BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 22 (Beall) - Health care coverage: mental health parity.
Amended: April 2, 2013 Policy Vote: Health 9-0
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: SB 22 would require health plans and health
insurers to submit annual reports to their regulators certifying
their compliance with state and federal mental health parity
requirements.
Fiscal Impact:
One-time costs of about $190,000 for adoption of
regulations by the Department of Managed Health Care
(Managed Care Fund).
Potential ongoing costs of about $180,000 for follow-up
surveys and enforcement activities by the Department of
Managed Health Care (Managed Care Fund). To the extent that
the required reports indicate that health plans are not
complying with state and federal requirements, the
Department would likely have to conduct follow-up surveys of
plan participants and potentially take enforcement actions.
The Department anticipates that, on average, it will need to
perform these actions for at least one health plan per year.
One-time costs of $160,000 for the adoption of regulations
by the Department of Insurance (Insurance Fund).
Ongoing enforcement costs of $90,000 by the Department of
Insurance (Insurance Fund). The Department indicates that it
does not anticipate significant enforcement costs. However,
should the required reports indicate that mental health
parity requirements are not being met, there may be costs to
investigate those issues and enforce current parity
requirements.
Background: Current state law requires health plans and health
insurers who provide hospital, medical, or surgical coverage to
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provide coverage for the diagnosis and treatment of severe
mental illness (as specified in statute). In addition, health
plans and health insurers are required to provide additional
coverage for serious emotional disturbances of a child. In both
cases, coverage is required to be provided under the same terms
and conditions applied to other medical conditions.
Under current federal law, health plans and health insurers that
offer coverage for mental health or substance abuse disorders
are required to provide that coverage under the same terms and
conditions as other covered benefits.
Collectively, these requirements are referred to as "mental
health parity" requirements.
Under current state law, health plans are regulated by the
Department of Managed Health Care and health insurers are
regulated by the Department of Insurance.
Proposed Law: SB 22 would require health plans and health
insurers to submit annual reports to their regulators certifying
their compliance with state and federal mental health parity
requirements.
Specifically, the bill would:
Require the reports to be made available to the public and
authorize the regulating department to hold public hearings
on the reports.
Require the reports to analyze the health plan or health
insurers compliance with the requirements of state and
federal law as well as compliance with specified mental
health parity standards developed by a specific third party
commission.
Require health plans and health insurers to conduct surveys
of enrollees and providers.
Exempt Medi-Cal contracts from these requirements.
Staff Comments: Both regulators have indicated that health plans
and health insurers have not always complied with mental health
parity requirements, for example by denying coverage for certain
treatments for mental illness. Based on these indications, it
seems likely that there will be some ongoing enforcement
activity by the regulators as the reporting requirements of this
bill provide the regulators with information on non-compliance
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with mental health parity requirements.