Calif. Lawmakers Wrangle Over Insurance Mandates

A California effort to extend health care coverage to the uninsured would likely benefit a large number of state residents with mental illness, although not all (see State Gets Mediocre Grade).

A complex health care overhaul bill (ABX1 1) requiring employers to provide insurance to their workers or pay part of the cost of the state insuring them has advanced through the state Assembly and is pending before the Senate. It is the product of months of negotiation between Gov. Arnold Schwarzenegger (R) and the Democratic leadership of the state Assembly. Passage in the Senate is less certain because of concerns about the funding mechanism (see Political Obstacles Thwart Attempts to Expand Coverage).

However, the governor and speaker of the Assembly have already submitted an initiative for the November ballot on a package of fees and taxes to provide funding for the improvements.

Mental health advocates support the broadening of health care access, although psychiatrists have urged a variety of measures to overcome continuing concerns about mental health care access within the legislation and beyond it, including limits in the state's parity law.

“We were working to make sure that our current mental health parity provisions were maintained [for private insurance under ABX1 1], and they have been,” said Randall Hagar, director of government affairs for the California Psychiatric Association (CPA).

It is less clear, however, if the bill's planned health insurance pool for residents who can neither qualify for government benefits nor obtain private insurance will be sufficient to provide mental health benefits that state law requires private plans to provide.

The legislation would upgrade the state's mental health parity law to institute a requirement that public and private insurance plans also cover psychiatric medication. The current law requires treatment coverage only for a list of mental illnesses under the same terms and conditions as other health conditions the plans cover, and it specifies the minimum types of services those plans need to cover. It does not, however, require medication coverage.

California psychiatrists hope to gain the governor's support for a measure that also would expand the list of psychiatric disorders that insurers are required to cover to include all disorders in APA's Diagnostic and Statistical Manual. Schwarzenegger vetoed a bill (AB 423) last year that would have done that, but he indicated to its author, Assembly Rep. Jim Beall Jr. (D), that he might support it after a comprehensive health care plan is enacted, Hagar said.

A separate measure to establish a single-payer system was passed by the legislature last year and vetoed but has been reintroduced. The author of that measure, Sen. Sheila Kuehl (D), is considering presenting it to voters in November as a competing ballot measure.

Another challenge to the governor and speaker's plan is uncertainty over its legality. A federal judge invalidated San Francisco's landmark attempt to extend health care coverage to all uninsured adult residents last December, only to be reversed by an appeals panel in January. The federal judge had concluded that the federal Employee Retirement Income Security Act (ERISA) prohibited the city from mandating worker benefits. That plan, which the judge rejected on the grounds that the city was intruding into federal regulation of employee benefits, had cast doubt on the viability of a similarly designed statewide program for covering the uninsured.

Critics of the governor's health care plan, including Kuehl, note that it would cap how much employers would be required to pay into the state purchasing pool. However, no similar limit is included for worker costs for copays and deductibles, which could rise dramatically.

“I understand the concern that we have a deficit and that our plan is too daring, too bold, too expensive,” Schwarzenegger said during his January State of the State address. “But sometimes you have to be daring, because the need is so great.”

Supporters said the measure would provide free or very-low-cost coverage to low-income residents, who are defined as individuals with annual earnings of less than $25,520 or families of four with earnings of less than $51,625. Tax credits would also be offered to households with earnings under $82,600.

The plan does require a state medical board to set minimum standards for insurance policies, including basic services such as hospitalization, physician exams, and preventive services.

Information on ABX1 1 is posted at<www.assembly.ca.gov/acs/acsframeset2text.htm>.▪