BILL ANALYSIS Ó
AB 154
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ASSEMBLY THIRD READING
AB 154 (Beall)
As Amended January 23, 2012
Majority vote
HEALTH 12-5 APPROPRIATIONS 11-6
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|Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Bonilla, Eng, Gordon, | |Bradford, Charles |
| |Hayashi, | |Calderon, Campos, |
| |Roger Hernández, Bonnie | |Chesbro, Hall, Hill, |
| |Lowenthal, Mitchell, Pan, | |Ammiano, Mitchell, |
| |Williams | |Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Garrick, Mansoor, |Nays:|Harkey, Donnelly, Gatto, |
| |Silva, Knight | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires health plans and health insurers to cover the
diagnosis and medically necessary treatment of a mental illness,
as defined, of a person of any age, with specified exceptions,
and not limited to coverage for severe mental illness (SMI) as
in existing law. Specifically, this bill :
1)Requires health plans and those health insurance policies that
provide coverage for hospital, medical, or surgical expenses,
to provide coverage for the diagnosis and medically necessary
treatment of a mental illness of a person of any age,
including a child, under the same terms and conditions applied
to other medical conditions, including but not limited to
maximum lifetime benefits, copayments, and individual and
family deductibles. Existing law only requires such coverage
for SMIs, as defined.
2)Defines mental illness as a mental disorder classified in the
Diagnostic and Statistical Manual IV (DSM-IV) and includes
coverage for substance abuse. Requires the benefits provided
under this bill to include outpatient services; inpatient
hospital services; partial hospital services; and,
prescription drugs, if the plan contract already includes
coverage for prescription drugs.
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3)Excludes treatment of nicotine addiction and certain illnesses
under the "V" code designation in the DSM-IV, such as adult
antisocial behavior and bereavement, among others, from the
definition in 2) above.
4)Requires, following publication of each subsequent volume of
the DSM-IV, the definition of "mental illness" to be subject
to revision to conform to, in whole or in part, the list of
mental disorders defined in the then-current volume of the
DSM-IV.
5)Requires any revision to the definition of "mental illness"
pursuant to 4) above to be established by regulation
promulgated jointly by the Department of Managed Health Care
(DMHC) and the Department of Insurance.
6)Allows a health plan or health insurer to provide coverage for
all or part of the mental health coverage required by this
bill through a specialized health care service plan or mental
health plan and prohibits the health plan or health insurer
from being required to obtain an additional or specialized
license for this purpose.
7)Requires a health plan or health insurer to provide the mental
health coverage required by this bill in its entire service
area and in emergency situations, as specified.
8)Permits a health plan and health insurer to utilize case
management, network providers, utilization review techniques,
prior authorization, copayments, or other share-of-cost
requirements, to the extent allowed by law or regulation, in
the provision of benefits required by this bill.
9)Clarifies that nothing in this bill shall be construed to deny
or restrict in any way DMHC's authority to ensure a health
plan's compliance with this bill when the plan provides
prescription drug coverage.
10)Clarifies that, with regard to health insurance policies, any
action a health insurer takes to implement this bill,
including, but not limited to, contracting with preferred
provider organizations, shall not be deemed as an action that
would otherwise require licensure as a health care service
plan, as specified.
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11)Exempts contracts between the Department of Health Care
Services and a health plan for enrolled Medi-Cal beneficiaries
and plans administered by Managed Risk Medical Insurance Board
from the provisions of this bill.
12)Prohibits a health care benefit plan, contract, or health
insurance policy with the Board of Administration of the
Public Employees' Retirement System from applying to this bill
unless board elects to purchase a plan, contract, or policy
that provides mental health benefits mandated under this bill.
13)Exempts accident-only, specified disease, hospital indemnity,
Medicare supplement, dental-only, or vision-only plans or
insurance policies, except behavioral health-only policies,
from the provisions of this bill.
14)Prohibits this bill from being deemed to require a qualified
health plan that participates in the California Health Benefit
Exchange to provide any greater coverage than is required
under the minimum essential benefits package set forth in the
federal Patient Protection and Affordable Care Act (PPACA).
