, to physician organizations and to hospitals. So the statewide spending growth applies to all entities unless there is a lower target that is that is set.

I wish we had the ability to set the spending targets on pharmaceutical drugs. We know that those manufacturers are another key driver, but we don't have the ability within OCHA to do that.

So the board, after a year of consideration, looking at what other states have done, did set a spending target target at 3% again based on health care spending based on health care income of California families. So the Office recommended a 3% target and the board decided to have a glide path starting at 3.5%.

I want to spend a minute talking about the hospital sector target, recognizing that I'm short on time. I will just note that 40% of healthcare spending goes to hospitals and there is very wide variability in terms of hospital spending. So this chart shows you.

We relied on two different measures to try to understand healthcare spending by hospitals in California. And the takeaway here is that there is very wide variability. We have this unit price that looks at per discharge and most hospitals are charging $20,000. And the seven high cost hospitals in California are charging almost twice that at $40,000.

Our relative commercial to Medicare price shows that most hospitals are charging double Medicare, which is a nationally set standard that looks at whether you're in a high cost area looks at rate mix. Most hospitals are charging twice of what Medicare is charging. The seven high cost hospitals in California are charging three and a half times.

So based on that, the Health Care Affordability Board did decide to set a lower spending target for these high cost hospitals. We have five different work streams focused on promoting high value system.

This will be the last slide that I'll cover but I do think this is important to note that we are really driving to a high value system. And I'll just highlight. You can see the five work streams here and I'll just focus on primary care investment.

The research is clear when we have patients established with a primary care provider. When we invest in primary care, preventive and early intervention, we get better health outcomes, we have better health equity and total costs go down. So the board has set a spending target of 15%.

Today only 6 or $7 cents of every health care dollar is spent on primary care. We need to increase that to improve health outcomes. And we appreciate the covered California DHCs and CalPERS have come alongside us in adopting those in their contracts. Thank you very much.

Thank you. I will now bring it back to the Committee for any questions.

Can I just say I'm furious please. Doctor, thank you very much. You know I don't understand why people in the public and some of our constituents do not have the vision of what you all are having or where we are going to be very shortly.

And I am dumbfounded when they just think healthcare is just gonna be there for them. And when I see some of the people that come in our offices and are elderly and are disabled people. Anyone doctors, primary care doctors, they're all very, very concerned. And I don't get it.

What it's going to take for people to wake up because this is not affordable, it's not going to be taken care of. Our most vulnerable. You're doing a good job with what you have. So I just want to thank you very much. I'm just frustrated right now, so can you tell?

We'll go Senator Smallwood-Cuevas and then Assemblymember Patel.

I echo my good Assembly Members comments but I did have a question about the bronze plan. I'm curious. As folks are being outpriced and having to now come down and premiums going up, can't afford the other different healthcare plans, what happens when everyone jumps into the bronze? I'm curious.

I wonder how many practitioners, what kind of facilities that accept that plan. Does that put so much pressure where there will not be enough providers and then what will happen? I'm just curious what happens when you have such a shift so quickly of patients there? And also what is that coverage? What does it actually look like?

And then I also have a question about because I can't imagine what a health care that's three costs, three times the health care, the 351% high cost hospitals. I just can't imagine what that care looks like. I've never experienced that care. I've never been in that sort of coverage bracket.

So I'm curious what, you know, if there are some anecdotes about what that care is compared to sort of a bronze plan and what those patients will need. So two questions. So Ms. Altman and then HK first

of all, thank you for that really important question and kind of digging into what does this really mean after we see the consumer outcomes and the consumer fallouts. Cover California offers metal tiers.

All marketplaces do bronze, silver, gold, Platinum, that sort of offer the spectrum of either lower premiums with higher cost sharing or higher premiums for no deductibles, very low cost sharing, which is what you see all the way up at a platinum plan. Now what is not different is the essential health benefits are covered in every single plan.

Preventive health care services are free in every single plan. The networks like you would have, say Kaiser Bronze, Silver, Gold, Platinum, same providers offered. Right. What is different is the cost sharing and in particular the deductibles are much higher in the bronze plans that you see at Silver, Gold and Platinum.

Now we standardize our benefit design so we do the very best we can within the federal rules to make a bronze plan as good as a bronze plan can possibly be. But the deductibles are really high and we know that that is a deterrent for patients to seek care, care that they truly need. Right.

Skipping medications, skipping primary care visits. We do our best to educate in particular around the free preventive services. There are free primary care visits within a year even in the bronze plan. So people are maximizing and they are of course protected if they end up in the ER in a bronze plan right at that hospital high end.

So there's a lot of value there. But we've also worked very hard in recent years to get people out of bronze plans, to get them into the more generous plans. And we've been very successful.

And so like you were heartbroken to see this trend on the, on the one hand, but we also prefer it to them going uninsured. We'd rather have a bronze plan than not have coverage. And so in light of the affordability crisis there, there is sort of a pro and a con to the bronze outcome.

Something is better than nothing.

And then the question around high cost.

Yes, Senator, thanks for the question about the high cost hospitals. I wish I could say that we believe they're providing fundamentally better care, but that is not what our research shows.

So from pretty early on when we were having the health care affordability Board Meetings, we were hearing from teachers and carpenters and hotel workers about the high cost of hospital care. So we started doing some deep analysis. Many of them came from Monterey County and Monterey Counties. Those areas are covered. California premiums are much higher.

And what we saw when we looked at the data is that those are must have hospitals. So they are charging more because they can charge more. They don't necessarily have better quality scores. They don't necessarily provide more charity care. They're not providing this. The data shows that they're not necessarily providing higher care.

They're just charging more because they can charge more. And that's something that we need to be aware of.

Thank you. Thank you. We'll go to Assemblymember Patel and then Senator Rubio, Sharpe Collins and then we will bring it back to co chair and then we will wrap this panel because we have a lot more.

Thank you so much for your presentations. Just thinking about the ripple a little bit with the reduction in enrollment and those enrolling having lower coverage of care and costs approaching or surpassing 30% of an annual income. Read that in the report. Also, thank you for this excellent report. I'll say that again.

Are we doing anything, we're tracking cost, but are we doing anything to track accumulating medical debt that people might be accumulating? Again, I'm thinking about the economic ripple. People end up having debt and then we know what happens after that. They file for bankruptcy or they seek other kinds of coverage to the safety net programs.

I see this as having a huge impact. Are we able to track that in any way?

Thank you for that question. And I think there are so many different ripple effects, right? There's medical debt, there is healthcare outcomes when people don't seek care. There is what this all means for our safety net and the viability of the providers that our communities rely on.

And I think you can hear across a variety of the panels today the different ways we'll be trying to really understand and track and prevent some of those worst outcomes covered.

California in particular, we are deeply committed to hearing directly from Californians when it comes to these outcomes both from coverage and from a care perspective, including survey research, including qualitative focus groups, et cetera, as well as stakeholders and partners.

We are planning to survey people who were insured with us in 2025, in 2026, whether or not they stay insured or stay insured with us to say what, what is this meant for you and what is your lived experience?

And we can continue to survey those same people if we think that there is more to learn about the long term trajectory of affordability and impact in their lives. So thank you for that question.

I'll just add that your next panel is going to you're going to hear from UC Berkeley and from the California Healthcare foundation that's doing some of the research to get that data. I will note HCI has many data programs and one of them is capturing medical debt in the form of charity care and discount programs.

It is likely an undercount, but we do have some data and we're concerned that that's going to be increasing.

Senator Rubio, thank you.

Thank you and I appreciate, I believe, I think, Jennifer, that's you were expressing all the numbers where the new enrollees are now down. And I'm trying to get to a place that you may not be able to answer, but I'm trying to see where there's an opportunity for segregated data.

So you talked about those new enrollees not enrolling, but you also talked about asylees and everyone that we know about.

But I'm curious to know about those that have qualified, have been enrolled and now are dropping off because what I'm experiencing in my district, in fact I had a conversation with a couple of people this weekend where they're just so afraid of enrolling and giving information out.

And so I'm trying to separate those that would naturally not enroll because either immigration status or mixed family status and they're afraid of information being shared. But do we have data of those that have been, you know, historically enrolled, have services and now have fallen off? Is there a way we can get that information?

Thank you for that important question. We are both deeply committed to data collection at a very granular level. Granular level including race, ethnicity, language, geography, all of the different demographic factors that might interest you.

And in fact we have self reported race, ethnicity and language information on over 80% of our enrollees, which is pretty unheard of in public programs to have a data set at that level. And we use that to fuel our outreach. Our translation right. How do we think about not just giving information to the people we cover.

But our work to get people uninsured, of no surprise, but we're again heartbroken to see it. As we look at our data on who is disenrolling and who is not staying on, staying insured, we are seeing disproportionate coverage loss, particularly for our Latino communities and particularly for our black African American communities.

Now, when the enhanced premium tax credits went into effect, we saw disproportionate gains among those communities. Affordability is equity and we worked very hard to get them. So we're not surprised, surprised that the reversal of that same policy would reverse the disproportionate gains among those communities.

But to your question, I think we also, it's hard to tease this out in the data, but particularly for our Latino communities, feel that immigration and the public charge rule and fear and stigma and willingness to come forward to engage with government programs, state, at the state level or national is a factor.

I will also say we have also great data on our immigrant communities and the status that has allowed them to qualify for benefits through covered California previously.

