BILL ANALYSIS Ó SB 923 Page 1 Date of Hearing: June 29, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 923 (Hernandez) - As Amended May 31, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|17 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill prohibits health care service plans and health insurance carriers from changing cost-sharing requirements during a plan or policy year in the individual and small-group markets. FISCAL EFFECT: Costs to Department of Managed Health Care and California Department of Insurance are expected to be minor and absorbable, SB 923 Page 2 if any (Managed Care Fund/Insurance Fund). COMMENTS: 1)Purpose. The author explains one of the many individual market reforms California enacted while implementing the ACA was a provision that prohibited plans and insurers from altering premiums during the plan year. This essential patient protection, while meaningful on its own, does not currently apply to cost-sharing requirements such as deductibles, co-payments, and coinsurance. This bill is sponsored by Health Access, is supported by a number of health, legal, and consumer advocacy groups, and has no opposition. 2)Background. The health insurance market is comprised of large-group, small-group, and individual segments. Large-group purchasers are generally large and sophisticated entities, such as employers, government agencies, and labor unions. Most provisions of the federal Affordable Care Act reformed the individual and small-group markets, whose purchasers were less able to negotiate reasonable prices and protections. This bill expands on existing protections in the ACA and California state law, which include limits on cost-sharing, guaranteed issuance of coverage regardless of preexisting conditions, and standardized, easily comparable benefit structure for health plans and policies. 3)Prior Legislation. a) SB 639 (Hernandez, Chapter 316, Statutes of 2013) placed in California law, provisions of the ACA relating to cost-sharing limits, coverage levels, and other requirements. SB 923 Page 3 b) ABX1 2 (Pan, Chapter 1, Statutes of 2013) and SBX1 2 (Hernandez, Chapter 2, Statutes of 2013) establish health insurance market reforms contained in the ACA specific to individual purchasers. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081