Californians to Be Covered | All Californians covered through newly created single-payer California Health Insurance System (CHIS). |
Requirements Imposed on
Consumers/Individuals | Companion legislation, SB 1014, would require individuals to contribute a portion of income via taxes, in lieu of paying for health care premiums, copays, and deductibles. First $7,000 of income would be exempt. |
Treatment of Self-Employed | All Californians have same access to same standard benefits, regardless of type of employment. |
Requirements Imposed on
Employers | SB 1014 would require employers to contribute via a 8.17% increase in payroll tax of employee’s income over $7,000 and under $200,000. Contribution would be made in lieu of paying premiums. |
Treatment of Small Employers | Not applicable. |
Requirements Imposed on
Providers | None stated. |
Changes in Provider Payments or Reallocation of Funds for Providers | - New CHIS commissioner would negotiate and set all rates.
- Provides new right to providers to collectively negotiate rates and fees.
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Public Program Expansions and
Support for Low- Income Individuals | - Aims to consolidate funding for existing public programs into newly created Universal Healthcare Fund, under CHIS.
- All Californians receive coverage under CHIS, regardless of income.
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Role of Counties | Indigent receive care under CHIS; counties are largely removed of their obligation to care for indigent. |
Role of Federal Government | - Legislation intends for CHIS to consolidate funding from all existing public programs into the Universal Healthcare Fund, potentially including Medicare.
- People eligible for federal programs (Medicare and Medi-Cal) would remain enrolled in them and CHIS would pay their premiums and deductibles.
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Changes in State Tax Code and State Tax Revenue | SB 1014 would modify state tax code to increase individual income tax and employers’ payroll tax. |
Insurance Market Requirements/Reforms: Guaranteed Issue, Rating Reforms, and Other Requirements
Imposed on Health Plans | CHIS becomes the primary policy for all Californians. Insurers may sell supplemental policies. |
Insurance Market Requirements/Reforms: Connector/Purchasing Pool | All Californians receive coverage under CHIS. |
Insurance Market Requirements/
Reforms: Participant Contribution to Obtain
Coverage Through Purchasing Pool | New administrative bodies are created to administer CHIS and develop a premium structure for Californians. |
Financing Sources and Cost Estimates | - Creates the California Health Insurance Premium Commission to develop a premium structure to fund CHIS.
- Legislation relies on an estimated $29 billion in administrative and other savings that are used to fund expanded coverage under CHIS.
- SB 1014 would increase payroll and state income tax for financing. Legislation envisions:
- Individuals would pay 3-4% of income (between $7,000 and $200,000).
- Individuals would pay an additional 1% on income over $200,000.
- Employers would pay 8% of payroll tax (on payroll above $7,000 for full time employees).
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Cost Containment: Prevention and Wellness | Preventive care covered by CHIS. |
Cost Containment: Additional Provisions | Caps administrative spending to 5% of total system-wide spending and authorizes newly created CHIS Commissioner to create other forms of cost control. |
Enforcement | None specified. |
Implementation Timeline | - January 2008 – Premium Commission established.
- On or before January 2010, Commission makes recommendations to the Governor and Legislature.
- CHIS becomes fully implemented once the Secretary of Health and Human Services determines the Universal Healthcare Fund has sufficient revenue for the program to be operational.
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