We'll be working on some, some data we'll be giving to the Legislature, likely in April that breaks that down by geography, by which type of immigration status they have again, race, ethnicity, language, whatever would be most helpful. We have all of that data and are working to package it for you.

So really quickly, you just mentioned outreach, and I think that's where I'm trying to get because as I did at community coffee this weekend, that was the question on everyone's mind, affordability and healthcare. And certainly I don't want to get ahead of the good work that you're doing.

But if you could at some point separately perhaps advise us on what if you have packages or information that we can put out to our communities as we do these community outreach programs, so that we are in line with your message and make sure that we're accurate as we know the information is changing so rapidly every minute of the day that it's hard and I don't want to misinform, but thank you for that and we'll reach out to you separately.

Thank you.

We have so much and it's in language and culturally tailored and we'd love to share it with you.

Thank you. Assemblymember Sharp Collins.

I will make this quick. So just looking at the information, the one thing that I was hoping to hear a little bit more about is when we're looking at the administrative burdens as we as you know that part and then the verification requirements. So if someone can kind of speak to that.

So how will the administrative burdens and verification requirements directly prevent people from enrolling or even staying covered? I know we talked about 3% decline and then it's down 32% for new enrollment, down 59% for middle income and so forth. So I'm just wondering how these things are going to impact us as well.

Thank you also for that question. I think administrative burden is often underappreciated when it comes to what it takes to really get people covered. And we care deeply about consumer experience.

At Cover California, we didn't go into great detail or I didn't in my testimony because there are actually so many different policies across the rules and across HR1 that impact administrative process and administrative burden. Many of them do not go into effect until coverage year 2027 and even coverage year 2028.

And we're happy to provide materials that break down the different pieces and when and all of that. But in General, more verifications, more paperwork. I'm going to zero in on a few things before I do. One thing that is not applicable to Cover California is work requirements.

And so I do want to say that out loud that while I recognize for our colleagues at DHCS and Medi Cal that is a core component of conversation in the hearing I testified in yesterday, that is not something that will be applied to Cover California.

There are two very, very important provisions in HR1 directly relevant to Cover California that will take effect in 2028. So we do have some time to think about this. One will end what we call conditional eligibility where we'll. We are able today to provide tax credits to people while we're trying to clear paperwork, mismatch, mismatches.

We're trying to verify your income or your residency. And while we're doing that and you have some time to give us paperwork, we can give you all of the affordability based on what you've told us. And that will change in 2028. We will need to have everything verified up front in order to provide the federally funded benefits.

And the other is an end to auto renewal. Today, over 70% of our enrollees are automatically renewed into the plan they already have. They have to do absolutely nothing. And starting in 2028, they will have to take a proactive action in order to stay enrolled. And that one, I think, is really undervalued.

We are very closely watching and waiting for federal rules that will give more bones around the Federal Government's expectations and how strictly they are interpreting the statute of HR1. That is quite broad and has a lot of gray area. And we're happy to keep this body updated as we get more information and prepare for 2028.

May I add just two things? One, in your slides I did include an HR1 timeline, as mentioned. It's incredibly complicated and we find that it's very, it's across three slides and it breaks it down for what happens in Medicaid exchange, et cetera, at different times. Many have found that to be very helpful.

And then just to note on the Medicaid side of things, that is also an area under HR1 where there is enormous administrative burden and that explicit that touches anyone who's enrolled in Medi Cal, but it explicitly concentrates on the expansion population that was created under the aca.

There are various options that California can take to minimize the look back, period, et cetera, for Medicaid work requirements. And you're obviously maximizing what you can do to minimize that administrative burden. But. But if you have questions afterwards, etc. Happy to speak to that element as well, but the timeline might be helpful. Thank you.

Senator, do you have any questions?

Thank you. Chair. Want to thank all of you for coming and giving this panel to really kind of give the foundation the landscape of how we got to where we are and where we may be potentially going in the very near future.

I was with a very small delegation on the Senate that was just in D.C. last week to specifically look at and discuss HR1 impacts.

And I think one of the things that was shocking to me is that it's kind of like a foregone conclusion that this is where we are and this is where we will be under this Administration. I think there was hopes, at least I had hopes that maybe some of this could be reversed or changed.

But being there and speaking with the legislators there, I think it's pretty much known that this Administration is not going to reverse course. And so that was very, very shocking. I do have a question for you, Mrs. Joyce, because you mentioned the issue of the essential health benefits and, you know, the requirement to cover that.

However, there has been a change in the makeup of some of these advisory panels and their beliefs.

And so my question is, are you hearing anything that should make us be concerned that the advisory panels may change their recommendation for coverage that does not align with our values here in California, which would then potentially require us to figure out how we can continue to cover some of these things that we know really create healthy individuals?

Thank you for that question. Yes. So one, you are already taking steps to require your ACA Compliant plans to continue to cover the immunizations under the old schedule, the schedule that's endorsed by the AAP, the American Academy of Pediatrics. What we're seeing essentially is a splintering. Historically, public health has been more neutral, nonpartisan.

We've believed in it and science, and in that. Now we're seeing various states, including your own, rather than relying on the CDC or ACIP, the Committee that makes those recommendations, instead requiring their own plans to continue to cover what was in place as of last fall. Fall is how many of them are structured.

As we move forward, we have already seen a limiting in the number of vaccines that are recommended, including key ones that have been moved from being recommended or required for schools, et cetera, to being something that you consult with your own physician about. That's problematic from a population health perspective, as you know.

So things are safe for a certain period of time because of the steps that states have taken. But if we continue to see these committees not meet, that continues to happen, and to pursue recommendations that do not include immunizations, then it will be up to states to put those requirements into place.

And I think a key question will become, at what point is there a point at which you're then responsible as a state to cover any of that versus the feds covering it? So it can key financial decision at that point.

Right. Okay. And along those lines of changes in the requirement or what we have to cover, because we're talking a lot about individuals unfortunately no longer having insurance. But it was in your presentation, you didn't really get a chance to get to it.

The provider tax, you know, we did a lot around the issue of like mco and that those funds significantly help us be able to backfill a lot of the funding within our health care space, within our Medicaid program.

And I know that we, after we finish this round, we will no longer be able to rely on a provider tax rate as healthy as we have in the past. And I was just wondering if you know what that potential reduction in funds would be.

Excellent question. Thank you. I can speak to it from a broader perspective. I don't know what the reduction is like, how it will impact California and where your current rate is. Not offhand, I do have it in my computer. So with this, there are really two pieces of hr.

One that are some of the most concerning in terms of impact. Medicaid work requirements, as mentioned, in terms of loss, and then the change in provider tax. This, just for broader understanding, is what many states, including California, utilize to draw a pool of funds that then draws down greater federal funds.

It's how many or most states have expanded Medicaid and other adoptions this gra. And this is in the timeline, actually. So this gradually reduces it starting it's a number of years from now, and then it gradually decreases one half percentage point per year over a number of years.

So as that gradually happens, California will have less revenue that it's pulling, period, exponentially impacted by less revenue that it can pull from the federal level. But the timeline slides that I mentioned, and I know I can't put them back up there now, do indeed show that decrease.

If there were any area where I think it warrants really helping educate our elected Members at the federal level of the impact. That is one of the crucial.

There's two really this one helping them understand it because I think that there could be then an appetite to address that in a future Congress, potentially something with very slim margins.

And then the other is what will allow for exemptions under Medicaid work requirements if someone has a mental health condition, for example, how long that keeps them exempt from those requirements. Some of those have more bipartisan support with Those more centrist Rs who were hesitant about this Bill to begin with and have vulnerable seats.

Okay, thank you. I had heard that with our current MCO tax structure, we're taking in around 7 billion every year and that once this is done, we will be down in the millions, but we'll try to get those numbers again. Thank you. And for Director, a couple questions about oka.

So when you were talking about slowing the overall spending growth and there was a question about charity care or uncompensated care, have you all thought about the fact that hospitals will most likely have a significant spike in the amount of their uncompensated care?

Because we all know that with these changes, if people lose insurance, they're still going to get sick, they're still going to need to be seen. They're just going to be seen in hospitals, which even you recognize has the highest spending portion in our overall health care landscape.

So they're going to go to the most expensive place, but they won't have insurance. And so that going to essentially be uncompensated or charity care that the hospitals will have to deal with, wondering if that is or has or will be taken into any consideration when you're looking at spending targets.

Thank you, Dr. Weber Pearson. So we have, we did have the conversation starting this summer after The President signed HR1 about what the impacts would be in hospitals raising concerns about whether the spending targets were still reasonable in light of that. So we have heard from hospitals about their perspective. We are concerned about additional people being uninsured.

A number of board Members did give the perspective that they don't see how that as one of them said, we've had an affordability problem for decades and we're going to continue to have an affordability problem. So we have heard from a number of board Members that they think it is right to stay the course.

And absolutely, we will be presenting data to the board every year and the board has the ability to modify the spending targets. We also have the ability to do so. There's both a front end look and also a back end look that the first piece. So 2026 is the first enforceable target.

We will be getting data from the health plans in the fall of 2020, fall of 2027, with the 2026 data, analyzing it. And at that point we'll have the opportunity to see if there is that trend line.

Okay. And then when you're looking at these various benchmarks, from ok. Standpoint, how exactly does that translate into lower premium, premium payments? Excuse me, for businesses and families?

