BILL ANALYSIS
AB 244
Page 1
ASSEMBLY THIRD READING
AB 244 (Beall)
As Amended May 5, 2009
Majority vote
HEALTH 12-5 APPROPRIATIONS 12-5
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|Ayes:|Jones, Ammiano, Block, |Ayes:|De Leon, Ammiano, Charles |
| |Carter, | |Calderon, Davis, Fuentes, |
| |De Leon, Hall, Hayashi, | |Hall, John A. Perez, |
| |Hernandez, Bonnie | |Price, Skinner, Solorio, |
| |Lowenthal, Nava, | |Torlakson, Krekorian |
| |V. Manuel Perez, Salas | | |
| | | | |
|-----+--------------------------+-----+---------------------------|
|Nays:|Fletcher, Adams, Conway, |Nays:|Nielsen, Duvall, Harkey, |
| |Emmerson, Audra | |Miller, |
| |Strickland | |Audra Strickland |
| | | | |
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SUMMARY : Requires health plans and health insurers to cover the
diagnosis and medically necessary treatment of a mental illness,
as defined, of a person of any age, including a child, and not
limited to coverage for severe mental illness (SMI) as in
existing law. Specifically, this bill :
1)Requires health plans and those health insurance policies that
provide coverage for hospital, medical, or surgical expenses,
to provide coverage for the diagnosis and medically necessary
treatment of a mental illness of a person of any age,
including a child, under the same terms and conditions applied
to other medical conditions, including, but not limited to,
maximum lifetime benefits, copayments, and individual and
family deductibles. Existing law only requires such coverage
for SMIs, as defined.
2)Defines mental illness as a mental disorder classified in the
Diagnostic and Statistical Manual IV (DSM IV) and includes
coverage for substance abuse. Requires the benefits provided
under this bill to include outpatient services; inpatient
hospital services; partial hospital services; and,
prescription drugs, if the plan contract already includes
coverage for prescription drugs.
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3)Allows a health plan or health insurer to provide coverage for
all or part of the mental health coverage required by this
bill through a specialized health care service plan or mental
health plan and prohibits the health plan or health insurer
from being required to obtain an additional or specialized
license for this purpose.
4)Requires a health plan or health insurer to provide the mental
health coverage required by this bill in its entire service
area and in emergency situations, as specified.
5)Permits a health plan and health insurer to utilize case
management, network providers, utilization review techniques,
prior authorization, copayments, or other share-of-cost
requirements, to the extent allowed by law or regulation, in
the provision of benefits required by this bill.
6)Exempts contracts between the Department of Health Care
Services and a health plan for enrolled Medi-Cal beneficiaries
from the provisions of this bill.
7)Exempts accident-only, specified disease, hospital indemnity,
Medicare supplement, dental-only, or vision-only insurance
policies from the provisions of this bill.
8)Prohibits a health care benefit plan, contract, or health
insurance policy with the Board of Administration of the
Public Employees' Retirement System (CalPERS) from applying to
this bill unless the board elects to purchase a plan,
contract, or policy that provides mental health benefits
mandated under this bill.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, based on findings of the California Health Benefits
Review Program (CHBRP) of the University of California, this
bill will result in annual costs to the Healthy Families Program
of $104,000 (33% General Fund) and savings of $2 million in the
Major Risk Medical Insurance Program and Access for Infants and
Mothers Program. Annual increased premium costs across the
private insurance market of $44 million.
COMMENTS : The author states that this bill corrects a serious
discrimination problem that bankrupts families and causes
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enormous taxpayer expense. The author notes that many health
plans do not provide coverage for mental disorders and those
that do, impose stricter limits on mental health care than on
other medical care. The author asserts that a typical plan
might cap lifetime mental health treatment at $50,000 as opposed
to $1 million for other services. Individuals struggling with
mental illness quickly deplete limited coverage and personal
savings and become dependent on taxpayer-supported benefits.
This bill is intended to end the discrimination against patients
with mental disorders and substance abuse addictions by
requiring treatment and coverage of these illnesses that is
equitable to coverage provided for other medical illnesses.
