BILL ANALYSIS Ó
AB 18
Page 1
Date of Hearing: April 23, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 18 (Pan) - As Amended: April 16, 2013
SUBJECT : Health care coverage: pediatric oral care.
SUMMARY : Exempts health plans and insurance policies that are
qualified health plans (QHPs) participating in California's
Health Benefit Exchange (Exchange), now called Covered
California, from the Essential Health Benefits (EHBs)
requirement to offer a pediatric oral care benefit if a
specialized health plan contract or insurance policy (also
referred to as a stand-alone dental plan) is offered, marketed,
or sold through the Exchange. Specifically, this bill :
1)Requires every specialized health plan contract and insurance
policy providing pediatric oral care benefits in the small
group or individual market through the Exchange to provide an
annual rebate to each enrollee and insured under that
coverage, on a pro rata basis, if the ratio of the amount of
premium revenue expended by the specialized health plan or
insurer on the costs for reimbursement for services provided
to enrollees or insureds under that coverage and for
activities that improve dental care quality to the total
amount of premium revenue, excluding federal and state taxes
and licensing or regulatory fees and after accounting for
payments or receipts for risk adjustment, risk corridors, and
reinsurance, is less than 75%.
2)Requires every specialized health plan contract or insurance
policy described above to maintain a minimum medical loss
ratio of 75%.
3)Exempts a health care service plan contract or insurance
policy that is a QHP, as defined, that is offered, marketed or
sold through the Exchange from the pediatric oral care
requirement of the EHBs if a specialized health care service
plan contract or insurance policy, as specified, is offered
through the Exchange.
4)Provides that a QHP that excludes coverage of the pediatric
oral care requirement shall not be offered, marketed, or sold
outside of the Exchange.
AB 18
Page 2
5)Requires cost sharing that is imposed as a result of a
specialized health care service plan contract or insurance
policy providing pediatric oral care benefits to be
coordinated with that cost sharing which is associated with
the QHP identified in 3) above so that the total cost sharing
for a combined QHP and specialized health care service plan or
insurance policy does not exceed the total cost sharing for a
QHP that includes coverage of the pediatric oral care
requirement. Requires the plans to develop a method for
coordinating and tracking cost sharing that limits the burden
on the subscriber.
6)Requires a specialized health care service plan contract and
insurance policy providing pediatric oral care benefits that
is offered through the Exchange to, at a minimum, include
coverage of the benefits for pediatric oral care covered under
the dental plan available to subscribers of the Healthy
Families Program in 2011-12, including the provision of
medically necessary orthodontic care provided pursuant to the
federal Children's Health Insurance Program Reauthorization
Act of 2009.
7)Provides that a specialized health care service plan contract
and insurance policy providing pediatric oral care benefits
not be regarded as providing excepted benefits under federal
law, for the purpose of determining applicability of the
Patient Protection and Affordable Care Act (ACA) sections
relating to:
a) The prohibition of preexisting condition exclusions or
other discrimination based on health status;
b) Fair health insurance premiums;
c) Guaranteed availability of coverage;
d) Guaranteed renewability of coverage;
e) Prohibition against discrimination against individual
participants and beneficiaries on the basis of health
status;
f) Nondiscrimination in health care; and,
AB 18
Page 3
g) Prohibition of excessive waiting periods, annual limits,
and lifetime limits.
8)Requires pediatric vision and oral care benefits to be
provided for individuals up to 26 years of age, to the extent
permitted under the ACA.
9)Makes a specialized health care service plan contract and
insurance policy providing pediatric oral care benefits
through the Exchange subject to existing state law related to
timely access to care, adequate networks, and rate reviews, as
specified.
EXISTING LAW :
1)Establishes the Department of Managed Health Care (DMHC) to
regulate health plans under the Knox-Keene Health Care
Services Plan Act of 1975 (Knox-Keene Act) in the Health and
Safety Code; the California Department of Insurance (CDI) to
regulate health insurers under the Insurance Code; and, the
Exchange to compare and make available through selective
contracting health insurance for individual and small business
purchasers as authorized under the ACA.
