BILL NUMBER: AB 1526	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Monning

                        JANUARY 19, 2012

   An act to amend Sections 12711, 12718, 12725, and 12737 of the
Insurance Code, relating to health care coverage, and making an
appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1526, as introduced, Monning. California Major Risk Medical
Insurance Program.
   Existing law establishes the California Major Risk Medical
Insurance Program (MRMIP) that is administered by the Managed Risk
Medical Insurance Board (MRMIB) to provide major risk medical
coverage to residents who have been rejected for coverage by at least
one private health plan, as specified. Existing law creates the
Major Risk Medical Insurance Fund and continuously appropriates the
fund to MRMIB for the purposes of MRMIP.
   This bill would alternatively require, as a condition of
eligibility for MRMIP, that an applicant have documentation from a
licensed physician, physician assistant, nurse practitioner, or other
health care professional, if designated by MRMIB verifying the
applicant's preexisting medical condition. By expanding the
eligibility criteria for MRMIP, the bill would make moneys in a
continuously appropriated fund available for a new or expanded
purpose and would thereby make an appropriation.
   Existing law specifies the minimum scope of benefits offered by
participating health plans in MRMIP and requires the exclusion of
benefits that exceed $75,000 in a calendar year or $750,000 in a
lifetime, as specified.
   This bill would eliminate those annual or lifetime limits and
would authorize MRMIB to exclude from the subscriber contribution
rate that portion of the standard average individual rate
attributable to the elimination of those limits.
   The bill would also provide that regulations adopted and readopted
by MRMIB to implement changes made to MRMIP enacted in 2012 are
deemed to be an emergency and would exempt MRMIB from describing
facts showing the need for immediate action and from review by the
Office of Administrative Law.
   Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 12711 of the Insurance Code is amended to read:

