BILL ANALYSIS Ó AB 1254 Page 1 Date of Hearing: April 28, 2015 ASSEMBLY COMMITTEE ON HEALTH Rob Bonta, Chair AB 1254 (Grove) - As Amended April 6, 2015 SUBJECT: Health care service plans: abortion coverage. SUMMARY: Provides that a health care service plan (plan) is not required to include abortion as a covered benefit, and would prohibit the Director of the Department of Managed Health Care (DMHC) from denying, suspending, or revoking a plan's license, or from otherwise imposing discipline on a plan, if the plan excludes coverage for abortions. EXISTING LAW: 1)Establishes the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), which provides for the licensure and regulation of health care service plans by DMHC. 2)Requires a health plan contract to provide to enrollees "basic health care services" defined as: a) Physician services; b) Hospital inpatient services and ambulatory care services; c) Diagnostic laboratory and diagnostic and therapeutic radiologic services; AB 1254 Page 2 d) Home health services; e) Preventive health services; f) Emergency health care services, as specified; and, g) Hospice care. 3)Provides that the Director of the DMHC may, for good cause, by rule or order, exempt a plan contract or any class of plan contracts from the requirement to provide basic health care service either unconditionally, upon specified terms and conditions, or for specified periods of time, if the Director finds the action to be in the public interest and not detrimental to the protection of enrollees, and that the regulation of the plan contracts is not essential to the purposes of Knox-Keene Act. 4)Establishes the California Reproductive Privacy Act, which provides that the state shall not deny or interfere with a women's right to choose or obtain an abortion prior to viability of the fetus, or when the abortion is necessary to protect the life or health of the woman, and makes legislative findings and declarations that every individual possesses a fundamental right of privacy with respect to personal reproductive decisions, and that every woman has the fundamental right to choose to bear a child or to choose and to obtain an abortion, as specified. FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee. COMMENTS: 1)PURPOSE OF THIS BILL. According to the author, no one, especially religious organizations with moral objections, should be forced to pay for abortions in their health care plans. The author states that, not only is this an unconscionable assault on our most fundamental freedoms, it flagrantly violates federal law. The author argues that AB 1254 Page 3 unelected state officials knew about this federal requirement, but decided to break the law instead, and as a result, California could lose tens of billions in federal health care dollars for this violation hurting people throughout the state who depend on that money. The author argues that California exempts certain religious employers from requirements to include contraception coverage in their health plans, but this exemption does not exist for abortions. The author concludes that this bill will ensure that a health plan is not required to include abortion as a covered benefit, and prohibit DMHC from taking disciplinary action on, or denying a license to, a plan that excludes coverage for abortion. 2)BACKGROUND. a) Knox-Keene Act coverage requirements. The Knox-Keene Act requires coverage of basic health care services, which include physician services, inpatient hospital services, ambulatory care services, outpatient hospital services, and preventive services. Plans are required to provide these basic health care services to its enrollees where medically necessary. Existing regulations further define basic health care services, and specify that they must include a variety of family planning services. Applying the American Medical Association's definition of "medical necessity," any legal abortion clearly qualifies, as the procedure is a clinically appropriate health care service provided by a prudent physician to treat pregnancy. b) Relevant case law. Over four different terms, beginning in 1978, California's Budget Act changed provisions in the California Constitution that limited Medi-Cal coverage for abortion, yet still covered the medical expenses of indigent women who carried their child to term. The Committee to Defend Reproductive Rights filed suit in 1978, arguing that the denial of this coverage was a violation of California's constitutional right to privacy. The Superior Court agreed, ruling in Committee to Defend Reproductive Rights v. Myers, 29 Cal.3d 252 (1981) (CDRR v. Myers), "By virtue of the explicit protection afforded an individual's AB 1254 Page 4 inalienable right of privacy by Article I, Section 1 of the California Constitution?the decision whether to bear a child or to have an abortion is so private and so intimate that each woman in this state - rich or poor - is guaranteed the constitutional right to make that decision as an individual, uncoerced by governmental intrusion." The court held that the abortion funding restrictions in the Medi-Cal program, which resulted in the funding of childbirth but not abortion, infringed the woman's exercise of her right of procreative choice. There is nothing to suggest that the state's regulatory authority for health care service plans is not subject to the same constitutional principle as its funding authority. c) Federal law. The Federal Hyde Amendment is a legislative provision barring the use of certain federal funds to pay for abortions except if a pregnancy arises from incest or rape. The requirement is renewed annually as a "rider" that, in various forms, has been routinely attached to annual appropriations bills since 1976. The Hyde Amendment applies only to funds allocated by the annual appropriations bill for the Department of Health and Human Services and primarily affects Medicaid. The cutoff of federal Medicaid funds prompted some states to provide public funding for abortion services from their own budgets, without