2)Establishes as California's EHBs the Kaiser Small Group Health
Maintenance Organization (HMO) plan along with the following
10 ACA mandated benefits:
a) Ambulatory patient services;
b) Emergency services;
c) Hospitalization;
d) Maternity and newborn care;
e) Mental health and substance use disorder services,
including behavioral health treatment;
f) Prescription drugs;
g) Rehabilitative and habilitative services and devices;
h) Laboratory services;
i) Preventive and wellness services and chronic disease
AB 18
Page 4
management; and,
j) Pediatric services, including oral and vision care.
3)Establishes in state government the Exchange, an independent
public entity not affiliated with an agency or department.
Establishes requirements for health plans seeking
certification as QHPs, including that carriers fairly and
affirmatively offer, market, and sell in the Exchange at least
one product within each of five specified levels. Requires
carriers that sell any products outside the Exchange to fairly
and affirmatively offer, market, and sell all products made
available in the Exchange to individuals and small groups
outside the Exchange.
4)Pursuant to the ACA an exchange may not make available any
health plan that is not a QHP. However, each exchange within
a state shall allow an issuer that only provides limited scope
dental benefits meeting specified requirements through their
exchange (either separately or in conjunction with a QHP) if
the plan provides pediatric dental benefits meeting specified
requirements.
5)Pursuant to the ACA exclusion of a pediatric dental EHB
outside of the Exchange is not permitted. Individuals
enrolling outside of the exchange must be offered all 10 EHB
categories, including the pediatric dental benefit.
6)Pursuant to the ACA, in defining EHBs, requires the Secretary
of the federal Department of Health And Human Services to
provide that if a plan, as specified, (related to stand-alone
dental benefits plans) is offered through an exchange, another
health plan offered through such exchange shall not fail to be
treated as a QHP solely because the plan does not offer
coverage of benefits through the stand-alone plan that are
otherwise required. Pursuant to the preamble to specified
regulations package says this is the only exception to the EHB
coverage permitted under the ACA.
7)Pursuant to federal regulations a stand-alone dental plan
covering the pediatric dental EHB must demonstrate that it has
a reasonable annual limitation on cost-sharing as determined
by the exchange. Such annual limit is calculated without
regard to EHBs provided by the QHPs and without regard to
out-of-network services.
AB 18
Page 5
8)Prohibits out-of-pocket limits greater than Health Savings
Accounts (HSAs) in all markets.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . This bill is needed to update
California's EHB law to exempt QHPs in Covered California from
the requirement to offer pediatric oral benefits if there are
stand-alone dental plans participating in the Exchange.
Dental health plans and preferred provider organizations
(PPOs) are concerned about a conflict between state laws and
the ACA and its regulations that may prevent them from
competing with QHPs for pediatric oral enrollment in Covered
California. Further, with the addition of the stand-alone
dental option, consumers choosing a stand-alone dental benefit
in addition to a QHP will have complexities in managing and
tracking the cost-sharing, out of pocket maximums and possible
subsidies associated with the two plans. This bill aims to
make this process as easy as possible for consumers and ensure
the broadest possible consumer protections. This bill also
resolves a conflict in the age associated with pediatric for
purposes of vision and dental EHB coverage. The California
Health Benefits Review Program (CHBRP) issued a report on
March 6, 2013 indicating that Healthy Families (which has been
chosen as the basis for California's pediatric dental benefit)
provides coverage up to age 19. The Blue Cross Blue Shield
(BCBS) Federal Employee Dental and Vision Insurance Program
(FEDVIP) BlueVision plan for vision coverage (which has been
chosen as the basis for California's pediatric vision benefit)
provides coverage up to age 22. Another option is age 26,
which is the age limit for "dependent children" to be allowed
on their parents' insurance according to state law and the
ACA. The federal regulation recommends 19 but allows states
to provide these benefits beyond age 19.
2)BACKGROUND . On March 23, 2010, the federal ACA (Public Law
111-148), as amended by the Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152) became law.