Yeah, it's a great question. So the spending target doesn't itself say premiums can't rise more than 3%. But because it's a per capita analysis of the spending growth target over time, we should absolutely see that premiums are controlled alongside other costs because of the mlr, the medical loss ratio.

If spending is decreasing on a per person basis and health plans can only have to spend at least 85% on medical care, we will see premiums, the spending growth of premiums, be better controlled as well. Thank you.

Thank you. And for that very robust conversation, we are going to move on now to our second panel and Senator Weber Pearson will preside over that. And while she is getting her notes, we will have Miranda Dietz and Christoph Stremeckis come up.

Yes. So this panel consists of California experts who will help set the stage on the population impacts and drill down into cost drivers. And we'll, as Chair Bonta stated, start with Miranda Dietz, who is Director of healthcare programs at UC Berkeley Labor Center. You may begin.

Let's try that again. Thank you so much. As my slides get loaded here, I'll introduce myself. Good afternoon. Thanks for the opportunity to speak today. My name is Miranda Dietz and I'm the Director of the Healthcare Program at the UC Berkeley Labor Center.

At the labor center, we research issues that matter to workers and their families, including health insurance coverage and affordability. Today I want to talk about the big picture context on access and affordability issues that California consumers face, starting with I can do this. Here we go.

I want to start by grounding us in how most folks get their health insurance. So Most people age 65 and older have Medicare, but for those of us under 65, more than half have job based coverage either from their own job or a family member's. About a third have medical covered.

California plays an important role in filling the gap. That's the slice in green. And then uninsured is also about 7%. And there's access and affordability concerns for folks in each of these segments. Nationally, there's been a lot of talk about the federal ACA subsidies that have not been renewed.

And these matter a lot for folks in covered California who, as you've heard, will face substantially higher premiums or risk either going uninsured or getting fairly bare bones bronze level coverage that can leave them susceptible to high out of pocket costs.

In Medi Cal, millions of enrollees are at risk of losing that coverage due to HR1 or due to state policy choices. But I think it's really critical that we not overlook the affordability challenges for more than half of Californians age 0 to 64 who have job based coverage.

For those of us with job based coverage, the affordability challenges are high and growing premiums, deductibles and out of pocket costs. To look in a little more detail at the problem for those of us with job based coverage, premium costs, I went the wrong way.

Premium costs have been growing faster than incomes and that means that more and more of the family budget is going to health coverage. Back in 2002, a worker would pay on average $2,000 a year for family coverage from their job, and that took up about 4% of the typical household's income.

In 2022, the cost of family coverage was much higher at 7.9%, almost twice what it was as a share of the typical household income. And in 2022, that family plan probably came with a hefty deductible as well.

In 2002, most private sector employer plans in California didn't have a deductible so workers are paying more for health insurance and getting less. I'll let our next panelist tell you more about why health care is getting more expensive.

Workers pay the full cost of health insurance premiums in foregone wages, so this problem of increasing premiums makes affording everything else more challenging as well. Unite here Members sitting down at the bargaining table with hotels will tell you the more money that goes to paying for health care, the less is available for wage increases.

High costs have real impacts on access to care, resulting in workers and their families skipping or delaying care due to cost and too often falling into medical debt. The Office of Health Care Affordability was created to try to keep this problem from getting worse. Because things are getting worse.

To take just one example, Calpers premium increases have averaged over 9% per year between 2024 and 2026. Am I going the right way? All right. Turning now to think about the roughly 1/3 of Californians who get their care through Medi California. For those folks, the big risk is losing their Medi Cal because of HR1 or other state changes to the program that will restrict access for certain immigrants.

We project that California could have as many as 2 million more uninsured residents by 2030. Some of that will be because of the covered California changes, the green bars. But most of these additional uninsured will be folks who lose Medi Cal coverage and become uninsured. That's the big increase in the orange bar here.

And we know that when folks lose coverage, they don't get the care they need. They live sicker, they die younger, and they're often one hospital visit away from bankruptcy. Some who lose Medi Cal might have an offer of job based coverage to fall back on.

In General, we know that workers paid low wages that's under about $20 an hour in 2022. The data you're seeing here. Those workers are much less likely to have coverage through their own job, 34% of low wage workers compared to 69% for all other workers.

They're more likely to rely on Medi Cal, the 22% in orange, and more likely to be uninsured. Some of these workers are not offered coverage. Their employer might be small, they might work part time and not be eligible. And for others, the coverage they are offered through their job may simply be unaffordable.

The challenges of healthcare access and affordability in California are substantial. But having health insurance matters for individuals, health and financial security. Access to coverage also matters for equity. Over the last decade we've seen a narrowing of coverage disparities by race and ethnicity, by immigration status, by income, and we're on the verge of seeing that progress undone.

The affordability of health insurance and health care matters, too. For making sure people get the care they need free from medical debt. The workers get wage increases that keep up with the cost of living and that household budgets are not continually squeezed by the cost of health care. Thank you. Thank you,

Dr. Weber Pearson, Chairwoman Bonta and Members, thank you for having me here today. Maybe in the interest of time, I'm going to forego the slides. Just know there's a few of them in your background packet. If you're more graphically oriented, they'll illustrate some of the key points. But I don't think we need them projected.

My name is Christoph Stromikus. I'm the Director of market analysis and insight at the California Health Care Foundation. CHCF is an independent, nonprofit philanthropy that is dedicated to ensuring that all Californians can get access to the care that they need at a price that they can afford.

You've heard already, you've shared, some of you have shared yourselves some of these very compelling stories about the affordability challenges that are so prevalent in this state. I think you'll hear more this afternoon. The only thing that I can add to this is maybe some additional data.

There is in your background material the results of a recent survey that we conducted among all Californians. And there is so much data in there about the depth, the scope and the scale of this problem. There's just a. You've heard a lot of numbers already.

I'm just going to give you a couple more and then I promise I'll move on. But I would start, Dr. Patel, you asked about medical debt. Going to start with the number four. Four out of ten Californians reported in the last year that they or a family Member were struggling with medical debt.

And we go to the number five. Five out of ten Californians say that their health care expenses are growing faster than their income. And we've heard, I think, Chairwoman Bonta, you mentioned skipping care due to coverage. 66 in 10 Californians reported that they are a family Member in the last year skipped care due to costs.

And then finally the last number is seven. Chairwoman Bhatta, I think you mentioned worries about affordability, healthcare affordability, 7 out of 10. Nearly 7 out of 10 Californians reported that they are worried about medical bills. That's higher, as you mentioned, Chairwoman.

Then worries about gas, housing, rent, electricity, all of the basic living expenses that Californians face in a very high cost state like this. Healthcare is number one. It is the number one thing that they're worried about. Thank you so much. It's like so much data to kind of wrap your head around.

But I think the important point is this. For each of these stories that you share and that you're going to hear later, there are literally hundreds of thousands and sometimes millions of Californians that are experiencing something similar. This is just such a widespread problem. And I'm so glad that we're all here today to talk about solutions.

Before we talk about solutions, I think we also need to talk about drivers. It's really important to focus on what is the problem that we're trying to solve and so what is the root cause of these consumer affordability challenges, which is the ultimate thing that we want to solve.

That is incredibly complicated and there's a lot to say. We can get at it, we can get into it a little more in the questions. But there's really two main points I want to make. We cannot address this consumer affordability crisis without getting at the underlying cost of health care.

Healthcare is too expensive for families because those underlying costs in our system have been allowed to grow unchecked for decades. Underlying costs, I think of them as like the base ingredients. They're the things like hospital operating costs, prescription drug prices and doctor's fees.

Now when those things go up year after year, they ultimately always get passed on and borne by patients through higher premiums, foregone wages, larger deductibles, larger out of pocket expenses.

Now second, and this is equally important, 25% of those under research shows that 25% of those underlying costs in our system actually don't help patients get any better or improve the quality of care. We call that at CHCF the 25% problem. I think there's another short explainer in your background material if you want to learn more.

Where does that money go? Where is that 25% going? There are several areas. The biggest, clearly the largest problems are around administrative complexity and waste. This is slightly different than the administrative burdens that have been put in place now for enrollment in Medi California, but also very concerning and requiring our urgent attention.

This is for those Dr. Weber, Pearson and Dr. Patel. You must, you've, I'm sure, live this in practice. Kind of the back and forth and the non clinical administrative burden of delivering services.

That explains about one third of these wasted expenses in our system that we really need to target and pull out if we're going to make healthcare more affordable.

There are also, we heard a little bit of this from Dr. From Director Landsberg around inflated prices that can be charged because there simply isn't competition in many parts of our system, both horizontally and vertically. And then the last area is really around prevention.

And this, I think, is where you heard some of the panel this afternoon talk about the necessity of primary care and how primary care pays off over the long run. That is absolutely true.

And we know that when people don't have access to primary care, illnesses, conditions, complications develop that ultimately cost money, not to mention make people sicker. So I know I heard the bell. I know I'm out of time. There's a lot more to say here about what we can do. But I'll sort of leave you with this.

The growth targets that have been put in place recently through the Office of Healthcare Affordability, I think are so crucial as an overall goal. And there are additional things that you can do right now to try to get a handle and address these. Address affordability challenges. We need to do those things in the system.

But while we're doing that, we also need to provide additional support to consumers right now. There are literally millions of consumers out there in California right now that are struggling with high health care expenses. They have medical debt. There are things that can be done.

