Amended in Senate April 17, 2013

Senate Bill No. 18

Introduced by Senator Hernandez

(Principal coauthor: Senator Monning)

December 3, 2012

An act begin insert to amend Section 127660 of the Health and Safety Code, end insert relating to health care begin delete coverage, and declaring the urgency thereof, to take effect immediately end delete .

LEGISLATIVE COUNSEL’S DIGEST

SB 18, as amended, Hernandez. begin delete Individual health care coverage. end delete begin insert California Health Benefits Review Program: health insurance. end insert

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Existing law requests the University of California to establish the California Health Benefits Review Program to assess legislation proposing to mandate a benefit or service or to repeal a mandated benefit or service, and to prepare a written analysis with relevant data on specified areas, including public health, medical impacts, and financial impacts.

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This bill would include essential health benefits and the impact on the California Health Benefit Exchange in the areas to be reported on by the California Health Benefits Review Program.

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Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA) enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual. PPACA prohibits a group health plan and a health insurance issuer offering group or individual health insurance coverage from imposing any preexisting condition exclusion with respect to that plan or coverage. PPACA allows the premium rate charge by a health insurance issuer offering small group or individual coverage to vary only by family composition, rating area, age, and tobacco use, as specified, and prohibits discrimination against individuals based on health status.

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Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and the regulation of health insurers by the Insurance Commissioner. Existing law requires plans and insurers offering coverage in the individual market to comply with certain requirements, including that they offer coverage for a child on a guarantee issue basis.

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This bill would state the intent of the Legislature to enact legislation that would reform the individual health care coverage market consistent with the PPACA.

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This bill would declare that it is to take effect immediately as an urgency statute.

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Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 127660 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

127660.  

(a) The Legislature hereby requests the University of
California to establish the California Health Benefit Review
Program to assess legislation proposing to mandate a benefit or
service, as defined in subdivision (c), and legislation proposing to
repeal a mandated benefit or service, as defined in subdivision (d),
and to prepare a written analysis with relevant data on the
following:

(1) Public health impacts, including, but not limited to, all of
the following:

(A) The impact on the health of the community, including the
reduction of communicable disease and the benefits of prevention
such as those provided by childhood immunizations and prenatal
care.

(B) The impact on the health of the community, including
diseases and conditions where gender and racial disparities in
outcomes are established in peer-reviewed scientific and medical
literature.

(C) The extent to which the benefit or service reduces premature
death and the economic loss associated with disease.

(2) Medical impacts, including, but not limited to, all of the
following:

(A) The extent to which the benefit or service is generally
recognized by the medical community as being effective in the
screening, diagnosis, or treatment of a condition or disease, as
demonstrated by a review of scientific and peer reviewed medical
literature.

(B) The extent to which the benefit or service is generally
available and utilized by treating physicians.

(C) The contribution of the benefit or service to the health status
of the population, including the results of any research
demonstrating the efficacy of the benefit or service compared to
alternatives, including not providing the benefit or service.

(D) The extent to which mandating or repealing the benefits or
services would not diminish or eliminate access to currently
available health care benefits or services.

(3) Financial impacts, including, but not limited to, all of the
following:

(A) The extent to which the coverage or repeal of coverage will
increase or decrease the benefit or cost of the benefit or service.

(B) The extent to which the coverage or repeal of coverage will
increase the utilization of the benefit or service, or will be a
substitute for, or affect the cost of, alternative benefits or services.

(C) The extent to which the coverage or repeal of coverage will
increase or decrease the administrative expenses of health care
service plans and health insurers and the premium and expenses
of subscribers, enrollees, and policyholders.

(D) The impact of this coverage or repeal of coverage on the
total cost of health care.

(E) The potential cost or savings to the private sector, including
the impact on small employers as defined in paragraph (1) of
subdivision (l) of Section 1357, the Public Employees’ Retirement
System, other retirement systems funded by the state or by a local
government, individuals purchasing individual health insurance,
and publicly funded state health insurance programs, including
the Medi-Cal program and the Healthy Families Program.

(F) The extent to which costs resulting from lack of coverage
or repeal of coverage are or would be shifted to other payers,
including both public and private entities.

(G) The extent to which mandating or repealing the proposed
benefit or service would not diminish or eliminate access to
currently available health care benefits or services.

(H) The extent to which the benefit or service is generally
utilized by a significant portion of the population.

(I) The extent to which health care coverage for the benefit or
service is already generally available.

(J) The level of public demand for health care coverage for the
benefit or service, including the level of interest of collective
bargaining agents in negotiating privately for inclusion of this
coverage in group contracts, and the extent to which the mandated
benefit or service is covered by self-funded employer groups.

(K) In assessing and preparing a written analysis of the financial
impact of legislation proposing to mandate a benefit or service and
legislation proposing to repeal a mandated benefit or service
pursuant to this paragraph, the Legislature requests the University
of California to use a certified actuary or other person with relevant
knowledge and expertise to determine the financial impact.

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(4) The impact on essential health benefits, as defined in Section
1367.005 and Section 10112.27 of the Insurance Code, and the
impact on California Health Benefit Exchange.

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(b) The Legislature requests that the University of California
provide every analysis to the appropriate policy and fiscal
committees of the Legislature not later than 60 days after receiving
a request made pursuant to Section 127661. In addition, the
Legislature requests that the university post every analysis on the
Internet and make every analysis available to the public upon
request.

(c) As used in this section, “legislation proposing to mandate a
benefit or service” means a proposed statute that requires a health
care service plan or a health insurer, or both, to do any of the
following:

(1) Permit a person insured or covered under the policy or
contract to obtain health care treatment or services from a particular
type of health care provider.

(2) Offer or provide coverage for the screening, diagnosis, or
treatment of a particular disease or condition.

(3) Offer or provide coverage of a particular type of health care
treatment or service, or of medical equipment, medical supplies,
or drugs used in connection with a health care treatment or service.

(d) As used in this section, “legislation proposing to repeal a
mandated benefit or service” means a proposed statute that, if
enacted, would become operative on or after January 1, 2008, and
would repeal an existing requirement that a health care service
plan or a health insurer, or both, do any of the following:

(1) Permit a person insured or covered under the policy or
contract to obtain health care treatment or services from a particular
type of health care provider.

(2) Offer or provide coverage for the screening, diagnosis, or
treatment of a particular disease or condition.

(3) Offer or provide coverage of a particular type of health care
treatment or service, or of medical equipment, medical supplies,
or drugs used in connection with a health care treatment or service.

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SECTION 1.  

It is the intent of the Legislature to enact
legislation to reform the individual health care coverage market
consistent with the federal Patient Protection and Affordable Care
Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152).

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SEC. 2.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to update state law consistent with federal requirements
at the earliest possible time, it is necessary that this bill take effect
immediately.

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