California Commonsense Healthcare Proposal

Section 1: Title

This act shall be known as the California Commonsense Healthcare (CCH) Act.

Section 2: Purpose and Goals

The purpose of the California Commonsense Healthcare is to ensure access to quality, affordable healthcare for all citizens of California, without regard to income, health status, or any protected characteristics. The goals of the California Commonsense Healthcare are as follows:

1. Provision of Comprehensive Health Coverage: Ensure that all legal residents of the state have access to a comprehensive health insurance plan that covers all necessary health services.
2. Net Savings: Achieve a net savings for all Californians by eliminating health insurance premiums, co-payments, and other out-of-pocket expenses.
3. Cost Control: Control the overall cost of healthcare through cost-saving measures, including reduced administrative expenses, increased system efficiency, and improved health outcomes.
4. Access to a Full Range of Services: Ensure the availability of a full spectrum of healthcare services, including preventive care, primary care, specialty care, hospitalization, dental, vision, mental health, prescription drug services, and long-term care. Long-term care shall include services such as skilled nursing, home-based care, assisted living, hospice, and other support services necessary for individuals with chronic illnesses, disabilities, or age-related needs.
5. High-Quality, Evidence-Based Care: Promote the delivery of high-quality, evidence-based healthcare services, with a focus on patient-centered, integrated, and coordinated care.
6. Minimization of Administrative Burdens: Reduce the administrative burden on both patients and healthcare providers.
7. Public Health and Wellness: Promote public health through prevention and wellness programs designed to improve the general health and well-being of the state's residents.

Section 3: Right to Healthcare

1. Healthcare Access: All citizens of California shall have the fundamental right to access comprehensive, high-quality healthcare services through the California Commonsense Healthcare System (CCH).
2. Non-Discrimination: The State shall not deny or limit the availability of healthcare services based on a resident’s income, employment status, or health condition.
3. Equal Treatment: All residents shall receive equal treatment and access to healthcare services, regardless of their socioeconomic status or background.
4. Protection from Financial Hardship: No resident shall pay for healthcare services, insurance premiums, co-payments, or other out-of-pocket expenses related to medically necessary care.
5. Right to Choose Providers: Residents shall have the right to choose their healthcare providers from a network of licensed professionals participating in the California Commonsense Healthcare System.

Section 4: Savings

1. Expected Savings: The implementation of the California Commonsense Healthcare is projected to result in significant long-term savings. This will be achieved by reducing the inefficiencies of the current fragmented healthcare system and improving overall health outcomes for California residents.
2. Negotiation of Drug Prices: The State shall negotiate directly with pharmaceutical companies to reduce the cost of prescription drugs, including establishing a bulk purchasing program to lower drug prices.
3. Utilization of Savings: Savings generated through these measures shall be used to enhance the quality and accessibility of healthcare services and to ensure the financial sustainability of the California Commonsense Healthcare.

Section 5: Administration

1. Board of Directors: The California Commonsense Healthcare shall be governed by a Board of Directors consisting of ninteen (19) members, initially appointed by the Governor and confirmed by the California State Senate. After the full implementation of the California Commonsense Healthcare System, which shall occur after a four-year phase-in period, the Board shall be elected by the residents of California in a manner specified by the State Legislature.
2. Duties and Responsibilities: The Board of Directors shall be responsible for overseeing the implementation and operation of the California Commonsense Healthcare, including but not limited to:

1. Setting quality standards and cost parameters.
2. Negotiating contracts with healthcare providers.
3. Ensuring the financial sustainability of the system.

3. Board Composition and Terms:

1. The Board shall consist of ninteen (19) members, who shall serve six-year terms, with a maximum of three (3) terms per member.
2. Members of the Board shall be compensated for their service.
3. The Board shall initially consist of seven (7) members, with the full complement of ninteen (19) members to be reached over a four-year period as follows:

1. After two years: An additional six (6) members shall be appointed.
2. After four years: An additional six (6) members shall be appointed, completing the full complement of the Board.

