BILL ANALYSIS
SB 1158
Page 1
SENATE THIRD READING
SB 1158 (Scott)
As Introduced January 29, 2004
Majority vote
SENATE VOTE :23-14
HEALTH 12-4 APPROPRIATIONS 14-5
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|Ayes:|Cohn, Chan, Dymally, |Ayes:|Chu, Berg, Laird, Corbett |
| |Frommer, Koretz, Lieber, | |Correa, Goldberg, Leno, |
| |Montanez, Nakano, Negrete | |Nation, |
| |McLeod, Ridley-Thomas, | |Negrete McLeod, Pavley |
| |Salinas, Wolk | |Ridley-Thomas, Wesson, |
| | | |Wiggins, |
| | | |Yee |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Spitzer, Dutton, Plescia, |Nays:|Runner, Bates, Daucher, |
| |Richman | |Haynes, |
| | | |Keene |
| | | | |
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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 under 18 years of age. 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
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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
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)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 : According to the Assembly Appropriations
Committee analysis, minor absorbable costs to DMHC and DOI to
enforce the provisions of this bill.
COMMENTS : According to the author, 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
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(Connecticut, Kentucky, Louisiana, Maine, Maryland, Missouri,
and Oklahoma) currently mandate coverage for both adults and
children.
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. The
California Health Benefits Review Program's (CHBRP's) analysis
of SB 1158 indicates the following:
1)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.
2)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, the California Public Employees Retirement System
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.
3)Public health impacts. The CHBRP report estimates that an
additional 3,200 children would obtain hearing 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
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studies suggest that untreated hearing impairments result
in increases in lost productivity, special education needs
and medical care costs.
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.
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.
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 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
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(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.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0007812