Among many other provisions, the new law makes statutory
changes affecting the regulation of and payment for certain
types of private health insurance. Beginning in 2014,
AB 18
Page 6
individuals will be required to maintain health insurance or
pay a penalty, with exceptions for financial hardship (if
health insurance premiums exceed 8% of household adjusted
gross income), religion, incarceration, and immigration
status. Several insurance market reforms are required, such
as prohibitions against health insurers imposing preexisting
health condition exclusions and a requirement that carriers
offer EHBs in the individual and small group markets. These
reforms impose new requirements on states related to the
allocation of insurance risk, prohibit insurers from basing
eligibility for coverage on health status-related factors,
allow the offering of premium discounts or rewards based on
enrollee participation in wellness programs, impose
nondiscrimination requirements, require insurers to offer
coverage on a guaranteed issue and renewal basis, determine
premiums based on adjusted community rating (age, family,
geography, and tobacco use).
Additionally, by 2014 either a state will establish a separate
exchange to offer individual and small-group coverage or the
federal government will establish one. Exchanges will not be
insurers but will provide eligible individuals and small
businesses with access to private plans in a comparable way.
In 2014 some individuals with income below 400% of the federal
poverty level (FPL) will qualify for credits toward their
premium costs, subsidies, andcost-sharing for insurance
purchased through an exchange. California has established
Covered California, as a state-based exchange that is
operating as an independent government entity with a
five-member Board of Directors.
Beginning in 2014, QHPs will be required to offer coverage at
one of four levels: bronze, silver, gold, or platinum.
Levels will be based on a specified share of full actuarial
value of the EHBs. These plans will be prohibited from
imposing an annual cost-sharing limit that exceeds the
thresholds applicable to HSA-qualified High Deductible Health
Plans (HDHPs). In 2014, the annual out-of-pocket maximum for
an individual is $6,400 and $12,800 for family coverage.
Catastrophic plans are also permitted only in the individual
market for young adults (under age 30) and for those persons
exempt from the individual mandate, but catastrophic plans
must cover EHBs and have deductibles equal to the amounts
specified as out-of-pocket limits for HSA-qualified HDHPs.
Small group health plans providing QHPs will be prohibited
AB 18
Page 7
from imposing a deductible greater than $2,000 for individual
coverage and $4,000 for any other coverage in 2014, adjusted
annually after.
As mentioned, some individuals with income under 400% FPL will
receive advanceable, refundable tax credits toward the
purchase of an Exchange plan. The payment will go directly to
the insurer and will reduce the premium liability for that
individual. Those who qualify for premium credits and are
enrolled in an exchange plan at the silver tier beginning in
2014 and will also be eligible for assistance in paying any
required cost-sharing for their health services. As indicated
above, limitations on Exchange plans related to out-of-pocket
costs will be based upon HDHPs that qualify individuals for
HSAs. Cost sharing subsidies will further reduce those
out-of-pocket maximums by two-thirds for qualifying
individuals between 100% and 200% FPL, by one-half for
qualifying individuals between 201% and 300% FPL, and by
one-third for qualifying individuals between 301% and 400%
FPL.
3)CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT
LETTER . On April 5, 2013, the Center for Consumer Information
and Insurance Oversight (CCIIO), Centers for Medicare and
Medicaid Services (CMS) issued a letter to issuers on
federally-facilitated and state partnership exchanges. The
CCIIO letter includes a chapter on stand-alone dental plans.
The letter indicates that stand alone dental plans are not
subject to the insurance market reform provisions of the ACA
that generally apply to health plans in the individual and
small group markets inside and outside an exchange, such as
guaranteed availability and renewability. However, some
market-wide and exchange-specific provisions in the ACA apply
to stand-alone plans seeking certification as a QHP, including
the prohibition on annual and lifetime dollar limits and
annual limits on cost sharing. Under federal regulations,
rather than meeting the specific dollar limits that apply to
cost sharing for comprehensive medical QHPs, stand-alone
dental plans certified to be offered in an exchange will be
required to demonstrate that they have a reasonable annual
limitation on cost-sharing. The final rule clarified that an
exchange is responsible for determining the level of
"reasonable." For the federal exchange, CMS interprets
reasonable to mean any annual limit on cost sharing that is at
or below $700 for a plan with one child or $1,400 for a plan
AB 18
Page 8
with two or more children.
4)STAND ALONE OUTSIDE . According to the preamble to the final
federal rule, CMS restates that the ACA does not provide for
the exclusion of a pediatric dental EHB outside the exchange.
