Novato Chamber Publicly OPPOSES AB 3087

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May 16, 2018


Dear Assembly Member Kalra: 

The Novato Chamber OPPOSES your AB 3087 as amended April 9, 2018, that interferes with an employer's ability to negotiate for benefit designs and costs for their employees, interferes with Covered California's ability to negotiate with insurers, reduces access to care, adds an additional layer of bureaucracy, and adds a new health care cost called" witness fees". 

AB 3087 establishes an appointed commission to impose price controls on health care providers and insurers
and determine the number of an individual's copays and deductibles. In addition, AB 3087 would create the Purchaser Participation Program to pay "witness fees" to individuals to advocate on behalf of their client. 

Price controls ignore the underlying reason for the cost of services and products. Given the language of 
AB 3087 the proponents goal is to reduce payments to health care providers and insurers. While the bill contains language for a health care entity to appeal the rates, the process still leaves decisions as what is 
"fair" to an appointed board, an administrative judge and judicial review. Without adequate reimbursement price controls will drive providers and insurers out of the market. 
AB 3087 empowers the commission, in addition to setting rates paid to providers and insurers, to decide the
level of copays, deductibles, coinsurance and any other share of cost for services. Employers, like 
Covered California is active purchasers. Active purchasers negotiate with health plans on prices, 
networks and quality measures. The ultimate price plays a key role in other facets of a health plan such as the number of doctors offered to patients or cost-sharing. Under AB 3087 those issues are delegated to the new Commission. 

Most economists believe price controls keep prices artificially low and supply does not keep up with the...


Coy Smith, CEO