A California Chamber of Commerce- opposed Cost Driver bill passed the Assembly Health Committee this week despite warnings that it would hinder the affordability of health insurance for everyone.
AB 298 (Bonta; D-Alameda) increases premiums for California’s employers and employees by restricting insurers from imposing a deductible, coinsurance, or copayment for in-network health care services provided to an individual under 21 years of age enrolled in a large group plan.
Although AB 298 aims to alleviate cost burdens for families with children, it overlooks the fundamental economic principle that eliminating cost-sharing mechanisms will be offset by increased monthly premiums.
The increase will have a disproportionate impact on California’s working families, who already face escalating healthcare costs that surpass the national average, as documented by the California Health Care Foundation.
The California Health Benefits Review Program (CHBRP) released an updated report laying out the medical, financial, and public health impacts of AB 298. Although AB 298 would reduce enrollee cost sharing for some consumers, total premiums would increase by more than $710 million for the large group insurance market and the California Public Employees’ Retirement System (CalPERS).
Historically, legislative attempts to alter the delicate balance between premiums and cost sharing have resulted in substantial cost increases, and AB 298 is expected to follow this trend.
In a letter to legislators, CalChamber pointed out that a comprehensive range of preventive care services for children currently is provided at no cost, even before deductibles are met. These services already are factored into premium calculations, which are subject to approval by the Department of Managed Health Care.
The legislature must carefully consider the broader economic implications of AB 298. Shifting costs to one segment of the population will result in increased premiums for all consumers and employers. In the current economic climate, where businesses and individuals are already grappling with rising costs across all sectors, this premium increase will likely lead to employers reconsidering or reducing health benefit offerings, increased employee cost-sharing, and ultimately consumers being unable to afford monthly premiums.
Key Vote
AB 298 passed Assembly Health on January 13, 11-0.
Ayes: Addis (D-Morro Bay), Aguiar-Curry (D-Winters), Bonta (D-Alameda), Caloza (D-Los Angeles), Carrillo (D-Palmdale), Mark González (D-Los Angeles), Krell (D-Sacramento), Patel (D-San Diego), Schiavo (D-Chatsworth), Sharp-Collins (D-San Diego), Stefani (D-San Francisco).
Not voting: Chen (R-Yorba Linda), Gallagher (R-Nicolaus), Patterson (R-Rocklin), Celeste Rodriguez (D-San Fernando), Sanchez (R-Rancho Santa Margarita).
AB 298 will be considered next by the Assembly Appropriations Committee. It must pass the full Assembly by the end of the month to remain active this year.
