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California runs ahead of health reform

Maryalene LaPonsie | June 11, 2010

Is it 2014 already?

They must think so in California. Despite the fact that most provisions from the federal health reform bill aren't scheduled to go into effect until 2014, the California Legislature appears to be in a time warp. Before breaking for their summer recess, legislators passed a collection of bills designed to begin implementing federal reform provisions four years early.

Short-term insurance fixes before the main event

When President Barack Obama finally signed the health reform bill into law earlier this year, supporters cheered while opponents sneered. States, however, breathed a collective sigh of relief knowing that they had four years to implement the bill's main provisions. Although some medical insurance changes are scheduled during the next three years, reform's main event--health insurance exchanges--aren't expected until 2014.

In a radical departure from the normal government operating procedure of waiting until the last minute, the California Legislature decided that it would be best to pass some short-term insurance fixes in anticipation of the federal reform implementation. Legislation recently passed by the California Assembly:

  • Prohibits insurers from denying coverage based upon a pre-existing condition
  • Extends maternity coverage to women with individual insurance policies
  • Requires insurers to get permission before cancelling someone's policy
  • Requires all employers, regardless of size, to provide mental health medical coverage
  • Begin the creation of a California Health Insurance Exchange
Smart thinking or jumping the gun?

On the face of it, the California bills sound like a good idea. After all, what could be better than advance planning? Well, for one thing, the federal government hasn't even created definite guidelines for the health insurance exchanges yet. Without specifics, the California Legislature may find itself doing double the work if it has to amend its plan to conform with federal requirements.

In addition, four years is a long time for the federal government to further reform the health reform. After all, government doesn't have a stellar reputation for consistency. Witness the Michigan Legislature's decision to implement a service tax in 2007...and then repeal it hours later. If the Tea Party revolution takes place in the 2010 general election, as many predict, health reform might look very different in 2011.

Of no less concern is the impact of the bills on the availability of health insurance. Critics point out that the California bills are in some respects more stringent than the upcoming federal reforms. For example, while the federal health reform requires mental health medical coverage only from employers with more than 50 workers, the California bill includes all employers, large and small.

Whether the bills may ultimately make it to Governor Arnold Schwarzenegger for his signature remains to be seen. However, it seems clear that the California legislators are betting that they will be ahead of the curve once the federal mandates take effect.

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