1. Following the full implementation of the California Commonsense Healthcare (end of the four-year phase-in period), all members of the Board shall be elected by the residents of California. The election process and rules for such elections shall be defined by the State Legislature and may include provisions for staggered terms, voter eligibility, and other necessary procedures to ensure representation and fair governance.

Section 6: Implementation

1. Phase-in Period: The California Commonsense Healthcare shall be phased in over a period of four (4) years, with the goal of complete coverage and a smooth transition for patients, healthcare providers, and employers. This phased implementation will include public education, outreach efforts, and the enrollment of eligible residents.
2. Specific Timelines:
• Within ninety (90) days of passage, and lasting until full implementation:
• In addition to current Medi-Cal eligiblity, all individual eligible Californians whose income is at or below 250% of the Federal Poverty Level shall be eligible for Medi-Cal at no cost.
• Within one (1) yearof passage, and lasting until full implementation:
• Health, vision, and dental coverage will be mandated for all health plans, as determined by the CHS Board.
• In addition to current Medi-Cal eligiblity, all individual eligible Californians whose income is at or below 350% of the Federal Poverty Level shall be eligible for Medi-Cal at no cost.
• Employers who do not offer qualified health insurance, as determined by the CHS Board, to all employees will be required to pay an annual employment healthcare fee, as follows:
• Employers with more than fifty (50) employees: $20,000 per employee.
• Employers with between ten (10) and forty-nine (49) employees: $16,000 per employee.
• Employers with between three (3) and ten (10) employees: $12,000 per employee.
• Employers with one (1) or two (2) employees: $10,000 per employee.
• Within eighteen (18) months:
• The CHS Board shall have developed and implemented a working plan for full implementation.
• End of Year Four:
• Full implementation of the California Commonsense Healthcare.
3. Central malpractice insurance: The state shall establish a centralized malpractice insurance fund, which will be administered according to the guidelines set forth by the CHS Board.
• Coverage will include:
• Legal defense costs
• Settlements and judgments
• Mediation and arbitration services
• Providers will be automatically enrolled upon joining the California Commonsense Healthcare (CCH).

Section 7: Smart Health Access System (SHAS)

1. Implementation of a Digital Health Identity System:
   Within two (2) years of the passage of this Act, the State shall develop and implement a Smart Health Access System (SHAS) to streamline patient access, provider payments, care coordination, public health research, and real-time service utilization tracking across the California Commonsense Healthcare System (CCH) and all approved private insurance plans.
2. SHAS Access Options:
   All citizens of California shall be issued a secure California Health Access ID (CHAI), available in both digital and physical formats:
   1. The digital version shall be accessible via a secure mobile app and digital wallets.
   2. A physical smart card shall be available by request for accessibility, offline use, or emergencies.
   3. Both formats shall integrate with healthcare providers, pharmacies, labs, and insurers statewide.
3. CHAI Digital Credentials Shall Include, but not be limited to:
   1. Unique health ID number
   2. Encrypted health history and prescriptions
   3. Claims and billing history
   4. Emergency instructions
   5. Consent preferences and settings
   6. Organ donor status
4. Interoperability and Open Standards:
   The SHAS system shall be built on open-source, privacy-first standards to ensure full interoperability across:
   1. Public CHS providers and systems
   2. Regulated private insurers and care providers
   3. Pharmacies, diagnostic labs, specialists, and emergency responders
5. Benefits and System Improvements:
   The integration of SHAS will:
   1. Improve care coordination by giving every provider access to up-to-date health records.
   2. Reduce duplicate tests, procedures, and administrative friction.
   3. Enable faster response in emergencies with real-time access to critical patient data.
   4. Power public health research that helps California detect, prevent, and treat disease more effectively.
6. Mandatory Provider Integration:
   All licensed healthcare providers and insurers operating in California shall be required to:
   1. Use SHAS for recordkeeping, billing, eligibility verification, and compliance.
   2. Report service outcomes and health quality metrics through SHAS infrastructure.

The SHAS shall be administered under strict privacy and security standards consistent with HIPAA, the California Consumer Privacy Act (CCPA), and additional CHS-specific data governance regulations.