Therefore, individuals enrolling in health insurance coverage
not offered in an exchange must be offered the full 10 EHB
categories, including the pediatric dental benefit. The
preamble states that an individual can purchase stand-alone
pediatric dental coverage offered by an exchange-certified
stand-alone plan, and when the health insurance carrier is
reasonably assured that the individual has obtained such
coverage, the issuer would not be found non-compliant with the
EHB requirements. This alternate method of compliance is at
the option of the health insurance carrier. The preamble also
indicates that while someone purchasing in the exchange
whether or not he or she has children, can opt not to purchase
a separate stand-alone dental plan, the same option is not
available outside the exchange. Outside the exchange an
individual must be offered coverage of all 10 categories of
EHB, either through one policy (where the dental benefit is
embedded in the health plan), or through a combination of a
medical policy and an exchange-certified stand-alone dental
plan. Many questions have been raised about how this option
would be enforced, which is why this bill does not exempt
health insurance carriers selling products outside of the
exchange from the EHB requirement to provide pediatric oral
benefit. This bill does not prevent stand-alone dental
insurance policies from being available for purchase outside
the exchange, just as is the case in the market today.
5)COST SHARING . With respect to the annual limit on cost
sharing the CCIIO letter indicates where an issuer uses
multiple service providers to help administer benefits
(separate pharmacy benefit manager or behavioral health
organization), new coordination processes may be required to
ensure compliance with the maximum out-of-pocket limits. This
may be necessary where, for example, the plan's service
providers impose different levels of out-of-pocket limitations
and/or use different methods for crediting participants'
expenses against any out-of-pocket maximums.
Additionally, the ACA and implementing regulations exclude
stand-alone dental plans from the cost-sharing reduction
requirements placed on medical QHPs. According to the letter,
AB 18
Page 9
the ACA generally states that any cost sharing reductions that
would be applied to the pediatric dental EHB in a
comprehensive medical QHP will not be applied if the pediatric
dental benefit is provided through a stand-alone dental plan.
The final federal regulations state that a stand-alone dental
plan covering the pediatric dental EHB must demonstrate that
it has a reasonable annual limitation on cost-sharing as
determined by the exchange. Such annual limit is calculated
without regard to EHB provided by the qualified health plan
and without regard to out-of-network services. With regard to
calculation of actuarial value, a stand-alone plan may not use
the federal actual value calculator. The stand-alone dental
plan must demonstrate that it offers the pediatric EHB at
either a low level of coverage with an actuarial value of 70%
or a high level of coverage with an actuarial value of 85%,
and within a de minimis variation of plus or minus two
percentage points of the 70% or 85%.
6)COVERED CALIFORNIA . On April 3, 2013, Covered California
issued "Rules for QHP bidders for Submission of Pediatric
Dental Essential Health Benefit Dental Plans in conjunction
with Qualified Health Plans which provide all Essential Health
Benefits other than Pediatric Dental EHB." In this document,
Covered California indicates that the QHP solicitation
requires all QHP bidders to submit two premium bids: one
inclusive of pediatric dental EHB and one without. The
purpose of this requirement was to provide the Exchange with
the option of selecting stand-alone dental plans which offer
the pediatric dental EHB. Because of final federal rules
issued in February 2013 the Exchange is clarifying bidding
rules. The final federal rules regarding pediatric
stand-alone dental plans allow a separate annual limitation on
cost-sharing to apply to the pediatric dental EHB only if it
is offered by a separate dental plan. The Exchange has
adopted standard benefit plans for the pediatric dental EHB
that include a $1000 annual out-of-pocket maximum and
determined it to be reasonable. This applies to both dental
PPOs and dental HMOs. Covered California states with respect
to QHPs which embed the pediatric dental EHB plan it is clear
that single QHP out-of-pocket maximum would apply to all 10
EHBs including pediatric dental. Therefore, Covered
California is requiring all QHPs to bid the pediatric dental
EHB by bundling with a dental plan partner and is not allowing
AB 18
Page 10
the pediatric dental EHB to be embedded. According to Covered
California, this approach creates administrative and offering
uniformity and avoids the need for QHPs to cross accumulate
all patient cost-sharing, including for dental services, to a
single out-of-pocket maximum which many health plans indicated
they could not accomplish.
