Consumers Union West Coast Regional Office

press release

To ensure enhanced quality and consumer protections for all patients in the state's managed care plans, Consumers Union supported the implementation of a number of broad policy changes including independent review, HMO liability, reorganization of the Department of Corporations and an independent ombudsprogram for consumers.

BILLS PASSED / CU SUPPORTED:

INDEPENDENT MEDICAL REVIEW

AB 55 Migden Passed and signed by Governor CU Supported

Would require health plans to allow patients to seek an independent medical review when services are denied or delayed. California will join more than 25 states in implementing an independent review process. Consumers Union supported this measure as a critical consumer protection, and urged that the system avoid undue obstacles, such as requiring provider recommendations for review or charging consumers fees to use independent review.

HMO LIABILITY

SB 21 Speier Passed and signed by Governor CU Supported

Would permit consumers to hold managed care providers financially liable for services denied or delayed, if it resulted in "substantial harm" to the consumer. Consumers often had no redress against HMOs that unjustifiably denied needed treatment. By holding health plans legally liable when they influence treatment decisions, SB 21 would provide a strong incentive for HMOs to provide higher quality care.

INDEPENDENT REVIEW & GRIEVANCES

SB 189 Schiff Passed and signed by Governor CU Supported

Would require HMOs to provide subscribers and enrollees with written responses to grievances, with a clear and concise explanation of the reasons for the plan's response; allow submission of grievances to the Department of Managed Care after participating in the plan's grievance process for 30 days; and require the Department to respond to each grievance in writing within 30 days.

OVERSIGHT OF MANAGED CARE INDUSTRY

AB 78 Gallegos Passed and signed by Governor CU Supported

Would transfer authority to new Department of Managed Care in the Business, Transportation and Housing Agency (BTH). Consumers Union studies have documented the failure of the current oversight agency (Department of Corporations) to adequately protect and educate consumers. CU supported improved oversight of the managed care industry, with expanded staff with health expertise. We supported moving the agency to the Health and Human Services Agency, rather than BTH.

MEDI-CAL AND HEALTHY FAMILIES

AB 1107 Cedillo Passed, signed and chaptered *CU Supported

Consumers Union supported certain provisions of this budget trailer bill pertaining to Healthy Families and Medi-Cal, including the expansion of eligibility for Healthy Families up to 250% of the Federal Poverty Level and the coverage of recent legal immigrant children. CU also supported the allocation of six million dollars in outreach grants to community-based organizations to help families learn about and enroll in Medi-Cal and Healthy Families and provisions requiring some simplification of the Medi-Cal application process. While these are important steps, more needs to be done to enroll all those who are eligible in Medi-Cal and Healthy Families.

MEDICAL GROUP OVERSIGHT

SB 260 Speier Passed and signed by Governor CU Supported

Would establish Financial Solvency and Standards Board within the Department of Managed Care and require contracts between HMOs and medical groups to include provisions concerning the medical group's administrative and financial capacity.

NONPROFIT HOSPITALS

AB 254 Cedillo Passed and signed by Governor CU Supported

Would regulate the merger of nonprofit hospitals with other nonprofit systems. Would require Attorney General's approval, public disclosure of transaction documents, public hearing, and health impact statement. CU believes the potential impact of these transactions on the availability and accessiblity of health care in communities can be as significant as the impact of hospitals switching to for-profit, particularly on charity care and other community benefits.

BILLS NOT PASSED / CU SUPPORTED:

INDEPENDENT EXTERNAL OMBUDSPROGRAM

AB 138 Gallegos 2-year bill CU Supported

Would allocate funding for independent ombudsprogram for consumer counseling, assistance and advocacy. Consumers Union believes such programs are key to helping consumers navigate the complex managed care market, and they can provide valuable data on consumer experiences and satisfaction with managed care and inform future policymaking.

PRESUMPTIVE ELIGIBILITY FOR HEALTHY FAMILIES

SB 87 Escutia 2-year bill CU Supported

Would provide that traditional children's health care providers, including pediatricians and health professionals who deliver services in community health centers, deem children under 19 to be presumptively eligible for medically necessary Medi-Cal services no more than once in a calendar year.

