BILL ANALYSIS
SB 1555
Page 1
SENATE THIRD READING
SB 1555 (Speier)
As Amended July 2, 2004
Majority vote
SENATE VOTE :26-12
HEALTH 11-3 APPROPRIATIONS 12-5
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|Ayes:|Cohn, Spitzer, Chan, |Ayes:|Chu, Berg, Corbett, |
| |Dymally, Frommer, Koretz, | |Correa, |
| |Lieber, Montanez, Nakano, | |Goldberg, Leno, Oropeza, |
| |Ridley-Thomas, Wolk | |Pavley, Ridley-Thomas, |
| | | |Wesson, Wiggins, Yee |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Dutton, Plescia, Richman |Nays:|Runner, Bates, Daucher, |
| | | |Keene, Nation |
| | | | |
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SUMMARY : Requires every individual or group policy of health
insurance, as specified, to cover maternity services, as
defined. Specifically, this bill :
1)Requires every individual or group policy of health insurance
that covers hospital, medical, or surgical expenses that is
issued, amended, renewed, or delivered on or after January 1,
2005, to cover maternity services.
2)Specifies that maternity services include prenatal care,
ambulatory care maternity services, involuntary complications
of pregnancy, neonatal care, and inpatient hospital maternity
care.
3)Exempts from the provisions of this bill Medicare supplement,
short-term limited duration health insurance, vision-only, or
Champus-supplement insurance, or to hospital indemnity,
hospital-only, accident-only, or specified disease insurance
that does not pay benefits on a fixed benefit, cash payment
only basis.
EXISTING LAW :
1)Provides for the regulation of health plans by the Department
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of Managed Health Care (DMHC) and for the regulation of health
insurers by the Department of Insurance (DOI).
2)Requires health plans to cover a number of basic health care
services and permits the Department of Managed Health Care
(DMHC) to define the scope of the services and to exempt plans
from the requirement for good cause. Provides that "basic
health care services" includes: a) physician services,
including consultation and referral; b) hospital inpatient
services and ambulatory care services; c) diagnostic
laboratory and diagnostic and therapeutic radiological
services; e) home health services; f) preventive health
services; g) emergency health care services, including
ambulance and ambulance transport services and out-of-area
coverage; and, h) hospice care.
3)Includes maternity services, through regulations, among the
basic health care services provided as a condition of health
plans' licensure.
4)Prohibits health plans and health insurers from issuing
contracts and policies that contain a copayment or deductible
for inpatient hospital or ambulatory care maternity services
that exceeds the most common amount charged for the same type
of care and services provided for other covered medical
conditions. Prohibits health plans and health insurers
providing maternity benefits for a person covered continuously
from conception from attaching any exclusions, reductions, or
limitations to coverage for involuntary complications of
pregnancy unless those provisions apply to all of the benefits
paid by the plan or insurer.
FISCAL EFFECT : Unknown. According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : According to the author, affordable reproductive
health care coverage continues to be an obstacle for many women
who purchase their own insurance in California. This lack of
coverage for prenatal care, delivery, and perinatal services can
have serious health and cost ramifications for both the mother
and the baby. One of the latest trends in the individual
insurance market is for insurers to exclude maternity care
within their basic plan benefits in order to sell cheaper
products to target populations. This bill prohibits this
growing practice and ensures that pregnant women who purchase
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their own insurance because they do not have employer-group
coverage can obtain affordable health care coverage in
California.
Consistent with AB 1996 (Thomson), Chapter 795, Statutes of
2002, the University of California reviewed this bill to
determine its financial impact in relation to the entire private
health insurance market for the working-age population. As a
result, although SB 1555 only directly affects people in DOI
regulated plans, the California Health Benefits Review Program
(CHBRP) reports costs and coverage changes for the entire
private-insurance market and the potential impact on public
payers and the number of uninsured. According CHBRP, most
Californians with private insurance (98%) have coverage for
prenatal care and maternity services. For small firms (up to 50
employees), about 74,000 adults (1.4% of those employed in small
firms that provide employee health benefits) lack coverage for
maternity benefits. In large firms, about 18,000 adults (0.2%
of those employed in large firms that provide employee health
benefits) lack this coverage. In the market for individual
coverage, approximately 12% lack maternity benefits. Total
expenditures (including total premiums and out-of-pocket
spending for copayments and non-covered benefits) by or on the
behalf of all commercially insured individuals were estimated to
increase by 0.01% as a result of the bill (or $0.03 per member
per month). Virtually all of the impact is expected to be
concentrated in the individual insurance market, where total
costs (including total premiums and out-of-pocket spending for
copayments and non-covered benefits) were estimated to increase
by 0.10%. Total costs in the group market, for both small and
large firms, were estimated to increase by less than $0.03 per
member per month.
The report concluded that if the mandate contained in this bill
is not enacted, more commercial insurers in the individual and
group insurance markets could potentially drop maternity
benefits as a cost-saving strategy to lower premiums and
increase market share. The report also stated that this market
segmentation could drive up the premiums for insurers who
continue to offer maternity benefits, and lead to more
individuals with private insurance moving to the Medi-Cal
program to pay for their prenatal and delivery care.
Analysis Prepared by : Melanie Moreno / HEALTH / (916)
SB 1555
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319-2097 FN: 0006699