BILL ANALYSIS Ó
SB 43
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SENATE THIRD READING
SB
43 (Hernandez)
As Amended August 17, 2015
Majority vote
SENATE VOTE: 37-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Health |17-1 |Bonta, Maienschein, |Patterson |
| | |Bonilla, Burke, | |
| | |Chávez, Chiu, Gomez, | |
| | |Gonzalez, Roger | |
| | |Hernández, Lackey, | |
| | |Nazarian, Rodriguez, | |
| | |Santiago, Steinorth, | |
| | |Thurmond, Waldron, | |
| | |Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bloom, Bonta, | |
| | |Calderon, Chang, | |
| | |Nazarian, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
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| | |Jones, Quirk, Rendon, | |
| | |Wagner, Weber, Wood | |
| | | | |
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SUMMARY: Updates California law related to the definition of
essential health benefits (EHBs) to make it consistent with
recent federal regulations under the Patient Protection and
Affordable Care Act (ACA). Specifically, this bill:
1)Updates existing law to reflect that, for plan years
commencing on or after January 1, 2017, the following :
a) The Kaiser Foundation Health Plan Small Group HMO 30
plan as offered during the first quarter of 2014 (rather
than 2012) is California's EHB benchmark.
b) For pediatric vision care, the Federal Employees Dental
and Vision Insurance Program (FEDVIP) as offered during the
first quarter of 2014 (rather than 2012) is California's
benchmark; and,
c) For pediatric oral care, the dental benefit received by
children under Medi-Cal program as of 2014 is California's
benchmark.
2)Replaces, for plan years commencing on or after January 1,
2016, the existing definition of "habilitative services" with
the federal definition, and prohibits, for plan years
commencing on or after January 1, 2017, limits on habilitative
and rehabilitative services and devices from being combined.
3)Extends emergency regulation authority for the Department of
Managed Health Care (DMHC) and the California Department of
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Insurance (CDI) and makes this authority inoperative on July
1, 2018.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill results in:
1)One-time costs of $150,000 to revise regulations and ensure
policy compliance by CDI (Insurance Fund).
2)One-time costs of $350,000 to revise regulations and ensure
plan compliance by DMHC (Managed Care Fund).
3)No anticipated impact to state health care program such as
Medi-Cal or California Public Employees' Retirement System
(CalPERS). This bill's provisions make minor changes to
statute governing the individual and small group health care
markets, which do not include those programs.
4)No cost to the state to provide subsidies for additional costs
to Covered California plans, due to the change to the
definition of habilitative services. Recent federal guidance
indicates that states are not obligated to defray any
additional subsidy costs in health benefit exchanges due to a
change to the definition of habilitative services.
COMMENTS: According to the author, in 2012, the Legislature
established California's benchmark EHB plan through a process
that recognized the importance of existing state-mandated
benefits incorporating as many state mandates as possible;
protecting California's commitment to reproductive services;
embracing the consumer-oriented regulatory framework in place at
DMHC; and maintaining affordability for consumers. Using these
principles and through a process of comparison, SB 951 (Ed
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Hernandez), Chapter 866, Statutes of 2012, paired with AB 1453
(Monning), Chapter 854, Statutes of 2012, designated the Kaiser
Small Group health maintenance organization (HMO) to serve as
the state's benchmark plan. The author states that, earlier
this year, the federal government issued new regulations
requiring states to update their EHBs based on 2014 benchmark
plans. The new regulations also create a definition of
habilitative services and devices that is more generous than
California's current definition. The author states that this
bill has been introduced to make statutory changes necessary to
conform to federal requirements.
Under the ACA, plans and policies sold in the individual and
small group markets are required to ensure coverage of EHBs,
which include items and services within the following 10
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.
States have the flexibility to select a benchmark plan that
reflects the scope of services offered by a "typical employer
plan." In 2012, the state selected the 2012 Kaiser Foundation
Health Small Group HMO 30 plan as the state's base benchmark
plan. To supplement the base-benchmark plan in the areas of
pediatric vision and pediatric oral services, the state selected
the FEDVIP and CHIP (formerly referred to as the Healthy
Families Program (HFP)), respectively.
Recent federal regulations require state to use 2014 plans to
define EHB, starting with the 2017 plan year. This bill updates
the current Kaiser Small Group HMO 30 and FEDVIP benchmark plans
to the 2014 products. Additionally, the 2012-13 state Budget
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required the transition of children enrolled in the HFP to the
Medi-Cal program. As such, CHIP-eligible children are now
covered under Medi-Cal. For the purposes of selection of the
state's CHIP program to supplement the base-benchmark plan,
dental benefits provided under the Medi-Cal program serves as
the benchmark for pediatric dental benefits. This bill replaces
an outdated reference to HFP, with a reference to the Medi-Cal
program, with respect to pediatric dental benefits.
Supporters of the bill state that the current definition of EHBs
assure comprehensive health benefits, and assert that by
conforming to the federal definition of "habilitative services"
this bill will provide comprehensive habilitative services thus
helping get families and children the care they need.
The California Insurance Commissioner Dave Jones, orthotics and
prosthetics providers, and other provider and consumer
stakeholders support this bill, if amended, to select the Kaiser
CalPERS HMO for the state's EHB benchmark plan because it
provides a slightly broader benefit package that includes
coverage for hearing aids, infertility treatment, and certain
prosthetic and orthotic devices.
There is no opposition on file.
Analysis Prepared by:
Kelly Green / HEALTH / (916) 319-2097 FN:
0001654
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