BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1305 (Bonta) - Limitations on cost sharing: family coverage
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|Version: June 25, 2015 |Policy Vote: HEALTH 8 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 17, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1305 would require out-of-pocket expenditure limits
and deductibles for family health plan or health insurance
coverage to include out-of-pocket expenditure limits and
deductibles for each individual member of the family that are no
more than the amounts allowed for individual coverage.
Fiscal
Impact:
One-time costs of about $440,000 for policy development and
adopting regulations and ongoing costs of about $340,000 per
year for the Department of Managed Health Care to update
policies and respond to public information requests (Managed
Care Fund).
One-time costs of about $40,000 in 2015-16 and $45,000 in
2016-17 to review plan filings for compliance by the
Department of Insurance (Insurance Fund). Ongoing costs are
expected to be minor.
AB 1305 (Bonta) Page 1 of
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No significant costs to the Medi-Cal program or for health
care coverage provided by CalPERS are anticipated. According
to the California Health Benefits Review Program, health plans
and health insurance policies provided by Medi-Cal and CalPERS
are already compliant with the requirements of the bill and
therefore would not experience any increased costs.
Background: Beginning in 2014, under the federal Patient Protection and
Affordable Care Act (Affordable Care Act), total annual
out-of-pocket expenditures for health care coverage in the
individual, small group, and health benefit exchange markets is
limited to roughly $6,000 for an individual and $13,000 for a
family. In addition, annual deductibles in the small group
market are generally limited to $2,000 for an individual and
$4,000 for a family.
Under current practice, health plans and health insurance
products can include both individual out-of-pocket maximums and
deductibles as well as family out-of-pocket maximums and
deductibles. For example, a health plan for a family of four
could have individual deductibles of $1,500 as well as an
aggregated family deductible of $3,000. The family's health plan
could require both the individual deductible and the family
deductible to be met before the health plan coverage begins. For
example, if only one member of the family needed significant
medical care, that individual could need to pay for medical
services up to $3,000 (the family deductible) before coverage
began. Whereas, if that member of the family purchased similar
coverage as an individual, he or she may only have to pay $1,500
before coverage began.
According to the California Health Benefit Review Program, about
98% of health care coverage in the state is already compliant
with the requirements of the bill. There are a small number of
high-deductible health plans that have aggregated deductibles or
out-of-pocket maximums for family members.
Proposed Law:
AB 1305 would require out-of-pocket expenditure limits and
deductibles for family health plan or health insurance coverage
to include out-of-pocket expenditure limits and deductibles for
each individual member of the family that are no more than the
AB 1305 (Bonta) Page 2 of
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amounts allowed for individual coverage.
Implementation of the bill's provisions relating to deductibles
in large group coverage would go into effect on July 1, 2016.
Related
Legislation:
AB 339 (Gordon) would restrict outpatient prescription drug
cost-sharing, require coverage for specified drugs under
certain circumstances, and standardize tiers for prescription
drug coverage. That bill will be heard in this committee.
SB 639 (Hernandez, Statutes of 2014) codified federal
requirements relating to out-of-pocket maximum cost-sharing.
Staff
Comments: The only costs that may be incurred by a local agency
relate to crimes and infractions. Under the California
Constitution, such costs are not reimbursable by the state.
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