BILL ANALYSIS
SB 1158
Page 1
Date of Hearing: June 23, 2004
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
SB 1158 (Scott) - As Introduced: January 29, 2004
Policy Committee: HealthVote:12-4
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires group health plans and group and individual
health insurers that cover hospital, medical, or surgical
expenses to provide coverage for hearing aids for up to $1,000
to all enrollees under age 18. Specifically, this bill:
1)Allows the hearing aid benefit to be restricted to one claim
during a 36-month period.
2)Defines a "hearing aid" as any non-experimental, 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 it remain within the sole discretion of the health
plan/insurer as to the provider of hearing aids with which it
chooses to contract.
4)Requires reimbursement to be provided according to the
respective principles and policies of the health plan/insurer.
5)Prohibits anything in the bill from precluding a health
plan/insurer from conducting managed care, medical necessity,
or utilization review.
FISCAL EFFECT
1)Minor absorbable costs to the Department of Managed Health
Care (DMHC), which regulates health care service plans, and
the Department of Insurance, which regulates health insurers,
to enforce the provisions of this bill.
SB 1158
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2)No state fiscal impact to the Medi-Cal and Healthy Families
Programs as these programs are already required to cover
hearing aids. Minor increased state costs to the Major Risk
Medical Insurance Program, likely less than $100,000 annually,
as this program does not currently cover hearing aids.
3)Because this bill reflects current CalPERS practice, there
would be no immediate cost. By codifying this current covered
benefit, however, this bill would preclude CalPERS from
implementing a narrower benefit package for CalPERS enrollees,
which could result in lower state health insurance premium
costs as a result. For example, if the employer's share of
CalPERS employee premiums decreased by .03% in 2004, the state
would realize a GF savings of approximately $387,000. This
bill precludes such an option.
COMMENTS
1)Purpose . The author argues that most health plans cover
surgery to repair hearing, but do not cover 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)Background . AB 1996 (Thomson), Chapter 795, Statutes of 2002,
requests the University of California (UC) to 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. UC's
analysis indicates CalPERS provides a hearing aid benefit of
$1,000 for every 36 months, and 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. For the
privately insured, CHBRP estimates an average premium increase
of .05% or $0.12 per member per month, with the largest impact
on the small group market.
SB 1158
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3)Support . The NorCal Center on Deafness argues that the 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
third 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 argues 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.
4)Opposition . Health plans and the State Chamber of Commerce
contend this bill will result in higher health insurance
costs, and that some Californians will no longer purchase
health insurance because of these costs. The 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.
Analysis Prepared by : Scott Bain / APPR. / (916) 319-2081