BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, 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) Page 1 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.