BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1453 (Monning) - Essential health benefits.
Amended: April 17, 2012 Policy Vote: Health 6-3
Urgency: No Mandate: Yes
Hearing Date: August 16, 2012
Consultant: Brendan McCarthy
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: AB 1453 would select the Kaiser Small Group HMO
plan as the state's essential health benefit benchmark plan,
pursuant to the federal Affordable Care Act.
Fiscal Impact:
One-time costs of about $350,000 to adopt regulations and
review health plan filings by the Department of Managed
Health Care (Managed Care Fund).
Ongoing costs of about $100,000 per year to respond to
consumer complaints by the Department of Managed Health Care
(Managed Care Fund).
One-time costs of about $2 million to adopt regulations and
review insurance policy filings by the Department of
Insurance (Insurance Fund). The much higher projected costs
to the Department of Insurance reflect the fact that the
adoption of comprehensive essential health benefit
requirements will have a pose a much larger change in
business practices on health insurers than health plans.
Therefore, there will be greater workload to adopt
regulations and review changes to insurance policies.
No anticipated costs to subsidize the costs of state
benefit mandates for health plans sold in the Exchange. See
staff comments below.
Background: Under the federal Patient Protection and Affordable
Care Act (Affordable Care Act), health plans and health insurers
that offer coverage in the individual market or the small group
market must provide coverage that is equivalent to the benefits
of a specified essential health benefits benchmark plan. Federal
AB 1453 (Monning)
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guidance allows states to determine which plan will be the
benchmark plan.
Also under the Affordable Care Act, individuals with household
income less than 400 percent of the federal poverty level and
certain small businesses purchasing health plans through the
California Health Benefit Exchange will be eligible for
subsidies. The Affordable Care Act requires the state to pay for
the subsidies attributable to any state-mandated benefits that
are not provided under the benchmark plan.
Proposed Law: AB 1453 would require individual or small group
health plans and health insurance policies sold in the Exchange
or the small group market after January 1, 2014 to provide
benefits at least equal to those provided by the essential
health benefits benchmark plan.
The bill would select the Kaiser Small Group HMO as the state's
essential health benefits benchmark plan. The bill requires
habilitative services (which are not covered by the Kaiser Small
Group HMO) to be covered at parity with rehabilitative services
provided by the Kaiser Small Group HMO. In addition, the bill
requires pediatric oral care and pediatric vision care (neither
of which are covered by the Kaiser Small Group HMO) to be
provided at the same level as is provided in certain federal
plans.
Related Legislation:
AB 1461 (Monning) requires health plans to comply with
federal requirements in the individual market. That bill
will be heard in this committee.
SB 951 (Hernandez) would designate the Kaiser Small Group
HMO as the state's essential health benefit benchmark plan.
That bill is in the Assembly Appropriations Committee.
SB 961 (Hernandez) requires health plans to comply with
federal requirements in the individual market. That bill is
in the Assembly Appropriations Committee.
Staff Comments: Federal guidance issued to date indicates that
the federal government will allow the states to select the
essential health benefit benchmark plan. Formal regulations have
not yet been issued by the federal government.
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Because the bill selects a health plan that is subject to all
state-mandated benefits, the bill does not impose an obligation
on the state to pay for the costs of subsidizing those benefits
for individuals or small employers eligible for subsidies. In
addition, the bill specifies that it shall only be implemented
to the extent that it does not result in the state being
obligated to subsidize coverage of mandated benefits.
To date, federal guidance on the definition or scope of required
benefits for habilitative services has been limited. Once
additional federal guidance becomes available, the bill may need
to be amended to ensure that it conforms to federal
requirements.
Under the bill, the only costs that may be incurred by a local
agency relate to crimes or infractions. Under the California
Constitution, such costs are not reimbursable by the state.
The proposed author's amendments revise definition of
habilitative services, ensure that essential health benefits
must comply with state and federal mental health parity
requirements, and specify that the bill is only required to the
extent federal essential health benefits are required and that
medically necessary basic health services are covered.