Section 8: Parallel Private Insurance Framework

(a) Permitted Scope of Private Insurance:
Private insurance providers may offer supplemental and parallel coverage, subject to the following conditions:

• Supplemental Plans may cover services not included in CHS (e.g. elective procedures, luxury accommodations, alternative treatments).
• Parallel Plans may offer core services already covered under CHS only if:
• They do not bill more than the CHS-set maximums for any covered service.
• Providers accept both CHS and private plan patients without discriminatory wait times or prioritization.
• Patients retain the right to use CHS services at any time, regardless of private plan status.

(b) Prohibition on Duplication of Core CHS Services at Higher Cost:
No private insurance plan may require patients to pay more than CHS for identical services, nor may they exclude patients from access to public services due to enrollment in a private plan.

(c) Taxation and Reporting:
Private insurers must pay an annual Healthcare System Participation Fee, set by the CHS Board, and submit quarterly reports on coverage, claims, and patient satisfaction metrics.

Section 9: Insurance Utility Commission (IUC)

(a) Establishment of the Insurance Utility Commission (IUC):
An independent public body, the Insurance Utility Commission, shall be established to regulate all private health insurance entities operating in California.

(b) Responsibilities of the IUC:

• Set annual profit margin caps for private insurers operating in the parallel market.
• Review and approve all private plan benefit designs and pricing structures.
• Monitor and enforce standards of care, equity, and accessibility across public and private systems.
• Investigate consumer complaints, ensure compliance with billing laws, and issue penalties for violations.
• Publish an annual report detailing private insurer performance, cost trends, and regulatory compliance.

(c) Public Representation and Transparency:
The IUC shall include thirteen (13) representatives from:

• The CHS Board
• Consumer advocacy groups
• The medical community
• Health economists and data scientists
• At least four (4) California residents unaffiliated with insurers

All IUC meetings shall be public, and regulatory decisions shall be published online for public review.

Section 10: Quality and Access Provisions

1. Provider Participation and Choice
   1. All licensed healthcare providers within California shall be required to participate in the California Commonsense Healthcare (CCH). Providers may also contract with approved private insurance plans, subject to the following standards of equity, transparency, and patient rights.
2. Payment Equity and Standards

1. Providers shall accept standardized CHS payment rates for all services covered under CHS, regardless of whether the patient is using CHS or a parallel private plan.
2. No provider may charge more for the same service to a private plan than they would receive from CHS.
3. Patients shall not be billed directly for any service covered under CHS.

3. Equal Access and Anti-Discrimination

1. Providers must treat CHS and private plan patients equally in scheduling, prioritization, and access to covered services.
2. Private plan membership shall not entitle patients to jump queues or gain faster access to medically necessary services also covered by CHS.
3. All patients retain the right to use CHS services at any time, regardless of private insurance status.

4. Dual System Integration and Transparency

1. All services, whether delivered under CHS or through private coverage, must be recorded in the Smart Health Access System (SHAS) for coordination, quality tracking, and transparency.
2. Providers must disclose when a service offered is not covered by CHS and may result in additional charges under a private plan.

5. Quality Assurance Across Systems

1. All providers must meet uniform care quality standards as set by the CHS Board and enforced by the Insurance Utility Commission (IUC).
2. Performance metrics, outcomes, and patient satisfaction data must be submitted to both CHS and IUC.
3. The CHS Board shall have the authority to revoke CHS participation for providers who violate access, billing, or discrimination rules.

6. Service Expansion through Private Innovation (Optional Services Only)

1. Private insurance plans may fund services not included in CHS, such as elective procedures, luxury accommodations, or expanded wellness offerings, as long as:
2. Such services are not substitutes for essential CHS services.
3. The offerings are fully disclosed and opt-in only for patients.
4. Pricing is approved by the IUC and must not burden CHS infrastructure.

