Angelides Unveils HMO Reforms

SAN DIEGO - As part of his sweeping health care reform efforts, California State Treasurer and Democratic nominee for Governor Phil Angelides today unveiled detailed plans to crack down on HMOs in order to increase affordable access to quality care.

"Governor Schwarzenegger has failed to adequately regulate HMOs and health plants to protect California families and businesses from rising health costs and poor quality care," said Angelides. "When it's a choice between the health needs of Californians and the profits of HMOs and drug companies, the Governor always stands with the big guys."

Angelides' comprehensive HMO reform package will:

1. Protect families and businesses from excessive HMO overhead, salaries and profits. California law prohibits health plans from spending an "excessive" amount on administration and under existing regulations, the Department of Managed Health Care is supposed to hold HMOs to account when those administrative costs, including profits, exceed 15% of premiums. But as annual reports by the California Medical Association using state data have shown, the big for-profit health plans routinely have excessive administrative costs. As Governor, Angelides will crack down on HMOs, regulating these excessive administrative costs as California's law intends, and seeing that Californians get their money's worth from their health plans.
   
   
2. Ensure timely access to care. In 2002, the Legislature passed a bill (AB 2179 Cohn) requiring the Department of Managed Health Care to write regulations to ensure that HMO patients get timely access to care. While the law said the regulations were supposed to be in place at the beginning of 2004, the Schwarzenegger administration still hasn't produced them, leaving patients without the protection they need. As Governor, Angelides will regulate HMOs so that families get the timely care they are already paying for.
   
   
3. Require maternity coverage. On Arnold Schwarzenegger's watch, the Legislature passed Sen. Jackie Speier's bill (SB 1555) requiring all health insurers to provide maternity coverage, so that expectant mothers get the coverage they need and there is gender equity in health coverage. Governor Schwarzenegger vetoed the bill - Governor Angelides will sign it into law.

No governor in recent California history - not Ronald Reagan or Jerry Brown or George Deukmejian or Pete Wilson or Gray Davis - has cared less about health care or done less to expand and improve it than Arnold Schwarzenegger.  Instead of exercising any leadership on issues of health access, cost, or quality, he has taken California backwards.

As Governor, Angelides has pledged to expand health care coverage, beginning with providing health care to all children in California and fight to control prescription drug costs. Angelides has also pledged to require large employers to sponsor legislation to require large corporations (200+ employees) to provide health care coverage to their workers and their families.

"Arnold Schwarzenegger should be sued for political malpractice for his record on health care," said Angelides.

• Schwarzenegger vetoed legislation to provide health insurance to all of California's children.
  
  
• Schwarzenegger tried to block nurse staffing ratios that protect the quality of care for patients.
  
  
• Schwarzenegger led the campaign to repeal SB 2, which would have required multinational corporations like WalMart to do their fair share so that millions of working Californians and their families could have health insurance.
  
  
• Schwarzenegger has failed to adequately regulate HMOs and health plants to protect California families and businesses from rising health costs and poor quality care.

Governor Schwarzenegger sided against patients when he green-lighted the two huge HMO mergers of WellPoint/Blue Cross with Anthem, Inc. and UnitedHealth with Pacificare.  The mergers poured nearly $1 billion into the pockets of HMO executives even while premiums continue to soar. Angelides stood up for families and opposed the two mega-mergers.

"We are in this together," Angelides added. "As Governor, I won't wait until days before the next election to pull everyone together - business, labor, consumers, providers, government leaders - to come up with ways to contain costs and expand health care security for California families. I won't wait while our current health system puts more businesses at a competitive disadvantage and leaves more families without coverage. We can solve these problems. All it takes is the leadership that California doesn't now have."