MOORLACH UPDATE — Health-Related Bills Signed — October 14, 2019

Health-Related Bills

The Governor signed and vetoed a massive number of bills over this last weekend, the deadline for doing so.  Due to the volume, expect a number of articles over the next few days culling through his actions.

The California Healthline provides its perspective on a number of health-related bills in their piece below.

Of the bills mentioned in the piece, I voted for SB 159, SB 464, SB 496 (see MOORLACH UPDATE — Governor Signs SB 496 — September 9, 2019), SB 223 and AB 45 and against AB 824, SB 24, SB 142, SB 8, SB 227 and SB 290.  I abstained on SB 600.

25th Anniversary Look Back

The OC Register‘s two pieces published on October 13, 1994, caused many to react (see MOORLACH UPDATE — Burying Electric Lines and Bills — October 13, 2019).

I was not alone in fearing an implosion of the Orange County Investment Pool and being frustrated that the OC Register could not focus on the core issues of the quagmire.

Larry T. Smith of Newport Beach, a Certified Public Accountant and banker, was kind enough to FAX me this letter to the editor that he sent that very same day:

It was fascinating to read Chris Knap’s articles regarding the County Treasurer, Mr. Citron.  On the one hand, Mr. Citron admits that the investment portfolio incurred substantial losses due to a misjudgment on his part and on the other hand he says not to worry–things are going great.  Balderdash!

The truth of the matter is simple and easy to understand.  If the OC investment fund was forced to mark to market as all non-governmental private funds are, he would have to record hundreds of millions, perhaps, billions in losses.  He says we shouldn’t worry, however, because they will hold these investments to maturity and will thereby avoid the losses that now exist. That statement is patently untrue.

The only way these losses will be avoided is through a significant reduction in interest rates over the next three years.  If rates stay the same or go up, the losses that exist now (and in the case of higher interest rates, additional losses) must be absorbed by the OC investment pool.  These losses will manifest themselves in one or two ways–either by sale, which will result in the recognition of the losses at that point, or incrementally through a reduced interest return.

When these losses drive the OC investment pool’s return below the return his investors can receive in the private sector, there is a potential for a disastrous run on the pool which will force an immediate recognition of the remaining unrecognized losses and could result in huge losses of principal by the investing agencies.

In summary, unless interest rates drop significantly, the losses Mr. Citron has admitted to must be absorbed by the investors in the OC pool.  It is simply a bullet that cannot be dodged. Mr. Citron is a smart man. He understands these facts. In my humble opinion, his obfuscating of the above realities raises serious questions that need to be asked by the press and our elected officials.  Perhaps, they could start by asking Mr. Citron why shouldn’t he be required to observe the same standards as the private sector by marking to market.

Larry T. Smith

Although I had vowed not to take Chris Knap’s calls, on October 14,1994 I did FAX him the two recent articles from The Bond Buyer (see MOORLACH UPDATE — SB 359 and Cuyahoga County and  MOORLACH UPDATE — Mail Bag and Group 8 — October 2, 2019).

Here’s what my transmittal letter stated:

  1. Cuyahoga County (parallels to O.C. are frightening); October 12 Bond Buyer article (also see Wall Street Journal of October 13, page C20).
  1. Bond Buyer of October 13 — “I wish we had been right. . . .”
  1. Have your editor put a business reporter on this story, someone who understands bond and equity markets (not a political reporter), and I’ll be glad to talk to him or her.  


After the above, and who knows how many others submitting input, the OC Register would infer that the upcoming bankruptcy filing would be a complete surprise.

For the last Look Back, see MOORLACH UPDATE — Burying Electric Lines and Bills — October 13, 2019.

How Newsom’s Bill-Signing Marathon Affects Your Health Care

Gov. Gavin Newsom wrapped up his bill-signing marathon Sunday, capping the end of a legislative session that will have a big impact on Californians’ health care and coverage.

Some of the most high-profile — and contentious — measures of the year were health care-related: Who hasn’t heard of the bill that spawned raucous protests at the Capitol by anti-vaccine activists? After some hesitation, Newsom signed SB-276 and an accompanying measure, which will give state public health officials authority to review and, in some cases, revoke questionable medical exemptions for childhood vaccinations.

In a blow to Big Pharma, the Democratic governor also signed what health advocacy groups deem this year’s biggest effort to lower prescription drug costs. AB-824 will give the state attorney general more power to go after pharmaceutical companies that engage in “pay for delay,” a practice in which makers of brand-name drugs pay off generic manufacturers to keep the lower-cost generic versions of their medications off the market.

And legislation adopted as part of the state budget this year will require Californians to have health insurance next year or face a penalty. The budget also funded new state-based tax credits for Californians who purchase health insurance through Covered California, including some who earn too much to qualify for federal financial aid.

Also starting next year, young adults in the country illegally will be eligible for Medi-Cal if their incomes qualify.

“This was a landmark year in health care,” said Anthony Wright, executive director of the consumer advocacy group Health Access California. “Over a million Californians will be getting help to access or afford coverage.”

