BILL ANALYSIS Ó
AB 2004
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ASSEMBLY THIRD READING
AB
2004 (Bloom)
As Amended May 31, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Health |16-0 |Wood, Maienschein, | |
| | |Bonilla, Burke, | |
| | |Campos, Chiu, | |
| | |Dababneh, Gomez, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Lackey, Nazarian, | |
| | |Olsen, Rodriguez, | |
| | |Santiago, Steinorth, | |
| | |Waldron | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |16-2 |Gonzalez, Bloom, |Bigelow, Jones |
| | |Bonilla, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
AB 2004
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| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Holden, Quirk, | |
| | |Santiago, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Requires coverage for hearing aids for enrollees or
insureds less than 18 years of age, as specified. 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. 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. Makes coverage inoperative if
the state becomes fiscally liable for hearing aid coverage
provided to adults. Sunsets coverage on January 1, 2019.
Includes legislative intent to explore alternate approaches to
ensure the continuation of broad coverage of pediatric hearing
benefits without incurring ongoing state costs.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)According to the California Health Benefits Review Program
(CHBRP):
a) No cost to Medi-Cal (General Fund (GF)/federal) nor
California Public Employees' Retirement System, as hearing
aids are already covered.
b) Increased employer-funded premium costs in the private
insurance market of approximately $13 million.
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c) Increased premium expenditures by employees and
individuals purchasing insurance of $7.1 million, and
reduced total out-of-pocket expenses of $16.5 million
(based on $19.5 million in newly covered benefits, offset
by cost-sharing of $3 million).
These costs would only be incurred for the operative date of
the mandate, until January 1, 2019, assuming coverage was no
longer provided.
2)Minor costs to the California Department of Insurance
(Insurance Fund) and the Department of Managed Health Care
(Managed Care Fund) to verify plans and insurers comply with
this requirement.
3)This bill is likely to exceed the essential health benefits
and result in a cost to the state to defray expenditures on
behalf of enrollees in Covered California (CoveredCA) plans to
which this mandate would apply. This essentially means the
state would pay for hearing aids on behalf of anyone enrolled
in CoveredCA. These costs could be as high as $1.8 million GF
for 2017 and 2018, assuming costs must be defrayed for
small-group and individual enrollees in CoveredCA plans. The
mandate expires in 2019 and the state would not incur costs to
defray the costs of exceeding essential health benefits (EHBs)
beyond this date.
4)Recent state regulatory action in other states indicated a
broad federal ban on age discrimination in insurance coverage
invalidates age limits for coverage of hearing aids. If
similar logic applied in California, the state would be
required to pay for hearing aids for adults as well. Federal
regulations issued on May 16, 2016 clarifying
antidiscrimination provisions do not apply to state mandates
may resolve this concern.
COMMENTS: The author states that a child's ability to hear
should not be determined based on family income. It should be
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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.
CHBRP Analysis. CHBRP estimates that in 2015, all
state-regulated coverage (for 25.2 million Californians) would
be subject to this bill. Coverage required by this bill would
appear to exceed EHBs as this benefit is not included in the
state's benchmark plan. 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.
Postmandate, CHBRP estimates there 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.
Coverage for Hearing Aids. California law requires 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
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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.
Similar Requirements in Other States. Sixteen states 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.
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 Association of Health Plans, 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.
Analysis Prepared by:
Kristene Mapile / HEALTH / (916) 319-2097 FN:
0003286
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