Los Angeles county recently spent about $5 million to relieve hundreds of millions of dollars in medical debt. On behalf of Angelenos, we need to provide that immediate assistance to people that are struggling right now. Thank you so much for your time and attention. I'm sorry for being a couple minutes over.

No, thank you so much. I will now see if there are anyone on the panel who has any questions. And we'll start with Senator Smallwood-Cuevas.

Thank you, Madam Chair. And thank you so much, both of you for this detail overview. I have a couple of questions and one, it's in talking to some of my county providers and hearing both of your presentations, it's sort of like deja vu all over again before Obamacare.

These are the kinds of discussions that folks are in trying to figure out what's the root cause, what are the drivers, how do we address it. And here we are back in so many ways where we started, but grateful for the analysis and the presentation. The question that I have, I have two questions.

One has to do with the federal funding. And I'll direct both of. Well, I'll direct this one to you. I'm sorry, Mr. Kristof.

Kristof, yeah.

And then I have A question for Ms. Dietz, one is as the federal funding becomes less reliable, health care costs continue to rise. Is it realistic in your view for California to maintain this, our coverage levels without addressing revenue? You talked about drivers, you talk, we've talked about all the ways we're negotiating with the Federal Government.

We're hearing this is the number one concern on top of a lot of affordability concerns. You know, I'm just curious, in your analysis, what are you seeing?

Yeah, I would answer it this way. I would say that, you know, we don't know what's going to happen at the federal level and certainly you know about the more about the California state budget than I do.

And I would say there is no scenario that I'm aware of where California is going to be able to backfill these federal cuts which are completely unhelpful from a population health perspective and an affordability perspective here in California.

And I think the things we can do if we're really going to try to mitigate the challenge here is be laser focused on those underlying costs of care. We certainly need to expand coverage and we need to continue to find ways to make sure people have health insurance coverage.

But we're never going to be able to do that in a sustainable way unless we reduce these underlying costs of care or reduce the total cost to the state of California to ensure that everyone has access to care, which we should do.

And Ms. Dietz, I'd like you to answer that question. I have another question for you and that is really appreciate the analysis around the workers and the workforce and particularly looking at the low wage workforce and when you look at those folks who are on Medi Cal and those who are uninsured, it's the majority of low wage workers who are in what feels like an intractable crisis.

But what will the benefits of the cost growth target be for workers? I mean, you know, will there be one? And then also your thoughts on this question about given the situation that we're in, is it realistic for California to maintain the healthcare benefits that we are providing at this level without addressing the revenue question?

Thank you. Yeah. To, to touch on the revenue question first. I think that we know from research that having health insurance is so important and it's an investment in people and the future of California and so absent moves on the federal level that I don't think anyone is expecting having California explore revenue options to keep making those investments in California and our future seems to make sense in terms of your question about the cost growth targets and what that would mean for workers.

So just looking at the data we do have, you know, historically from 2022 to 2025, we saw family premiums increase from about $23,000 to $28,000 if those costs had grown at only 3.5% per year. So sort of if we were hitting those targets, the cost of family coverage would be $3,000 lower than what it really was.

And so that's $3,000 in a family's pocket that they can use for other things. And that would have made a huge difference.

Thank you for that.

Thank you. Assemblymember.

Thank you so much. Madam Chair. Thank you so much for all the work that you're doing and the testimony that you're providing. And I want to thank the Committee, the joint Committee, for highlighting these issues as best as we can.

And I want to echo the sentiments by the Senator about some really hard fought gains that we accomplished during the Affordable Care Act. And I say hard fought because it's a good reminder for us as I'm new to this Committee but not new to the issues of knowing what it feels like to not have health insurance.

Growing up in my family about politically how difficult it is to reach the solutions that we are describing, but how dire and important it is to, to reach them. And you mentioned the survey and the data and the plethora of information.

We are inundated with data and we're always told to make conclusions and to drive our policy outcomes with data. I'm wondering if you can for the record, just synthesize and if there's sort of one data set or point that you want to make out of all of the newly released information.

What would you want to leave on this Committee and what would you like to mention?

I would return to maybe that initial number four. Four out of ten Californians struggling with medical debt that is an issue that we've heard for leads people to forego care to become sicker. It undermines their, the stability, the financial stability and the economic security of their family.

And that is really something that we need to address and we need to address that systematically by changing the systems, making it easier to qualify for financial assistance.

And there are things that we can do right now, again, LA County, you know, using a little bit of public resources has made a significant difference for about 200,000 Angelenos, I believe it is.

Thank you so much. I'm glad that you mentioned that because I think it's, it's important to underline when they're not getting the health care that they need or they're foregoing it, it's only going to be more expensive on all of us moving forward.

And the lack of access to the preventative health care that they need is setting the entire system back and it's only hurting and costing more in the long run. So it's not only a moral imperative to address that barrier, but it's an economic imperative as well.

And I don't think we talk enough about, we talk a lot about the immoral imperative of this, but it also is just costing us more. And so those things are inextricably linked.

And I wanted to just underline a little bit about the medical debt pilot program from LA County because I know, I think that what gets lost in a lot of these conversations is not helping, is that these cuts are devastating, but they're even more devastating for our most vulnerable constituencies and residents. And I'm wondering if you can.

I'm glad that you mentioned the 200,000 Angelenos that would be impacted and helped by erasing that medical debt.

And I know, as my colleagues have noted, as Chair Bonta visited Silicon Valley in my district a few months ago, how our county and local municipality move forward with a sales tax measure to help backfill some of these draconian cuts last November.

And I'm wondering if you could sort of go into the success of addressing that medical debt because as you mentioned in your testimony, we're not going to be able to save everyone from the draconian fascist Federal Government who's wreaking havoc on our most vulnerable constituencies with HR1.

But I'm wondering if you can really highlight for us that success. And where have you seen it implemented? Is LA county the only one that's done that? I know that individual basis. We've seen medical debt be forgiven.

We've seen instances of the, you know, anonymous donors or the private sector stepping in to help erase medical debt as these sort of feel good stories. But I'm wondering if you can provide any more testimony on the benefits of what that means and how that helps catch people up.

Boy, it is really sad that we're here talking about this, but, you know, I just want to want to add one more thing on the problem and then kind of get to your question about the solution. Senator Smallwood, you had asked, I think, one of the previous panels about like, what happens when someone has a high deductible.

In addition to this data we've collected, we've also collected a lot of stories from Californians and there's a video, I think it's in your background material too. It's also on our website.

Someone that's actually down in LA County that had a high deductible health plan that ended up $7,500 in debt that like fundamentally changed that family's well being. And it is so important that we provide relief that is like one of like hundreds of thousands of people in California right now. So what did L A do?

Just kind of for folks that aren't familiar, you can buy medical debt from debt collectors for pennies on the dollar and they used $5 million in public resources. I'm going to get this number wrong, but it was something like 200 or $300 million in debt that was bought back and then forgiven.

And I know it was on behalf of 200,000 Angelenos. That type of immediate relief is sort of the consumer relief that I think we need to consider and pursue very seriously right now.

And Assemblymember Ahrens, to your point, there are structural changes that LA also worked on to harmonize financial assistance requirements across hospitals to make sure that's easier to understand, to make sure that whole process is more efficient to get people qualified. And that is certainly something that other counties can model and we can replicate at the state level.

Thank you Madam Chair. And I'll just end by saying that the State of California spends a lot of money on, on trying to find solutions.

And this is one of the very few that I can probably name on one hand that we can spend a very nominal amount and literally impact hundreds of thousands of people in a very positive way that helps set us up for success not only economically but morally.

And it's definitely something we should be looking at because again we spend $5 million on pencils and paper and all kinds of other things that don't directly have any material impact on better healthcare outcomes.

And yet helping address this medical debt is again, we can't help everything in HR1, but addressing this as LA County has done has, is going to be a game changer for hundreds of thousands of people if we address it. So just wanted to highlight that for the Committee. Thank you.

Thank you so much Madam Chair and Madams Chairs for this hearing on this important issue. And I know, I just, you know, I have to say as I said at the last hearing that we had on HR1, I have to note the absence of all Republican Members again on this issue, which is shocking considering what kind of impact it's going to have.

And I think the point that you're making that is so often lost or not discussed is the impact, Ms. Dietz, that you talked about how increases in health insurance take so much out of worker wages. Right. I know hotel workers after Covid, everything on the table in negotiations was put towards health care.

No raises, nothing after they had been out of work and struggling and suffering. Right. And they had to put it all towards going to their health increases to try to make that continue to be affordable for people. So this is something that critically impacts workers when you talk about the increased costs in insurance.

And I think it's important that we make that link between what is happening now in the cuts in health care and how that's going to drive increases in health insurance.

Because we know that when there are uninsured patients going into hospitals that those hospitals are going to and insurers are going to increase costs because hospitals will need higher reimbursements to cover the cost of care and kind of balance things in their hospitals that we're going to see insurance increases broadly because the cost of uncompensated or uninsured care is going to be put on those who are insured.

So this is, you know, this is going to hit workers even more who are lucky enough to be able to keep some health care coverage.

And I wonder if there's anything that's looking into how people are, if it's going to be driving people to get on, like to take up more spousal insurance or something like that, like driving people into. Into getting on insurance too.

We don't have to talk about that today, but I'm just curious about if there's other kind of ripple effects that we're not thinking about, but I wondered if you could talk a little bit about OCHA .

I know, you know, OCHA is doing a lot of great work to really make sure that they're controlling costs in the areas of hospitals right now. And then in the future insurance is kind of on the horizon.

