BILL ANALYSIS
AB 98
Page 1
ASSEMBLY THIRD READING
AB 98 (De La Torre)
As Amended April 13, 2009
Majority vote
HEALTH 13-4 APPROPRIATIONS 12-5
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|Ayes:|Jones, Ammiano, Block, |Ayes:|De Leon, Ammiano, Charles |
| |Carter, | |Calderon, Davis, Fuentes, |
| |De La Torre, De Leon, | |Hall, John A. Perez, |
| |Hall, Hayashi, Hernandez, | |Price, Skinner, Solorio, |
| |Bonnie Lowenthal, Nava, | |Torlakson, Krekorian |
| |V. Manuel Perez, Salas | | |
| | | | |
|-----+--------------------------+-----+---------------------------|
|Nays:|Adams, Conway, Gaines, |Nays:|Nielsen, Duvall, Harkey, |
| |Audra Strickland | |Miller, |
| | | |Audra Strickland |
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SUMMARY : Requires every individual or group health insurance
policy, as specified, to cover maternity services, as defined.
Specifically, this bill :
1)Requires every individual or group policy of health insurance
that covers hospital, medical, or surgical expenses that is
issued, amended, renewed, or delivered on or after January 1,
2010, to cover maternity services.
2)Defines maternity services to include prenatal care,
ambulatory care maternity services, involuntary complications
of pregnancy, neonatal care, and inpatient hospital maternity
care, including labor and delivery and postpartum care.
3)Exempts from the provisions of this bill Medicare supplement,
short-term limited duration health insurance, vision-only, or
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS)-supplement insurance, or hospital indemnity,
hospital-only, accident-only, or specified disease insurance
that does not pay benefits on a fixed benefit, cash payment
only basis.
4)Makes the following findings and declarations:
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a) Health care service plans (health plans) are required by
the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene) to provide maternity services as a basic
health care benefit;
b) Existing law does not require health insurers to provide
designated basic health care services and, therefore, they
are not required to provide coverage for maternity
services; and,
c) It is essential to clarify that all health coverage made
available to California consumers, whether issued by health
plans regulated by the Department of Managed Health Care
(DMHC) or disability insurers who sell health insurance
(health insurers) regulated by the California Department of
Insurance (CDI), must include maternity services.
EXISTING LAW :
1)Provides for the regulation of health plans by DMHC under
Knox-Keene and for the regulation of health insurers by CDI
under the Insurance Code.
2)Provides, under Knox-Keene, that health plans must provide all
medically necessary basic health care services, including
maternity services necessary to prevent serious deterioration
of the health of the enrollee or the enrollee's fetus, and
preventive health care services, specifically including
prenatal care.
3)Prohibits health plans and health insurers from issuing
contracts and policies that contain a copayment or deductible
for inpatient hospital or ambulatory care maternity services
that exceed the most common amount charged for the same type
of care and services provided for other covered medical
conditions.
4)Prohibits health plans and health insurers providing maternity
benefits for a person covered continuously from conception
from attaching any exclusions, reductions, or limitations to
coverage for involuntary complications of pregnancy unless
those provisions apply to all of the benefits paid by the plan
or insurer.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, based on findings of the California Health Benefits
Review Program (CHBRP) of the University of California, no
direct state fiscal impact for publicly supported health
coverage provided through Medi-Cal, the California Public
Employees' Retirement System (CalPERS), or Healthy Families.
This bill creates a mandate on insurers and not health plans, as
maternity benefits are already mandated for health plans
regulated by DMHC. Additional costs in the private health
insurance market associated with individual market premium
increases.
COMMENTS : The author asserts that one of the latest trends in
the individual market is for insurers to exclude maternity care
from their basic plan benefits to sell cheaper products to
target populations. The author argues that these types of
non-maternity products delay and restrict access to prenatal
care, which can lead to serious health complications for both
the mother and the baby, and force more women into state-funded
programs, such as Medi-Cal or Access for Infants and Mothers.
