AB 3087 Tackles Out-of-Control Health Care Prices

Have you ever received an outrageously high medical bill that you wondered how you were going to pay? If you’re like most Californians, the answer is yes. What you likely don’t know is why the bill was so high to begin with.

Out-of-control health care prices have created a crisis that is squeezing families, businesses and patients. There’s no rhyme or reason to health care prices, and very little transparency. That needs to change.

The California Labor Federation is co-sponsoring AB 3087 (Kalra) amid new reports that concern over high health care prices resulted in more than 40 percent of Americans skipping a doctor visit when they were sick or injured in the last year. A recent survey from the University of Chicago found more than half of adults put off procedures or tests because of high costs. The bill was introduced at a press conference this morning in Sacramento, positioning California to lead addressing a glaring problem in the health care system that affects millions of Americans. The bill was detailed in a report in today’s LA Times.

Bill author Assemblymember Ash Kalra:

“AB 3087, the Health Care Price Relief Act, is a breakthrough for Californians who are suffering from out-of-control health care prices. Reining in skyrocketing health care prices is the first step in any serious effort to deliver life-saving care to more Californians, and relieve the pressure that soaring healthcare costs place on working families. We must act now before prices become unsustainable, not just for working families and their employers, but for our healthcare system overall.” 

California’s unions are leading the charge on this important bill because every dollar that goes to health care costs as prices rise comes out of a worker’s pocket.

Nicholas Javier, a server at the Westin St. Francis in San Francisco and a member of UNITE HERE Local 2:

“Year after year, healthcare costs go higher and higher. During each contract negotiation, health care eats up more and more of what should be our raises and retirement savings – and it’s even worse for non-union workers. When I used to work at a non-union hotel, I had coworkers who were paying hundreds of dollars per month for family coverage. Health care prices seem to change arbitrarily and without limit – and workers deserve better than that. That’s why UNITE HERE is cosponsoring AB 3087.”

And those costs aren’t justified. Look at how much U.S. patients pay compared to other advanced countries around the world. Americans pay up to twenty times more for doctor visits and hospital procedures than other nations.  Across California, prices for medical procedures are arbitrary and completely unrelated to quality; prices for the same procedures can vary widely in hospitals even next door to each other.

Exploding out of pocket costs for medical care is crushing workers and their families; deductibles have increased six times faster than wages since 2010. Desperate families are skipping health care as a result. What’s more, skyrocketing employer healthcare costs hurt both business and workers, with high costs exacerbating income inequality, taking the biggest bite out of low-and middle-income workers’ paychecks.

California Labor Federation health care expert Sara Flocks:

“We know the escalating cost of healthcare is eating away at wages and widening the income inequality gap every single day. AB 3087 is fundamentally about fairness. It’s about ending the medical industry price gouging. But most of all, it’s about ensuring that Californians receive the quality healthcare they deserve at a price that’s reasonable and affordable for years to come.”

Effective models for fair prices exist and work for consumers and health care providers alike. The U.S. Medicare system and advanced countries around the world establish fair prices that are affordable to consumers and allow providers a reasonable profit. Medicare has been setting health care rates for decades and has a transparent, public formula for establishing reimbursement rates for doctors, hospitals and other health care settings.

AB 3087 uses this existing model to establish reasonable healthcare costs for California workers, employers, and seniors. This bill creates an independent Cost, Quality, and Equity Commission with the authority and expertise to make health care prices fair, and allows a process for doctors and hospitals to adjust prices when necessary. The Commission would build off of Medicare reimbursement rates whereby rates can be set at , using a precedent set by previous California legislation.

SEIU California President Roxanne Sanchez:

“Medical monopolies are the only ones who benefit from skyrocketing prices; the rest of us are paying the price because we have no choice,” “We are at a tipping point where change is necessary and possible with AB 3087.  Californians shouldn’t have to be more worried about getting a health care bill than they are about getting a serious illness.”

AB 3087 is critical legislation that shakes up the medical establishment, which has been overcharging Californians for far too long.

Health Access California Executive Director Anthony Wright:

“With so much consolidation in our health system, California consumers need oversight on the prices set by health plans and providers, just like we have for utilities that also provide essential services. Building on the progress California has made on addressing inflated prices on prescription drugs and out-of-network doctor bills, this effort is the crucial next step in confronting high health prices.”

As with any legislation that takes on the status quo, this bill will have hordes of corporate and industry lobbyists opposing it. But California patients and families know it’s the right thing to do. We can’t wait any longer to address skyrocketing health care costs. Now is the time. The legislature must act before it’s too late.

Check out the live footage of the launch this morning via UNITE HERE’s Facebook page