BILL ANALYSIS Ó
AB 2004
Page 1
Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 2004
(Bloom) - As Amended March 9, 2016
SUBJECT: Hearing aids: minors.
SUMMARY: Requires coverage for hearing aids for enrollees or
insureds less than 18 years of age, as specified. Specifically,
this bill:
1)Requires a health care service plan (health plan) contract or
a health insurance policy (health policy) that is issued,
amended, or renewed on or after January 1, 2017, to include
coverage for hearing aids for an enrollee or insured under 18
years of age when medically necessary.
AB 2004
Page 2
2)Includes initial assessment, new hearing aids at least every
five years, new ear molds, new hearing aids if alternations to
the existing hearing aids cannot meet the needs of the child,
a new hearing aid if the existing one is no longer working,
fittings, adjustments, auditory training, and maintenance of
the hearing aids.
3)Defines hearing aid as an electronic device usually worn in or
behind the ear of a deaf and hard of hearing person for the
purpose of amplifying sound.
4)Excludes accident-only, specified disease, hospital indemnity,
Medicare supplement, dental-only, or vision-only health
insurance policies from this bill.
EXISTING LAW:
1)Establishes the Department of Managed Health Care (DMHC) to
regulate health plans and the California Department of
Insurance to regulate health insurers.
2)Requires health plans and insurers providing health coverage
in the individual and small group markets to cover, at a
minimum, essential health benefits (EHBs), including the ten
EHB benefit categories in the Patient Protection and
Affordable Care Act (ACA), and consistent with California's
EHB benchmark plan, the Kaiser Foundation Health Plan Small
Group HMO 30 plan (Kaiser benchmark), as specified in state
law.
AB 2004
Page 3
3)Requires issuers of individual and small group coverage to, at
a minimum, cover EHBs in the following ten categories:
Ambulatory patient services, emergency services,
hospitalization, maternity and newborn care, mental health and
substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and
wellness services and chronic disease management, and
pediatric services, including oral and vision care.
4)Requires health plans to provide basic health care services,
including physician services; hospital inpatient and
ambulatory care services; diagnostic laboratory and diagnostic
and therapeutic radiologic services; home health services;
preventive health services; emergency health care services;
and, hospice care.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. The author states that a child's
ability to hear should not be determined based on family
income. It should be viewed as a fundamental right of choice
to the citizens of our state, especially when the state has a
mandated hearing screening program. To diagnose deafness and
then fail to provide intervention is morally and ethically
unacceptable.
2)BACKGROUND. Every state and territory in the United States
has now established an Early Hearing Detection and
AB 2004
Page 4
Intervention (EHDI) program. The EHDI program staff are
responsible for creating, operating, and continuously
improving a system of services which assures that:
" Every child born with a permanent hearing loss is
identified before three months of age and provided with
timely and appropriate intervention services before six
months of age;
" Every family of an infant with hearing loss receives
culturally-competent family support as desired;
" All newborns have a "medical home;" and,
" Effective newborn hearing screening tracking and data
management systems are linked with other relevant public
health information systems.
The California Department of Health Care Services (DHCS),
Children's Medical Services has implemented a statewide
comprehensive Newborn Hearing Screening Program (NHSP). The
NHSP helps identify hearing loss in infants and guide families
to the appropriate services needed to develop communication
skills. Families of infants delivered in general acute care
hospitals with licensed perinatal services which have been
certified by DHCS to participate in the NHSP will have the
opportunity to have their baby's hearing screened. Infants who
do not pass the screening in the hospital will be referred for
additional testing after discharge. DHCS is contracting with
Hearing Coordination Centers to work with the hospitals in
developing hearing screening programs, to perform quality
assurance activities, and to follow infants who need
additional services.
a) California Health Benefits Review Program (CHBRP)
analysis. AB 1996 (Thomson), Chapter 795, Statutes of
2002, requests the University of California to assess
legislation proposing a mandated benefit or service and
prepare a written analysis with relevant data on the
AB 2004
Page 5
medical, economic, and public health impacts of proposed
health plan and health insurance benefit mandate
legislation. CHBRP was created in response to AB 1996. SB
125 (Hernandez), Chapter 9, Statutes of 2015, added an
impact assessment on essential health benefits, and
legislation that impacts health insurance benefit designs,
cost sharing, premiums, and other health insurance topics.
CHBRP states in its analysis of AB 2004 the following:
i) Enrollees covered. CHBRP estimates that in 2015,
all state-regulated coverage (for 25.2 million
Californians) would be subject to this bill.
ii) Impact on expenditures. CHBRP estimates that
this bill would increase total net annual expenditures
by $3,599,000 in the first year postmandate. While
CHBRP does not anticipate a major increase in
utilization, there would be a shift in costs from
enrollee out-of-pocket expenditures to costs paid by
health plans and policies for children's hearing aids.
