Governor Vetoes VSP-Backed Plan to Work With Covered California

September 29, 2014

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Source: Sacramento Business Journal

Once again, VSP Global got the door slammed on hopes to get access to new business through Covered California.

Gov. Jerry Brown vetoed legislation Thursday that would have established a separate vision care marketplace with links to the exchange website — even though VSP and other vision plans agreed to front the money to get it going until operating costs could keep it afloat.

Assembly Bill 1877 by Democratic Assemblyman Ken Cooley from Rancho Cordova would have created a vision care access council in state government, modeled after the state health benefit exchange. The council would contract with vision plans, manage the program and work with the exchange to establish a link between the two programs,

The veto came “as a complete shock,” especially given unanimous approval in the State Assembly and Senate, VSP Global president and CEO Rob Lynch said in a statement Friday.

“AB 1877 was a great solution to provide affordable access to eye care for adult Californians,” he said in the statement. “This veto is inexplicable and unacceptable.”

What VSP plans to do next, he did not say. Initially rebuffed by Covered California more than two years ago, Lynch suggested at that time he might move the company headquarters out of state.

Covered California initially excluded stand-alone vision plans from its health plan line-up due to federal rules, reconsidered after the VSP protest, but ultimately stuck to the federal policy.

“(AB 1877) would require Covered California’s board to run the council’s operations and use the board’s staff and resources to conduct the activities of the council, if permitted by federal law,” Brown wrote in the veto message. “Creating a new state bureaucracy to inform consumers about vision plans isn’t necessary, nor is it advisable to divert Covered California’s focus with a new scheme, the governance of which may be impermissible under federal rules.”

No funding for the program would have come from state coffers; VSP and other vision plans agreed to front $250,000 to get the concept off the ground and as much as “low millions” of dollars in start-up costs. It’s expected that ongoing operating costs of at least $5 million annually would be generated by fees on participating plans.

VSP is an important employer in the Sacramento region and one of the few headquarters in the area, Cooley said when the bill was approved by lawmakers. He had hoped the bill would “clear up a confounding principle.”

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