BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 2345 (De La Torre) Hearing Date: 8/2/2010 Amended: 7/15/2010 Consultant: Katie Johnson Policy Vote: Health 6-2 _________________________________________________________________ ____ BILL SUMMARY: AB 2345 would prohibit health care service plans and health insurers from imposing cost-sharing requirements, such as copayments and coinsurance, on specified preventive services as stated in the Patient Protection and Affordable Care Act (ACA) for group and individual contracts and policies issued, amended, renewed, or delivered on or after September 23, 2010. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Healthy Families $425 $850 $850General/* increased premiums Federal CalPERS increased premiums $390 $780 $780General/** Special *65 percent federal funds; 35 percent General Fund **55 percent General Fund; 45 percent special and other funds _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Subject to the minimum interval established by the federal Department of Health and Human Services (HHS), this bill would prohibit health care service plans and health insurers from imposing cost-sharing requirements, such as copayments and coinsurance, on specified preventive services as stated in the ACA for group and individual contracts and policies issued, amended, renewed, or delivered on or after September 23, 2010. Those preventive services include, at a minimum, immunizations, preventive care and screenings, and breast cancer screening, mammography, and prevention. To the extent that health plans and insurers that contract with the Managed Risk Medical Insurance Board (MRMIB) and the California Public Employees Retirement System (CalPERS) do not currently fully comply with these requirements, there could be cost pressure to increase rates. If MRMIB and CalPERS had to pay $1 annually more in premiums for each of their respective 800,000 to 900,000 subscribers and 778,934 state employees and their dependents, costs would be approximately $800,000 - $900,000 total funds for the Healthy Families Program, Major Risk Medical Insurance Program (MRMIP), and the Page 2 AB 2345 (De La Torre) Access for Infants and Mothers Program (AIM), and $778,934 total funds annually for CalPERS. Healthy Families costs are shared approximately 65 percent federal funds and 35 percent General Fund as well as subscriber premiums; MRMIP's costs are about 40 percent state tobacco tax revenue and 60 percent subscriber premiums; AIM costs are shared approximately 65 percent federal funds and 35 percent state tobacco tax revenue. CalPERS costs are shared approximately 55 percent General Fund and 45 percent special and other funds as well as some subscriber premiums. While the provisions of this bill are required by the federal ACA, by placing these requirements in state statute, there would be costs to these programs to maintain these provisions if federal law were to be amended or repealed.