BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 155| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 155 Author: Evans (D) Amended: 5/4/11 Vote: 21 SENATE HEALTH COMMITTEE : 7-1, 4/27/11 AYES: Hernandez, Alquist, Blakeslee, De León, DeSaulnier, Rubio, Wolk NOES: Anderson NO VOTE RECORDED: Strickland SENATE APPROPRIATIONS COMMITTEE : 6-3, 5/26/11 AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg NOES: Walters, Emmerson, Runner SUBJECT : Maternity services SOURCE : American Congress of Oncologists and Gynecologists, District IV California Commission on the Status of Women Kaiser Permanente DIGEST : This bill requires every individual or group health insurance policy, as specified, to cover maternity services, as defined. ANALYSIS : Existing federal law : CONTINUED SB 155 Page 2 1. Requires employers, under the Federal Civil Rights Act, that offer health insurance and have 15 or more employees, to cover maternity services benefits at the same level as other health care benefits. 2 .Defines, under the Patient Protection and Affordable Care Act (PPACA) (Public Law 111-148), as amended by the Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), a list of "essential health benefits package," including maternal and newborn care, which health insurance coverage and group health plans must provide beginning in 2014. Existing state law : 1. Provides for the regulation of health plans and insurers by the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI), respectively. 2. Requires DMHC-regulated health plans to provide all medically necessary basic health care services, as defined. 3. Permits DMHC to define the scope of the services and to exempt plans from the requirement for good cause. 4. Specifies that basic health care services include maternity services necessary to prevent serious deterioration of the health of the enrollee or the enrollee's fetus, and preventive health care services, specifically including prenatal care. No similar provision is applicable to health insurers regulated by CDI. 5. Prohibits health plans and insurers from issuing contracts and policies that contain a copayment or deductible for inpatient hospital or ambulatory care for maternity services that exceeds the most common amount charged for the same type of care and service provided for other covered medical conditions. 6. Prohibits health plans and insurers that provide maternity benefits from attaching any exclusions, CONTINUED SB 155 Page 3 reductions, or limitations to coverage for involuntary complications of pregnancy, unless those provisions apply to all of the benefits paid by the plan or insurer. 7. Prohibits health plans and insurers from gender rating, or charging differential premiums based on gender for contracts issued, amended, or renewed on or before January 1, 2011. This bill: 1. Requires any health insurer with a pending or approved individual or group health insurance policy form on file with CDI as of January 1, 2012, to submit to CDI, on or before March 1, 2012, a revised policy form that provides coverage for maternity services. 2. Requires new forms for individual or group policies submitted to CDI after January 1, 2012, to provide coverage for maternity services. 3. Requires the corresponding policy, issued, amended, or renewed on or after 30 days following CDI's approval of the revised form, to include coverage for maternity services. 4. Defines "maternity services" to include prenatal care, ambulatory care for maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery, and postpartum care. 5. States that the above definition of "maternity services " will remain in effect until such time as federal regulations define the scope of benefits to be provided under the maternity benefit requirement of that act. 6. Exempts specialized health insurance, Medicare supplement insurance, short-term limited duration health insurance, Civilian Health and Medical Program of the Uniformed Services supplemental insurance, TRI-CARE supplemental insurance, and hospital indemnity, accident-only, or specified disease insurance from these CONTINUED SB 155 Page 4 requirements. Background Value of prenatal care . A 2008 report from the National Women's Law Center entitled "Nowhere to Turn: How the Individual Health Insurance Market Fails Women" found that it is difficult and costly for women to find health insurance that covers pregnancy-related care. Numerous studies have shown that prenatal care pays for itself by helping to minimize the prevalence and severity of low- and very low birthweight babies. A 2004 study in the Journal of Perinatal and Neonatal Nursing evaluated the effects of augmented prenatal care on women at high-risk for having a low-birth weight baby who were enrolled in a special program that provided basic prenatal care, prenatal education, and case management. The program saved about $13,962 per single, low birthweight birth prevented, and, after program costs were considered, the return on investment equaled 37 percent (for every dollar invested in the program $1.37 was saved). An American College of Obstetricians and Gynecologists study of over 3,000 women estimated that each dollar cut from prenatal care could cost taxpayers up to $3.33 in neonatal care for sick babies. The March of Dimes reports that premature birth is among the most common, serious, and costly problems