Consumers Union supported a number of successful and unsuccessful measures to improve access to and lower fees for credit and other finance products for low- and moderate-income consumers.

BILL PASSED / CU SUPPORTED:

DEBIT CARDS

SB 313 Figueroa Passed, signed, chaptered CU Co-sponsored

Would limit debit cardholders' liability to $50 in the event of unauthorized use. CU supported the measure to provide a valuable source of certainty to California consumers as they move into the age of electronic payments. It received strong bipartisan support

CREDIT INSURANCE

AB 1456 Scott Passed, signed and chaptered CU Sponsored

Would require that property and unemployment credit insurance premiums be lowered so that policies returned at least 60 cents in claims per dollar of premium paid. The bill gives the Department of Insurance statutory authority to issue regulations setting price caps on two of the most overpriced kinds of credit insurance. Consumers Union found that in the three years from 1995 to 1997, consumers nationally paid $2 billion too much for credit insurance

IDENTITY THEFT

SB 930 Hughes Passed, signed and chaptered CU Supported

To combat identity theft, would require credit card issuers to confirm change of address from consumers responding to credit card offers sent in the mail. This is one of the most common means of committing identity theft, which is a fast-growing consumer problem.

HOME IMPROVEMENT CONTRACTS

SB 99 Hughes Passed, signed and chaptered CU Supported

Would require home improvement contractors to consider buyer's ability to repay an installment contract if security interest exceeds $5000. Large-ticket retail installment sale items where the sale is to be secured by the home can be the subject of high-pressure sales. The bill will prevent retail installment sellers from targeting financially vulnerable and fixed-income homeowners for a sales contract that they cannot afford to repay without the loss of their home

CREDIT REPORTS

AB 758 Thomson Passed and signed by Governor CU Supported

Would strengthen the Credit Reporting Act by deleting provision allowing courts to award attorneys' fees to credit bureaus if they prevail in an action brought by a consumer alleging violations of the Act. Because of the possibility of attorneys' fees to prevailing defendants, virtually no cases have been filed by consumers in the 24-year history of the Act.

DEBT COLLECTORS

AB 969 Papan Passed, signed and chaptered CU Supported

Would conform state debt collection law to federal law. This means that state law now covers internal collection units of banks, retailers and other creditors, and not just outside collection agencies.

CREDIT UNIONS

AB 577 Honda Passed, signed, and chaptered CU Supported

Would allow credit unions in California to do business in other states and jurisdictions.

BILL NOT PASSED / CU OPPOSED:

BOUNCED CHECK FEES

AB 1004 Papan 2-year bill CU Opposed

Would increase fees for bounced checks to $20 in 2001 and $25 thereafter. CU believed the bill would undermine the legal principles concerning unconscionable contract provisions. The sponsors failed to justify these fee increases based on the actual costs incurred for processing bounced checks.

UNFAIR COMPETITION

SB 593 Morrow 2-year bill CU Opposed

Would limit state's Unfair Competition laws to require that the individual bringing action must have been harmed or threatened with harm. Public interest organizations, legal aid lawyers, and private individuals have all used these statutes to protect the public, and the bill would place major burdens on the use of these laws to halt wrongful and deceptive business practices.

SMALL CLAIMS COURT

AB 1131 Ackerman 2-year bill CU Opposed

Would allow debt collectors and other assignees to sue consumers in small claims court. This would be a major change in the operation of small claims court and encourage debt collectors to sue and rather than reach settlements with consumers.

DEBT COLLECTORS

SB 383 Haynes 2-year bill CU Opposed

Would increase attorneys' fees for debt collectors suing consumers in Superior Court. This bill and AB 1131 were made two-year bills to allow for a full discussion of the issues with all interested stakeholders.

HOMESTEAD EXEMPTION

SB 348 Hayes Died in committee CU Opposed

Would narrow the California homestead protection, which protects part of the value of a home from being taken by creditors after the home is sold.

BILL NOT PASSED / CU SUPPORTED:

PAYDAY LOANS

SB 834 Perata and Murray 2-year bill CU Sponsored

Would lower the allowable Annual Percentage Rate (APR) of interest and fees for payday loans, prohibit loan rollovers, and provide improved disclosure. The high rates make it difficult for many borrowers to repay the loan, thus putting many consumers on a debt treadmill. They often rollover the existing loan and pay high fees each time. Thus, this kind of credit puts people in worse financial shape then when they started.

