BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 222|
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UNFINISHED BUSINESS
Bill No: SB 222
Author: Evans (D) and Alquist (D), et al.
Amended: 9/2/11
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : 52-26, 09/07/11 - See last page for vote
SUBJECT : Health plans: joint ventures
SOURCE : American Congress of Obstetricians &
Gynecologists,
District IV
California Commission on the Status of Women
Kaiser Permanente
DIGEST : This bill requires policies in the individual
health insurance market to provide coverage for maternity
services.
Assembly Amendments delete the prior version of the bill
related to health plans and joint ventures, and now
addresses maternity services for the insured.
ANALYSIS : 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
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same level as other health care benefits.
2.Defines, under Patient Protection and Affordable Care Act
(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 the
Department of Managed Health Care (DMHC) under Knox-Keene
Health Care Service Plan Act of 1975(Knox-Keene) and for
the regulation of health insurers by the Department of
Insurance (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
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.
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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.
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 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 to provide maternity
services as a basic health care benefit.
B. Existing law does not require health insurers to
provide designated basic health care services and,
therefore, they are not required to provide
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coverage for maternity services.
C. It is essential to clarify that all health
coverage made available to California consumers,
whether issued by health plans regulated by DMHC or
disability insurers who sell health insurance
regulated by CDI, must include maternity services.
6. Requires that the provisions of this bill become
inoperative only if
AB 210 (R. Hernández) of the 2011-12 Regular Session is
also enacted and takes effect.
Background
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 percent; 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
According to the Assembly Appropriations Committee analysis
of SB 155 (Evans) which contained similar provisions, this
bill will result in the following costs:
According to the California Health Benefits Review
Program, no direct state fiscal impact for publicly
supported health coverage provided through Medi-Cal,
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California Public Employees' Retirement System, or
Healthy Families/Access for Infants and Mothers.
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.
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.
SUPPORT : (Verified 9/2/11)
American Congress of Obstetricians 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
Blue Shield of California
California Academy of Family Physicians
California Association of Physician Groups
California Department of Insurance
California Medical Association
California National Organization for Women
California Nurse Midwives Association
California Nurses Association
California Pan-Ethnic Health Network
California Primary Care Association
California School Employees Association
California Teachers Association
California Women's Law Center
Congress of California Seniors
First 5 Los Angeles
Having Our Say Coalition
Latino Health Alliance
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Local Health Plans of California
March of Dimes Foundation
Maternal and Child Health Access
NARAL Pro-Choice California
National Association of Social Workers, California
Nevada County Citizens for Choice
Planned Parenthood Affiliates of California
Planned Parenthood Mar Monte
United Nurses Associations of California/ Union of Health
Care
Professionals
Women's Health Specialists
OPPOSITION : (Verified 9/6/11)
California Chamber of Commerce
ARGUMENTS IN SUPPORT : According to the author's office,
existing law requires health plans and group insurers to
include maternity services, but individually marketed plans
are not subject to that requirement. The author's office
maintains that as a result, cheaper "maternity-free"
policies have increased. The author's office also asserts
that the percentage of policies containing maternity
coverage has dropped from 82 percent in 2004 to only 19
percent in 2009, leaving a growing number of women priced
out of the insurance market. The author's office 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 percent of these individuals are
women of childbearing age. The author's office 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.
ARGUMENTS IN OPPOSITION : The California Chamber of
Commerce opposes this bill and writes, "The marketplace for
health coverage products includes an array of options for
which employers and individuals can choose to meet their
needs and their budget. Options include discounted
products for individuals that do not want or need maternity
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coverage. SB 222 would prohibit insurers from offering
these discounted products and would lead to premium rate
increases for many Californians.
"While well intentioned, CalChamber believes that SB 222
would further exacerbate the problem of rising health care
costs. This bill may only minimally increase health
insurance premiums; however this increase cannot be viewed
in isolation. This year alone the legislature considered
at least a dozen new mandates to add to the many currently
imposed benefit mandates. These mandates have reduced
flexibility in benefit design, increased health care costs
and premium rates leading to reduced employers' and
individuals choice of benefit packages, ultimately
contributing to the need for health care reform today.
Benefit mandates make insurance less affordable, resulting
in an increased number of uninsured."
ASSEMBLY FLOOR : 52-26, 09/07/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fletcher, Fong,
Fuentes, Galgiani, Gatto, Gordon, Hall, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Lara, Bonnie
Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, Perea, V.
Manuel Pérez, Portantino, Skinner, Solorio, Swanson,
Torres, Wieckowski, Williams, Yamada, John A. Pérez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Beth Gaines, Garrick, Grove, Hagman, Halderman, Harkey,
Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell,
Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao,
Wagner
NO VOTE RECORDED: Furutani, Gorell
CTW:do 9/8/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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