7)COVERED CALIFORNIA STANDARD BENEFIT DESIGNS .
-------------------------------------------------------------
|Procedure Categories |PPO High |PPO Low |HMO |HMO |
| |(Plan |(Plan |High |Low |
| |Pays) |Pays) |(copay|(copay|
| | | |s) |s) |
|--------------------------+---------+----------+------+------|
|Diagnostic & Preventive | | | | |
|--------------------------+---------+----------+------+------|
|X-rays, Exams, Cleanings |100% |100% |0 |0 |
|Sealants | | | | |
|--------------------------+---------+----------+------+------|
|Office visit |n/a |n/a |0 |$20 |
|--------------------------+---------+----------+------+------|
|Basic Restorative |80% |50% |$40 |$95 |
|Services | | | | |
|--------------------------+---------+----------+------+------|
|Major Services: Crowns & |50% |50% |$365 |$365 |
|Casts, Prosthodontics, | | | | |
|Endodontics, Peridontics, | | | | |
|Oral Surgery | | | | |
|--------------------------+---------+----------+------+------|
| |Enrollee |Enrollee | | |
| |Pays |Pays | | |
|--------------------------+---------+----------+------+------|
|Medically Necessary |50% |50% |$1,000|$1,000|
|Orthodontics | | | | |
|--------------------------+---------+----------+------+------|
|Deductible |$50 (not |$60 |None |None |
| |applied |(applied | | |
| |to D&P) |to all | | |
| | |services) | | |
|--------------------------+---------+----------+------+------|
|Annual Maximum |None |None |None |None |
|--------------------------+---------+----------+------+------|
|OOP Maximum |$1,000 |$1,000 |$1,000|$1,000|
AB 18
Page 11
| | | | | |
|--------------------------+---------+----------+------+------|
|Waiting periods |None |None |None |None |
|--------------------------+---------+----------+------+------|
|Actuarial Value |86% |72% |87% |72% |
-------------------------------------------------------------
8)PEDIATRIC AGE FOR BENEFITS . AB 1996 (Thomson), Chapter 795,
Statutes of 2002, requests the University of California to
assess legislation proposing a mandated benefit or service,
and prepare a written analysis with relevant data on the
medical, economic, and public health impacts of proposed
health plan and health insurance benefit mandate legislation.
CHBRP was created in response to AB 1996 and extended for four
additional years in SB 1704 (Kuehl), Chapter 684, Statutes of
2006. In a 2013 CHBRP report to the Legislature, "Policy
Brief: Pediatric Dental and Pediatric Vision Essential Health
Benefits" CHBRP points out that the ACA does not specify age
eligibility guidelines for pediatric dental and pediatric
vision EHBs and California law is silent as to the exact age
of enrollees eligible for EHB pediatric dental and pediatric
vision benefits. The two benchmarks specified in AB 1453
(Monning) Chapter 854, Statutes of 2012, and SB 951 (Ed
Hernandez), Chapter 866, Statutes of 2012, for defining the
supplemental benefit packages use two distinct age guidelines.
Healthy Families provides pediatric dental benefits to
beneficiaries up to age 19. BCBS FEDVIP BlueVision plan
provides pediatric vision benefits to enrollees up to age 22.
Therefore, the benefit packages may be made available to
differing age groups. CHBRP indicates that the question of
age eligibility for pediatric EHBs may be resolved by the
federal rule finalized on February 25, 2013, which recommends
that pediatric dental and pediatric vision benefits be
provided to children up to age 19, with a state option to
provide these benefits beyond age 19. CHBRP also adds that
California regulation or legislation may be necessary to
reconcile the differences between the California legislation
passed in September and this federal rule.
9)SUPPORT . The 100% Campaign (a collaborative effort of The
Children's Partnership, Children Now, and Children's Defense
Fund-California) and California Coverage & Health Initiatives
supports this bill because it extends important ACA
protections to consumers who purchase stand-alone dental
plans. This bill would ensure that these limits take into
AB 18
Page 12
account the combined cost of purchasing both a QHP and a
specialized health plan, such as a stand-alone dental plan.
Without this assurance, parents might be less likely to
purchase coverage for pediatric oral care benefits through a
stand-alone dental plan, putting their children at risk for
preventable and costly oral health problems. This bill would
also ensure that specialized health plans, like stand-alone
dental plans, are prohibited from charging unfair premiums.
