BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1158|
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THIRD READING
Bill No: SB 1158
Author: Scott (D)
Amended: As introduced
Vote: 21
SENATE INSURANCE COMMITTEE : 6-3, 4/21/04
AYES: Speier, Escutia, Figueroa, Ortiz, Scott, Soto
NOES: Johnson, Morrow, Oller
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Hearing aids
SOURCE : Author
DIGEST : This bill requires group health plan contracts
and all health insurance policies issued, amended, or
renewed on or after January 1, 2005, to provide coverage
for hearing aids, up to $1,000, to all enrollees,
subscribers, and insureds under 18 years of age at least
once every 36 months.
ANALYSIS : Existing law, the Knox-Keene Health Care
Service Plan Act of 1975, provides for the regulation of
health care service plans by the Department of Managed
Health Care. Existing law requires a health care service
plan to provide specified coverage to its enrollees and
subscribers. Existing law provides that a violation of the
act is a crime. Existing law provides for the regulation
of health insurers by the Insurance Commissioner. Existing
law requires a health insurance policy to provide specified
CONTINUED
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coverage to insureds.
This bill:
1.Mandates that every health plan contract that covers
hospital, medical, or surgical expenses on a group basis,
and every health insurance policy, provide coverage for
hearing aids, up to $1,000, to all enrollees and
subscribers under 18 years of age at least once every 36
months.
2.Defines a "hearing aid" as any nonexperimental, wearable
instrument or device designed for the ear and offered for
the purpose of aiding or compensating for impaired human
hearing, but excluding batteries and cords.
3.Requires that health plans and health insurers retain
sole discretion as to the provider of hearing aids with
which they choose to contract. Would further require
that reimbursement to providers be made according to the
principles and policies of the health plan or health
insurer.
4.Specifies that the bill would not preclude health plans
or health insurers from conducting managed care, medical
necessity, or utilization review.
5.For health insurers only, not apply to Medicare
supplement, vision-only, dental-only, CHAMPUS-supplement
insurance, or insurance excluded from the statutory
definition of "health insurance."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/10/04)
American Academy of Pediatrics
American Federation of State, County, and Municipal
Employees, AFL-CIO
AT Network
California Academy of Audiology
California Speech-Language Hearing Association
Ear Professionals International Corporation (EPIC)
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Nor-Cal Center on Deafness
Self Help for Hard of Hearing People
Speech-Language Pathology and Audiology
3 Individuals
OPPOSITION : (Verified 5/10/04)
America's Health Insurance Plans
Association of California Life and Health Insurance
Companies
Blue Cross
California Association of Health Plans
California Chamber of Commerce
California Manufacturers and Technology Association
Health Net
MAG Instruments, Inc.
ARGUMENTS IN SUPPORT : According to the author's office,
increasing children's access to needed hearing aids will
allow for significant improvement in their ability to learn
and to succeed in school, at negligible cost. The author
notes that most HMOs currently provide surgery to repair
hearing but do not offer hearing aids, despite the high
rate of utilization among those covered for the devices.
Seven states (Connecticut, Kentucky, Louisiana, Maine,
Maryland, Missouri, and Oklahoma) currently mandate
coverage of hearing aids for children. The California
Speech-Language Hearing Association (CSLHA) writes in
support of SB 1158, and argues that mandated coverage of
hearing aids for children would improve communication and
language skills of hearing-impaired children at an early
age, and would improve educational outcomes by lowering
special education costs and preventing students from
falling behind in school or dropping out. Further, CSLHA
believes that the benefit would lower county social service
and public safety costs. The American Federation of State,
County and Municipal Employees, AFL-CIO and the AT
(Assistive Technology) Network emphasize the importance of
hearing aids in assimilating hearing-impaired children into
appropriate peer groups and educational settings. The
Nor-Cal Center on Deafness emphasizes the high cost of
hearing aids for families, and notes that as children grow,
their hearing is likely to deteriorate. New hearing aids
are needed more frequently for growing children.
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ARGUMENTS IN OPPOSITION : The California Association of
Health Plans, Health Net, and the Association of California
Life and Health Insurance Companies write that plans and
health insurers offer coverage for hearing aids already, so
that the effect of this bill will be to limit employer and
consumer choice. The Association notes that the UC study
estimated a $2.5 million per month increase to premiums
following implementation of SB 1158, and that the majority
of the cost increase would fall on the individual and
small-employer markets, which are the most likely health
insurance consumers to drop coverage in response to rising
costs. America's Health Insurance Plans and Blue Cross
write that this bill follows the passage of a substantial
number of health mandate measures in state legislatures,
and that employers will respond to higher costs and reduced
flexibility by self-insuring, reducing coverage, reducing
wages, increasing co-payments or dropping coverage. The
California Chamber of Commerce writes that, while this bill
would have a minor impact on health care premiums, taken
together mandated health care benefits are difficult for
businesses to absorb under the cost-sharing rules
established by The Health Insurance Act of 2003 (SB 2,
Burton/Speier). The Chamber urges a moratorium on new
health mandate bills until the costs to businesses of SB 2
can be assessed
DLW:nl 5/11/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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