7. Patient Bill of Rights
   The CHS Board shall issue a comprehensive California Patient Bill of Rights, guaranteeing:

1. Equal treatment regardless of payer
2. Transparent cost information
3. Access to grievance procedures via CHS and IUC
4. A clear, published list of all services covered under CHS and where private coverage may apply

Section 11: Regulation

1. Compliance with Laws and Regulations: The California Commonsense Healthcare shall be subject to all applicable state and federal laws, including those pertaining to quality standards, cost controls, privacy, and consumer protection.
2. Regulatory Authority: The CHS Board shall have the authority to set policies, negotiate payment rates, and ensure the delivery of high-quality healthcare services to all citizens of California. The Board shall ensure compliance with all applicable laws and regulations.

Section 12: Funding

1. Funding Sources: The California Commonsense Healthcare shall be funded through the following sources:
• A single percentage payroll tax shall be imposed on employers on all earnings above 250% of the Federal Poverty Level.
• A single percentage payroll tax shall be imposed on employees on all earnings above 250% of the Federal Poverty Level.
• Existing state healthcare funds shall be redirected to fund the program.
• Any available federal funds may be utilized.
• The California legislature shall fund the program as part of the state budget.
• Grants and donations from public and private sources may be accepted to support specific programs or initiatives within the California Commonsense Healthcare.
• Funding mechanisms shall be designed to ensure the long-term sustainability of the California Commonsense Healthcare System while minimizing the financial burden on individuals.
2. Use of Medicaid (Medi-Cal) Funds
• Authorization for Medi-Cal Integration: The California Commonsense Healthcare (CCH) shall be authorized to utilize available Medi-Cal funds for the healthcare coverage of all individuals eligible under Medi-Cal eligibility guidelines. Medi-Cal funds will be integrated into the CHS funding structure to ensure that individuals covered by Medi-Cal continue to receive services, including preventive care, specialty care, mental health services, and long-term care within the CHS framework.
• The State of California will maintain and coordinate the Medi-Cal program under the broader umbrella of CHS, ensuring that existing Medi-Cal resources are effectively utilized and that eligibility and benefits remain consistent with current federal Medicaid guidelines.
• The California Department of Health (CDH) shall work with the Centers for Medicare & Medicaid Services (CMS) to ensure smooth integration, compliance with Medicaid laws, and proper reimbursement for services provided through the CHS system.
3. Medicare funds
• All eligible Medicare beneficiaries who reside in California and are enrolled in Medicare shall continue to receive Medicare benefits.
• The California Commonsense Healthcare (CCH) shall utilize available Medicare funds for the healthcare coverage of eligible residents who qualify under federal Medicare guidelines.
• The State of California shall enter into agreements with the Centers for Medicare and Medicaid Services (CMS) to facilitate the transfer, administration, and distribution of Medicare funds for eligible individuals who are residents of California, ensuring alignment with existing federal programs and regulations.
• Medicare beneficiaries will be integrated into the California Commonsense Healthcare for services beyond the scope of Medicare coverage, such as preventive care, specialty care, and long-term care.

Section 13: Conclusion

The adoption of the California Commonsense Healthcare will provide comprehensive access to high-quality, affordable healthcare for all citizens of California. This system will replace the existing fragmented healthcare structure with a more efficient, cost-effective model, ensuring that every resident receives care without financial hardship. The California Commonsense Healthcare System aims to reduce administrative costs, promote public health, and ensure long-term sustainability while guaranteeing that all residents can access the care they need.

If any part of this proposal is found to be unconstitutional, the remainder of this proposal shall remain in effect.

SUMMARY:

The California Commonsense Healthcare (CCH) Act proposes a publicly administered healthcare system to provide comprehensive, high-quality care to all citizens of California regardless of income or health status. It eliminates premiums and out-of-pocket costs, controls expenses through efficiency and negotiated drug prices, and ensures equal access across public and private providers. A phased four-year rollout includes a digital health ID system (SHAS) for streamlined care and data sharing. Private insurers may offer supplemental coverage but cannot exceed CHS costs. The system is funded through progressive payroll taxes and existing public funds, aiming for equity, cost savings, and improved health outcomes.