BILL NUMBER: AB 1526	CHAPTERED
	BILL TEXT

	CHAPTER  855
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2012
	PASSED THE SENATE  AUGUST 30, 2012
	PASSED THE ASSEMBLY  AUGUST 30, 2012
	AMENDED IN SENATE  AUGUST 24, 2012
	AMENDED IN SENATE  JUNE 20, 2012
	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  MARCH 20, 2012

INTRODUCED BY   Assembly Member Monning

                        JANUARY 19, 2012

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1526, 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.
   Existing law requires MRMIB to establish program contribution
amounts for each category of risk for each participating health plan
and requires that these amounts be based on the average amount of
subsidy funds required for the program as a whole, to be determined
in a specified manner. Existing law authorizes participating health
plans to charge subscriber contributions that do not exceed the
difference between its plan rate and the program contribution amounts
for a category of risk. Existing law requires the program to pay
program contribution amounts to participating health plans from the
Major Risk Medical Insurance Fund.
   This bill would, for the period commencing January 1, 2013, to
December 31, 2013, inclusive, additionally authorize the program to
further subsidize subscriber contributions based on a specified
percentage of the standard average individual risk rate for
comparable coverage, as specified. The bill would prohibit the amount
of any subsidy provided to subscribers from affecting the
calculation of premiums for certain products. Because the bill
removes a restriction limiting the expenditure of money available
under an existing appropriation from a continuously appropriated
fund, the bill would make an appropriation.
   The bill would also provide that if regulations are adopted and
readopted, those regulations by MRMIB to implement the changes made
to MRMIP enacted by this bill are deemed to be an emergency and the
bill would exempt MRMIB from describing facts showing the need for
immediate action and from review by the Office of Administrative Law.

   Appropriation: yes.


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

  SECTION 1.  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 the period commencing January 1, 2013, to December 31,
2013, inclusive, in addition to the amount of subsidy funds required
pursuant to subdivision (a), the program may further subsidize
subscriber contributions so that the amount paid by each subscriber
is below 125 percent of the standard average individual risk rate for
comparable coverage but no less than 100 percent of the standard
average individual risk rate for comparable coverage. For purposes of
calculating premiums for the following products, any reference to,
or use of, subscriber contributions, premiums, average premiums, or
amounts paid by subscribers in the program shall be construed to mean
subscriber contributions as described in subdivision (a) without
application of the additional subsidies permitted by this
subdivision:
   (1) Standard benefit plans pursuant to Section 10127.16 and
Section 1373.622 of the Health and Safety Code.
   (2) Health benefit plans and health care service plan contracts
for federally eligible defined individuals pursuant to Sections
10901.3 and 10901.9 and Sections 1399.805 and 1399.811 of the Health
and Safety Code.
   (3) Conversion coverage pursuant to Section 12682.1 and Section
1373.6 of the Health and Safety Code.
  SEC. 2.  Nothing in this act shall be construed to require the
Managed Risk Medical Insurance Board to adopt and readopt regulations
to implement the changes made by this act. However, if the Managed
Risk Medical Insurance Board adopts and readopts regulations, the
adoption and readoption of regulations by the Managed Risk Medical
Insurance Board to implement the changes made by this act to Part 6.5
(commencing with Section 12700) of Division 2 of the Insurance Code
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.