As evidence of the need to level the playing field between
health plans regulated by DMHC that are required to cover
maternity services and health insurers regulated by CDI that
currently are not, the author points to a 2008 report from the
National Women's Law Center entitled, Nowhere to Turn: How the
Individual Health Insurance Market Fails Women, which found that
it is difficult and costly for women to find health insurance
that covers pregnancy-related care. The report indicated that
women often face higher premiums than men because insurance
companies engage in gender rating practices that further erode
the affordability of these products for women.
AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the
University of California to assess legislation proposing a
mandated benefit or service, and prepare a written analysis with
relevant data on the medical, economic, and public health
impacts of proposed health plan and health insurance benefit
mandate legislation. CHBRP was created in response to AB 1996
and extended for four additional years in SB 1704 (Kuehl),
Chapter 684, Statutes of 2006. In its analysis of this bill,
CHBRP reports that this bill would impact only those enrollees
in individual CDI-regulated policies. According to CHBRP, most
Californians enrolled in CDI-regulated policies (66%) have
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coverage for prenatal care and maternity services. In the
individual insurance market, about 805,000 enrollees currently
lack maternity benefits, including 207,000 women between the
childbearing ages of 19 and 44. CHBRP estimates that
approximately 7,100 pregnancies would be newly-covered under CDI
insurance policies as a result of this bill. Overall, the
mandate in this bill is estimated to have no impact on the
number of deliveries since the birth rate is not expected to
change as a result of this bill. CHBRP concludes that most
women are likely to continue to face large out-of-pocket costs
for maternity services regardless of whether or not their
insurance policy includes maternity benefits and attributes this
to almost two-thirds of the women in CDI-regulated policies
currently being in high deductible health plans (HDHPs).
According to CHBRP, prenatal care is usually subject to HDHP
deductibles and would affect women currently enrolled in
non-HDHPs choosing to switch to HDHPs as a result of this bill
in order to save on premiums.
The sponsor of this bill, the California Commission on the
Status of Women, writes that women should not have to pay more
for what amounts to essential medical care and this bill will
ensure fair, affordable access to maternity coverage in all
health insurance policies. The American College of
Obstetricians and Gynecologists, District IX, asserts that women
should not be required to pay significantly more for coverage
for their basic medical needs that are part of their biology and
such gender discrimination is exacerbated by a lesser ability to
pay for these policies when women still earn less than 80-cents
on the dollar of that of men. The California Medical
Association and the California Association of Physician Groups
point out that reproductive health coverage is preventive
medicine that, in its absence, can pose significant health
problems for both the mother and baby. Blue Shield of
California notes that while it does not generally support
benefit mandates, the practice of allowing insurers to offer
individual policies without maternity coverage undermines a
basic purpose of insurance, which is to spread treatment costs
for fundamental health care services over a large population,
keeping costs reasonable for all. Health Access California
states that this bill closes a gap in existing law; and if an
insurer fails to provide maternity coverage, the state picks up
the cost, whether for prenatal care provided through a public
program or the costs associated with lack of prenatal care.
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Finally, the California Nurses Association insists that
insurance products in the individual market that do not carry
comprehensive maternity coverage offer selective health care
that is not in the best interest of women.
The Association of California Life and Health Insurance
Companies contends in opposition that since federal law already
requires group insurance policies to include maternity benefits,
the mandate in this bill is an individual market competition
issue, rather than a health insurance access or equity issue.
The National Federation of Independent Business objects to this
bill because it would significantly increase the cost of
individual health care policies which are a major vehicle for
small business owners and others who do not have employer-based
coverage. Anthem Blue Cross writes that, by eliminating choice,
this bill negatively impacts women and men who have made a
conscious decision not to buy maternity services, or women who
are unable to have children, by forcing them to purchase
coverage for services they do not want or need.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097
FN: 0001211