BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          SB 951 (Hernandez) - Health care coverage: essential health 
          benefits
          
          Amended: April 16, 2012         Policy Vote: Health 6-3
          Urgency: No                     Mandate: Yes
          Hearing Date: April 30, 2012                           
          Consultant: Brendan McCarthy    
          
          This bill does not meet the criteria for referral to the 
          Suspense File. 
          

          Bill Summary: SB 951 would select the Kaiser Small Group HMO 
          plan as the state's essential health benefit benchmark plan, 
          pursuant to the federal Affordable Care Act.

          Fiscal Impact: 
              No additional costs to subsidize the costs of state benefit 
               mandates for health plans sold in the Exchange.
              One-time costs to the Department of Insurance of $120,000 
              in 2012-13 and $110,000 in 2013-14 for the review of health 
              insurance policy filings (Insurance Fund).

          Background: Under the federal Patient Protection and Affordable 
          Care Act (Affordable Care Act), health plans and health insurers 
          that offer coverage in the individual market or the small group 
          market must provide coverage that is equivalent to the benefits 
          of a specified essential health benefits benchmark plan. Federal 
          guidance allows states to determine which plan will be the 
          benchmark plan.

          Also under the Affordable Care Act, individuals with household 
          income less than 400 percent of the federal poverty level and 
          certain small businesses purchasing health plans through the 
          California Health Benefit Exchange will be eligible for 
          subsidies. The Affordable Care Act requires the state to pay for 
          the subsidies attributable to any state-mandated benefits that 
          are not provided under the benchmark plan.

          Proposed Law: SB 951 would require individual or small group 
          health plans and health insurance policies sold in the Exchange 
          or the small group market after January 1, 2014 to provide 








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          benefits at least equal to those provided by the essential 
          health benefits benchmark plan. 

          The bill would select the Kaiser Small Group HMO as the state's 
          essential health benefits benchmark plan. The bill requires 
          habilitative services (which are not covered by the Kaiser Small 
          Group HMO) to be covered at parity with rehabilitative services 
          provided by Kaiser Small Group HMO. In addition, the bill 
          requires pediatric oral care and pediatric vision care (neither 
          of which are covered by the Kaiser Small Group HMO) to be 
          provided at the same level as is provided in certain federal 
          plans.

          

          Related Legislation: 
              SB 961 (Hernandez) 2011 requires health plans to comply 
              with federal requirements in the individual market. That 
              bill will be heard in this committee.
              SB 1321 (Harman) 2011 requires the California Health 
              Benefit Exchange to select the health plan with the lowest 
              cost as the essential health benefit benchmark plan. That 
              bill is in the Senate Health Committee.
              SB 1453 (Monning) 2011 is identical to this bill. That bill 
              is in the Assembly Appropriations Committee.

          Staff Comments: Because the bill selects a health plan that is 
          subject to all state-mandated benefits, the bill does not impose 
          an obligation on the state to pay for the costs of subsidizing 
          those benefits for individuals or small employers eligible for 
          subsidies.

          To date, federal guidance on the definition or scope of required 
          benefits for habilitative services has been limited. Once 
          additional federal guidance becomes available, the bill may need 
          to be amended to ensure that it conforms to federal 
          requirements.

          The bill does not impose a reimbursable state mandate because 
          the only costs that might be incurred by a local agency relate 
          to a crime or infraction.











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