facing infants in the United States, and is responsible for about half of all infant hospitalizations. According to the California Department of Public Health, in 2006, 85.9 percent of births were to mothers who initiated prenatal care in the first trimester. Only 0.6 percent of California women received no prenatal care. Overall in California, there are approximately 75 maternal pregnancy-related deaths and 3,000 infant deaths per year. Infant mortality is most frequently caused by birth defects (23.5 percent of deaths), followed by prematurity and low birthweight (15.6 percent of deaths), maternal complications of pregnancy (6.0 percent of deaths), and Sudden Infant Death Syndrome (5.2 percent of deaths). CONTINUED SB 155 Page 5 FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee analysis: Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Cost pressure to $49-$244 $98-$489 $98-$489County/* provide care for newly Federal uninsured persons *Costs could be shared equally between county and federal funds, or could be all county funds. SUPPORT : (Verified 5/26/11) American Congress of Oncologists and Gynecologists, District IV (co-source) California Commission on the Status of Women (co-source) Kaiser Permanente (co-source) American Academy of Pediatrics, California American Civil Liberties Union American Federation of State, County, and Municipal Employees California Academy of Family Physicians California Association of Physician Groups California Congress of Seniors California Department of Insurance California Medical Association California National Organization for Women California Nurses Association California Pan-Ethnic Health Network California Primary Care Association California Teachers Association California Women's Law Center First 5 Los Angeles Having Our Say Coalition Local Health Plans of California March of Dimes Foundation CONTINUED SB 155 Page 6 Maternal and Child Health Access National Association of Social Workers, California NARAL Pro-Choice California Nevada County Citizens for Choice Planned Parenthood Affiliates of California Planned Parenthood Mar Monte United Nurses Assoc. of California/Union of Health Care Professionals Women's Health Specialists OPPOSITION : (Verified 5/26/11) America's Health Insurance Plans Association of California Life and Health Insurance Companies California Chamber of Commerce ARGUMENTS IN SUPPORT : The California Commission on the Status of Women and the American Congress of Obstetricians and Gynecologists, sponsors of this bill, argue that since only women are biologically able to have children, they are the ones who need to buy the more expensive policies and bear the burden of the increased cost. The sponsors add that this economic burden is magnified by the fact that women on average make only 77 percent of men's wages, have less ability to pay expensive health costs, and the burden is more substantial for women of color whose average wages are less. The sponsors contend that the resulting disproportionate costs for men and women to obtain coverage for their basic medical needs constitutes gender discrimination, that maternity care is basic and preventive health care; and that the law should not allow the sale of insurance policies that discriminate against women. Proponents of this bill state that DMHC-regulated health plans are already required to include maternity services and this bill would bring CDI-regulated policies into conformity, pointing out that insurance products in the individual market that do not carry comprehensive maternity coverage offer selective health care that is not in the best interest of women. Proponents add that lack of coverage for prenatal care, delivery, and perinatal services can have serious health and cost ramifications for both the mother and the newborn. Proponents of this bill CONTINUED SB 155 Page 7 contend that if an insurer fails to provide maternity coverage, the state picks up the cost, whether for prenatal care provided through a public program or the costs associated with lack of prenatal care and that this bill closes a gap in existing law. ARGUMENTS IN OPPOSITION : Opponents of this bill include health insurers and the California Chamber of Commerce who argue that, because federal law already requires group insurance policies to include maternity benefits, the mandate in this bill is an individual market competition issue, rather than a health insurance access or equity issue. Opponents argue that by eliminating choice, this bill negatively impacts women and men who have made a conscious decision not to buy maternity services, and women who are unable to have children, by forcing them to purchase coverage for services they do not want or need. Opponents argue that the 15 mandate bills introduced this session add to over 87 mandates already in statute and will further erode affordable health insurance options for insureds. Opponents contend that this bill is premature and could further exacerbate California's budget crisis if the benefits mandated in this bill exceed the benefits mandated in federal health care reform. In addition, this bill will increase costs in the private sector at a time when the state is still struggling through an economic crisis, as evidenced by one of the highest unemployment rates in the nation. CTW:do 5/27/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED