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News & Press: CalAdvisor Newsletter

Legislative Update

Friday, July 7, 2017   (0 Comments)
Posted by: Shari McHugh
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Legislative Issues of Interest

SB 562 (Lara) – Single Payer Healthcare - OPPOSE

Despite intense lobbying and grassroots efforts, the single payer bill, SB 562 by Senator Lara, passed the Senate. However, Assembly Speaker Anthony Rendon (D-Lakewood) released a statement on Friday, June 23 that he is holding SB 562 in Rules.

Single-payer health insurance will not provide promised long-term savings, and it will further limit physician and hospital choices, which have already been reduced dramatically. The Senate Appropriations Committee set a cost estimate for SB 562 as approximately $400 billion dollars per year. This is more than twice the amount of California’s entire proposed state budget of $180 billion. Additionally, all proposed funding offsets would require enormous resources and are unlikely to be feasible.  Even with absorption of all existing government health care funding, and all current employer health care spending, there would still be a minimum funding shortfall of $50 to $100 billion per year.  The Senate Appropriations Committee speculated that this shortfall is likely to result in a new payroll tax of about 15 percent with no cap on wages subject to the tax. That fiscal impact would be unsustainable for employees and employers in California and would result in the highest tax burden in the country-a strong disincentive to remain in business in California.

NAIFA-California and other stakeholders are active participants with Covered California.   These organizations believe SB 562 unnecessarily complicates the Covered California program by forcing the entire state health care system to move in an entirely different, prohibitively expensive direction. California has just completed another successful open enrollment season and the percentages of those who are uninsured have dropped to 7.1 percent, a record low in our state.  It is important to note that licensed, certified health insurance agents contributed in large part to this success story, having helped millions of Californians find and keep affordable health care coverage, and standing ready, willing and able to continue doing so.  Lastly, in a single-payer system, the consumer loses the vital benefit of a qualified health insurance agent who is able to assist in navigating complex healthcare management issues.

With all of this being said, it is more important than ever that NAIFA-California has a very loud voice in Sacramento.  The association needs to have as many members as possible in total number, and we need to have as many of those members actively working with their legislators to tell them why SB 562 is not a good idea.  Strength in numbers has never been more important than it is today.

AB 989 (Cooper) – Health Savings Accounts – SUPPORT

NAIFA-California was pleased to support, along with CAHU and IIABCal, AB 989 by Assemblyman Cooper (D-Elk Grove), which would have enabled California taxpayers to take advantage of a health expense benefit, in fact the same tax benefit enjoyed by the majority of other states (as well as Federally), as an effort to make health care expenses more reasonable. 

Unfortunately, the bill was held on Suspense by the Assembly Appropriations Committee thanks to the estimated price tag to the state. 

AB 788 (Lara) – SUPPORT

NAIFA-California is pleased to support, along with other insurance trade organizations, SB 788 by Senator Lara, which would require the Insurance Commissioner to allow individuals who are applying for or renewing an insurance license to use an Individual Tax Identification Number (ITIN).

ITINs are tax processing numbers issued by the Internal Revenue Service to ensure that people pay taxes even if they do not have a Social Security number.  In addition to allowing people to pay taxes, ITINs are used to open bank accounts, obtain a driver’s license and provide proof of residency.  SB 788 simply makes licensure more obtainable for folks with ITINs and it aligns the Department of Insurance’s licensing requirements with the licensing departments within the Department of Consumer Affairs.

The bill passed out of the Senate, and is currently waiting to be heard in the Assembly.

SB 425 (Mendoza) Product Filings -- SUPPORT

NAIFA-California is co-sponsoring SB 425 with the Association of California Life and Health Insurance Companies (ACLHIC) and the Chairman of the Senate Insurance Committee, Senator Mendoza (D-Artesia), is the author of the bill.

While the Department of Insurance has made progress in reviewing product filings, it still takes quite some time for carriers to get their products approved and to market…especially compared to other states.  SB 425 would have authorized the Department to develop and publish an expedited policy form approval application for certain new products, and would have alleviated some of the backlog in the product approval bureau.  This expedited process would have provided consumers with more products to meet their insurance and retirement planning needs, without sacrificing consumer protections. 

Unfortunately, the bill was held on suspense in the Senate Appropriations Committee thanks in part to information still not being available from the Department as to the back-log.


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