But many lesser-known health care measures could also have a dramatic impact on Californians’ lives, including college students, dialysis patients, older adults and new moms. Some of the laws put California in the forefront nationally, such as a measure to expand access to HIV prevention drugs.

Most of these measures take effect Jan. 1:

HIV Prevention

California will be the first state to allow people to access HIV prevention drugs from pharmacies without a doctor’s prescription. Pre-exposure prophylaxis (PrEP) is a once-a-day pill for HIV-negative people that may keep them from becoming infected, and post-exposure prophylaxis (PEP) is medication that can help prevent the virus from taking hold if they have been exposed to it. SB-159 by state Sen. Scott Wiener (D-San Francisco) will allow pharmacists to dispense a 60-day supply of PrEP, or a 28-day course of PEP. Patients will need to see a physician to obtain more medication. The bill prohibits insurance companies from requiring patients to obtain prior authorization before obtaining the medication.

Abortion Pill

Students at California’s 34 California State University and University of California campuses will have access to medication-induced abortion — commonly known as the abortion pill — at on-campus student health centers by Jan. 1, 2023. Under SB-24 by state Sen. Connie Leyva (D-Chino), students who are up to 10 weeks pregnant will be eligible. Initial costs, such as the purchase of medical equipment, will be paid for with private, not state, dollars.

Maternal Health

Black women are three to four times more likely to die during childbirth and from other pregnancy-related causes than white women, according to the Centers for Disease Control and Prevention. SB-464 by state Sen. Holly Mitchell (D-Los Angeles) will require perinatal health care providers to undergo bias training with the goal of reducing preventable maternal deaths among black women. “The disproportionate effect of the maternal mortality rate on this community is a public health crisis and a major health equity issue,” Newsom said upon signing the bill.

Some new moms returning to their jobs who want to pump milk at work will face fewer barriers. SB-142 by Wiener will require employers to provide new mothers with a private space that includes a table, chair, electric outlet and nearby access to running water and refrigeration. Businesses with fewer than 50 employees may be eligible for an exemption. “Too many new mothers are unable to express milk at work or are forced to do so in a restroom or other unsuitable space,” Wiener said.

Financial Abuse Of Older Adults

Investment advisers and broker-dealers will be required to report suspected financial abuse of elder or dependent adults. SB-496 by state Sen. John Moorlach (R-Costa Mesa) allows these financial experts to temporarily delay requested transactions, such as stock trades and disbursement of funds, when they suspect potential abuse. “With growing Alzheimer’s and dementia concerns, it is critical that we provide safeguards to prevent financial abuse for those in the beginning stages of a difficult life journey,” Moorlach said in a statement.

Smoking In State Parks

Californians will be prohibited from smoking or vaping at state beaches and parks, except for paved roads and parking areas. Violations of SB-8 by state Sen. Steve Glazer (D-Orinda) will carry a fine of up to $25. Similar efforts were vetoed by former Gov. Jerry Brown.

Nurse Staffing

State health officials who make unannounced inspections of hospitals will start reviewing nurse staffing levels. Some California hospitals disregard the state’s current nurse-to-patient ratio requirements, Leyva, the bill’s author, argued. SB-227 establishes penalties for violations: $15,000 for the first offense and $30,000 for each subsequent violation.

Medical Marijuana On School Grounds

Even though medicinal cannabis has been legal for years in California, it has not been allowed on school grounds. SB-223 by state Sen. Jerry Hill (D-San Mateo), will allow school boards to adopt policies that authorize parents or guardians of students with severe medical and developmental disabilities to administer medicinal cannabis on campus, as long as it is not via smoking or vaping. This allows students to “take their dose at school and then get on with their studies,” Hill said.

Dialysis Industry Profits

One new law could disrupt the dialysis industry’s business model. Dialysis companies often get higher reimbursements from private insurers than they do from public coverage. One way low-income patients remain on private insurance is by getting financial assistance from the American Kidney Fund, a nonprofit that receives most of its donations from the two largest dialysis companies, Fresenius Medical Care and DaVita Inc. AB-290, by Assemblyman Jim Wood (D-Santa Rosa), will limit the private-insurance reimbursement rate that dialysis companies receive for patients who get assistance from groups such as the American Kidney Fund.

Health Care In Jails And Prisons

County jails and state prisons will be prohibited from charging inmates copays — usually $3 to $5 — for medical and dental services with the passage of AB-45, by state Assemblyman Mark Stone (D-Scotts Valley). Some states already prohibit copays in prison, but California is the first to eliminate copays in county jails.

Cancer Patients

Californians undergoing cancer treatment such as radiation or chemotherapy will have insurance coverage for fertility preservation treatments. Under SB-600 by state Sen. Anthony Portantino (D-La Cañada Flintridge), private health plans must cover procedures such as the freezing of eggs, sperm or embryos for patients who want to try to have children in the future.

Ana B. Ibarra: aibarra, @ab_ibarra


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