BILL NUMBER: AB 88	ENROLLED
	BILL TEXT

	PASSED THE ASSEMBLY   SEPTEMBER 10, 1999
	PASSED THE SENATE   SEPTEMBER 9, 1999
	AMENDED IN SENATE   SEPTEMBER 8, 1999
	AMENDED IN SENATE   AUGUST 17, 1999
	AMENDED IN ASSEMBLY   FEBRUARY 24, 1999

INTRODUCED BY   Assembly Member Thomson
   (Principal coauthor:  Senator Perata)
   (Coauthors:  Assembly Members Alquist, Aroner, Cardoza, Corbett,
Davis, Dickerson, Dutra, Frusetta, Granlund, Hertzberg, Jackson,
Knox, Kuehl, Lempert, Longville, Lowenthal, Machado, Mazzoni, Migden,
Papan, Romero, Scott, Shelley, Steinberg, Strom-Martin,
Villaraigosa, Washington, Wayne, and Wright)
   (Coauthors:  Senators Alpert, Chesbro, Escutia, Ortiz, Rainey,
Solis, and Vasconcellos)

                        DECEMBER 10, 1998

   An act to add Section 1374.72 to the Health and Safety Code, and
to add Section 10144.5 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 88, Thomson.  Health care coverage:  mental illness.
   Under existing law, a disability insurer or health care service
plan may not discriminate based on race, color, religion, national
origin, ancestry, marital status, or sexual orientation.  A
disability insurer or health care service plan is also prohibited
from refusing to insure a person or from charging a different premium
or rate because of that person's blindness.
   This bill would require a health care service plan contract or
disability insurance policy issued, amended, or renewed on or after
July 1, 2000, to provide coverage for the diagnosis and medically
necessary treatment of severe mental illnesses, as defined, of a
person of any age, and of serious emotional disturbances of a child,
under the same terms and conditions applied to other medical
conditions.  This bill would allow a health care service plan or
disability insurer to provide the required mental health coverage
through a separate specialized health care service plan or mental
health plan subject to certain conditions, as specified.  The bill
would exempt from the provision relating to a health care service
plan contract, a contract between the State Department of Health
Services and a health care service plan for enrolled Medi-Cal
beneficiaries.  The bill would exempt certain insurance policies from
these provisions.
   Because a willful violation of the provisions relating to health
care service plans is a crime, this bill would impose a
state-mandated local program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  (a) The Legislature finds and declares all of the
following:
   (1) Mental illness is real.
   (2) Mental illness can be reliably diagnosed.
   (3) Mental illness is treatable.
   (4) Treatment of mental illness is cost-effective.
   (b) The Legislature further finds and declares all of the
following:
   (1) There is increasing scientific evidence that severe mental
illnesses, such as schizophrenia, bipolar disorders, and major
depression, are as effectively treated with medications as other
severe illnesses.
   (2) Most private health insurance policies provide coverage for
mental illness at levels far below coverage for other physical
illnesses.
   (3) Limitations in coverage for mental illness in private
insurance policies have resulted in inadequate treatment for persons
with these illnesses.
   (4) Inadequate treatment causes relapse and untold suffering for
individuals with mental illness and their families.
   (c) The Legislature further finds and declares all of the
following:
   (1) Lack of adequate treatment and services for persons with
mental illness has contributed significantly to homelessness,
involvement with the criminal justice system, and other significant
social problems experienced by individuals with mental illness and
their families.
   (2) The failure to provide adequate coverage for mental illnesses
in private health insurance policies has resulted in significant
increased expenditures for state and local governments.
   (d) The Legislature further finds and declares that other states
that have adopted mental illness parity legislation have experienced
minimal additional costs if medically necessary services were well
managed.
  SEC. 2.  Section 1374.72 is added to the Health and Safety Code, to
read:
   1374.72.  (a) Every health care service plan contract issued,
amended, or renewed on or after July 1, 2000, that provides hospital,
medical, or surgical coverage shall provide coverage for the
diagnosis and medically necessary treatment of severe mental
illnesses of a person of any age, and of serious emotional
disturbances of a child, as specified in subdivisions (d) and (e),
under the same terms and conditions applied to other medical
conditions, as specified in subdivision (c).
   (b) These benefits shall include the following:
   (1) Outpatient services.
   (2) Inpatient hospital services.
   (3) Partial hospital services.
   (4) Prescription drugs, if the plan contract includes coverage for
prescription drugs.
   (c) The terms and conditions applied to the benefits required by
this section, that shall be applied equally to all benefits under the
plan contract, shall include, but not be limited to, the following:

