BILL ANALYSIS Ó
AB 369
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 369 (Pan)
As Amended February 18, 2014
2/3 vote. Urgency
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|ASSEMBLY: |78-0 |(January 30, |SENATE: |32-0 |(March 6, |
| | |2014) | | |2014) |
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Original Committee Reference: HEALTH
SUMMARY : Allows a person with health coverage in the individual
market whose health plan or policy was cancelled between
December 1, 2013, and March 31, 2014, to request that his or her
new health plan or insurance policy cover the completion of
services for treatment of specified conditions, such as cancer
or pregnancy, from the person's existing provider who is not a
participating provider with the new health plan or policy.
Contains an urgency clause to ensure that the provisions of this
bill go into immediate effect upon enactment.
The Senate amendments:
1)Allow enrollees that switch from a health plan regulated by
the Department of Managed Health Care (DMHC) to an insurance
policy regulated by the California Department of Insurance
(CDI), and vice versa, to receive continuity of care under
this bill.
2)Clarify that, for purposes of this bill, a nonparticipating
provider is a provider that does not have a contract with a
health plan or insurer to provide services under an enrollee's
health plan or an insured's policy.
3)Require a provider who agrees to provide services to an
insured in a CDI-regulated policy under this bill to accept
the reimbursement, as specified, as payment in full and not
bill the insured for any excess amount, with the exception of
copayments and deductibles.
4)Clarify that a provider's agreement to contractual terms and
conditions and acceptance of payment rates to continue
services to an insured under this bill shall not be construed
as an agreement for any other insureds or services, nor shall
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it be construed as an agreement to any other contract.
5)Delete language stating the intent of the Legislature that a
provider whose services are continued under a CDI-regulated
policy under this bill accept the reimbursement required by
this bill as payment in full and not bill the insured for any
excess amount.
6)Make several minor, technical changes.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)One-time costs of about $120,000 in 2013-14 and $110,000 in
2014-15 to CDI for enforcement and consumer assistance
(Insurance Fund).
2)One-time costs of about $15,000 in 2013-14 and $80,000 in
2014-15 to DMHC for enforcement and consumer assistance
(Managed Care Fund).
3)No anticipated impact on the Medi-Cal program. Under current
law and practice, Medi-Cal managed care plans are already
required to provide continuity of care for new enrollees as
would be required under this bill.
COMMENTS : According to the author, California's continuity of
care laws, which create an opportunity for a patient to complete
treatment with their existing provider under certain conditions
when the provider's contract is terminated with a health
plan/insurer or when a health plan enrollee is forced to choose
a new plan, leave out people who lose plans/policies of health
insurance coverage in the individual market, including people
whose policies have been cancelled because the policies are not
compliant with the Patient Protection and Affordable Care Act
(ACA). This bill is intended to fix deficiencies in existing
law as soon as possible so that people currently undergoing
treatments have the opportunity to maintain access to their
providers during this transition to new coverage under the ACA.
This bill also makes consistent continuity of care provisions in
the Health and Safety Code, which governs DMHC-regulated
entities and the Insurance Commissioner, which governs CDI
regulated entities.
On March 23, 2010, the federal ACA (Public Law (P.L.) 111-148),
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as amended by the Health Care and Education Reconciliation Act
of 2010 (P.L. 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.
Several insurance market reforms are required, such as
prohibitions against health insurers imposing preexisting health
condition exclusions. Many of these reforms took effect January
1, 2014, including the imposition of nondiscrimination
requirements, requirements that health plans and insurers offer
coverage on a guaranteed issue and renewal basis, and determine
premiums based on adjusted community rating (age, family,
geography, and tobacco use).
Under the ACA, states were allowed to either establish a
separate health insurance exchange to offer individual and
small-group coverage or rely on a new federal 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. California has also
enacted legislation to incorporate most of the federal insurance
market reforms into state law, including a requirement that
coverage issued, amended, or renewed on or after January 1,
2014, be compliant with ACA reforms such as guaranteed issue,
premium limits, and use of a single risk pool for determining
rates.
On May 7, 2013, Covered California adopted model contract
requirements that require participating plans, also known as
Qualified Health Plans (QHPs), to terminate all non-ACA
compliant policies effective December 31, 2013. QHPs began
sending out cancellation letters to their enrollees and insureds
in late September. The Commissioner of CDI did not approve the
termination of policies of two companies under CDI's
jurisdiction, indicating that the cancellations were not in
compliance with notice requirements of existing law. For people
insured by these companies, cancellation periods were extended
to allow for adequate notice. As such these policy
cancellations are permitted to take place by February and March
of 2014.
On November 14, 2013, the President announced and the federal
Center for Consumer Information and Insurance Oversight issued a
policy giving insurers the option to offer renewals to people in
noncompliant plans who were enrolled on October 1, 2013.
However, implementation was deferred to states and is subject to
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state law.
It is estimated that approximately 900,000 individuals will be
affected by these plan cancellations in California. However,
half will be able to obtain more affordable, more comprehensive
coverage with premium rate reductions. It is believed that 25%
of these individuals will be able to obtain more comprehensive
coverage at premium rates comparable to what they would have
paid for comprehensive coverage without the ACA. Another 50,000
people will be losing access to their existing plans because of
insurance carriers withdrawing from California's individual
market. Approximately 20,000 of those individuals are expected
to be eligible for federal subsidies. Covered California's
governing board chose to maintain its policy (with the exception
of the two CDI regulated carriers) because they determined that
for the vast majority of Californians ACA coverage is better
coverage. A special consumer assistance unit was established to
help consumers through this transition.
Health Access California supports this bill because it provides
continuity of care protections to Californians facing
cancellation of health insurance as a result of the
implementation of the consumer protections in the ACA. In the
world prior to the ACA, consumers obtaining coverage as
individuals were subjected to medical underwriting which made it
unlikely that someone receiving care for a serious or acute
condition or in the midst of pregnancy would be able to obtain
coverage at any price. The new rules prohibiting denials of
coverage based on pre-existing conditions mean that consumers in
the midst of care can change individual coverage without fear of
being locked out of coverage. The California Association of
Physician Groups, in support, writes that this bill will create
a mechanism to ensure that these affected Californians maintain
their active course of treatment through their transition into
the newly created Covered California QHPs. Without this bill,
these patients will not have continuity of care rights. Simply
put, it will ensure that people won't fall through the cracks in
the system. Western Center on Law and Poverty supports this
bill because it is critical that treatment not be interrupted
for enrollees during these transitions to new coverage.
Consumers Union, in support, writes that the ACA created a sea
change for consumers obtaining non-group coverage, and the
important continuity of care protections also should apply to
the newly reformed individual market.
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Opposition: None on file.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0003054