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Lawmakers move on health insurance rules

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POSTED February 28, 2013 9:56 p.m.


SACRAMENTO  (AP) — California lawmakers took the first step Thursday toward passing new consumer protections, such as guaranteeing coverage even with pre-existing conditions, under the federal health care overhaul.

Democrats in both houses of the Legislature passed bills dealing with individual insurance regulations that would prevent insurers from discriminating and overcharging customers.

The bills, ABx1 2 by Assemblyman Richard Pan, D-Sacramento, and SBx1 2 by Sen. Ed Hernandez, D-West Covina, also seek to ensure quality health coverage.

The bills now switch houses while lawmakers work out the details with Gov. Jerry Brown to eventually pass and sign just one of them. One of the sticking points is how many geographic regions health insurers will be able to use to determine premiums.

"This is just one part of the puzzle," Hernandez said.

The bills were introduced during a special legislative session convened by Brown to implement health care reform in the state.

The governor wants lawmakers to tweak state laws as soon as possible so officials can launch a new insurance marketplace and expand the state's health insurance program for the poor.

The two regulatory bills passed Thursday on party-line votes prevent insurers from discriminating based on an individual's health status, medical condition, plan experience and genetic information. Instead, insurers will be limited to adjusting rates on age, geography and family size.

The measures essentially add the Affordable Care Act to California law so state agencies have the power to enforce and regulate new individual insurance rules.

"If you have a child who gets diagnosed with autism or born prematurely, you can get health insurance." Pan told lawmakers in the Assembly.

Republicans opposed the bills, saying more restrictions will drive up health insurance costs rather than make it more affordable. They also say the state should reconsider its decision to prevent health insurance companies from charging smokers up to 50 percent more on their policies.

Assemblyman Don Wagner, R-Irvine, worried that the insurance industry has never had to account for the cost of covering people with pre-existing conditions.

"Put them in there and there's an inevitable increase in price," Wagner said.

Assemblyman Jimmy Gomez, D-Los Angeles, said the insured are currently subsidizing the uninsured in the state.

As a child, he said, he developed pneumonia and eventually had to spend a week in the hospital because his family was unable to afford health coverage and preventative care.

"This will actually prevent those situations because it will allow people to take care of their loved ones as soon as they get sick and help drop the cost for all of us," Gomez said of the new bills.

Brown, a Democrat, has committed to expanding Medicaid, known as Medi-Cal in California, for people who make up to 138 percent of the federal poverty level, or about $15,400 a year for an individual. The expansion is estimated to bring 1.2 million new enrollees by 2017.

The program already serves about 8 million adults and children, nearly one of every five California residents.

Sen. Bill Emmerson, R-Redlands, and Sen. Ted Gaines, R-Roseville, said they're concerned that expansion costs could soar out of control, particularly once the federal government reduces support to states for Medicaid expansion.

The federal government will pay the full cost of expanding the low-income health program for the first three years then gradually reduce payments to 90 percent starting in 2020, putting the rest of the cost on the state.

Emmerson had urged the state Senate to hold off on Thursday's vote until the state receives more direction from the federal government on insurance regulations.

"Let's not rush into this and pass something today that we're going to be sorry that we passed," he said.


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