SACRAMENTO, CA, Jan. 7, 2022 - IIABCal and its industry coalition partners today strongly opposed a state legislative proposal mandating a government run single payer health care program that abolishes private health insurance, Medi-Cal, Medicare, Covered California, and the valuable advocacy services of insurance professionals and advisors.
IIABCal, the California Agents & Health Insurance Professionals (CAHIP), and the National Association of Insurance and Financial Advisors of California (NAIFA-California) -- the state's three largest associations of professional licensed health insurance agents and other health insurance industry professionals -- announced that it is opposing AB 1400, arguing the measure would harm California residents with a $400 billion dollar price tag per year and no guarantee of better healthcare.
Millions Served By Exisiting Plans
"IIABCal members help millions of individual Californians and businesses evaluate, select, purchase, and use their health care coverage plans, resulting in greater health and financial security - all at no additional cost to the consumer," IIABCal Lobbyist John Norwood said in a letter to bill sponsors. "Our agents and brokers also serve as consumer advocates for the insured and their families when coverage disputes arise."
"As associations representing health insurance agents in California, we understand the importance of health care coverage and affordability of that coverage," NAIFA's Shari McHugh said. "However, we believe the negative impacts that AB 1400 would have on the health insurance marketplace and the overall economy in California significantly outweigh the benefits of creating a universal single-payer, government run program."
"Agents are concerned that AB 1400 would cause those currently insured to lose their health care coverage and have it replaced with a new benefit structure determined by what government feels it can afford, not on what the consumer may want or need," CAHIP's Faith Lane Borges said. "While AB 1400 promises all citizens healthcare coverage, it does not guarantee access to medical care."
A $400-Billion Proposal
AB 1400 is sponsored by Assembly members Ash Kalra, (D-27th), Alex Lee (D-25th), and Miguel Santiago (D-53). The Senate Appropriations Committee set a conservative cost estimate for similar legislation at approximately $400 billion dollars per year. Bill opponents said the proposal would require twice the amount of California’s average state budget. Additionally, opponents said, 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 more than $150 billion per year," Norwood said. "That fiscal impact would be unsustainable for employees and employers in California and would result in the highest tax burden in the country. AB 1400 gambles Californians’ access to healthcare and their economic futures."
Prosposal Complicates Covered California
IIABCal and its coalition partners believe AB 1400 unnecessarily complicates the Covered California program by forcing the entire state health care system to move in an entirely different, prohibitively expensive direction.
"Our organizations have been active stakeholders, supporters and participants with Covered California," McHugh said. "California is nearing the end of another successful open enrollment season and the percentage of those who are uninsured is at a record low."
McHugh added that it was 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.
"Agents stand ready, willing and able to continue doing so," she said.
Borges said single-payer health care leaves consumers virtually defenseless if a decision is made not to provide health care coverage for that individual.
"Currently, consumers who are denied coverage for a surgery, procedure or prescription by a carrier can turn to their health insurance agent for help," Borges said.
AB 1400 Eliminates Jobs
Norwood said AB 1400 would eliminate hundreds of thousands of jobs in California.
"Under existing law, a health insurance agent is uniquely situated to successfully intervene on behalf of the individual, family, or business consumer," Norwood said. "Since carriers must depend on agents for the distribution of their products, the agent is in a highly leveraged position when advocating on behalf of her/his consumer client. There is no such leverage in a single-payer format. The consumer is left undefended in the hands of a government-run single-payer bureaucracy."
Coaltion partners have reached out the bill sponsors to discuss options to help repair problems encountered by everyday Californians who are trying to obtain and pay for health care. Coalition partners said there are viable market stabilization strategies that will help California continue to lead the nation in successfully administering the Affordable Care Act.
Coalition partners will contnue meeting as the bill progresses in the legislature to develop a unified, coordinate industry opposition to AB 1400.