SACRAMENTO, CALIF. - IVN recently examined AB 955, by Assemblymember David Alvarez. The bill seeks to expand a healthcare service program I created in 1998 as the author of SB 1658.

This has been a remarkably successful program. However, AB955 as currently drafted, would lead to serious increases in health care costs for the overwhelming majority of San Diego and Imperial County residents living near the border.

I certainly understand the instinct to build on the two decades of success by making more folks eligible to receive covered health care on the Mexican side of the border.

However, there is a certainty of an unintended and serious consequence in the approach envisioned by AB955. Put simply, health care costs for San Diego and Imperial County residents receiving care on the American side of the border will go up.

Why?

AB 955 proposes to expand access to Mexican prepaid health plans, currently limited to Mexican nationals and their dependents, to include any employee working in San Diego and Imperial counties. The intent is to offer a more affordable, culturally relevant option for those who live and work along the border.

A simplistic blanket expansion of eligibility will subject health care providers in places like Chula Vista and El Centro to disastrous enrollment impacts that would be particularly damaging to capitated care models that most working and low-income folks depend on.

These systems rely upon maintaining a broad age demographic of patients. This is why the federal Obamacare system included provisions requiring young workers to enroll in health care systems.

AB955 would certainly lead health plans located south of the border to target these younger customers who tend to view plan options based solely on price rather than a serious understanding of coverage.

This, of course, means that prices must go up for everyone choosing to stay in plans like Sharp or Kaiser.

In expanding these plans, the bill also reopens complex questions like: How do we increase access without lowering California’s high standards for patient protections? How do we maintain a fair playing field between California-based and Mexico-based healthcare providers?

As the conversation over cross-border health care continues, and the bill moves through the legislature, we should be careful to make sure good intentions don't erode the very protections California patients rely on.

Regulatory Exemptions and the Risk of Uneven Care

Currently, Mexican prepaid health plans are licensed by the California Department of Managed Health Care (DMHC) but are exempt from several core protections in the state’s Knox-Keene Health Care Service Plan Act. These exemptions include:

Timely access to care
Provider network adequacy
Independent review and grievance procedures
Disability access compliance
Oversight from California’s professional licensing boards

These carve-outs were initially intended for limited, employer-sponsored coverage used by cross-border workers. But expanding these plans to a broader population without modifying these exemptions could create a two-tier system where some California patients receive care without the same rights and safeguards others expect.

The Challenge of Emergency Reimbursement

Related to this concern, for example, is the reality that California-based providers must provide emergency services to enrollees in Mexican prepaid plans. DMHC has documented, however, repeated enforcement actions for noncompliance and delayed reimbursements from these plans to California hospitals.

If enrollment in such plans grows without stronger oversight, the financial burden of unreimbursed care will be pushed unfairly onto California providers, particularly on safety-net hospitals already under strain.

Ultimately, these costs will then manifest into higher health care premiums for patients in California and added stress to the healthcare industry on the northern side of the border.

Market Impact: Risk Pool Fragmentation

The expansion of lower-cost plans could also disrupt the insurance landscape in California’s border counties. If healthier, younger individuals migrate toward prepaid plans due to lower premiums, California-regulated insurers could be left with an imbalanced, higher-risk pool. This could further lead to increased premiums for families and older adults.

Policymakers must weigh the long-term stability of the insurance market against the short-term appeal of cheaper alternatives.

The Path Forward: Strengthen, Don’t Abandon

None of this is to say AB 955 should be scrapped. In fact, the conversation it has sparked is long overdue. It highlights the urgent need for policies that reflect the cross-border nature of life in Southern California, but it also underscores the risks of expanding access without serious oversight of the bipartisan industry.

For a bill like AB 955, born of a genuine effort to solve real problems in border communities, this moment offers a chance to get it right. By pairing access with accountability, California can set a national precedent for cross-border policymaking that benefits everyone: patients seeking affordable care, providers navigating binational systems, and communities that span both sides of the border.

In doing so, the state not only strengthens its own healthcare infrastructure, but also demonstrates how good policy, built on trust and transparency, can foster meaningful partnership with Mexico—and serve as a model for others to follow.

Tag: health insurance