BILL ANALYSIS
SB 1158
Page 1
Date of Hearing: June 15, 2004
ASSEMBLY COMMITTEE ON HEALTH
Rebecca Cohn, Chair
SB 1158 (Scott) - As Introduced: January 29, 2004
SENATE VOTE : 23-14
SUBJECT : Hearing Aids.
SUMMARY : Requires group health care service plan (health plan)
contracts and health insurance policies that cover hospital,
medical, or surgical expenses to cover one claim for hearing
aids in a 36-month period, up to $1,000 for all enrollees,
subscribers, or insureds. Specifically, this bill :
1)Requires every health plan contract that covers hospital,
medical, or surgical expenses on a group basis and every
health insurance policy that covers hospital, medical, or
surgical expenses that is issued, amended, or renewed on or
after January 1, 2005, to provide coverage for hearing aids.
Permits one claim per 36-month period, up to $1,000, to all
enrollees, subscribers, or insureds under 18 years of age.
2)Defines "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)States that the health plan or health insurer has sole
discretion as to the provider of hearing aids with which it
chooses to contract. Requires reimbursement to be provided
according to the respective principles and policies of the
health plan or health insurer. States that nothing precludes
a health plan or health insurer from conducting managed care,
medical necessity, or utilization review.
4)Excludes Medicare supplement, vision-only, dental-only,
Champus-supplement insurance, or insurance excluded from the
definition of health insurance, as specified.
EXISTING LAW :
1)Licenses and regulates health plans under the Knox-Keene Act
through the Department of Managed Health Care (DMHC).
Licenses and regulates health insurers through the Department
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of Insurance (DOI).
2)Requires each health plan contract to provide to subscribers
and enrollees all of the basic health care services, except
that the director may, for good cause, by rule or order exempt
a plan contract or any class of plan contracts from this
requirement.
3)Requires DMHC, by rule, to define the scope of each basic
health care service which health care service plans are
required to provide as a minimum for licensure under the
Knox-Keene Act.
4)Defines "basic health care services" to mean all of the
following:
a) Physician services, including consultation and referral;
b) Hospital inpatient services and ambulatory care
services;
c) Diagnostic laboratory and diagnostic and therapeutic
radiologic services;
d) Home health services;
e) Preventive health services;
f) Emergency health care services, including ambulance and
ambulance transport services and out-of-area coverage; and,
g) Hospice care, as specified.
5)Requires health plans and health insurers to provide coverage
for certain benefits and services, some of which are required
for group and individual coverage, others of which are limited
to group coverage.
FISCAL EFFECT : Unknown. This bill was approved by the Senate
Appropriations Committee pursuant to Senate Rule 28.8.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, most health
plans cover surgery to repair hearing, but do not cover
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hearing aids. The author argues that 15 children in 1,000
would benefit from using hearing aids, and the cost of
providing this option is small in comparison to the critical
difference that testing and hearing aids will make to children
and their ability to learn and succeed in school. The author
indicates seven states (Connecticut, Kentucky, Louisiana,
Maine, Maryland, Missouri, and Oklahoma) currently mandate
coverage for both adults and children.
2)CALIFORNIA HEALTH BENEFITS REVIEW PROGRAM (CHBRP) . AB 1996
(Thomson), Chapter 795, Statutes of 2002, requests the
University of California (UC) assess legislation proposing a
mandated benefit or service, and prepare a written analysis
with relevant data on the public health, medical, and economic
impact of proposed health plan and health insurance benefit
mandate legislation. The CHBRP was created in response to AB
1996. CHBRP's analysis of SB 1158 indicates the following:
a) Medical Effectiveness . A literature search analysis
supports the conclusion that the use of hearing aids is
medically effective in treating children with hearing
loss. One report showed observational and anecdotal
evidence that early childhood detection and
intervention of hearing impairment improves speech and
language development.
b) Utilization, Cost and Coverage Impacts .
Approximately 61% of children with hearing loss whom do
not have coverage for hearing aids use hearing aids.
