BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 314
                                                                  Page  1

          Date of Hearing:   April 17, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                      AB 314 (Pan) - As Amended:  April 9, 2013 

          Policy Committee:                              HealthVote:14-5

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill prohibits annual or lifetime benefit limits in a  
          health plan directly operated by a college or university for  
          students and others in the school community, as specified.
           
           FISCAL EFFECT  

          Given the limited role for the Department of Managed Health Care  
          (DMHC) in enforcing just one provision of the comprehensive body  
          of law regulating health plans, this bill's fiscal impact should  
          be minor, probably less than $100,000.  The actual cost depends  
          on the number of plans falling under the bill's provisions and  
          the extent to which any enforcement is needed.

           COMMENTS  

           1)Rationale  . Many colleges and universities provide health  
            coverage to students and these health plans often contain  
            limits in annual and/or lifetime benefits.  A single instance  
            of cancer or another serious illness can leave an insured  
            person underinsured or even uninsured.   Federal health  
            reform, the Affordable Care Act (ACA), generally prohibits the  
            use of benefit caps but the ACA's provisions do not apply to  
            self-funded plans, such as the student plans targeted by this  
            bill.  There is authority under proposed federal regulations  
            for state regulation of these plans, which under current state  
            law are specifically exempt from oversight.  This bill is  
            drafted to create a limited exception to the existing  
            exemption; the exception is applicable only to the issue of  
            benefit limitations.

           2)Background: Student Health Plans and Benefit Limits  .  The  








                                                                  AB 314
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            issue addressed by this bill has drawn media attention due to  
            instances of students facing serious illnesses such as cancer  
            who then discover while undergoing treatment that their  
            insurance does not fully cover the illness. An estimated  
            200,000 to 300,000 students across the country are covered by  
            these health plans.  The University of California' Student  
            Health Insurance Plan (UC SHIP) enrolled more than 138,000 UC  
            undergraduate and graduate students and their dependents in  
            fall 2012. Current benefit caps for UC SHIP include a $400,000  
            lifetime coverage cap and a $10,000 annual prescription drug  
            cap. Since 2010, UC SHIP administrators estimate that 11  
            students surpassed the lifetime benefits cap, and  
            approximately 150 students exceeded the prescription drug  
            benefit cap.  When this bill was heard in the Assembly Health  
            Committee, UC provided testimony indicating the possibility  
            the cap would be raised, although it is not clear at this time  
            when an increase, if it occurs, will be effective. 
           Analysis Prepared by  :    Debra Roth / APPR. / (916) 319-2081