federal funding. Over time the number of states doing so has gradually expanded, either through legislation or consequent to judicial rulings mandating equal access to health care for low-income women. As of 2007, 17 of the 50 states provide such funding; four of these states provide such funds voluntarily and 13 of these states do so pursuant to a court order. California is one of the 13 states that does so by court order, per CDRR v. Myers. d) Recent DMHC actions. In August 2014, DMHC sent letters to seven plans it determined had language in their AB 1254 Page 5 contracts that may discriminate against women by limiting or excluding coverage for termination of pregnancies. The letters were issued after it became known that two California universities limited employee coverage for abortions only to those necessary to protect a woman's health. In the letter, DMHC stated that it had erroneously approved or failed to object to the discriminatory language in the plans' evidence of coverage filings. DMHC reminded plans that the Knox-Keene Act "requires the provision of basic health care services, and that the California Constitution prohibits health plans from discriminating against women who choose to terminate a pregnancy." DMHC also stated, "?all health plans must treat maternity services and legal abortion neutrally." Additionally, DMHC stated that exclusions and limitations on abortion coverage are incompatible with the California Reproductive Privacy Act and multiple court rulings that have "unambiguously established under the California Constitution that every pregnant woman has the fundamental right to choose to either bear a child or to have a legal abortion." DMHC also clarified that a plan is not required to cover abortions that would be considered unlawful. DMHC directed the plans to review all current plan documents to ensure they are compliant with the Knox-Keene Act with regard to legal abortion, including any plan documents previously approved or not rejected by the department. DMHC also required plans to amend health plan documents to remove discriminatory coverage exclusions and limitations, including but not limited to, any exclusion of coverage for "voluntary" or "elective" abortions and/or any limitation of coverage to only "therapeutic" or "medically necessary" abortions. AB 1254 Page 6 3)SUPPORT. The California Right to Life Committee, Inc. (CRLC) states that this bill recognizes that under the Patient Protection and Affordable Care Act, a licensee does not have to provide abortion as essential benefit coverage. Further, the CRLC states that this bill offers a choice to a licensee who may choose to exclude or restrict abortion coverage, but would not prohibit any health insurance companies from offering this coverage. CRLC argues that California citizens should have the opportunity to select health care service plans in keeping with their medical needs and ethical values, and insurance companies should not be discriminated against for not including abortion coverage. 4)OPPOSITION. Opponents state that abortion is a health condition requiring medical care, and abortion, like childbirth, is an individual decision that a woman may make about how to treat her pregnancy. Opponents argue that abortion is a legally and constitutionally protected medical option: under the California Constitution, the government cannot weigh a woman's decision to carry a pregnancy to term or obtain an abortion, and under state law the state may not interfere with a woman's right to choose or obtain an abortion. Opponents assert that if the state required plans to cover childbirth, but not abortion, it would weight a woman's individual decision about how to treat her pregnancy, and interfere with her right to choose any legally available and medically necessary treatment for pregnancy. Opponents contend that the state must treat abortion and childbirth neutrally, and cannot require insurance coverage of the medical expenses for women who decided to continue a pregnancy, while excluding coverage for abortion. Further, opponents cite CDRR v. Myers which disallows Medi-Cal program from excluding coverage for abortions defined as not medically necessary while subsidizing all other prenatal and delivery expenses, and argues that DMHC is subject to the same constitutional principle. Opponents argue that plans are required to cover basic health care services, which includes a "variety of voluntary family planning services" which AB 1254 Page 7 encompasses abortion, and that any legal abortion qualifies under Knox-Keene's medical necessity criteria, which triggers coverage, because the procedure is a clinically appropriate service provided by a physician to treat pregnancy. 5)PREVIOUS LEGISLATION. a) AB 2336 (Grove) of 2014, would have prohibited a person from performing, or attempting to perform an abortion if they know the pregnant woman is seeking the abortion on account of the gender of the unborn child. AB 2336 failed passage in the Assembly Health Committee. b) ACA 5 (Grove), of 2014, would have prohibited, except in the case of an emergency, a physician from performing an abortion on an unemancipated minor unless the physician has notified one of her parents, or a judge has granted the unemancipated minor a waiver of the notification requirement. ACA 5 failed passage in the Assembly Health Committee. REGISTERED SUPPORT / OPPOSITION: Support California Right to Life Committee, Inc. AB 1254 Page 8 Capitol Resource Institute Faith and Public Policy Opposition American Civil Liberties Union of California National Health Law Program Planned Parenthood Advocacy Project Los Angeles Planned Parenthood Affiliates of California Planned Parenthood Mar Monte Planned Parenthood Northern California Action Fund Planned Parenthood of Orange and San Bernardino Counties Planned Parenthood Pasadena and San Gabriel Valley Planned Parenthood of Santa Barbara, Ventura & San Luis Obispo Counties Analysis Prepared by:Paula Villescaz/Kelly Green / HEALTH / (916) 319-2097 AB 1254 Page 9