BILL ANALYSIS
AB 244
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 244 (Beall) - As Amended: May 5, 2009
Policy Committee: Health Vote:12-5
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires health plans and health insurers to provide
coverage for mental health and substance abuse treatment under
the same terms and conditions as other medical conditions,
creating parity between these and other health conditions. This
bill exempts CalPERS and Medi-Cal from requirements established
by the bill.
FISCAL EFFECT
1)According to the California Health Benefits Review Program
(CHBRP), annual costs to the Healthy Families Program (HFP) of
$104,000 (33% GF) and savings of $2 million in the Major Risk
Medical Insurance Program (MRMIP) and Access for Infants and
Mothers (AIM) Program. Some portion of these savings will be
GF. Savings in these programs reflect this bill providing
full, rather than partial, parity for treatment in those
programs.
2) Annual increased premium costs
across the private insurance market of $44 million. These
costs reflect increased premiums for group insurance and
premiums in the individual health insurance market. $11
million of increased premium costs are due to a reduction in
out-of-pocket costs incurred prior to mandate established by
this bill.
COMMENTS
1)Rationale . This bill is supported by a range of mental health
and substance abuse treatment stakeholders. This bill
increases mental health parity in California and increases
AB 244
Page 2
access to substance abuse services. Supporters indicate that,
although these benefits increase costs initially, substantial
savings are likely to the extent hospitalizations,
homelessness, and incarcerations are reduced.
2)Mental Health Parity . Under current law, California has had
partial mental health parity for specified conditions since AB
88 (Thompson), Chapter 524, Statutes of 1999. AB 88 requires
treatment parity for "serious mental illness" (SMI) such as
schizophrenia, autism, and anorexia nervosa. Under current
law, less serious mental health issues are subject to
utilization controls such as annual caps on number of visits
and patient co-payments that exceed co-payments for other
medical treatment.
Under full parity, if a health plan establishes a $1 million
lifetime limit on medical or surgical services, the plan
cannot impose a $100,000 limit on mental health treatment. AB
1887 expands parity to other mental illnesses specified in the
Diagnostic and Statistical Manual of Mental Disorders (DSM)-IV
to include less serious mental illness such as low-grade
depression and anxiety. The public costs of this bill are
minor because 92% of Californians with insurance already have
access to non-SMI mental health treatment. The aggregate costs
of the bill are due to health coverage moving from partial to
full parity.
3)Industry Cost Concerns . Opponents of this bill indicate
legislatively mandated health benefits increase costs and
limit insurer, employer, and individual choices with respect
to a variety of health benefits. Insurers indicate this bill
limits individual, employer, and employee choices with respect
to health care expenditures. When considered together,
mandates may also hinder the ability of insurers and employers
to offer a wide range of affordable products to consumers with
a variety of health care needs.
4)Related Legislation . There are more than two dozen current law
health mandates, established over the last two decades, to
provide coverage for specified services such as cancer
screenings and treatment. There are another handful of
mandates to offer coverage for a number of other health
services.
AB 1887 (Beall) in 2008 and AB 423 (Beall) in 2007 were similar
AB 244
Page 3
to this bill and both vetoed due to concerns about the costs
of health mandates.
5)Other Health Mandates in the Current Session . There are nine
health mandates under legislative consideration this year,
including AB 244. Other proposed health mandates include:
a) AB 56 (Portantino): mammography coverage
b) AB 98 (De La Torre): maternity coverage
c) AB 163 (Emmerson): amino acid elemental formula coverage
d) AB 214 (Chesbro): durable medical equipment coverage
e) AB 259 (Skinner): access to nurse midwives
f) AB 513 (De Leon): lactation consultant coverage
g) SB 158 (Wiggins): HPV vaccine coverage
h) SB 161 (Wright): chemotherapy treatment
Two other bills address minimum coverage or loosening of
current law mandates in the current session. These two bills
are:
a) AB 786 (Jones): standardization of individual market
products
b) SB 92 (Aanestad): out-of-state carrier coverage
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081