Assemblymember Ash Kalra Releases Statement on Governor’s Office of Health Affordability

Thursday, January 9, 2020

SACRAMENTO – Assemblymember Ash Kalra (D-San Jose) today responded to Governor Gavin Newsom’s announcement proposing the establishment of an Office of Health Care Affordability:

I commend Governor Newsom for his proposal to establish an Office of Health Care Affordability. This is an important step forward in helping to reign in the spiraling costs of health care. Although we have made tremendous strides in increasing access to health care, many continue to forego needed medical treatment because of the continued year-by-year increases in health care costs. The skyrocketing cost of health care is contributing to wage stagnation and fueling income inequality in our state. Health care has become far too expensive and, if left unchecked, will be unsustainable for working families and employers, both public and private, that offer health insurance.

Over the past two years I authored two measures to address the skyrocketing costs of health care in California—Assembly Bill 3087 and Assembly Bill 731—which have helped lay the foundation for this discussion. I am grateful for the Governor’s continued leadership on this issue. I look forward to working on this during the budget process to ensure the Office is able serve its purpose of reducing costs and ensure Californians are not priced out of accessing their health care.

AB 3087 (2018), the California Health Care Price Relief Act, was a groundbreaking bill that changed the nature of the conversation about health care affordability to focus on reigning in the seemingly unending increases in health care costs. AB 731 (2019) will help to increase transparency and expand the ability of the health care purchasers to have a clearer picture of health care costs to better allow regulators and purchasers to control and improve the value of health care spending.

Health care spending in the United States far outpaces other industrialized countries; 18% of U.S. GDP is spent on health care, twice as much when compared with other countries. Based on recent health insurance rate filing data, hospital costs and physician services represent an overwhelming proportion of the overall projected premium dollar—75% for each projected premium dollar in 2018.[1]

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[1] UNITE HERE, “It’s Still the Prices: Second Year Data from California’s Rate Filing Law Reveals Prices, not Utilization, Continue to Drive Premium Costs in the Fully-Insured Large Group Market” February, 2018