Healthcare bills

By CMTA Staff

Capitol Update, Jan. 18, 2008 Share this on FacebookTweet thisEmail this to a friend

The hearing scheduled this week on the major healthcare reform legislation, ABx1 1 (Fabian Nunez, D-Los Angeles), was postponed while the Chair of the Senate Health Committee, (Sheila Kuehl, D-Santa Monica) awaited a financial analysis of the bill. Senate Speaker pro Tempore Don Perata (D-Oakland) had requested the analysis from the Legislative Analyst's Office (LAO).

"One of the very basic, key pieces of information that I need is the LAO’s report," Kuehl said. "She is analyzing the impact the bill will have on the budget, but also the initiative. I really want, as Don [Perata] requested, her real report on the impact on the budget and the adequacy of the proposed funding." The bill is now officially scheduled to be heard on Wednesday, January 23rd, although CMTA has heard that it will be postponed even longer.

Meanwhile, media reports focus on a potential reversal of position by one of the biggest supporters of the bill. The California Hospital Association has expressed concern over language in the bill that would allow the Legislature, with a two-thirds vote, to raise the four percent hospital fee even higher, and use the money for services other than healthcare.

The Senate Health Committee heard a series of other healthcare reform bills introduced by Republicans. One, SBx1 10 (Abel Maldonado, R-Santa Maria), was supported by CMTA.  It would provide full Health Savings Account (HSA) conformity with the federal "Medicare Prescription Drug, Improvement and Modernization Act of 2003."

HSA's, when combined with High Deductible Health Plans, can provide some level of health insurance for individuals. HSAs help individuals take control of how their health care dollars are spent and enables them to save for future medical expenses, including their retirement years, on a tax-free basis. The nationwide utilization of HSAs has increased significantly and many of the individuals using them were previously uninsured. SBx1 10 improves upon existing tax-deductible saving options because both the employer and employee may contribute to an employee's HSA without increasing the employee's taxable income. Additionally, unspent funds rollover from year to year and move with an employee.

Because California is one of the very few states that refuses to conform to federal law on HSAs, California employees of multistate or multinational employers can’t enjoy the tax advantages of HSAs.  They end up paying more for the same medical coverage.

Along with the labor unions, many democrats in the legislature oppose HSA conformity because they believe that such favorable tax treatment only encourages high deductible health plans.

SBx1 10 was defeated in the Senate Health Committee on a partisan vote.

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