Among the most significant features of the ACA are its
prohibitions on discriminating against consumers based on
pre-existing conditions. In fact, California passed state
legislation in the last legislative session to ensure health
plans did not discriminate against children's coverage based
on pre-existing conditions. This bill would extend these
protections by requiring that pediatric oral care benefits
provided by specialized health plans also be subject to
guaranteed availability and renewability of coverage,
prohibitions on preexisting condition exclusions or other
forms of discrimination based on health status, prohibitions
on imposing annual or lifetime limits, and a prohibition on
excessive waiting periods. This bill would help ensure that
pediatric oral care in California is both affordable and
available.
Health Access writes in support that it strongly supported
legislation adopted last year to implement EHBs, which
included pediatric dental benefits as required by federal law.
Health Access is very hesitant to allow the offering of any
benefit package which does not include all ten EHBs and would
oppose any measure which allowed the offering of less than the
ten EHBs outside the Exchange. Health Access learned from the
bitter experience of maternity coverage that carriers will
slice and dice benefits if permitted to do so, leaving much of
the market without affordable coverage that included
maternity. Health Access recognizes that today most dental
coverage is sold on a standalone basis. However, reconciling
standalone dental plans with the other consumer protections
already in California law is a real challenge. Health Access
supports the provisions of this bill that apply consumer
protections including timely access, network adequacy, medical
loss ratio to products offered on both the CDI and DMHC side
so that this bill will level the playing field between the two
regulators in terms of standalone dental plans.
10)SUPPORT IF AMENDED . According to the California Association
AB 18
Page 13
of Dental Plans (CADP), this bill will align state law
governing the provision of EHBs inside the Exchange with
federal law by allowing QHPs to exclude the pediatric dental
EHB from its coverage if there is a stand-alone dental plan
providing the pediatric dental benefit in the exchange. This
change to state law will support Covered California's decision
to require QHPs to file two standard benefit designs for use
in the exchange - one with pediatric dental coverage included
and one to be paired with a stand-alone pediatric dental plan
- and provide legal certainty for the DMHC and the CDI in
approving these products. This change will also ensure that
parents buying coverage in the Exchange can choose the plan or
combination of plans that best meets their families' needs
from a broad array of quality medical and dental plans. While
CADP appreciates this bill's alignment with federal law on
this issue inside the Exchange, it is deeply concerned by the
bill's prohibition of the same alignment outside the Exchange.
For their full-service health plan and insurance members,
consistency between inside and outside the exchange is
critical for the functionality of both markets, as well as for
managing the related regulatory requirements efficiently and
effectively. For their stand-alone dental plan and insurance
members, being able to pair their pediatric dental product
with a full-service medical product is necessary for
meaningful participation in the individual and small group
market. Federal ACA guidance issued in late February allows
full-service medical products to be sold without the pediatric
dental benefit outside the Exchange as long as the
full-service plan or insurer has "reasonable assurance" that
the enrollee has the requisite pediatric dental coverage.
CADP would like to see state law aligned with this federal
provision. CADP would also like to note that it has concerns
with the drafting of the most recent amendments to this bill
relating to cost sharing, the age limit for pediatric dental
coverage, the medical loss ratio, and the application of
various provisions of the ACA and Knox-Keene Act, including
rate review, and wishes to continue discussions about its
concerns as this bill moves through the legislative process.
The California Dental Association, which has not indicated a
position on this bill, has raised similar concerns as CADP.
Delta Dental is pleased to support the provisions of the bill
that would apply many of the consumer protections of the ACA
to stand-alone pediatric oral benefit plans. These protections
include prohibitions on pre-existing condition exclusions,
AB 18
Page 14
excessive waiting periods, rescission of policies, annual and
lifetime limits on benefits and discrimination on health
status, as well as provisions requiring guaranteed issue and
renewal of policies. Delta Dental also supports the
application of state law regarding timely access and network
adequacy to stand-alone pediatric dental coverage. Delta's
letter indicates concerns with redundancy of stand-alone
pediatric dental benefit plans in the market outside the
exchange; the requirement for coordination of cost-sharing;
the requirement that pediatric benefits are available to
individuals up to age 26; the medical loss ratio requirement
of 75% (prefer 70%); and subjecting stand-alone plans to rate
review requirements.
