BILL ANALYSIS Ó
AB 1453
Page 1
ASSEMBLY THIRD READING
AB 1453 (Monning)
As Amended April 17, 2012
Majority vote
HEALTH 13-4 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Bonilla, Eng, Gordon, | |Bradford, Charles |
| |Hayashi, | |Calderon, Campos, Davis, |
| |Roger Hernández, Bonnie | |Gatto, Hall, Hill, Lara, |
| |Lowenthal, Mitchell, Pan, | |Mitchell, Solorio |
| |V. Manuel Pérez, Williams | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Mansoor, Silva, |Nays:|Harkey, Donnelly, |
| |Smyth | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Establishes the Kaiser Small Group Health Maintenance
Organization (HMO) plan contract as California's Essential
Health Benefits (EHB) benchmark plan. Specifically, this bill :
1)Requires the service and benefits to be covered to the extent
they are medically necessary, and requires scope and duration
limits imposed on the services and benefits to be no greater
than the scope and duration limits imposed on those services
and benefits by the Kaiser Small Group HMO plan contract.
2)Requires habilitative services to be covered under the same
terms and conditions applied to rehabilitative services
identified in the plan contract identified above. Defines
"habilitative services" as health care services that help a
person keep, learn, or improve skills and functioning for
daily living.
3)Requires the same services and benefits for pediatric oral
care covered under the Federal Employees Dental and Vision
Insurance Program (FEDVIP) dental plan and vision plan with
the largest national enrollment as of the first quarter of
2012. Makes scope and duration limits imposed on the services
and benefits no greater than the scope and duration
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limitations imposed on those benefits by the FEDVIP as
described.
4)Prohibits a health plan or health insurer from indicating or
implying that the health plan contract or health insurance
policy covers EHBs when offering, issuing, selling, or
marketing a health plan contract or health insurance policy
unless the plan contract or policy covers EHBs.
5)Applies the provisions of this bill regardless of whether the
plan contract or policy is offered inside or outside the
California Health Benefit Exchange.
6)Requires a plan contract or health insurance policy subject to
this bill to also comply with state and federal requirements
with regard to annual and lifetime limits on the dollar value
of benefits.
7)Requires this bill to not be construed to prohibit a plan
contract or policy from covering additional benefits,
including, but not limited to, spiritual care services that
are tax deductible under the Internal Revenue Service Code, as
specified.
8)Exempts a plan contract or health insurance policy that
provides excepted benefits under the Public Health Service
Act, and a plan contract or health insurance policy that
qualifies as a grandfathered plan from some provisions of this
bill.
9)Requires this bill to be implemented only to the extent that
federal law or policy does not require the state to defray the
costs of benefits included within the definition of EHBs.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)This bill responds to pre-regulatory federal guidance. We
assume it is likely that forthcoming federal regulations will
reflect the guidance issued thus far. If the federal
regulations take a different approach, potential costs of
requiring all individual and small group plans to meet the EHB
standards are unknown but could be significant, to the extent
a different approach requires the state to defray the costs of
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state-mandated benefits. However, given this bill includes
protective language that requires this bill to be implemented
only to the extent that federal law or policy does not require
the state to defray the costs of benefits included within the
definition of EHBs, it should not result in increased state
costs. There could be minor legal costs to the California
Department of Insurance and the Department of Managed Health
Care (DMHC) to make this determination.
2)Regulatory and enforcement costs as a result of this bill are
minor and absorbable. Costs will be incurred to ensure
compliance with EHB standards under federal law; additional
workload as a result of this bill will be minor.
COMMENTS : According to the author, based on a bulletin issued
by the Center for Consumer Information and Insurance Oversight
(CCIIO) states are permitted to select a single benchmark to
serve as the EHB standard for qualified health plans operating
inside the state exchange and plans offered in the individual
and small group markets, with an exception for grandfathered
plans. For 2014 and 2015, states have been given the choice
among 10 options. If a state does not choose a benchmark plan,
CCIIO will use the largest product in the state's small group
market as the default (one of the 10 options). The author
believes, based on the information available at this time, the
Kaiser Small Group HMO represents the best benchmark plan choice
for Californians. The Kaiser Small Group HMO covers all of
California's mandates and includes vision exams. The contract
covers reproductive services, is licensed at DMHC as a
Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene)
plan and complies with all of the consumer rights and
protections that go along with that, and while the cost
differentials among all of the options are not significant, this
plan falls in the middle range.
Many organizations have expressed support for this bill. The
Service Employees International Union of California believes the
Kaiser Small Group HMO is a solid choice for California. The
California Pan-Ethnic Health Network is pleased that the plan is
governed by the Knox-Keene Act because it ensures a
comprehensive package of medically necessary basic health
services. The California Association for Behavior Analysis
believes this bill provides much needed clarity on the minimum
coverage which must be offered beginning 2014, particularly with
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regard to behavioral health treatment, which includes applied
behavior analysis for autism or pervasive developmental
disorder. The Congress of California Seniors supports efforts
to create a benchmark listing of EHBs for California health
plans as required by the Patient Protection and Affordable Care
Act. Planned Parenthood Affiliates of California indicates that
their preliminary analysis of the Kaiser Small Group HMO is
positive, including that preventive services such as family
planning counseling, well woman exams, cancer screenings, and
prenatal care are specifically identified as covered services
with no cost sharing. Consumers Union supports the
codification of the EHB standard based upon the most popular
small group plan in California.
While acknowledging that guidance is still not out on
cost-sharing, the Western Center on Law and Poverty (Western
Center) wants to ensure that the cost-sharing components of the
Kaiser Small Group HMO plan are not adopted in the EHB standard
because $400 per day hospital inpatient co-pays should not be
the basis for structuring cost-sharing. The Council of
Acupuncture and Oriental Medicine Associations is pleased that
this bill recognizes acupuncture as an EHB and requires
acupuncture for treatment of pain and nausea in the individual
and small group market but feels this is limiting and prevents
acupuncture for neuromusculoskeletal and smoking abstinence.
Health Access California (HAC) supports establishing EHBs and
believes that the decision that is made will remain in place for
several decades. HAC supports the Kaiser Small Group HMO
selection at this time. However, HAC remains concerned that the
Insurance Code framework in existing law allows insurers to
impose dollar and visit limits on outpatient care or hospital
stays, deny access to prescription drugs for which there is no
therapeutic equivalent or substituting one benefit for another,
and suggests additional amendments.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0003556
AB 1453
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