BILL ANALYSIS Ó
SB 222
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SENATE THIRD READING
SB 222 (Alquist)
As Amended September 2, 2011
Majority vote
SENATE VOTE :Vote not relevant
HEALTH APPROPRIATIONS
(vote not relevant) (vote not relevant)
SUMMARY : Requires policies in the individual health insurance
market to provide coverage for maternity services.
Specifically, this bill :
1)Requires every individual health insurance policy to provide
coverage for maternity services for all insureds covered under
the policy on or before July 1, 2012.
2)Defines "maternity services" to include prenatal care,
ambulatory care maternity services, involuntary complications
of pregnancy, neonatal care, and inpatient hospital maternity
care, including labor and delivery and postpartum care.
3)Requires the definition of "maternity services" from 2) above
to remain in effect until federal regulations and guidance
issued according to the federal health reform law, the Patient
Protection and Affordable Care Act (PPACA), define the scope
of benefits to be provided under the maternity benefit
requirement and at that time the PPACA definition is to apply.
4)Exempts from the provisions of this bill specialized health
insurance, Medicare supplement insurance, short-term limited
duration health insurance, Civilian Health and Medical Program
of the Uniformed Services-supplement insurance, or TRI-CARE
supplemental insurance, or hospital indemnity, accident-only,
or specified disease insurance.
5)Makes the following findings and declarations:
a) Health care service plans (health plans) are required by
the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene) to provide maternity services as a basic
health care benefit;
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b) Existing law does not require health insurers to provide
designated basic health care services and, therefore, they
are not required to provide coverage for maternity
services; and,
c) It is essential to clarify that all health coverage made
available to California consumers, whether issued by health
plans regulated by the Department of Managed Health Care
(DMHC) or disability insurers who sell health insurance
regulated by the Department of Insurance (CDI), must
include maternity services.
6)Requires that the provisions of this bill become inoperative
only if Assembly Bill 210 (Roger Hernández) of the 2011-12
Regular Session is also enacted and takes effect.
EXISTING FEDERAL LAW :
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 PPACA, 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 by DMHC under
Knox-Keene and for the regulation of health insurers by CDI
under the Insurance Code.
2)Requires health plans under Knox-Keene to cover a number of
basic health care services and permits DMHC to define the
scope of the services and to exempt plans from the requirement
for good cause.
3)Provides, under Knox-Keene, that "basic health care services"
include: a) physician services, including consultation and
referral; b) hospital inpatient services and ambulatory care
services; c) diagnostic laboratory and diagnostic and
therapeutic radiological services; d) home health services; e)
preventive health services; f) emergency health care services,
including ambulance and ambulance transport services and
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out-of-area coverage; and, g) hospice care.
4)Requires, under Knox-Keene, health plans to provide all
medically necessary basic health care services, including
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.
5)Prohibits health plans and health insurers from issuing
contracts and policies that contain a copayment or deductible
for inpatient hospital or ambulatory care maternity services
that exceed the most common amount charged for the same type
of care and services provided for other covered medical
conditions.
6)Prohibits health plans and health insurers providing maternity
benefits for a person covered continuously from conception
from attaching any exclusions, 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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis of SB 155 (Evans) which contained similar
provisions, this bill will result in the following costs:
1)According to the California Health Benefits Review Program, no
direct state fiscal impact for publicly supported health
coverage provided through Medi-Cal, California Public
Employees' Retirement System, or Healthy Families/Access for
Infants and Mothers.
2) Increased premium costs in the
individual insurance market of approximately $110 million.
Increased premium costs are estimated to be offset by a
reduction in out-of-pocket costs for women who would otherwise
pay for a variety of services not covered by insurance in the
absence of this mandate.
3)Federal regulations implementing PPACA may reduce the fiscal
impact of this bill in future years. PPACA requires maternity
services to be covered as a basic benefit in state-run health
insurance exchanges that will provide health coverage to
millions of individuals.
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COMMENTS : According to the author, current law requires health
plans and group insurers to include maternity services, but
individually marketed plans are not subject to that requirement.
The author maintains that as a result, cheaper "maternity-free"
policies have increased. The author also asserts that the
percentage of policies containing maternity coverage has dropped
from 82% in 2004 to only 19% in 2009, leaving a growing number
of women priced out of the insurance market. The author
contends that, as employer-sponsored coverage declines,
insurance companies are increasingly targeting the young and
uninsured with products that do not include maternity services,
even though 25% of these individuals are women of childbearing
age. The author maintains that these types of products delay
and restrict access to prenatal care, which can lead to serious
health complications for both the mother and the newborn, and
force more women into state-funded programs, such as Medi-Cal or
Access for Infants and Mothers.
Numerous studies have shown that prenatal care pays for itself
by helping to minimize the prevalence and severity of low- and
very low-birth weight 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-birth weight birth prevented, and, after program costs were
considered, the return on investment equaled 37%; for every
dollar invested in the program $1.37 was saved. In addition, a
March of Dimes (MoD) report indicated that hospital charges for
premature, low-birth weight infants totaled $37.7 billion
nationally in 2003. The MoD report stated that premature birth
was among the most common, serious, and costly problems facing
infants in the U.S. and is responsible for about half of all
infant hospitalizations.
Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097
FN: 0002577
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