BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 2299 (Nazarian) - Developmental services: health insurance
copayments, coinsurance, and deductibles.
Amended: August 4, 2014 Policy Vote: Human Services 4-0
Urgency: No Mandate: No
Hearing Date: August 11, 2014
Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2299 would broaden the eligibility for regional
centers to pay copayments, coinsurance, and/or deductibles
associated with private insurance coverage on behalf a regional
center consumer.
Fiscal Impact: It is uncertain how many regional center
consumers would be eligible to have copayments, coinsurance, or
deductibles paid on their behalf under the bill. The bill
broadens eligibility to have such payments made by a regional
center by making the requirement that the service or support be
necessary to prevent institutionalization one of several
criteria that would allow payments to be made (rather than that
requirement being a prerequisite for potentially making such
payments). Additionally, the bill would allow regional centers
to make payments on a consumer's behalf if doing so would
prevent the consumer from being dropped from private health care
coverage. It is not known how many consumers fall into either of
those categories. The following cost estimates are based on the
current population receiving behavioral health treatments, the
current costs to the regional centers to pay for copayments and
deductibles, and assume that 30 percent to 50 percent of
consumers with family incomes over 400 percent of the federal
poverty level receive payments authorized in the bill.
Ongoing administrative costs from $3 million to $5 million
per year for regional centers to review consumer eligibility
under the bill and to process reimbursements to consumers
for copayments, coinsurance, and deductibles (General Fund
and federal funds).
Ongoing costs from $2 million to $3 million per year for
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regional centers to pay copayments and coinsurance costs for
services and supports provided to consumers with family
incomes over 400 percent of the federal poverty level who
are not currently eligible for such payments (General Fund
and federal funds).
Unknown costs for regional centers to pay for deductibles
charged for services and supports provided to consumers with
family incomes over 400 percent of the federal poverty level
who are not currently eligible for such payments (General
Fund and federal funds). The regional centers have only
recently been authorized to pay consumers' deductibles.
Therefore, no information is available about the average
cost to do so. Given the variety of health care coverage
benefit designs available, it is difficult to project the
costs to make such payments. However, if a significant
number of consumers who are eligible for payments under the
bill have health care coverage with a high deductible, the
annual costs could be in the tens of millions per year.
Potential avoided costs to the regional centers from $5
million to $10 million per year, providing that the payments
made by regional centers under the bill allow consumers to
keep their private health care coverage. There are
indications that some consumers have dropped their private
health care coverage, rather than pay high copayments,
coinsurance, or (particularly) deductibles. If a consumer
drops his or her private health care coverage then the
regional center becomes responsible for paying the entire
cost services and supports the consumer is entitled to. If 5
percent to 10 percent of eligible consumers were to drop
their private coverage, the costs to the regional centers
would be $5 million to $10 million per year.
Background: California provides community-based services to
approximately 250,000 persons with developmental disabilities
and their families through a statewide system of 21 regional
centers. Regional centers are private, nonprofit agencies under
contract with the Department of Developmental Services for the
provision of various services and supports to people with
developmental disabilities. As a single point of entry, regional
centers provide diagnostic and assessment services to determine
eligibility; convene planning teams to develop an Individual
Program Plan for each eligible consumer; and either provide or
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obtain from generic agencies appropriate services for each
consumer in accordance with the Individual Program Plan.
Over the past several years, there have been a number of medical
entities that have concluded that intensive behavioral
treatments are effective in treating children and adults with
autism. There are a several different types of behavioral health
treatment. One of the best-known and most commonly accepted as
being an evidence-based practice is Applied Behavioral Analysis.
Current state law (SB 946, Steinberg, Statutes of 2011)
specifically requires health plans and health insurers to cover
behavioral health therapy for pervasive development disorder or
autism. Under current law, behavioral health treatment includes
Applied Behavior Analysis and other evidence-based behavior
intervention programs. Because state law now mandates coverage
for behavioral health treatment, private insurers and health
plans are now responsible for paying for treatments that had
previously been paid for by regional centers.
Under current law, regional center consumers and their families
are not required to share in the costs of service for behavioral
health treatments provided by regional center vendors. As
consumers with private health care coverage have shifted to
receiving behavioral health treatment from private health care
coverage, consumers and their families have become liable to pay
for copayments, coinsurance, and/or deductibles required by
their coverage. Advocates have raised the issue that this
requirement has imposed a financial hardship on many families,
as the high cost of behavioral health treatments can result in
significant out-of-pocket expenditures by consumers and their
families.
As part of the 2013 Budget Act, the state authorized regional
centers to pay copayments and/or coinsurance for consumers whose
family income is up to 400 percent of the federal poverty level.
The recently enacted 2014 Budget Act expanded this eligibility
to include the payment of deductibles for consumers whose family
income is up to 400 percent of the federal poverty level.
In addition, current law authorizes regional centers to pay for
copayments, coinsurance, and/or deductibles on behalf of
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consumers whose family income exceeds 400 percent of the federal
poverty level if certain conditions are met. Specifically, those
payments can be made if the services is necessary to maintain
the consumer at home or in the least-restrictive setting and if
1) there is an extraordinary that impacts the family's ability
to make the payments, or 2) there is a catastrophic loss that
limits the family's ability to make the payments, or 3) the
family has significant unreimbursed medical costs associated
with the consumer or another child.
Proposed Law: AB 2299 would broaden the eligibility for regional
center consumers to have copayments, coinsurance, and/or
deductibles associated with private insurance coverage paid on
behalf of the consumer by a regional center.
Specifically, the bill would:
Delete the requirement that payments can only be made by a
regional center on behalf of a consumer with family income
over 400 percent of the federal poverty level only if the
service is necessary to maintain the consumer in the home or
in the least restrictive setting;
Authorize regional centers to make payments on behalf of
consumers with family incomes over 400 percent of the
federal poverty level if the services or support is
necessary to maintain the consumer in the home or least
restrictive setting;
Authorize regional centers to make payments on behalf of
consumers with family incomes over 400 percent of the
federal poverty level if the payments made by the regional
center will allow the consumer to maintain health care
coverage (i.e. the payments will prevent the consumer from
dropping his or her private coverage due to the inability to
pay the copayments, coinsurance, or deductibles).
Related Legislation:
SB 163 (Hueso, 2013) would have required regional centers
to pay any copayment, coinsurance, or deductible required
for services or supports provided to a regional center
consumer by private health care coverage. That bill was held
on this committee's Suspense File.
AB 2041(Jones) would define the professional activities and
the educational and training requirements necessary for
vendorization by a regional center as a Behavior Management
Assistant or a Behavior Management Consultant. That bill is
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on this committee's Suspense File.
Staff Comments: The bill authorizes regional centers to make
payments to pay for copayments, coinsurance, or deductibles if
such payments will maintain the consumer's private health care
coverage. In other words, a regional center may make payments if
the consumer is likely to drop his or her private health care
coverage if the regional center does not cover those costs. The
intention of this change to current law is to prevent consumers
from being dropped from their private coverage because they
cannot afford the cost sharing associated with expensive
services, such as behavioral health treatments. In practice, it
will be very difficult for regional centers to determine which
consumers are likely to drop coverage if they do not receive
such payments. The regional centers are likely to be put in a
position where they will have to analyze the income and
household budget information from a consumer's family to
determine how likely the family is to maintain the private
health care coverage without payments from the regional center
for copayments, coinsurance, or deductibles.