In 1999, the Legislature passed and the Governor signed AB 88
(Thomson), Chapter 534, Statutes of 1999, requiring health plans
and health insurers to provide coverage for the diagnosis and
medically necessary treatment of certain SMIs of a person of any
age, and of SEDs of a child, as defined, under the same terms
and conditions applied to other medical conditions. For covered
conditions, health plans are required to eliminate benefit
limits and share-of-cost requirements that have traditionally
rendered mental health benefits less comprehensive than physical
health coverage. Current law requires mental health parity
(MHP) benefits to include outpatient services, inpatient
hospital services, partial hospital services, and prescription
drugs, if the health plan contract includes coverage for
prescription drugs. MHP is required to provide at least, in
addition to all basic and other health care services required by
Knox-Keene, coverage for crisis intervention and stabilization,
psychiatric inpatient services, including voluntary inpatient
services, and services from licensed mental health providers.
Since SMI services are already covered under AB 88, this bill
focuses on the incremental effect of extending parity to non-SMI
and substance abuse disorders.
The Mental Health Parity and Addiction Equity Act of 2008
(MHPA), enacted in October 2008, requires group health
insurance plans to cover mental illness and substance abuse
disorders on the same terms and conditions as other illnesses
and help to end discrimination against those who seek treatment
for mental illness. MHPA does not mandate group health plans
provide any mental health coverage. However, if a plan does
offer mental health coverage, then it requires equity in
financial requirements, such as deductibles, co-payments,
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coinsurance, and out-of-pocket expenses; equity in treatment
limits, such as caps on the frequency or number of visits,
limits on days of coverage, or other similar limits on the
scope and duration of treatment; and, equality in
out-of-network coverage. MHPA applies to all group health
plans for plan years beginning after October 3, 2009, and
exempts small firms of 50 or fewer employees. Although this
bill defines mental illness as those disorders identified in
the DSM-IV, the MHPA does not specify a definition for mental
health and substance abuse (MH/SA) disorders.
In its analysis of this bill, CHBRP noted that the impacts
described are based on changes in coverage attributable to this
bill after the implementation of the federal MHPA. CHBRP
reported that studies of parity in coverage for mental health
and substance abuse (MH/SA) services suggest that when parity is
implemented in combination with intensive management of MH/SA
services, there are subsequent decreases in consumers' average
out-of-pocket costs; health plan expenditures per user of MH/SA
services; rates of growth in the use and cost of services; and
inpatient admissions for MH/SA care. CHBRP found that roughly
18 million insured individuals would be subject to this bill's
mandate and that approximately 64% of individuals in policies
subject to this bill currently have parity coverage for non-SMI
disorders and 1% lack coverage; 64% of insured Californians have
parity coverage for substance use disorders and 6% have none.
CHBRP estimates that utilization would increase by 9.1
outpatient mental health visits and 1.8 outpatient substance
abuse visits per 1,000 members per year.
CHBRP also found that no measurable change in the number of
uninsured is projected to occur as a result of this bill
because, on average, premium increases are estimated to increase
by less than 1%. The scope of potential outcomes related to
MH/SA treatment includes reduced suicides, reduced symptomatic
distress, improved quality of life, reduced pregnancy-related
complications, reduced injuries, improved medical outcomes, and
improved social outcomes, such as a decrease in criminal
activity.
Disability Rights California states in support of this bill that
defining mental illness is necessary to ensure that parity
requirements apply to any diagnosed SMI and this bill will
prevent health plans and health insurers from adopting narrow
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and restrictive definitions of mental illness. Psychiatric
Solutions, Inc., the nation's largest provider of acute
psychiatric services, writes in support that this bill will
eliminate the unequal and unfair status that MH/SA treatment has
within the treatment of other health conditions. Drug Policy
Alliance notes that addiction and mental illness, which are
often co-occurring, are the only conditions, which left
untreated, often lead to the incarceration of the sufferer and
the parity requirement in this bill will reduce costs to the
criminal justice system. Health Access California points out
that this bill will have a positive fiscal impact on the health
care system through ensuring earlier intervention to prevent,
mitigate, or reverse the need for care.
The Department of Managed Health Care is opposed to this bill,
stating that although the intent of this bill has merit, its
implementation would be too costly and complicated to justify
its purpose. The Association of California Life and Health
Insurance Companies and the California Association of Health
Plans also contend that this bill is an expensive and massive
expansion of state and federal laws that will lead to large
premium increases and related drops in coverage. The California
Association of Joint Powers Authorities opposes this bill
because it provides an unfair advantage to CalPERS by exempting
it from complying with the same coverage expansion and costs
that are being forced upon other government agencies.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097 FN: 0001213