   (1) Maximum lifetime benefits.
   (2) Copayments.
   (3) Individual and family deductibles.
   (d) For the purposes of this section, "severe mental illnesses"
shall include:
   (1) Schizophrenia.
   (2) Schizoaffective disorder.
   (3) Bipolar disorder (manic-depressive illness).
   (4) Major depressive disorders.
   (5) Panic disorder.
   (6) Obsessive-compulsive disorder.
   (7) Pervasive developmental disorder or autism.
   (8) Anorexia nervosa.
   (9) Bulimia nervosa.
   (e) For the purposes of this section, a child suffering from,
"serious emotional disturbances of a child" shall be defined as a
child who (1) has one or more mental disorders as identified in the
most recent edition of the Diagnostic and Statistical Manual of
Mental Disorders, other than a primary substance use disorder or
developmental disorder, that result in behavior inappropriate to the
child's age according to expected developmental norms, and (2) who
meets the criteria in paragraph (2) of subdivision (a) of Section
5600.3 of the Welfare and Institutions Code.
   (f) This section shall not apply to contracts entered into
pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8
(commencing with Section 14200) of Division 9 of Part 3 of the
Welfare and Institutions Code, between the State Department of Health
Services and a health care service plan for enrolled Medi-Cal
beneficiaries.
   (g) (1) For the purpose of compliance with this section, a plan
may provide coverage for all or part of the mental health services
required by this section through a separate specialized health care
service plan or mental health plan, and shall not be required to
obtain an additional or specialized license for this purpose.
   (2) A plan shall provide the mental health coverage required by
this section in its entire service area and in emergency situations
as may be required by applicable laws and regulations.  For purposes
of this section, health care service plan contracts that provide
benefits to enrollees through preferred provider contracting
arrangements are not precluded from requiring enrollees who reside or
work in geographic areas served by specialized health care service
plans or mental health plans to secure all or part of their mental
health services within those geographic areas served by specialized
health care service plans or mental health plans.
   (3) Notwithstanding any other provision of law, in the provision
of benefits required by this section, a health care service plan may
utilize case management, network providers, utilization review
techniques, prior authorization, copayments, or other cost sharing.
  SEC. 3.  Section 10144.5 is added to the Insurance Code, to read:
   10144.5.  (a) Every policy of disability insurance that covers
hospital, medical, or surgical expenses in this state that is issued,
amended, or renewed on or after July 1, 2000, shall provide coverage
for the diagnosis and medically necessary treatment of severe mental
illnesses of a person of any age, and of serious emotional
disturbances of a child, as specified in subdivisions (d) and (e),
under the same terms and conditions applied to other medical
conditions, as specified in subdivision (c).
   (b) These benefits shall include the following:
   (1) Outpatient services.
   (2) Inpatient hospital services.
   (3) Partial hospital services.
   (4) Prescription drugs, if the policy or contract includes
coverage for prescription drugs.
   (c) The terms and conditions applied to the benefits required by
this section that shall be applied equally to all benefits under the
disability insurance policy shall include, but not be limited to, the
following:
   (1) Maximum lifetime benefits.
   (2) Copayments and coinsurance.
   (3) Individual and family deductibles.
   (d) For the purposes of this section, "severe mental illnesses"
shall include:
   (1) Schizophrenia.
   (2) Schizoaffective disorder.
   (3) Bipolar disorder (manic-depressive illness).
   (4) Major depressive disorders.
   (5) Panic disorder.
   (6) Obsessive-compulsive disorder.
   (7) Pervasive developmental disorder or autism.
   (8) Anorexia nervosa.
   (9) Bulimia nervosa.
   (e) For the purposes of this section, a child suffering from,
"serious emotional disturbances of a child" shall be defined as a
child who (1) has one or more mental disorders as identified in the
most recent edition of the Diagnostic and Statistical Manual of
Mental Disorders, other than a primary substance use disorder or
developmental disorder, that result in behavior inappropriate to the
child's age according to expected developmental norms, and (2) who
meets the criteria in paragraph (2) of subdivision (a) of Section
5600.3 of the Welfare and Institutions Code.
   (f) (1) For the purpose of compliance with this section, a
disability insurer may provide coverage for all or part of the mental
health services required by this section through a separate
specialized health care service plan or mental health plan, and shall
not be required to obtain an additional or specialized license for
this purpose.
   (2) A disability insurer shall provide the mental health coverage
required by this section in its entire in-state service area and in
emergency situations as may be required by applicable laws and
regulations.  For purposes of this section, disability insurers are
not precluded from requiring insureds who reside or work in
geographic areas served by specialized health care service plans or
mental health plans to secure all or part of their mental health
services within those geographic areas served by specialized health
care service plans or mental health plans.
   (3) Notwithstanding any other provision of law, in the provision
of benefits required by this section, a disability insurer may
utilize case management, managed care, or utilization review.
   (4) Any action that a disability insurer takes to implement this
section, including, but not limited to, contracting with preferred
provider organizations, shall not be deemed to be an action that
would otherwise require licensure as a health care service plan under
the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code.
   (g) This section shall not apply to accident-only, specified
disease, hospital indemnity, Medicare supplement, dental-only, or
vision-only insurance policies.
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.