BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 155|
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                                 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  :
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          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, 

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             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 

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             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).


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           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

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          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 

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          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

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