   12711.  The board shall have the authority:
   (a) To determine the eligibility of applicants.
   (b) To determine the major risk medical coverage to be provided
program subscribers.
   (c) To research and assess the needs of persons not adequately
covered by existing private and public health care delivery systems
and promote means of assuring the availability of adequate health
care services.
   (d) To approve subscriber contributions, and plan rates, and
establish program contribution amounts.
   (e) To provide major risk medical coverage for subscribers or to
contract with a participating health plan or plans to provide or
administer major risk medical coverage for subscribers.
   (f) To authorize expenditures from the fund to pay program
expenses which exceed subscriber contributions.
   (g) To contract for administration of the program or any portion
thereof with any public agency, including any agency of state
government, or with any private entity.
   (h) To issue rules and regulations to carry out the purposes of
this part.  The adoption and readoption of regulations to
implement the changes made to this part enacted in 2012 shall be
deemed to be an emergency and necessary to avoid serious harm to the
public peace, health, safety, or general   welfare for
purposes of Sections   11346.1 and 11349.6 of the Government
Code, and the board is hereby exempted from the requirement that it
describe facts showing the need for immediate action and from review
by the Office of Administrative Law. 
   (i) To authorize expenditures from the fund or from other moneys
appropriated in the annual Budget Act for purposes relating to
Section 10127.15 of this code or Section 1373.62 of the Health and
Safety Code.
   (j) To exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed upon it
under this part.
  SEC. 2.  Section 12718 of the Insurance Code is amended to read:
   12718.   (a)    Benefits under this 
chapter or Chapter 5 (commencing with Section 12720)  
part  shall be subject to required subscriber copayments and
deductibles as the board may authorize. Any authorized copayments
shall not exceed 25 percent and any authorized deductible shall not
exceed an annual household deductible amount of five hundred dollars
($500). However, health plans not utilizing a deductible may be
authorized to charge an office visit copayment of up to twenty-five
dollars ($25). If the board contracts with participating health plans
pursuant to Chapter 5 (commencing with Section 12720), copayments or
deductibles shall be authorized in a manner consistent with the
basic method of operation of the participating health plans. The
aggregate amount of deductible and copayments payable annually under
this section shall not exceed two thousand five hundred dollars
($2,500) for an individual and four thousand dollars ($4,000) for a
family. 
   (b) Benefits under this part shall have no annual or lifetime
limits. 
  SEC. 3.  Section 12725 of the Insurance Code is amended to read:
   12725.  (a) Each resident of the state meeting the eligibility
criteria of this section  and who is unable to secure
adequate private health coverage  is eligible to apply for
major risk medical coverage through the program. For these purposes,
"resident" includes a member of a federally recognized California
Indian tribe.
   (b) To be eligible for enrollment in the program, an applicant
shall  have   demonstrate that he or she is
unable to secure adequate private health care coverage by  
providing either of the following: 
    (1)     Documentation that he or she has
 been rejected for health care coverage by at least one private
health plan. An applicant shall be deemed to have been rejected if
the only private health coverage that the applicant could secure
would do one of the following: 
   (1) 
    (A)  Impose substantial waivers that the program
determines would leave a subscriber without adequate coverage for
medically necessary services. 
   (2) 
    (B)  Afford limited coverage that the program determines
would leave the subscriber without adequate coverage for medically
necessary services. 
   (3) 
    (C)  Afford coverage only at an excessive price, which
the board determines is significantly above standard average
individual coverage rates. 
   (2) Documentation satisfactory to the board from a licensed
physician, physician assistant, or nurse practitioner, or, if
designated by the board, other health care professional, verifying
the applicant's preexisting medical condition. 
   (c) Rejection for policies or certificates of specified disease or
policies or certificates of hospital confinement indemnity, as
described in Section 10198.61, shall not be deemed to be rejection
for the purposes of eligibility for enrollment  under paragraph
(1) of subdivision (b)  .
   (d) The board may permit dependents of eligible subscribers to
enroll in major risk medical coverage through the program if the
board determines the enrollment can be carried out in an actuarially
and administratively sound manner.
   (e) Notwithstanding the provisions of this section, the board
shall by regulation prescribe a period of time during which a
resident is ineligible to apply for major risk medical coverage
through the program if the resident either voluntarily disenrolls
from, or was terminated for nonpayment of the premium from, a private
health plan after enrolling in that private health plan pursuant to
either Section 10127.15 or Section 1373.62 of the Health and Safety
Code.
   (f) For the period commencing September 1, 2003, to December 31,
2007, inclusive, subscribers and their dependents receiving major
risk coverage through the program may receive that coverage for no
more than 36 consecutive months. Ninety days before a subscriber or
dependent's eligibility ceases pursuant to this subdivision, the
board shall provide the subscriber and any dependents with written
notice of the termination date and written information concerning the
right to purchase a standard benefit plan from any health care
service plan or health insurer participating in the individual
insurance market pursuant to Section 10127.15 or Section 1373.62 of
the Health and Safety Code. This subdivision shall become inoperative
on December 31, 2007.
  SEC. 4.  Section 12737 of the Insurance Code is amended to read:
   12737.  (a) The board shall establish program contribution amounts
for each category of risk for each participating health plan. The
program contribution amounts shall be based on the average amount of
subsidy funds required for the program as a whole. To determine the
average amount of subsidy funds required, the board shall calculate a
loss ratio, including all medical costs, administration fees, and
risk payments, for the program in the prior calendar year. The loss
ratio shall be calculated using 125 percent of the standard average
individual rates for comparable coverage as the denominator, and all
medical costs, administration fees, and risk payments as the
numerator. The average amount of subsidy funds required is calculated
by subtracting 100 percent from the program loss ratio. For purposes
of calculating the program loss ratio, no participating health plan'
s loss ratio shall be less than 100 percent and participating health
plans with fewer than 1,000 program members shall be excluded from
the calculation.
   Subscriber contributions shall be established to encourage members
to select those health plans requiring subsidy funds at or below the
program average subsidy. Subscriber contribution amounts shall be
established so that no subscriber receives a subsidy greater than the
program average subsidy, except that:
   (1) In all areas of the state, at least one plan shall be
available to program participants at an average subscriber
contribution of 125 percent of the standard average individual rates
for comparable coverage.
   (2) No subscriber contribution shall be increased by more than 10
percent above 125 percent of the standard average individual rates
for comparable coverage.
   (3) Subscriber contributions for participating health plans
joining the program after January 1, 1997, shall be established at
125 percent of the standard average individual rates for comparable
coverage for the first two benefit years the plan participates in the
program.
   (b) The program shall pay program contribution amounts to
participating health plans from the Major Risk Medical Insurance
Fund. 
   (c) For purposes of subdivision (a), the board may exclude from
the subscriber contribution that portion of the standard average
individual rate attributable to the elimination of annual and
lifetime benefit limits pursuant to subdivision (b) of Section 12718.