BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          SB 746 (Leno) - Health care coverage: premium rates.
          
          Amended: April 30, 2013         Policy Vote: 7-2
          Urgency: No                     Mandate: Yes
          Hearing Date: May 13, 2013      Consultant: Brendan McCarthy
          
          This bill does not meet the criteria for referral to the  
          Suspense File.
          
          
          Bill Summary: SB 746 would require health plans in the large  
          group market to annually provide specified information to the  
          Department of Managed Health Care. The bill would also require  
          certain health plans to provide additional information to the  
          Department and to provide claims data to a large group  
          purchaser, upon request.

          Fiscal Impact: Minor ongoing costs to review rate filings by the  
          Department of Managed Health Care (Managed Care Fund).

          Background: Under current law, the Department of Managed Health  
          Care regulates health plans. Current law requires health plans  
          in the individual and small group markets to provide certain  
          information regarding rate increases to the Department annually.  
          In the large group market, current law requires health plans to  
          submit certain information on rate increases to the Department  
          for unreasonable rate increases. The federal government has not  
          provided guidance on what constitutes unreasonable rate  
          increases in the large group market and the Department has not  
          adopted regulations to implement this provision of law.

          Proposed Law: SB 746 would require health plans in the large  
          group market to annually provide specified information on  
          covered beneficiaries and detailed information regarding rate  
          increases to the Department of Managed Health Care.

          The bill would require health plans that contract with no more  
          than two medical groups to provide specific information on cost  
          increases to the Department. 

          In addition, those health plans would also, upon request of a  
          large group purchaser, be required to provide to claims data or  








          SB 746 (Leno)
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          equivalent information. 

          Related Legislation: 
              SB 1163 (Leno, Statutes of 2010) requires health plans and  
              insurers in the small group and individual markets to file  
              specified rate information. The bill also requires health  
              plans and insurers in the large group market to provide  
              information in the case of unreasonable rate increases, as  
              defined by the federal government.
              AB 52 (Feuer, 2011) would have required health plans and  
              health insurers to apply for prior approval of proposed rate  
              increases. AB 52 died on the Senate Floor.
              AB 2578 (Jones and Feuer, 2010) would have required health  
              plans and health insurers to file a complete rate  
              application with regulators for a rate increase and would  
              have prohibited excessive rate increases.  AB 2578 died on  
              the Senate Floor.

          Staff Comments: At this time the only health plan in the state  
          that would be impacted by the requirements on health plans that  
          contract with no more than two medical groups is Kaiser  
          Permanente.