CNA/NNOC Opposes Latest Amended Version of Flawed Healthcare "Reform" Bill Before California Legislature

The California Nurses Association/National Nurses Organizing Committee strongly opposes the latest amended version of AB 8, the flawed healthcare reform bill by Assembly Speaker Fabian Nunez.

Hundreds of CNA/NNOC members will visit state legislators in the Capitol on Monday to express their strong opposition to the bill.

California legislators are expected to vote on the bill in the State Senate on Monday in the State Assembly on Tuesday. The bill parallels proposals made by Gov. Arnold Schwarzenegger in its reinforcement of the insurance-based system as opposed to a guaranteed healthcare plan that ends insurance industry profiteering and denial of care.

Schwarzenegger has said he will veto the bill in its current form – and Nunez and some others are expected to then resume closed door talks with the Governor on a very similar bill that would include further concessions to the insurance industry.

Following is a CNA/NNOC statement on why it opposes the current AB 8:

AB 8 as amended still has serious policy and funding flaws. 

• AB 8 has no minimum standard of health benefits for employees who are over 300% of poverty.  It is based on the Knox-Keene requirement of benefit with the Managed Risk Medical Insurance Board determining the pool of benefits.  To date, legislators do not know what those benefits are.  It can be safely assumed that it will be high deductible, high co-pay with a low standard of covered benefits, the same experience of Massachusetts.
• AB 8 is probably under funded and if so the only place to cut is on covered benefits.
• AB 8 is still NOT affordable because:
• Employees over 300% of poverty who are not exempt are subject to insurance premiums that are not cost contained.
• It does nothing to limit the rising prescription drug costs and insurance premiums that far exceed wages. 
• The 7.5% employer tax is substantially less than what most employers currently pay (15%). The result could be a shift from employers demanding their employees to accept cheaper, more substandard plans.
• Recent amendments require employees earning less than 300% of poverty AND whose income does not exceed 5% of income do not have to “take up” job-based health coverage; but then they will have no health care. With wage increases and potentially decreases due to demotions, it would be an administrative nightmare to figure out which employees falls into this category.  This amendment may be unenforceable.
• AB 8 gives Employers wide latitude to pay instead of play.  AB 8 gives wide latitude to employers who pay.  If employees choose to make a contribution towards “health expenditures,” than the employer can choose to accept them.  These expenditures or reimbursements can be Health Savings Accounts and reimbursements for healthy lifestyles and wellness programs.
• AB 8 has employer mandate which is in violation of ERISA.
• AB 8 could be the “ENRON style” Health Care Reform of 2007 due to last minute, non transparent process.
  The process of negotiating behind the scenes with “stakeholders” that results in each group getting something to get their “support” is not the way to deal with comprehensive legislative change on this scale.  The last time California did this it almost bankrupted the state.  It’s also wrong that most legislators voting on a complicated bill will be voting on amendments made one day ago and can’t possibly know enough to make this large a decision affecting 37 million Californians.  This same process was used to fashion the Worker’s Comp “reform” which was supported by most of labor.  It turned out to be a policy that they would later denounce because when the details were uncovered it turned out to harm workers while allowing insurance companies to make windfall profits.
• AB 8 funding with hospital fees encourages the death of the county safety net hospitals:   AB 8 is based upon a hospital tax to help fund the plan.  The modeling is based on a two-tiered assessment fee to “private hospitals” on patient days.  Private hospitals will see an increase of about $1.7 billion. Those funds will be matched by federal funds of about $3.4 billion to be used to care for the poor.  Unfortunately, the modeling starves off county and University of California hospitals. When a county puts up the money for this tax, they don’t get any federal matching dollars in return because they are ineligible to this federal match.  Counties will loose about $600 million statewide from this deal and they will also lose their patient base.  Why should hospitals like Cedars-Sinai have a net windfall of $56 million while Los Angeles County just pays the fee?.
• AB 8 is not Guaranteed Issue.  AB 8 doesn’t even take care of the 3.4 million it seeks to cover.  If you have “serious” medical conditions, those individuals are kicked to a public high-risk pool.  When it is over subscribed, people will not be covered.
• AB 8 and individual mandate?  For employees it most certainly is if they make over 300% FPL and if it is sent to the Governor he will most certainly call a special session and send the legislature a second bill that will have full individual mandate in it.