The estimated average cost of a hearing aid is $3,000
and the expected life-span of a child's hearing aid is
two years. Only 10% of the large group insurance
market cover hearing aids, for example, CalPERS offers
a benefit of $1,000 for every 36 months. Medi-Cal and
Healthy Families cover hearing aids. Medi-Cal coverage
is subject to utilization controls and Healthy Families
covers hearing aids and ancillary items at no charge
every 36 months. In terms of this bill's impacts on
cost, the CHBRP predicts an average increase of .05% or
$0.12 per member per month, with the largest impact on
the small group market. CHBRP states that the mandate
in this bill would likely increase access to
approximately 4% of children with hearing impairments.
c) Public Health Impacts . The CHBRP report estimates
that an additional 3,200 children would obtain hearing
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aids with the passage of this bill, and that children
who had obtained hearing aids previously are likely to
obtain aids with better technology with the benefit
subsidy in this bill. Additionally the report provides
that qualitative studies suggest that untreated hearing
impairments result in increases in lost productivity,
special education needs and medical care costs.
3)PRIOR LEGISLATION . SB 174 (Scott) of 2003 was similar to this
bill offering a $1,000 subsidy only without the 36 month
limitation. SB 1638 (Scott) of 2002 would have provided up to
$1,500 in coverage without a time limitation. AB 2884
(Wiggins) of 2002 would have required coverage up to $1,200
per hearing aid every 46 months. SB 174 was held in the
Senate Insurance Committee pending the CHBRP report. SB 1638
and AB 2884 were held in the Assembly Health Committee.
4)SUPPORT . NorCal Center on Deafness supports this bill because
they believe early use of hearing aids will prevent life-long
harm to children while saving their families and the state
money on special education costs, social, and rehabilitation
services and income maintenance programs. NorCal states that
the average reading level for deaf adults served by their
agency is at a 3rd grade level. The Speech-Language Pathology
and Audiology Board expresses support for this bill because
early identification and treatment of hearing loss results in
significantly better speech and language development. The
board states that there is a critical time for language
development and it is important that these children be fitted
with appropriate amplification, as soon as possible, to
stimulate normal development of speech and language. The
American Academy of Pediatrics, California District argues in
support that screening programs are only successful if they
are followed by rapid and appropriate hearing aid fitting and
early intervention for affected babies and children.
OPPOSITION . Health plans, the California Chamber, of Commerce
and other employer groups oppose this bill. Opponents contend
that the mandate in this bill will result in higher health
insurance costs and that some Californians will no longer
purchase health insurance because of these costs. The
Association of California Life and Health Insurance Companies
writes in opposition that they are concerned, in this era of
double digit premium inflation, that mandating additional new
benefits is counterproductive to making insurance more
affordable and available, and mandated benefits erode the
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flexibility of the employer to pick benefits that best address
the needs of his or her employees. The California Chamber of
Commerce is concerned that this mandate and the possible
implementation of SB 2 (Burton), Chapter 673, Statutes of 2003,
which would require large and medium employers to provide health
coverage or pay into a purchasing pool if a referendum scheduled
for the November 2004 ballot is not successful, will further
drive up health care costs for employers. Kaiser opposes
mandates because it believes that they put state regulated plans
at a disadvantage to self-funded Employee Retirement Income
Security Act plans. Additionally, they state that they offer
hearing aid coverage to their large group purchasers but the
benefit has proven unpopular. The California Association of
Physician Groups asserts among other arguments, that this bill
is unnecessary because physicians already provide all medically
necessary products and services to their patients.
REGISTERED SUPPORT / OPPOSITION :
Support
American Academy of Pediatrics, California District
California Academy of Audiology
California Speech-Language Pathology and Audiology Board
California Speech-Language-Hearing Association
NorCal Center on Deafness
Self Help for Hard of Hearing People
1 individual
Opposition
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
Blue Cross of California
California Association of Health Plans
California Association of Physician Groups
California Chamber of Commerce
California Manufacturers and Technology Association
Health Net
Kaiser Permanente
National Federation of Independent Business
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097