Governor Edmund G. Brown, Jr.
c/o State Capitol, Room 1173
Sacramento, CA 95814
RE: Urging veto of AB 1523 (Atkins)
Dear Governor Brown:
I respectfully urge you to return AB 1523 to the Assembly without your signature because it puts the survival of small assisted living facilities at the whim of insurance companies that may decide arbitrarily to cancel policies or raise premiums to unaffordable levels.
There are almost 6400 RCFEs with six beds or less serving over 37,000 seniors in California. The majority of these small businesses are minority and/or women owned and employ more than 225,000 caregivers statewide. AB 1523, while well intentioned, threatens to put these hardworking individuals out of work and eliminate an option for tens of thousands of seniors.
We favor insurance for RCFEs and a great many of our members have insurance. But if insurance is made a condition of licensure (as AB 1523 would do), then when an insurance company cancels a policy or raises the premium to unaffordable levels (which they have been known to do after a single frivolous lawsuit), the RCFE would be out of business immediately and its residents’ lives horribly disrupted.
This bill should not be signed or implemented until a provision has been made for a risk pooling arrangement or other backup insurance plan, such as the State Fund serves for workers compensation insurance. If such an arrangement were in place, then an insurance requirement would be supportable. Since the insurance requirement in AB 1523 does not take effect until July 1, 2015, there is time to work on legislation next year that puts such a backup insurance plan into place BEFORE making insurance a condition of licensure for RCFEs.
AB 1523 is another example of well-meaning legislation introduced because of a real problem but which has not been thought through and will have very serious unintended consequences and put many small enterprises out of business.
We look forward to helping your administration and the Legislature craft responsible RCFE insurance legislation next year.
Calling everyone to send this letter to save our 6-bed care facilities for seniors in California and save many small business owners.