BILL NUMBER: AB 2578	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Members Jones and Feuer
   (Principal coauthor: Senator Leno)
   (Coauthor: Assembly Member Brownley)

                        FEBRUARY 19, 2010

   An act to add Section 1385.1 to the Health and Safety Code, and to
add Section 10181 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2578, as introduced, Jones. Health care coverage: rate
approval.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care and
makes a willful violation of the act a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Under existing law, no change in premium rates or coverage
in a health care service plan or a health insurance policy may
become effective without prior written notification of the change to
the contract holder or policyholder. Existing law prohibits a plan
and an insurer during the term of a plan contract or policy from
changing the rate of the premium, copayment, coinsurance, or
deductible during specified time periods.
   This bill would require approval by the Department of Managed
Health Care or the Department of Insurance of an increase in the
amount of the premium, copayment, coinsurance obligation, deductible,
and other charges under a health care service plan or health
insurance policy.
   Because the bill would specify an additional requirement under the
Knox-Keene Act, the willful violation of which would be a crime, the
bill would impose a state-mandated local program.
    The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1385.1 is added to the Health and Safety Code,
to read:
   1385.1.  (a) The following definitions apply for the purposes of
this section:
   (1) "Applicant" means a health care service plan seeking to
increase the rate it charges its subscribers.
   (2) "Rate" includes, but is not limited to, premiums, copayments,
coinsurance obligations, deductibles, charges, and the cost of
coverage per exposure base unit.
   (b) No applicant shall increase the rate it charges a subscriber
unless it submits an application to the department, and the
application is approved by the department.
  SEC. 2.  Section 10181 is added to the Insurance Code, to read:
   10181.  (a) The following definitions apply for the purposes of
this section:
   (1) "Applicant" means a health insurer seeking to increase the
rate it charges its policyholders.
   (2) "Rate" includes, but is not limited to, premiums, copayments,
coinsurance obligations, deductibles, charges, and the cost of
insurance per exposure base unit.
   (b) No applicant shall increase the rate it charges a policyholder
unless it submits an application to the department, and the
application is approved by the department.
  SEC. 3.   No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.