BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                  SB 1182
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          SB 1182 (Leno)
          As Amended August 22, 2014
          Majority vote

           SENATE VOTE  :21-12  
           HEALTH              13-6        APPROPRIATIONS      12-5        
          |Ayes:|Pan, Ammiano, Bonilla,    |Ayes:|Gatto, Bocanegra,         |
          |     |Bonta, Chesbro, Gomez,    |     |Bradford,                 |
          |     |Gonzalez,                 |     |Ian Calderon, Campos,     |
          |     |Roger Hernández,          |     |Eggman, Gomez, Holden,    |
          |     |Lowenthal, Nazarian,      |     |Pan, Quirk,               |
          |     |Ridley-Thomas, Rodriguez, |     |Ridley-Thomas, Weber      |
          |     |Wieckowski                |     |                          |
          |     |                          |     |                          |
          |Nays:|Maienschein, Chávez,      |Nays:|Bigelow, Donnelly, Jones, |
          |     |Mansoor, Waldron,         |     |Linder, Wagner            |
          |     |Patterson, Wagner         |     |                          |
          |     |                          |     |                          |
           SUMMARY  :  Requires health plans and insurers to share specified  
          data with purchasers that have 1,000 or more enrollees or that  
          are multiemployer trusts.  Specifically,  this bill  :  

          1)Requires a health plan or insurer annually to provide  
            deidentified claims data at no charge to a large group  
            purchaser upon request, if the purchaser is able to  
            demonstrate its ability to comply with state and federal  
            privacy laws and is either an employer with enrollment of  
            greater than 1,000 covered lives or a multiemployer trust.  

          2)Requires health plans and insurers to obtain a determination  
            by a qualified statistician that the claims data do not  
            provide a reasonable basis from which to identify an  
            individual.  Provides that data that a statistician is unable  
            to determine has been deidentified shall not be shared under  
            this bill.  Allows a health plan to provide the claims data in  
            an aggregated form as necessary to comply state and federal  
            privacy laws.

          3)Makes the information shared not subject to public  


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            availability, as specified.  Deems data shared under this bill  
            confidential information that shall not be shared by state  
            regulators and is exempt from disclosure under the California  
            Public Records Act.

          4)As an alternative to providing claims data under 1) above,  
            requires a health plan or insurer to provide:  deidentified  
            aggregated data sufficient for the purchaser to compare costs  
            of similar services from other health plans or insurers; and  
            deidentified aggregated patient level data that includes  
            demographics and encounter data, including data used to  
            experience rate the group, as specified.  Requires the health  
            plan or insurer, for purposes of this requirement, to obtain a  
            formal determination, in writing, from a qualified  
            statistician that the shared data do not provide a reasonable  
            basis from which to identify an individual.  

           FISCAL EFFECT  :  Unknown.  This bill, as amended, has not been  
          analyzed by a fiscal committee. 

           COMMENTS  :  The author writes the rising cost of health care is a  
          major concern for employers in California, and the lack of  
          transparency in pricing for the large group market has  
          contributed to uncontrolled cost increases for large employers  
          and union trusts.  This bill is intended to bring transparency  
          to this market for purchasers in an effort to control costs.

          According to the Medical Expenditure Panel Survey (MEPS), a  
          survey of employers conducted by the United States Census Bureau  
          that collects information on employer-sponsored health  
          insurance, premiums for employer-based coverage have increased  
          significantly over the past decade.  MEPS data from 2012 show  
          the average annual premium for individual private sector  
          employer coverage in California is $5,422, an 85% increase since  
          2002.  For family coverage, the average premium was $15,898, a  
          90% increase since 2002.  For comparison, prices for goods and  
          services increased 27.6% during this period, according to the  
          Bureau of Labor Statistics' Consumer Price Index.

          The California Labor Federation (Labor Fed), a co-sponsor of  
          this bill, writes that rising health care costs are taking a  
          toll on employers, workers, and union trust funds.  The Labor  
          Fed argues every dollar that large purchasers have to put toward  
          health coverage is a dollar that comes out of workers' pockets,  
          with employers increasingly shifting costs to workers by  


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          increasing cost sharing and the use of high-deductible plans.   
          The Labor Fed argues that this bill's requirement for health  
          plans to disclose claims data to large purchasers will help  
          those purchasers understand health care cost drivers, institute  
          cost savings programs, and bargain effectively with health  
          plans.  The California Teachers Association, in support, argues  
          the data provided under this bill will be an essential tool in  
          the bargaining process, one that has the potential to free up  
          funds for use in the classroom.

          Kaiser Permanente, in opposition to a prior version of this  
          bill, argues that it currently provides very robust information  
          to its large group purchasers, and suggests this bill  
          inappropriately inserts the Legislature into private and  
          voluntary contractual discussions between plans and purchasers.   
          The California Association of Health Underwriters (CAHU), also  
          in opposition to a prior version, argues that health plans  
          currently go to great lengths to provide as much information as  
          possible to all size group purchasers to help them evaluate  
          coverage options for their workers in the highly competitive  
          group market.  CAHU argues that this bill's data sharing  
          requirements are not necessary and that, by creating new  
          administrative costs, this bill has the potential to raise  
          premium costs.  

           Analysis Prepared by  :    Ben Russell / HEALTH / (916) 319-2097 

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