Postmandate, CHBRP estimates that premiums would remain
the same or increase per member per month (PMPM) as
follows:
(1) Publicly funded plans (CalPERS HMO, Medi-Cal
managed care plans): $0.00 change PMPM due to current
coverage of hearing aids;
(2) Privately funded DMHC plans: PMPM increases
range from $0.05 in the individual market, $0.10 in
large group, to $0.13 in small group; and,
(3) Privately funded CDI policies: $0.09 PMPM
increase in the individual market, $0.12 PMPM increase
in large group and $0.13 PMPM increase in small group.
iii) EHBs. Coverage required by this bill would
appear to exceed EHBs as this benefit is not included
AB 2004
Page 6
in the state's benchmark plan.
iv) Medical effectiveness. It is generally accepted
that the use of hearing aids improves the hearing of
children with hearing loss. As a result, there have
been few recent studies on the impact of hearing aids
on hearing in children. CHBRP concludes that there is
a preponderance of evidence from studies with
moderately strong research designs that:
Hearing aids are effective in improving speech
outcomes in children. In particular, evidence suggests
that earlier age of fitting with hearing aid is
associated with greater gains in speech outcomes.
Hearing aids are effective in improving language
development outcomes in children. In particular, risk
for language delays in children with hearing loss may
be mitigated from an early age of fitting and
consistent use of hearing aids.
Conversely, there is insufficient evidence that hearing
aids are effective in improving nonverbal outcomes
(e.g., motor behavior) in children. There is
ambiguous/conflicting evidence that hearing aids are
effective in improving personal and social development
outcomes in children
v) Benefit coverage. Currently, CHBRP estimates
that in privately funded plans and policies, about 9%
of enrollees through age 17 have coverage for hearing
aids and services. In publicly funded plans, CHBRP
estimates that 100% of enrollees through age 17 have
coverage for hearing aids and services.
vi) Utilization. Postmandate, CHBRP estimates there
AB 2004
Page 7
would be no change in the average per enrollee cost of
hearing aids and services. CHBRP estimates hearing aids
and services cost on average $2,023 per enrollee, which
includes children who may not have purchased a new
hearing aid in the given year, but may use related
hearing aid services in that year. The average cost per
hearing aid user for their hearing aid and hearing aid
services is approximately $3,566.
vii) Public health. According to CHBRP, hearing loss
may be congenital (present at birth) or acquired later
during childhood. Children may experience hearing loss
in one or both ears, and may require either one or two
hearing aids. Nationwide, hearing loss in one ear
(unilateral) occurs in about 2.7% of adolescents aged
12 to 19 while hearing loss in both ears (bilateral) is
less common at 0.8% of adolescents. This overall
prevalence rate of 3.5% among adolescents includes both
congenital and acquired hearing loss. This hearing loss
range is greater than the moderate-to-severe range for
which hearing aids are most commonly prescribed. CHBRP
projects that AB 2004 would increase the first-time use
of hearing aids and services by 200 children (all in
the privately funded insurance market) in the
first-year postmandate; thus, assuming new coverage is
similar to premandate cost sharing, hearing and speech
and language skills would be expected to improve for
this subset of newly covered children with hearing loss
who were unable to afford hearing aids premandate.
viii) Long-term impacts. It is unknown to what degree
this bill would improve the future educational and
employment outcomes of children who obtain hearing aids
through new coverage. However, it stands to reason that
those who need and use hearing aids at a young age
would experience improved outcomes as compared with no
hearing aid use.
a) Coverage for Hearing Aids. California law requires
AB 2004
Page 8
screening for hearing loss among children, first at birth
in the Newborn Hearing Screening Program and subsequently
at school-age. There is no existing law mandating any kind
of coverage for hearing aids for private insurance.
However, for children 21 and under in Medi-Cal and children
who meet certain qualifications including a qualifying
hearing loss, hearing aids are covered through California
Children's Services (CCS). CCS is a state program that
provides coverage for children under age 21 with certain
eligible physical limitations and chronic health conditions
or diseases, including disorders of the sense organs like
hearing loss. Children may also qualify for CCS by meeting
certain age, residence, medical, and financial
requirements.
Medi-Cal recipients under age 21 must be referred to CCS for
hearing loss services, including hearing aids, both for
fee-for-service and managed care. For Medi-Cal beneficiaries in
county organized health system (COHS) plans, the COHS plans,
rather than CCS, provide hearing services.
b) Similar requirements in other states. Sixteen states
(Colorado, Connecticut, Delaware, Kentucky, Louisiana,
Maryland, Massachusetts, Minnesota,, Mississippi, New
Jersey, New Mexico, North Carolina, Oklahoma, Oregon, and
Tennessee) require that health benefit plans cover hearing
aids for children. Three states - Arkansas, New Hampshire,
and Rhode Island require that plans cover hearing aids for
adults and children. Wisconsin requires coverage for both
hearing aids and cochlear implants for children. Of the 16
states that mandate coverage of hearing aids for children,
California's proposed legislation is most similar to
Colorado's law which requires plans to cover hearing aids
for children younger than 18 years when medically
necessary. Under Colorado's law, coverage includes new
hearing aid(s) every five years, a new hearing aid when
alterations to the existing hearing aid(s) cannot meet the
needs of the child, and services and supplies such as the
initial assessment, fitting, adjustments, and auditory
AB 2004
Page 9
training.