Are there things that OCHA really needs to be looking at right now to be able to get a handle on rising costs of health care and how we can kind of at least prevent some of those increases that we know are going to really hit people in their pocketbook? So, so deeply.

Thank you for that question. So, yeah, One of the reasons I'm so glad that OCHA exists is the role they play in data collection and transparency because there is a lot of change and HR1 is going to change things like uncompensated care, but that's not going to be even across all hospitals. Right.

So we know that public hospitals in the past have spent more on uncompensated care and we anticipate that they'll shoulder more of the burden.

And so I think having an entity like OCHA that's able to gather that data and make and sort of hold hospitals to account, if you are really providing more care for uninsured people, let's have a record of that. And if you're not, then please don't use it as an excuse for why your prices went up. Right.

So having that data and transparency, I think is, is really critical. And to your point about sort of people taking up other kinds of health insurance, you know, there's this projection of 2 million more folks who will be uninsured, but the ripple effects are real.

And there are other folks who won't be uninsured but will be spending a lot more to get that coverage. They'll go on a spousal plan that will require paying the higher premiums associated with getting a family plan. So there are real impacts on family budgets besides just folks becoming uninsured.

And I think our Director would like to also address your question.

Hi, just want to Elizabeth Landsberg with OCHA I just want to clarify that the spending growth targets do apply to health plans and physician organizations in addition to hospitals. So the board did adopt a sector target with a lower target for the high cost hospitals. But it does apply across the board.

And that's a very important component of oka. Thank you.

Thank you so much. And I think, I mean, thank goodness OKA was created for a moment like this when we know that it's going to be so difficult. And I appreciate as one of your solutions, you're also talking about streamlining prior authorization because I have a Bill on that.

But I, you know, the other thing I just wanted to ask about is is there any discussion or looking at reserves and what and how those are being used? Because I know, you know, hospitals are going to be really in tight and difficult situations.

And at the same time, one of our very large hospitals has $67 billion in reserves that is partially meant for rainy days. And it is pouring right now. And so, you know, I feel like, and I've said many times in this Committee that everybody needs to have skin in the game.

And it feels like Californians are the ones who are suffering most at the hands of these horrendous cuts, federal cuts. But you can't just keep raising your prices and expecting to be able to make the same profits and the same amount of money when people are literally going to be dying because they don't have health care.

And so this is a moment when everyone, I think everyone in the healthcare space has to come forward with solutions and, you know, really be offering up how they are going to be making adjustments to address the concerns of millions of people who are going to be losing health insurance and healthcare because of this.

And, you know, curious if there's any discussions in, in your spaces around looking at those reserve dollars

And before you, you answer, if you don't have an answer, that's okay because I think that may also be addressed in one of our future panels. But go ahead.

I'll just say very briefly, I think you make a very important point, which is complexity and maybe nuance and there's variation. So you mentioned one hospital that's in your district maybe that's sitting on or somewhere that's sitting on $67 billion in reserves. That is certainly not the situation in all hospitals.

There are some that are doing quite well and others that are really, really struggling. It's really important in this case not to be painting with a broad brush. And fortunately, we have really good data here in California where we can look specifically at individual facilities.

Thank you, Senator Rubio. Thank you. Earlier today someone mentioned, you know, what happens to those that lose care. But I wanted to see, and you said, Mr. Kristof, you have stories and maybe can you share what we're hearing about patients that have ongoing care, for example, dialysis treatments. Right.

Or cancer treatment or other, you know, rare diseases that have fallen off healthcare systems, Whether it's just any like medical or anything else. How are we addressing that you hearing? Because I can't imagine being a patient going currently to dialysis or cancer treatments. And then now I'm undocumented and I have to get off this care.

What is happening? What are the stories that we're hearing and what is out there to support those patients?

And before you answer that, if you can't, that's okay because our next panel is on consumer impacts. zero, yeah.

I would just say I, I can't do that justice. I would definitely look to the next panel. And there is a there, you know, we have started to collect these stories we hear folks at the California Health Care Foundation a lot. And there is a video, you know, that summarizes one story.

It's about three minutes or so in your background material. But those are very, very compelling.

Okay, thank you. Thank you, Chair Bonta. Thank you. I did want to just hone in on this conversation around the, what you all are calling the 25% problem, which I think is very important for us to focus on. You've also indicated that there's basically seven, $73 billion that are not going to direct patient outcomes.

You've broken that down considerably.

I wanted to make a very strong delineation between the very specious narrative around waste, fraud and abuse that we hear from the GOP that don't even bother to show up to our conferences about, you know, conversations about this and what you've outlined as I think kind of the administrative friction that can happen in our system.

So one is just the kind of conversation about fraud. My understanding is that there's a very, very small percentage, less than 2.5% overall in the state of California that can be allocated towards fraud. And most of that is driven by upcoding that could can happen.

And California probably has one of the most robust program integrity processes in the nation. So one just kind of comment on that if you can. And then secondarily on the issue of the friction with our data integration, our paperwork, the fact that we still use faxes for looking at pre authorization.

Can you speak to some of the ways in which kind of more targeted solutions that we can think to decrease that 25% gap?

Yeah, I'll just, I'll start with this and let Miranda weigh in too. When it comes to fraud, there is fraud in our system and as you mentioned, chair, you got it exactly right. It is, it is a very small slice of our health care spending. Now do we want to like target it? Yes.

And does California have very robust program integrity provisions in place to go after it? Absolutely. What makes more sense to me personally is to look at those much, much larger buckets and you mentioned one that is the largest bucket of excess spending here, which is administrative waste.

And what I'm talking about you sort of outlined nicely is this, these frictions or inefficiencies in the exchange of clinical information, sometimes billing information. If you talk to any of our healthcare providers, Dr. Weber, Pearson and Dr. Patel, I'm sure you can speak about kind of the non clinical care burden of dealing with prior authorization processes.

There are ways that we can do that more efficiently. And because we're doing it inefficiently right now, it's costing all of us money.

And so I think it really behooves all of us to focus not on like small areas where we've got it pretty well covered in this state better than most and focus on these larger areas that we know are going to make the practice of medical care better for providers, make care better for patients, and save all of us money in the long run.

Thank you. Just have a couple of questions on your slides. When you talked about California could have 2 million more uninsured by 2030, your orange portion shows that there's going to be a significant jump. And those who are uninsured but still eligible for Medi Cal and covered California.

Can you explain a little bit more about why you have that significant jump even though those individuals are eligible for those programs?

Yeah. So that's largely the impact of HR1. So thinking about folks who lose their Medi Cal coverage because of work requirements and the frictions associated there that they should be eligible for Medi Cal, they meet all the other, you know, the income requirements and so on.

Okay, so they're not. They're no longer eligible because of something, but prior to HR1, they would have been eligible. That's the thing. Right.

They have failed to jump through administrative hoops, whether because, you know, for some folks it will be because they don't meet those requirements. But we know a lot of folks won't be able to meet those requirements even though they are working or should be otherwise eligible.

Okay, thank you.

And you know, Kristof, you mentioned, you know, the cost of health care in this country, which is just extremely exorbitant and really challenging to kind of grasp why it is so expensive here and yet other countries do not spend the amount of money and they actually have better health outcomes than what we have here in this country.

And you talked about just some of these underlying costs and also the inflated costs that we have, which I think those two issues are being addressed by Oka and also some of the things at the attorney General level in terms of consolidation, private equity and things like that.

But one thing you talked about is the role of preventative care. And that has been extremely frustrating for me since I have been here.

The lack of the ability to really focus and hone in our efforts and policy, but also finances in terms of our budget on preventative care and looking at health outside the hospital and the clinic setting to understand that there are also social drivers of health or social determinants of health and really understanding that if we invest more in that area and in the preventative care space, that we will ultimately spend less money overall because we won't be dealing with these chronic health conditions.

We won't be dealing with medications that people will not need. We won't be dealing with hospitalizations and surgeries and things like that so, you know, other countries are able to spend, I think I read, three times the amount that we spend on preventative care in our country. In our country.

Just wondering if you know of any other states in your research that are doing it better than what we're doing here in California. Because it's really hard to break through all of the layers to say we need to shift our focus and really start putting more money behind the preventative care aspect.

You've got it exactly right. So that like ounce of prevention is pound of cure, like actually is true. The research bears that out when it comes to healthcare systems.

And I'm glad you raised the international point because we know from research those systems when they allocate more financial resources into primary care vis a vis specialty care, they get those better outcomes. And you mentioned other states. I do want to put a plug in for California.

You know, this was glossed over or this, you know, just touched on briefly and the last panel. But there are new primary care spending targets here in California and I think that, like, consistent with the research is going to drive value and this overall cost of care down.

If we're dedicating more resources to those basic preventive services that people need, they're going to, they will not be as sick and the complications aren't going to develop as severely. We will save money in the long run. And so that is something that California is doing.

It's going to take some time to get there, but it is very much modeled on some other states.

Thank you. And with that, I want to thank this panel and we'll move to Chair Bonta to introduce our next panel.

Thank you so much and thank you for all the work you're doing to help our communities navigate what is an increasingly complex insurance market and access to coverage.

We are going to move on now to our third panel and I'd like to invite up our next panelist who will be providing us with a real look into the human impact of the instability of the insurance markets we are facing.