PAYDAY LOANS

AB 425 Corbett Referred to interim study CU Supported

Amended to become a study bill on payday lending practices.

ATM SURCHARGES

SB 270 Karnette 2-year bill CU Supported

Would ban ATM surcharges, which are a form of double-dipping by banks. ATM surcharges are also likely to promote additional concentration in the banking industry. Surcharges help big banks that own large ATM networks.

TELEPHONE SOLICITATIONS

SB 988 Figueroa 2-year bill CU Supported

Would require the Attorney General to maintain a "do not call" list for consumers who do not want to receive unsolicited telephone calls from salespeople.

HOME EQUITY COUNSELING

AB 1201 Torlakson 2-year bill CU Supported

Would require home equity lenders to provide counseling to consumers prior to signing loan agreement for a high-cost mortgage. The counseling would be independent advice from a qualified counseling agency, a nonprofit neighborhood counseling entity, or an attorney. This would help homeowners avoid situations where they get into a loan they cannot afford to repay, and are subsequently faced with possible loss of the home.

INTERNATIONAL MONEY TRANSFER

AB 143 Calderon 2-year bill CU Supported

Would prohibit money transmitters from including fees and commissions as a factor in the rate of exchange offered to customers making international money transfers. Money transmitters can use an artificially low rate of exchange to hide fees and commissions. This bill would provide consumers clear distinction between exchange rates and other fees when transmitting money internationally.

CONSUMER CREDIT REPORTS

AB 1331 Papan 2-year bill CU Supported

Would establish that if victims of identity theft provide police report regarding the theft to consumer credit reporting agencies, the agencies may not furnish that customer's credit report for three years without approval from the consumer. Current law allows thieves to continue to obtain new credit in the victim's name by using a different address. This bill would allow victims to take back control over their credit files by giving them notice before a credit bureau issues a credit report to any person.

CONSUMER CREDIT REPORTS

AB 453 Havice 2-year bill CU Supported

Would require consumer credit reporting agencies to include consumer's credit score in all disclosure to consumer.

PRIVACY

AB 1509 Machado 2-year bill CU Supported

Would improve consumers' right to block dissemination of personal information by credit card companies to subsidiaries and marketers of goods and services.

STUDENT LOANS

AB 1044 Wright Defeated on Senate floor CU Supported

Would require Franchise Tax Board and Student Aid Commission to provide basic due process protections to student loan borrowers facing non-judicial wage garnishment and bank account seizure. Borrowers with defenses to their debt now face loss of wages and bank accounts without adequate notice or opportunity for a hearing.

BILL PASSED / CU SUPPORTED:

LOW-COST AUTO INSURANCE

SB 171 Escutia Passed and signed by Governor CU Supported

Would establish low-cost Lifeline Auto Insurance Policy program for qualifying good drivers in Los Angeles. California needs sensible solutions to reduce the number of uninsured motorists on our roads. While Consumers Union would prefer to see a low-cost automobile insurance policy available on a statewide basis, CU believes that SB 171 is a step in the right direction.

LOW-COST AUTO INSURANCE

SB 527 Speier Passed and signed by Governor CU Supported

Would establish low-cost auto insurance policy for qualifying good drivers in San Francisco. See above.

BAD FAITH LAWSUITS

SB 1237 Escutia Passed and signed by Governor CU Supported

Would require insurers to deal in good faith with third party claimants and provide remedies for consumers dealt with in bad faith. It restores insurance consumers' basic right to sue an insurance company that unfairly delays, denies or underpays a legitimate insurance claim.

BILL NOT PASSED / CU OPPOSED:

NAMED-INSURED LIMITED COVERAGE

SB 519 Lewis Killed in committee CU Opposed

Would permit insurers to issue automobile liability insurance policies that exclusively cover the named insured and that do not cover any other person whatsoever.

