BILL ANALYSIS Ó
AB 1453
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CONCURRENCE IN SENATE AMENDMENTS
AB 1453 (Monning)
As Amended August 23, 2012
Majority vote
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|ASSEMBLY: |50-25|(May 14, 2012) |SENATE: |23-12|(August 28, |
| | | | | |2012) |
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Original Committee Reference: HEALTH
SUMMARY : Establishes the Kaiser Small Group HMO 30 plan as the
Essential Health Benefit (EHB) benchmark plan for individual and
small group health plan products licensed by the Department of
Managed Health Care (DMHC). Makes the enactment of this bill
contingent upon the enactment of SB 951 (Ed Hernandez).
The Senate amendments :
1)Specify that health benefits covered by the Kaiser Small Group
HMO 30 plan regardless of whether the benefits are
specifically referenced in the evidence of coverage or plan
contract are benchmark benefits.
2)Specify that where there are any conflicts or omissions in the
plan as compared with the requirements for health benefits
under this bill that were enacted prior to December 31, 2011,
Knox-Keene shall control unless otherwise specified.
3)Revise the benchmark for pediatric oral to be the same as
Healthy Families in 2011-12 including medically necessary
orthodontia.
4)Revise the definition of habilitation services and device, and
define health benefits.
5)Require the Paul Wellstone and Peter Domenici Mental Health
Parity and Addiction Equity Act of 2008 (MHPAE) to apply and
that coverage of mental health and substance use disorder
services along with scope and duration limits shall be in
compliance with MHPAE mental health and substance abuse
benefits to comply with federal mental health parity and all
rules, regulations, or guidance issued, as specified.
AB 1453
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6)Require the coverage of medically necessary basic health care
services, as defined.
7)Authorize a plan to substitute its prescription drug formulary
for the formulary provided under the Kaiser Small Group HMO 30
plan as long as the coverage for prescription drugs complies
with specified sections of this bill.
8)Require this bill to be implemented to the extent EHBs are
required by the Affordable Care Act (ACA), state that nothing
in this bill shall be implemented in a manner that conflicts
with a requirement of the ACA, and an EHB is required only to
the extent that federal law does not require the state to
defray the costs of the benefit.
9)Authorize DMHC to adopt emergency regulations, and sunset this
authority on March 1, 2016.
10)Apply this bill's provisions only to the Health and Safety
Code.
11)Make this bill's enactment contingent upon the enactment of
SB 951 (Ed Hernandez).
AS PASSED BY THE ASSEMBLY , this bill established the Kaiser
Small Group HMO plan contract as California's EHB benchmark plan
in both the Insurance and Health and Safety Codes.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)One-time costs of about $350,000 to adopt regulations and
review health plan filings by the DMHC (Managed Care Fund).
2)Ongoing costs of about $100,000 per year to respond to
consumer complaints by the DMHC (Managed Care Fund).
3)One-time costs of about $2 million to adopt regulations and
review insurance policy filings by the California Department
of Insurance (CDI) (Insurance Fund). The much higher
projected costs to the CDI reflect the fact that the adoption
of comprehensive EHB 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.
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This bill has been amended to remove the CDI provisions, which
remain in SB 951.
4)No anticipated costs to subsidize the costs of state benefit
mandates for health plans sold in the Exchange.
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 plan and complies with all of the consumer health
benefit 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.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0005670