3)SUPPORT. According to the Deaf and Hard of Hearing Service
Center, Inc., the barrier of cost needs to be removed,
primarily because some parents feel forced to choose a more
risky option, which is surgery to implant a cochlear device
that does not guarantee the child will hear. While not every
deaf child can benefit from a hearing device, those who can,
may be able to learn a spoken language. The California
Coalition of Option Schools (CCOS) and the Center for Early
Intervention on Deafness (CEID) state that many children who
are deaf and hard of hearing and their families choose the
most recent advancements in technology, including hearing
aids, as a way to aid them in accessing language and
communication. CCOS and CEID state that timely access to
hearing aids is a critical component to achieving optimal
outcomes for these children.
The National Association of Social Workers, California Chapter
(NASW-CA) state that purchasing hearing aids for children can
be a financial challenge for parents and as children grow so
do their ears. NASW-CA contends that a child's ability to
hear should not be determined by family income and should be
viewed as a fundamental right of choice. NASW-CA states that
existing law mandates a hearing screening for newborns and
when a child is diagnosed with deafness, the state fails to
provide intervention to the child and also fails the parent.
The Greater Los Angeles Agency on Deafness, Inc. writes that
hearing aids are a tool to assist deaf and hard of hearing
children identify sounds if they have some residual hearing
and state that it is critical for deaf and hard of hearing
children be fluent in American Sign Language and English. The
California Coalition of Agencies Service the Deaf & Hard of
Hearing (CCASDHH) states that language involves more than just
communication and with language, individuals can fully develop
their cognitive and neurological functions, thus increasing
their abilities and opportunities to attain their full
potential.
AB 2004
Page 10
4)OPPOSITION. According to the California Association of Health
Plans (CAHP), the Association of California Life and Health
Insurance Companies, and America's Health Insurance Plans
contend that health insurance mandates threaten efforts of all
health care stakeholders to provide consumers with meaningful
health care choices and affordable coverage options. They
state that the ACA requires the state to pay for the increased
cost associated with the mandate for those enrollees who
purchase health insurance on the Exchange. They also state
that benefit mandates eliminate the ability of health insurers
and HMOs to provide unique benefit packages aimed at the needs
of consumers by requiring individuals and employers to
purchase benefits prescribed by the Legislature, not driven by
consumer choice. Finally, they note that health benefit
mandates stifle the use of innovative, evidence based
medicine. The California Chamber of Commerce (CalChamber)
states that when health care issuers are required to cover new
services for all enrollees, premiums for all enrollees and
purchasers go up and this is true if only some enrollees
utilize the mandate. CalChamber states that these costs add
quickly. CalChamber notes that California has statutorily
imposed approximately 30 individual mandates, which helps
explain why the average monthly premium in California is
already more than $75 higher than the average monthly premium
nationally. Additionally, CalChamber notes that these
mandates have reduced health plans' flexibility in benefit
design and reduced employers' choice of benefit packages to
offer their employees.
5)PREVIOUS LEGISLATION.
a) AB 368 (Carter) of 2007 would have required health care
service plans and health insurers, on or after January 1,
2009, to offer, at minimal cost, coverage up to $1,000 for
hearing aids, as defined, to all enrollees, subscribers,
and insureds under 18 years of age. The Governor's veto of
AB 368 noted that the addition of a new mandate, no matter
how small, will only serve to increase the overall cost of
health care and increasing the cost of coverage by
AB 2004
Page 11
mandating benefits, may ultimately leave more children
without any coverage.
b) SB 1223 (Scott) of 2006 would require health care
service plans and health insurers to offer or provide, as
specified, coverage up to $1,000 for hearing aids, as
defined, to all enrollees, subscribers, and insureds under
18 years of age. SB 1223 would have provided that the
coverage would not apply to certain types of insurance. The
Governor vetoed SB 1223 and indicated that the bill may
contribute to rising premiums and make health care less
affordable and accessible for uninsured Californians.
c) SB 174 (Scott, Koretz, and Wiggins) of 2004, would have
required health plans and health insurers to provide
coverage, up to $1,000, for hearing aids, as defined, to
all enrollees and subscribers under 18 years of age. SB
174 was held in Senate Rules Committee.
d) SB 1158 (Scott) of 2004 would have require health care
service plans and health insurers to provide coverage up to
$1,000 for hearing aids, as defined, to all enrollees,
subscribers, and insureds under 18 years of age. SB 1158
would provide that the coverage would not apply to certain
types of insurance. SB 1158 was vetoed by the Governor who
indicated that increasing the cost of health coverage by
mandating benefits, if even by a small amount, would have
the far more serious consequence of leaving some children
without health insurance.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 2004
Page 12
California Coalition of Agencies Servicing the Deaf & Hard of
Hearing
California Coalition of Option Schools
Center for Early Intervention on Deafness
Deaf and Hard of Hearing Service Center, Inc.
Greater Los Angeles Agency on Deafness, Inc.
National Association of Social Workers
Opposition
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
AB 2004
Page 13
California Association of Health Plans
California Chamber of Commerce
Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097