BILL NOT PASSED / CU SUPPORTED:

CRA INSURANCE

AB 869 Keeley 2-year bill CU Co-sponsored

Would enact Community Reinvestment Act-like obligation for insurance companies to make economically targeted investments in low-income communities. This bill would help create jobs and housing in the state by encouraging insurance companies to make investments in California communities that need more investment capital.

BILL PASSED / CU SUPPORTED:

RETAIL MILK PRICES

SB 419 Speier Amended, passed and signed by Gov. CU Sponsored

Originally would end policy prohibiting retailers from selling milk for below cost. Under pressure from dairy industry and retailers, the bill faced defeat. Later amended to require California Department of Food and Agriculture to conduct survey of retail milk prices and make information publicly available. Although California is the nation's leading milk producer, California consumers pay among the highest retail milk prices in the nation.

SCHOOL BUS SEAT BELTS

AB 15 Gallegos Passed and signed by Governor CU Supported

Would require seatbelts in school buses purchased in the future. California laws require adults to ensure that children are buckled up while riding in passenger vehicles, but does not require such safety measures in school buses, where they ride unrestrained and often roaming in the aisles. Seat belts in schools buses would improve safety and help educate children about the importance of abiding buckling up at all times. New York and New Jersey have already passed laws requiring seatbelts in school buses, and more than 20 other states considered school bus seatbelt legislation in 1999. CU worked on this bill for two years.

AMUSEMENT RIDE SAFETY

AB 850 Torlakson Passed and signed by Governor CU Supported

Would establish Permanent Amusement Ride Safety Inspection Program, providing oversight of permanent amusement park rides which had been left since 1981 to the discretion of amusement park owners. Amusement park ride safety is a public safety issue, and its regulation is sorely needed and long overdue in California.

CHILD SAFETY SEATS/INSURANCE

SB 363 Figueroa Passed, signed and chaptered CU Supported

Would require auto insurance policies to cover replacement of child safety seat in use by child during a covered accident. Car seats are as vital to the safety features of a vehicle as are tires and headlights. When an automobile is in an accident, the cost of replacing the child passenger restraint system should be covered through automobile insurance policies that provide collision, physical damage, and uninsured motorist property damage coverage.

DMV INFORMATION

AB 771 Briggs Passed, signed and chaptered CU Supported

Would prohibit the Department of Motor Vehicles from distributing or selling drivers' pictures or any physical characteristic information to any private individual or corporation. Consumers must give the DMV this information; the DMV should not then sell this personal information to corporations or others for marketing purposes.

BILL NOT PASSED / CU SUPPORTED:

SCHOOLS AND PESTICIDES

AB 1207 Shelley & Jackson Passed and vetoed by Governor CU Supported

Would establish Healthy Schools Act requiring disclosure and reporting mechanism when schools use pesticides that cause cancer, reproductive harm, or that are extremely toxic to children's nervous systems.

CHILD SAFETY SEATS

SB 567 Speier Passed, stalled by Governor, became 2-year bill CU Supported

Would require any parent or guardian to secure a child less than 7 years old in child safety seat. The Governor wants technical amendments to clarify height and weight parameters for children who are physically too big for booster seats. Sen. Speier intends to have those amendments considered in January when the Legislature reconvenes.

RETAIL SCANNER ACCOUNTABILITY

AB 659 Wiggins 2-year bill CU Supported

Would require retail establishments that use scanners to pay a customer a specified amount of money if the customer is charged a price for an item that is greater than the advertised, posted, or quoted price. CU has worked on this bill in past sessions, when spearheaded by former Sen. Quentin Kopp.

CAMPAIGN FINANCE REFORM

SB 762 Sher 2-year bill CU Supported

Would close loophole in the current law that allows General Purpose Committees to delay reporting contributions received during the period covered by the pre-election statement until after an election. This allows campaigns to wait until after an election to report information regarding who paid for last-minute campaign hit pieces-too late to allow voters to make fully informed choices.

BILL PASSED / CU OPPOSED

UTILITY DEFAULT PROVIDER

AB 1421 Wright Passed and signed by Governor CU Opposed

Would allow incumbent utilities to serve as default gas provider and prohibit the California Public Utilities Commission (CPUC) from unbundling distribution-related gas services, such as metering and billing, for most customers.