I'll again ask each panelist to introduce themselves as part of their testimony and know that we've offered five. Three minutes. Three minutes for each for introductory remarks.

Natalie Santa Maria. Yeah. Yes. Hello and good afternoon. My name is Natalie Santa Maria. I am a Promotora in the Central Valley with Visioni Compromiso. Visioni Compromiso, it's a nonprofit organization that is committed to community well being, supporting the work of promotoras and community health workers.

In my role as a Promotora, I help people access necessary services and build capacity at the community and system levels.

My job is to increase health knowledge and self sufficiency through a variety of activities such as community outreach and education, patient management and follow up, community health education and information, informal counseling, social support, mediation, and participation in clinical research. In my day to day job as a Promotora, I encounter many people trying to enroll in Covered California.

Right now, I am seeing many people opting to choose the lowest tier of coverage as you've heard because of increasing premium prices. Specifically, the county I work in, Kern County, is considered a rural area with most of the population being Latino and about 62% enrolled on Medicaid.

With many of our population being agricultural workers, that is one of their top employment opportunities. In the Central Valley, I witness a variety of folks who have diabetes. More and more, I am hearing stories of folks sharing medicine and attempting to buy insulin in Mexico.

We are not a wealthy county, so services like Medicaid and Covered California are definitely life saving for populations I work with. In an environment where our families are struggling to pay for the basic needs like rent, utilities, and food, having our health care be a burden to sustain will have a negative effect on all of us.

It's already having a negative effect on all of us. Our lives depend heavily on having access for chronic disease prevention and management. Not only do I assist my community in enrollment for programs like Covered California, but I also use Covered California myself, as do many other working professionals.

I have also recently been impacted by the increase in premiums due to the lack of continuous subsidy support. As a result, I have had to opt for a lower tier coverage, actually lower than bronze.

I am enrolled—I had to enroll my now 7-month-old in a minimum coverage which only covers the well baby visits. It's costing me about $200 a month. This means that if I have an emergency or procedure for my baby, I would need to pay for all of those expenses out of pocket.

As we all know, Covered California was not a perfect system. However, as advocates, we were working to make this imperfect program better. Now, given the passage of HR 1 and rising premiums, we are being set back a decade, if not more.

The recent federal changes to Covered California subsidies have greatly impacted the ability to afford having health care coverage. I have seen firsthand how this rising prices have led families to devastating sacrifices.

As you have heard, promotoras have deep knowledge of health care access and affordability programs and should be woven into the state's efforts to ensure Californians don't lose their coverage. As your committees consider ways to keep people covered, we encourage you to find ways to integrate promotoras into the system. I'll end with this.

I am proud of the work that I do. I'm proud of the Californian that I am and the part of California that I'm from. The Central Valley is full of hard workers, many of which keep us, not just the state, but this country, fed.

As Covered California consumer and promotora, I have already seen the impacts of HR 1 and the failure to extend the ACA subsidies. If the state fails to act, the consequences will be deadly. The Legislature must work quickly to come up with solutions to California's rising affordability crisis. Thank you.

Thank you, Ms. Santa Maria. We will move on now to Vanessa Ignacio.

Thank you, Madam Chairs and Members of the community. My name is Vanessa Ignacio and I'm an independent health insurance agent. I own a small agency in rural Mendocino County, so my clients are often my friends and neighbors. I also serve on the Board of California Agents and Health Insurance Professionals.

For the past several years, I've helped several—hundreds—of Californians each enrollment season secure coverage through Covered California, Medi Cal, Medicare, and the small group market. I'm very proud of my work. This year, like many agents around the state, I had the heartbreaking responsibility of explaining significant premium increases.

And in rural parts of the state, when we see a premium increase of only 94%, we consider that good news. By the way, we're looking at 300,400% increases and families are already stretched thin.

I sat across working families and small business owners who are doing everything right and they are asking how am I going to afford this? And what I'm seeing is even more concerning. With a rise in premiums, like has already been stated, most of my clients didn't cancel coverage, but they definitely downgraded.

On paper, they remained insured, but in reality, their access to care changed dramatically. For example, in 2025, a diagnostic mammogram on a silver plan had a copay of $100. In 2026, on that same bronze plan for that same diagnostic mammogram, they're subject to a $6,000 deductible.

For many families, that means that they will wait, they'll delay follow up care, they'll postpone diagnostics, and they hope their symptoms will resolve on their own. And as it's been stated and we know after Covid, delayed care leads to more expensive care. Agents see this in real time.

We help consumers year round with understanding their benefits, finding in-network providers, resolving billing errors, appeal denials, and transition between programs without losing coverage. And of course, our services are all free to the direct consumer. I love my job that I get to help everybody who walks in the door, and I don't charge anybody a fee.

If Legislature's goal is to ensure Californians don't fall through the cracks, it's critical to recognize the importance of enrollment and year-round advocacy support, especially for families navigating complex eligibility challenges and financial strain. Agents stand ready to be part of the solution and I thank you and I welcome questions at the appropriate time.

Thank you. We'll move on to Yolanda Sandoval.

Good afternoon and thank you for allowing me to be here. My name is Yolanda Sandoval. I am a proud member leader of SEIU Local 521 and a Clinic Operations Supervisor at Monterey County Behavioral Health. I'm here today to speak about health care coverage and affordability and what that looks like in the community I live and serve.

I help people get access to behavioral health care and medications they need. I helped them navigate the system and deal with coverage gaps. Many of our clients work for the agricultural industry and many of them face a loss of coverage due to HR 1. Unless we act now, our entire community will suffer devastating outcomes.

The system is already so fragile, even a small change in access can wreak havoc on entire families when their loved ones can't get the treatment they need. Recently, a Rite Aid in King City closed. We had a client who needed medication immediately, but the closest option denied the refill due to Medi Cal reimbursement issues.

The next closest option was 25 miles away. Even if the patient could have gotten to the pharmacy, they could not have afforded to pay the out of pocket cost for the critical medication. It took my personal intervention and we avoided a dire crisis that day.

But we can see clearly that more and more crises are coming our way. For those who lose coverage altogether, they will not be able to afford the care. And for those with coverage, hospitals and healthcare systems will shift the cost to us, asking us to pay even higher prices for the same care, which we cannot afford.

Take my own personal case. I have a $2,000 FSA, an eye exam, contact fitting glasses, and contacts, just for me, cost $1,800. That leaves nothing for my kids. Many coworkers, including myself, live in a shared family home because we cannot afford a place of our own. And I'm a supervisor.

In our last contract negotiations, a contract for 3,000 county workers, health care costs was a number one concern and focus of discussion at the bargaining table. Working families in my county face rising out of pocket costs and increased premiums every single time we go to the table. This hobbles our ability to fight for livable, family-sustaining wages.

Workers should not have to choose between health care and a living wage. We are grateful for the Office of Health Care Affordability that has come to Monterey to hear our story and dig in deeper on the challenge of health care costs in our region. We are working hard to solve this problem daily.

We are engaging with our Board of Supervisors. We are also working with CalPERS. But we know we need statewide oversight and solution. This affordability fight is not new, but it is going to get much worse because of HR 1. The state must stay the course on the great work of the Office of Health Care Affordability.

Setting cost growth targets is not optional. If I can speak for my Monterey County colleagues and clients, we're scared for our communities and we're scared for ourselves as workers. No one, not our client and not my coworkers, should be forced to choose between feeding their family and treating their serious health care issues.

In closing, we must work to implement HR 1 in a way that does the least harm possible and keeps the most folks enrolled in coverage while supporting us, the workers. We must also recommit to statewide efforts to keep health care affordable. Thank you for the opportunity to share and we look forward to the work ahead.

Thank you. And I'll bring it back to the dais for any questions from Committee. Assemblymember Schiavo and then Senator Smallwood-Cuevas.

Thank you so much for being here today. I think, you know, already seeing the impact of this and it's just devastating. They had nurses in my office today talking about how they're seeing people denied hospice care because they'll only take insurance and they're no longer insured.

And that's certainly something you shouldn't be dealing with in your final days.

So, you know, I know you were talking about a little bit about OKA coming to Monterey and my understanding, and correct me if I'm wrong, is that that's an area where the hospital, I think, has the highest rates in the state and you know, and some of the challenges there.

But I wonder if you can just kind of expand upon because I know sometimes we'll have hospitals charging for the same thing. Right? A few miles from each other, very, very different amounts. And I think that's why there was so much concern in Monterey. But can you refresh my memory about what's been going on there?

Yes, that's a great question. Thank you. I can't—I know that we were, we do have a hospital or maybe more than one hospital there that was one of the highest charging hospitals. But I don't have too much information on that, but I can definitely get back to you on that.

And you know, in terms of what promotoras are doing, I think that's such an incredib critical role right now. We know that the work reauthorization is going to be a huge, huge barrier for people and it's really a major concern.

It was nice at the Health Budget Subcommittee yesterday to hear what's being done at the state level to try to streamline that as much as possible, but, but we know just having to do that paperwork is going to be really difficult.

And I did not realize until the prior committee today was also talking about now people are going to have to re-enroll also in Covered California which did not have to do that before too.

So, I mean I—it's so critical I think for us to think about prioritizing how we can support folks to be able to do this work and making sure that folks who are doing the kind of navigator work to support people who are trying to access the care that they probably qualify for.

We know that most people are working poor, they're working on Medi Cal and still unable to make ends meet and still qualify, you know, for that care.

