BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 18|
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CONSENT
Bill No: SB 18
Author: Hernandez (D)
Amended: 4/17/13
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 5/1/13
AYES: Hernandez, Anderson, Beall, De León, DeSaulnier, Monning,
Nielsen, Pavley, Wolk
SUBJECT : California Health Benefits Review Program: health
insurance
SOURCE : Author
DIGEST : This bill requests the California Health Benefits
Review Program (CHBRP) assess, in addition to the health,
medical, and financial impacts, the impact that health coverage
mandates will have on essential health benefits (EHBs), as
specified, and the California Health Benefits Exchange (Covered
California).
ANALYSIS :
Existing federal law:
1. Requires health plans and health insurers that offer coverage
in the small group or individual market to ensure that
coverage includes the EHB package.
2. Requires, under the Patient Protection and Affordable Care
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Act (ACA), as amended by the Health Care Education and
Reconciliation Act of 2010, each state, by January 1, 2014,
to establish an American Health Benefit Exchange (Exchange)
that makes qualified health plans (QHPs) available to
qualified individuals and qualified employers.
Existing state law:
1. Provides for regulation of health insurers by the Department
of Insurance under the Insurance Code and provides for the
regulation of health plans by the Department of Managed
Health Care (DMHC) pursuant to the Knox-Keene Health Care
Service Plan Act of 1975.
2. Requires health plans to cover a number of basic health care
services and permits DMHC to define the scope of the services
and to exempt plans from the requirement for good cause.
3. Establishes Covered California as California's Health Benefit
Exchange to facilitate the purchase of QHPs by qualified
individuals and qualified small employers by January 1, 2014.
4. Designates the Kaiser Small Group HMO as California's
benchmark plan to serve as the EHB standard.
5. Requests the University of California (UC) to establish the
CHBRP to assess, within 60 days of receiving a request by the
Legislature, legislation proposing to mandate or repeal a
health plan or health insurance benefit or service for public
health, medical, and financial impacts.
6. Requires health plans, except specialized health plans, and
health insurers, for fiscal years 2010-11 to 2014-15, to be
assessed an annual fee to fund the UC program, as specified,
not to exceed $2 million.
7. Sunsets the UC program on January 1, 2015.
This bill requests CHBRP assess, in addition to the health,
medical, and financial impacts, the impact that health coverage
mandates will have on EHBs, as specified, and Covered
California.
Background
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CHBRP . Since 2004, CHBRP has analyzed 89 bills, 41 of which
were passed by the Legislature and enrolled to the Governor, of
which 32 were vetoed. Eight bills analyzed by CHBRP became law.
Federal health care reform . On March 23, 2010, President Obama
signed the ACA into law. Beginning in 2014, individuals will be
required to maintain health insurance or pay a penalty, with
exceptions. These reforms impose new requirements on states
related to the allocation of insurance risk, among other
provisions.
Essential Health Benefits . Effective January 1, 2014, the ACA
also requires Medicaid benchmark and benchmark-equivalent plans,
plans sold through the Exchange and the Basic Health Program (if
enacted), and health plans and health insurers providing
coverage to individuals and small employers to ensure coverage
of EHBs, as defined by the Secretary of the Department of Health
and Human Services. Under federal law, EHBs must include 10
general categories and the items and services covered, as
specified.
Covered California . Through SB 900 (Alquist, Chapter 659,
Statutes of 2010) and AB 1602 (Perez, Chapter 655, Statutes of
2010), California was the first state in the nation to establish
a Health Benefit Exchange (now called Covered California). An
estimated 2.3 million California residents will enroll in a
health plan through Covered California by 2017.
Prior legislation
SB 1704 (Kuehl, Chapter 684, Statutes of 2006) extended the
sunset date of the UC program to January 1, 2011, and expands
the scope of the UC program to review legislation that repeals
mandated insurance benefits, as specified.
AB 1540 (Assembly Health Committee, Chapter 298, Statutes of
2009) extends the sunset date of the UC program to June 30,
2015.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
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SUPPORT : (Verified 5/1/13)
California Association of Health Plans
ARGUMENTS IN SUPPORT : The author's office states as of
January 1, 2014, the ACA will require most forms of health care
coverage to cover EHBs so that consumers will be certain that
products they purchase are comprehensive.
The author's office claims adding additional mandates not only
complicates implementation of the ACA, but also has the
potential to impose costs on the General Fund. The author's
office states that in addition to the information already
provided by CHBRP, this bill ensures that the Legislature has a
complete picture of the overall impact of health benefit
mandates by requiring an analysis of how these mandates will
affect Covered California as well as our EHB law.
The California Association of Health Plans (CAHP) writes in
support that implementation of the ACA, the establishment of
EHBs, and the development of standardized benefits means that
new mandate proposals must be analyzed with broader implications
in mind. CAHP states that several new laws proposed this session
may impact the work of Covered California and health plans in a
way that could complicate the October 2013 open enrollment
period for Covered California.
JL:d 5/7/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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