HMO Reforms Deserve Chance

Last year, Gov. Pete Wilson vetoed a raft of HMO reform bills for a sensible reason: In mandating coverage for specific procedures and body parts, they put legislators in the business of practicing medicine. Now that a second raft of HMO reform bills has landed on the governor’s desk, however, he has adopted a far less reasonable standard: Bills raising health care costs even nominally, his staff says, will probably be vetoed.

The governor should reconsider that threat because some of the bills, while imposing marginally higher costs, would go a long way toward relieving Californians’ frustration with managed care. In particular, Wilson should support the following modest and long-overdue reforms:

* AB 1100, by Assemblywoman Helen Thomson (D-Davis), would require health insurers to cover specific severe mental illnesses. A recent state Chamber of Commerce poll found 65% of the state’s small business leaders supporting such a mandate even if it raised their insurance premiums by 5%. Studies by the Rand Corp. and the federal government indicate it would not raise premiums.

* SB 324, by Sen. Herschel Rosenthal (D-Los Angeles), would require physicians making medical decisions as HMO “gatekeepers” to be licensed in the state. The Wilson-appointed Medical Board of California sponsored this bill because it is unable to discipline unlicensed physicians.

The governor should also sign two lesser-known bills: AB 2048, by Assemblyman Martin Gallegos (D-Monterey Park), which would require HMOs to disclose the criteria used to decide benefit coverage, and AB 2403, by Assemblyman Kevin Shelley (D-San Francisco), which would create consumer ombudsmen to help guide HMO patients through the grievance process, a reform that Wilson’s own managed care task force recommended last year.

By signing these bills into law, Wilson can help restore the HMOs’ credibility without denting their profitability.