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Annual increased premium costs in the private insurance market
of $60 million. These costs reflect increased premiums by
employers for group insurance and premiums paid in the
individual health insurance market. These increased costs are
partially offset by reduced out-of-pocket costs of $26 million
due to reduced co-payments and deductibles.
2)Federal regulations implementing the PPACA are likely to
reduce the fiscal impact of this bill beginning in 2014. The
PPACA requires mental health and substance abuse treatment to
be covered as a basic benefit in state-run health insurance
exchanges that will provide health coverage to millions of
individuals.
COMMENTS : According to the author, individuals struggling with
mental illness quickly exhaust limited coverage and personal
savings and become dependent upon taxpayer-supported benefits.
The author notes that annual national costs for mental illness
are an estimated $23 billion in lost work days to employers and
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another $150 billion in treatment, social services, and lost
productivity. The author maintains that many people in our
society with mental illness and substance abuse problems are
unable to obtain treatment and, as a result, wind up in
counties' indigent health care pool, emergency rooms, and state
and county jails. This bill is intended to end discrimination
against patients with mental health/substance abuse (MH/SA)
issues by requiring treatment and coverage of these illnesses
that is equitable to coverage provided for other medical
illnesses. Since SMI services are already covered under current
law, this bill focuses on the incremental effect of extending
parity to non-SMI and substance abuse disorders, with certain
exceptions.
On December 16, 2011, the federal Center for Consumer
Information and Insurance Oversight (CCIIO) issued a bulletin
proposing that essential health benefits (EHBs) be defined using
a benchmark approach. Under the CCIIO intended approach, states
would have the flexibility to select a benchmark plan that
reflects the scope of services offered by a "typical employer
plan." This approach would give states the flexibility to
select a plan that would best meet the needs of their residents.
In accordance with the bulletin, the benchmark options include:
1)One of the three largest small group plans in the state by
enrollment.
2)One of the three largest state employee health plans by
enrollment.
3)One of the three largest federal employee health plan options
by enrollment.
4)The largest HMO plan offered in the state's commercial market
by enrollment.
The benefits and services included in the benchmark plan
selected by the state would be the EHB package.
To meet the EHB coverage standard, a health plan or health
insurer would offer benefits that are "substantially equal" to
the benchmark plan selected by the state and modified as
necessary to reflect the 10 coverage categories. The bulletin
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indicates that states must select their benchmark plan in the
third quarter two years prior to the coverage year (by September
2012). The PPACA requires states to defray the cost of any
benefits required by state law to be covered by health plans and
health insurers beyond the EHBs. The federal bulletin implies
that existing state mandates could be incorporated in EHBs to
the extent they are included in a benchmark plan existing in
2012. However, the federal rules are not final or entirely
clear on this point. Comments on the federal bulletin are due
by January 31, 2012. Further evaluation of individual state
mandates pending this year will need to be considered in the
context of a broader discussion about California's benchmark
plan.
Supporters, including the California Mental Health Directors
Association, the California Hospital Association, the California
Medical Association, and the County Alcohol & Drug Program
Administrators Association of California, note that numerous
studies have shown that mental illness is treatable, and that
appropriate and timely treatment of mental health conditions
reduces costly hospitalizations, incarcerations, homelessness,
and, most importantly, human suffering. They state that this is
a long-overdue bill that aims to end insurance discrimination
faced by too many people seeking help and still struggling with
mental illness or the disease of addiction to alcohol and other
drugs.
Health plans and health insurers object to this bill, stating
that it is the wrong time for the Legislature to consider
enacting new benefit mandates since, starting in 2014, many
Californians can enroll in health coverage through the state-run
health insurance exchanges. Opponents contend benefit mandates
eliminate the ability of health insurers and HMOs to provide
unique benefit packages in response to the needs of consumers by
requiring individuals and consumers to purchase benefits
prescribed by the Legislature, not driven by consumer choice.
Lastly, they assert that carving out certain exemptions from
this bill unfairly raises costs for employers and individuals in
only certain market segments, thereby creating uneven playing
fields.
Analysis Prepared by : Cassie Royce / HEALTH / (916) 319-2097
FN: 0003068
AB 154
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