BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2081

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          Date of Hearing:  April 12, 2016

                            ASSEMBLY COMMITTEE ON HEALTH

                                   Jim Wood, Chair

          AB 2081  
          (Grove) - As Amended March 18, 2016

          SUBJECT:  Health care service plans:  abortion coverage.

          SUMMARY:  Provides that a health care service plan (health 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 otherwise sanction or discriminate against a health  
          plan, if the health plan excludes coverage for abortions.   

          EXISTING LAW:  

          1)Regulates health plans under the Knox-Keene Health Care  
            Service Plan Act (Knox-Keene) of 1975 through the 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  
             c)   Diagnostic laboratory and diagnostic and therapeutic  
               radiologic services;
             d)   Home health services;
             e)   Preventive health services;


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             f)   Emergency health care services, as specified; and,
             g)   Hospice care.

          3)Allows the Director of DMHC to, 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.

          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.

          5)Mandates the 10 federally required essential health benefits  
            (EHBs) in the individual and small group market and  
            establishes the Kaiser Small Group health plan as California's  
            EHB benchmark plan.

          FISCAL EFFECT:  This bill has not yet been analyzed by a fiscal  



          1)PURPOSE OF THIS BILL.  According to the author, DMHC changed  
            its policy and threatened to punish any insurance company who  


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            sold policies without elective abortion coverage when DMHC  
            notified all private health plans in California that all  
            health care plans issued in the state must immediately cover  
            elective abortions and DMHC interpreted "basic health care  
            services" to require coverage for all abortions.  The author  
            contends that it did this despite the fact that nothing in  
            California law or in the state constitution requires private  
            health plans to cover abortion, and despite the federal law  
            which forbids this type of discrimination.  The author argues  
            that the state of California is at risk for losing billions of  
            dollars in federal funding for violating federal law.

            The author indicates that seven California churches, with the  
            help of the Life Legal Defense Foundation and Alliance  
            Defending Freedom have filed a complaint with the U.S.  
            Department of Health and Human Services Office for Civil  
            Rights (HHS OCR) asking the agency to enforce federal law,  
            which outlaws discrimination against health insurance plans  
            that do not include abortion.

            The author states that ironically, California exempts certain  
            religious employers, allowing them to not include  
            contraceptive coverage in their health-care plans, but this  
            exemption does not exist for abortions.  According to DMHC, it  
            has approved a religious employer exemption with respect to  
            abortion coverage for employers that meet the Act's definition  
            of religious employer.  


             a)   Knox-Keene.  Knox-Keene requires coverage of basic  
               health care services, which includes physician services,  
               inpatient hospital services, ambulatory care services,  
               outpatient hospital services, and preventive services.   
               Health plans are required to provide these basic health  
               care services to its enrollees when medically necessary.   
               Existing regulations further define basic health care  
               services, and specify that they must include a variety of  
               family planning services. 


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             b)   Recent DMHC actions.  In August 2014, DMHC sent letters  
               to seven health plans it determined had language in their  
               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  

               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 Knox-Keene "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 health plans to review all current plan  
               documents to ensure they are compliant with Knox-Keene 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"  


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             c)   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  
               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  
               plans is not subject to the same constitutional principle  
               as its funding authority.

             d)   Federal law.  The Federal Hyde Amendment (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 Hyde Amendment  
               applies only to funds allocated by the annual  
               appropriations bill for the U.S. 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  


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               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.  

             e)   Federal investigation.  U.S. Department of Health and  
               Human Services Office for Civil Rights (HHS OCR) opened an  
               investigation into DMHC's 2014 decision to require all  
               health plans to cover abortions.  HHS OCR is responsible  
               for enforcing the Weldon Amendment.  The Weldon Amendment  
               allows the government to withhold federal funding from any  
               federal, state, or local entities that discriminate against  
               doctors, hospitals or health plans that choose not to offer  
               or cover abortion services.  At a congressional hearing in  
               February 2016, the HHS Secretary indicated that the HHS  
               OCR's investigation is not yet complete.  

          3)SUPPORT.  The California Catholic Conference, Inc. (CCI)  
            states that proponents of abortion are trying to force their  
            view on Catholic Institutions and other faith-based healthcare  
            organizations.  CCI contends that the federal law does not  
            enact such a rule and mandates at least one plan be available  
            in each state that excludes most abortion coverage.  

          4)OPPOSITION.  The National Health Law Program states that this  
            bill would violate California constitutional law, statutory  
            law, jurisprudence, and would deprive women of access to the  
            reproductive health care they are entitled to seek.  NARAL  
            Pro-Choice California contends that insurance plans should  
            treat termination of pregnancy and childbirth neutrally and  
            offer full coverage of comprehensive reproductive health care  
            services.  Planned Parenthood states that if the state  
            required health plans to cover childbirth, but not abortion,  
            it would weight a woman's individual decision about how to  
            treat her pregnancy and would interfere with the exercise of  
            her right to obtain an abortion.  The American Civil Liberties  
            Union of California (ACLU) writes that pregnancy is a health  
            condition requiring medical care and abortion, like  
            childbirth, is an individual decision that a woman may make  


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            about how to treat her pregnancy.  Additionally, ACLU states  
            that the concept that only certain abortions are medically  
            necessary is a relic of criminal abortion law that was  
            outdated when the Knox-Keene was passed in the 1970s and is in  
            conflict with current California constitutional and statutory  


             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  

             c)   AB 1254 (Grove), of 2015, would have provided that a  
               health plan is not required to include abortion as a  
               covered benefit, and would prohibit the 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.   AB 1254 failed passage in the  
               Assembly Health Committee.   




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          California Catholic Conference, Inc.

          American Civil Liberties Union of California
          American Congress of Obstetricians and Gynecologists, District  

          Naral Pro-Choice California 

          National Health Law Program 

          Planned Parenthood

          Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097