11)PREVIOUS LEGISLATION .
a) AB 1453 and SB 951 establish California's EHBs.
b) AB 51 (Alquist), Chapter 644, Statutes of 2011, conforms
California law to provisions of the ACA related to Medical
Loss Ratio requirements on health plan and health insurers
and prohibitions on annual and lifetime benefits.
c) SB 1163 (Leno) Chapter 661, Statutes of 2010, requires
health plans and health insurers to file with DMHC and CDI
specified rate information for individual and small group
coverage at least 60 days prior to implementing any rate
change. Requires rate filings to be actuarially sound and
to include a certification by an independent actuary that
any increase is reasonable or unreasonable. Requires the
filings in the case of large group contracts only for
unreasonable rate increases prior to implementing any such
rate change. Increases, from 30 days to 60 days, the
amount of time that health plan or insurer provides written
noticed to an enrollee or insured before a change in
premium rates or coverage becomes effective. Requires
health plans and insurers that decline to offer coverage to
or deny enrollment for a large group applying for coverage
or that offer small group coverage at a rate that is higher
than the standard employee risk rate to, at the time of the
denial or offer of coverage, provide the applicant with
reason for the decision, as specified.
d) AB 2179 (Cohn) Chapter 1594, Statutes of 2002, requires
DMHC and CDI to develop and adopt regulations to ensure
AB 18
Page 15
that enrollees have access to needed health care services.
12)POLICY COMMENT . Dental plans indicate that access to dental
benefits as part of their overall health coverage and keeping
their family dentist is important to consumers, which is why
the ACA included a pediatric dental benefit as one of the EHBs
and specifically provided for the participation of stand-alone
dental products in the Exchange. According to CADP, consumers
are benefited by having the choice to buy a health policy with
pediatric dental included or to pair a health policy with a
stand-alone pediatric dental policy by the convenience of
going to the same dental office as their children, preserve
relationship with their dentist, and the avoidance of paying
for duplicative pediatric dental coverage if the prefer to
purchase a stand-alone offering. According to CADP, 97% of
consumers with dental coverage today get it through
stand-alone dental policies; two thirds of which are issued by
stand-alone dental plans and one-third by full service medical
plans.
According to the Institute of Medicine, in 2008, 4.6 million
children (one out of every 16 children in the US) did not
receive needed dental care because their families could not
afford it. Arguably, this is the reason why the pediatric
oral benefit was included as a mandated EHB. While excluding
the pediatric oral benefit from the other 9.5 EHBs and
allowing a separate stand-alone plan option may preserve
access to existing relationships for those who have dental
coverage, it also creates disparities when purchasers of the
stand-alone product in the Exchange are compared to those who
will have only an embedded option outside the Exchange. First
it appears, there is no obligation to have pediatric oral
benefit if an individual purchases coverage in the Exchange,
even if the purchaser has a child. The federal regulations
make clear in the Exchange an individual doesn't have to
purchase the pediatric oral benefit if the plan does not offer
it. This is not the case outside the Exchange. Some families
with Exchange coverage, to save money, may choose not to
purchase the benefit. Additionally, because the exchange has
decided there will not be an embedded dental option, and there
will be a separate deductible for the stand-alone dental from
the medical QHP, it effectively results in an overall higher
out-of-pocket maximum for people purchasing coverage in the
Exchange. Outside the Exchange where the pediatric oral
benefit is embedded, there will be one deductible of no more
AB 18
Page 16
than $6,400 for an individual and $12,800 for a family.
Copayments will be coordinated through the plan. Inside the
Exchange where a stand-alone will be offered, there will be an
additional $1,000 added on top of the medical deductible for
purchasers of a stand-alone plan. Added complications and
cost to consumers as a result of trying to make the
stand-alone option work could have the unintended effect of
reducing access to the pediatric oral benefit.
REGISTERED SUPPORT / OPPOSITION :
Support
100% Campaign
California Coverage & Health Initiatives
Children's Defense Fund California
Children Now
Children's Partnership
Health Access California
Opposition
None on file.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097