So, you know, the—I would just say like your voices in Sacramento are really important right now to really highlight how important it is to have this kind of advocacy and the one-on-one support for patients that we're going to need to be able to help people navigate this new bureaucracy that is being forced on us by the Federal Government, who supposedly, you know, hates bureaucracy but creates piles and piles of it with HR 1 and, you know, really grateful for the work that you're doing to help people address those challenges.

And I don't know if you have any kind of insights on what you've been seeing so far.

As I've shared, folks have already opted to not enroll on Medi Cal but also on Covered California because of those have subsidies, high subsidies, or as myself, opted for a lower plan and praying to God that nobody gets sick or looking for other resources in the Communities in what county or city offers free health screenings, mammograms, and there's other agencies like Licks for Life that have other resources that, you know, we have access to preventative care.

But it's really devastating that there's very little that we could offer to our community.

Thank you. Senator Smallwood-Cuevas.

Thank you, Madam Chair, and thank you so much for your testimony and insights. We have a very vibrant promotora program in South LA Los Angeles County and really respect that work that are reaching communities that are so often disconnected from health care, with folks who love care and that they trust and so, really appreciate your work.

And you know, in South LA, I have a very diverse district, right, and even though in California, black Californians make up about 7% of the state, half of black people are on Medi Cal in the state. Half. And it looks similar to that in my community.

And so, when we think about the reduction in care, the health screening, the preventative care, cancer screenings, unfilled prescriptions, folks, like you said, praying nothing goes wrong, I just think about half of a whole community that is in that situation and our immigrant neighbors in a very similar one.

So, I guess my question just has to do about just how we deal with the losses, the cost burdens. Now, each community is feeling these in different ways. And is there any—and I think from practitioners, your perspective is really important. What policy should we consider to help deal with the disparities?

Because it's, you know, the state is having a cold around health care, but black and brown communities are having pneumonia. Right? That's always the way that this analogy works, unfortunately. And so, are there any policy recommendations, anything for this body that we could do? Of course, restoring all of our health care and making sure we bring revenue.

But are there any other strategies that you all have, policy wise, that can help in this moment?

If I can share something and highlight. There's a challenge when you have your local representation not be aligned with what's going on at the grassroots level. And I'm talking specifically about Kern County. Unfortunately, our county is not as progressive as LA County with coming up with ways to address gaps.

So, you know, when thinking of policy, I think—I always think of Legislature or California, how can they support Kings County, also Tulare County, not only Kern County, in being able to, I don't know...is the appropriate word, but this county level has to also step up and our cities have to also step up and be able to come together with community to find solutions.

I definitely think that promotoras is a bridge, your navigators of, you know, hand holding. And we should be looking at that. You know, there's budget requests that we're doing to support with that. But preventative care needs to continue to be the focus. And, you know, most of our, I think, expenditure needs to go there.

I know we're in retroactive mode. However, we cannot, you know, forget of that proactive and all of the work and all of the advancement that we did after ACA. So, I would look at those things.

Thank you. Would you like to respond as well?

I would just like to say that rural communities, especially Mendocino County, Humboldt, Lake County, and Variety, I mean, the counties are poor. We are struggling with access to health care. I currently live an hour and 15 minutes away from the nearest pharmacy. So, access, pure access, regardless of affordability, is also a real concern.

And I don't know how to create a solution where there is some equity among the county budgets and equity amongst access to health care, but that is a huge concern.

Well, I want to say rural or urban, our communities are more alike than different. And so, we stand with you in making sure that our most vulnerable communities have the access and care that they need and really appreciate those recommendations.

Thank you. Senator Caballero.

Thank you very much, Madam Chairs, and thank you for being here today. Your testimony is really incredibly important. And along with my colleague who has left, I am very disappointed that there are people—that there are legislators that didn't show up today. And so, I want to be very clear about where this is coming from.

It doesn't make the situation any better, but at least it gets it off my chest that we're sitting here. California made the biggest commitment to Obamacare from any other state, and we took it really seriously and we covered everyone with Medi Cal.

This is coming from an Administration that never liked Obamacare to begin with, and now, they're in control because so much of our resources are Federal Government resources that come to help us do these programs. They're causing chaos in our system, a system that already has problems and inequities, as you've articulated.

So, I want to be very clear that this is a situation that it's the reason that you're having a hard time getting your county to step up and to say, we need to make the investments in health care. They're part of that same system.

And so, we're going to have to figure out how we deal with the gaps that we have in our system. And the difficulty is, two years ago, just as a snapshot, so, I—my district has changed. My district now is all in the Central Valley. And prior to that, I had the Salinas Valley.

So, parts of Monterey County and 68% of the population in my district is Medi Cal—are Medi Cal clients. So, as you can see, the healthcare is critically important in an area that has some of the highest pollution and the lowest wages in the state.

But the question is, what do we save as part of the system if we can't save it all? And a couple of years ago, we had a number of hospitals that were filing for bankruptcy and were going to close, and one that did in the middle of my district.

And so, we spent a lot of time organizing a distressed hospital loan program. We're able to bring it back from the brink of extinction, and we saved 16 hospitals in doing the work that we did. But prevention is really the solution. We don't want people to use emergency rooms as their primary care provider. It's too expensive.

So, the work that you're doing as promotoras, the work that you're doing, doing outreach to the communities for prevention, and I want to recognize the Chair for mentioning prevention because I'm absolutely convinced that if we focus on prevention, we can lower costs and we can make it more affordable for everybody.

But the numbers that you're describing are horrific. Speaking for my family, it'd be very, very difficult for someone to pay $6,000 for an assessment. They'll forego it. I'll tell you, if it's $500, they'll forego it.

And what we need is we need people to get those assessments so we can figure out if it's serious or not, and if there's some lifestyle changes that need to happen in order for people to be healthier. So, your testimony here today—I don't have a question. My mother was a nurse. My sister's a nurse.

So, I'm steeped in healthcare information and have a great deal of respect for those who work in the healthcare industry, because you're doing a yeoman's job with very little resources, and we need to do better. So, I appreciate the emphasis on prevention. I think that's really, really important.

And know that I think we're going to do our best to try to fix the holes that are here. But it is a hostile Federal Government right now. And the requirements they put on the work authorization, the re-enrollments, they're with a purpose. It's not to save money.

It's to get people off the program and to roll back all of the, all of Obamacare work that was done and we're committed to it. And it's going to be a challenge to figure out how we do everything that we want to do. But I really appreciate your testimony here today. Thank you, Madam Chair.

Senator Dr. Weber Pierson.

Thank you, Chair. Really want to thank this panel because you have started to kind of give a face to the problem. Really good to hear about what you are seeing and hearing on the ground.

You know, want to also give kudos to my colleague in the in the Senate and also Assemblymember Schiavo for recognizing that those of us who decided to come and listen and participate were not part of creating this problem.

And it would be nice to have our colleagues on the other side here as well to hear and participate because the reality is even though they—this Administration aligns with their values, is going to impact everyone, regardless of whether or not you're a Democrat or Republican, an independent, black, white, Asian, you know, young, old, everyone in the communities are going to feel this impact.

Even for people who feel very secure in their insurance, even for people who live in higher socioeconomic areas within a city, you are going to feel it as well.

Because when some of those other clinics have to close, when those other emergency rooms are too full, or those hospitals in those other areas have to close, it is going to impact your community as well, because people will continue to get sick and they will continue to need care.

And so, we really do need a hall—all hands on deck—to try to fix the problems that we are facing and those that will be coming. My question to our panelists is we've had, we've heard about some of the issues that are currently happening and unfortunately, people switching plans or dropping off of enrollment.

But my question is things are going to get worse much quicker in 2027 and 2028 with the requirements, work requirements, recertification requirements, and some other fundings that we won't get. Just wondering what conversations are being had on the ground level for those who may not be impacted at this point but will be impacted in future years.

And how can we help ensure that people know that they need to enroll every six months so that we're not seeing people who should be eligible and could be eligible falling off for administrative reasons?

Well, there are health insurance agents helping on the ground with Medi Cal enrollments and Covered California changes and coming on work and often and of course we speak because we're in most every community, we're of most colors and speak most every language.

And amongst ourselves, we are certainly having conversations about strategizing what are the things that some of us are planning on doing. One of my concerns is simply also just the staffing at the Medi Cal enrollment offices.

I can submit an application, I can upload documents to Benefits Cal on their behalf, but I cannot control their actual enrollment that actually comes from the county Medi Cal enrollment office. They're already understaffed as it is trying to manage the burden that they have.

The coming burden is terrifying to agents all over the state about just trying to keep people insured who've already submitted all of the necessary documents. As far as strategies for when auto enrollments haven't come up, we've talked about different strategies as far as, you know, calling our clients, starting to set appointments in July, just pounding the pavement.

The change in enrollment from January 30th—1st—to December 31st is going to be a significant impact. Many, many of my clients get to feel a little relaxed that they get to get through the push of the holidays, especially young families and that they can deal with the with their changes and benefits come January.

And the preparation to wind that back means that our job needs to start even sooner that we're going to start in September.

Getting updated information, getting a sense of I won't have rates, I probably won't have benefit designs, but I'll have a sense of what's coming to move the process even earlier and then work on systems, system wide improvements, so that we can just reach everybody as quickly and as beneficially as it can.

And Calvert California has been a remarkable partner in this journey. I do have to say, on a personal note, in August and September when the changes were put out and they were talking about taking their $190 million and putting it towards the lowest population that actually worked, none of my clients that are in that bracket lost coverage.

All of them were able to support the premium increases at their same level of coverage. So, my silver 94 clients, my silver 87 clients, remain in their benefits. It's the people who are just above the poverty level that one would not expect to actually be without coverage are the ones that are without coverage, the small grocery store owners.

The employees will have coverage, but they won't. And we've done interesting strategies. Small business rates have been lower. I've been incredibly impressed by our business community for stepping up to create small group plans and how that's made a difference for consumers.

For my own, because my family has the gambit of all my very few staff had plans through Covered California. I have the benefit of being on my husband's employer-sponsored coverage. My staff was looking at a premium increase of about $550 for her family of three, going up to almost $3,000.

There was absolutely no way she could afford that. So, we managed to split the difference, and I created a small business plan. I'm covering the 100% for the employer, my staff, and then they're coming for their dependents. It's still a significant rate increase, but it's manageable. Of course, she won't be getting a raise.

She's, she's aware that that is. And which is awful to do because that—but at least there was balance. And I saw that throughout the community. I see that in the construction community. I see that in the grocery stores.

And it helped me sleep a little bit better at night because there were lots and lots and lots of dark days. Thank you.

So, just myself in the community that I work in, in Monterey County, we have a lot of rural, especially in the South County area, we have a lot of clients that are worried about their insurance.

A lot of them who are farm workers and are worried if they're going to be able to keep the health care coverage or if they're going to lose it and what they're going to do, are they going to still receive care?

And I work in the behavioral health, so their care is very important to them and to their families. So, that's just kind of what we're seeing there.

And we do have social workers who are starting to have discussions with the clients or trying to find how we can keep them on the coverage or what we can do with them, especially because some of them, their immigration status, as well, is a concern of theirs as well.

To your question of how do we approach those that think they're not affected or won't be, most of the people I interact with are already being impacted. However, I think we need to continue on that education that if a person is not covered and ends up in the hospital, my tax dollars will be paying for that.

So, I am going to be impacted. If I have to take, you know, if I'm lucky enough, lucky enough to have health coverage that is comprehensive, but I end up in the hospital, hospital beds are going to be full. Right? And even physicians.

And again, in the Central Valley, when you already have a need for specialists and for more doctors based on the amount of community members, that all of that is going to be impacted.

So, yes, we, we need to have more education that goes along with the prevention, but that it will either impact you right now or it will impact you in six months to two years because the availability of your doctor will be less.

So, you are going to feel that frustration of not being able to get an appointment in six months, however, you need a surgery immediately or it's life or death.

Thank you and I want to just recognize that both Ms. Sandoval and Ms. Ignacio specifically talked about the impact to our, particularly our low wage workforce and our small business owners who are not only facing the reality of premiums increasing, but also the challenge that with those premium increases it means that employers are going to be basically taking a double hit—or sorry, employees are going to be taking a double hit—because they don't have the ability to negotiate or get the kinds of raises or increasing compensation because now, employers are paying that primarily towards health care.

And I think you both offered information just from a small business owner perspective, as well as from an employee's perspective, and that should not be lost on us. I just want to highlight that all of you talked about the kind of on-paper access to care that is just on paper.

So, if you are facing increased premiums and you're buying into a plan that you can afford, but it means that you have a deductible that you can't meet or that you can't sustain the payments around the premium, our coverage may look like people are covered, even though we know that there are so many that are going to fall out.

But in actuality, in terms of where people will actually spend their health dollars, they're not going to be able to spend their health dollars, even though they have coverage and a plan.

And I think that that is all something that we need to hold and make sure that we're looking as we're looking at the Covered California numbers or the Medi Cal numbers or even the employer-based health coverage numbers, our overall access to care is going to be incredibly impacted.

And I want to thank you all for highlighting that. And then, just this last point around, around, I think many people look at what is happening in our healthcare system right now as a result of HR 1 and quite frankly, as a result of some of the decisions that we as a state made, and they are treating this as a them problem. Other problem.

Those people who are low wage workers, those people who are immigrants, those people who are Latino, black, people of color, it's those people and feel some comfort that is not happening to them.

But the reality is that this is happening to everyone and it is a we and an us problem.

And I really want to thank you all for highlighting the fact that we are all going to be in grave danger of basic ability to get the health care that we need, regardless of our status, regardless of our income level, as a result of the egregious changes to an investment in healthcare system and the decisions that have been made through HR 1.

So, I want to highlight the fact that you all are frontline folks who are just trying to make do, and we'll see a lot of these impacts.

And thank you for sharing your personal stories as well as knowing the work that you all do to make sure that as many people as possible are receiving some kind of coverage in this moment in time. And thank you for making this all the more real for us. Want to appreciate your comments.

And with that, perfect segue into our last panel. This panel is an opportunity for us to hear from providers and communities across the state and a purchaser. Please note that our last speaker, Casey Maroney, is unable to be with us today. However, Andrew Kiefer from Blue Shield will step in and be on the panel in her place.

So, please stick to the time of three minutes per panelist and we will begin with Dr. Hernandez. Thank you. And when you start, please state your name and who you're representing. Thank you.

Good afternoon, Madam Chairs and Members of the Committee. My name is Dr. Elizabeth Hernandez. I serve as the Interim Deputy Chief Administrative Officer for the County of San Diego Health and Human Services Agency. I appreciate the opportunity to speak today and thank the Committee for addressing these difficult issues.

As you've heard, HR1 represents a fundamental restructuring of the Federal State County Partnership for Provision of Safety Net Services. It will cause significant impacts to vulnerable populations and our county system. San Diego County is the most populous of California's 58 counties and the fifth largest county in the United States. We are extremely diverse.

46% of residents under 18 years of age are Hispanic and Hispanic population is expected to grow at a rapid rate. Approximately 23% of the county's population are immigrants, including refugees who speak 68 different languages and have a variety of needs as they live and adjust to a new environment.

We are currently home to nearly 1 million Medi-Cal residents. More than 300,000 are a part of the Affordable Care Act. As a result of HR work or community engagement requirements, we estimate that around 100,000 San Diego County residents will lose Medi-Cal Coverage in the first year of implementation.

Tens of thousands more will likely lose Marketplace health insurance that they were previously able to afford through Covered California subsidies. California law requires all counties to provide basic health services to indigent adults. So-called indigent care programs.

As you know, county indigent care programs are not health insurance and are not uniform covered services and eligibility varies from county to county.

San Diego county is one of 12 Article 13 counties in the state, meaning that we do not own or operate our own public health, excuse me, our own public hospitals and do not participate in the CMSP County Medical Services Program. We also do not operate primary care clinics.

Community health clinics and federal qualified health centers serve as our primary care safety net. Because of this structure, we fulfill our indigent care mandate by contracting directly with a wide network of community health centers, hospitals and specialty physicians to provide medically indigent care. Therefore, we act as a purchaser of services rather than a provider of services.

In San Diego county, we call our Indigent health program county medical services or CMS and prior to ACA, the state provided 1991 health realignment funding to support CMS. Our eligibility criteria was at the time and remains today quite limited. To be eligible under program rules, you must have an immediate medical need.

Nevertheless, in 2010, we served nearly 11,000 residents through CMS and the cost of the program at that time was $70 million a year. When ACA was implemented, enrollment in our program dropped significantly as more Californians qualified for health care coverage through Medi Cal and CMS was able to significantly scale down its operations.

Today we have between two and 12 individuals in the program in any given month. An important question that San Diego and other counties are grappling with is what should our intelligent health program look like moving forward given the incredible loss of coverage that we expect?

Just last week, our Board of Supervisors voted to explore various reforms of our CMS program and this analysis will take place over several months. No matter how San Diego CMS parameters might change, significant resources will be needed to support our safety net. Even if a small portion of those who lose Medi-Cal, seek County intelligent care.

The cost of providing medical services has increased since our last program has had a significant enrollment. We anticipate real fiscal pressures on top of an already challenging budget period for this county.

Our county's priorities are to ensure that those who are eligible can continue to remain enrolled in Medi-Cal to support our eligibility workers and strengthen our safety net. All vulnerable residents need significant support to navigate this complicated changes, and our county workforce needs support as well.

These pressures are compounded by the impacts community safety net providers are facing. And our health care providers are facing the prospect of a surge in uncompensated care costs, which in turn may impact our county services. If you could wrap up soon.

In closing, we're committed to working together with help providers to develop options to meet the challenge of providing San Diego's energy health needs. But we need significant partnership with the state to engage in that important work. Thank you for the opportunity to share today. Thank you.

Thank you. Good afternoon, Madam Chairs Committee Members. My name is Jason Britt. I'm the County Administrative Officer for Tulare County. I have served Tulare County for 31 years and was the Director of our indigent care program prior to ACA.

My county has a greater than 50% Medi-Cal participation rate and has a distressed hospital as defined by this Legislature. Estimates are 22,000 or more are at risk of losing Medi-Cal coverage, and of those, we estimate 7,200 individuals may come back to the county indigent program.

Similar to San Diego pre-ACA, Tulare County operated 23 qualified health clinics, a pharmacy, and had contracts with three local hospitals serving about 1400 individuals at a cost of about 7 to 8 million dollars annually. And we struggled.

If you assume higher inflation over the past several years and more individuals who need to be covered, I estimate indigent care will now cost Tulare county upwards of 30 to 40 million dollars annually.