BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1521 (Jones)
          
          Hearing Date:  8/27/2009        Amended: 7/15/2009
          Consultant: Katie Johnson       Policy Vote: Health 8-3
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          ____
          BILL SUMMARY:  AB 1521 would prohibit the variation of  
          compensation a health care service plan or a health insurer pays  
          to a solicitor for the sale or offer of, or application for, an  
          individual health plan contract or insurance policy that would  
          depend on the health status, claims experience, industry, or  
          occupation of the individual.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
                                                                  
          DMHC enforcement         up to $200 up to $375up to $350Special*

          *Managed Care Fund
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          ____

          STAFF COMMENTS: SUSPENSE FILE.
          
          Existing law provides for the regulation of health care service  
          plans by the Department of Managed Health Care (DMHC) and of  
          health insurers by the California Department of Insurance (CDI).

          This bill would prohibit health plans and insurers from entering  
          into a contract, agreement, or arrangement with a solicitor that  
          provides for or results in his or her compensation for the sale  
          or offer of, or application for, an individual health plan  
          contract or an individual insurance policy to be varied because  
          of the health status, claims experience, industry, or occupation  
          of the individual, as specified.

          This bill would also provide that the compensation paid to a  
          solicitor upon the transfer or renewal of an individual contract  
          or policy would be based upon the renewal rate for the contract  
          or policy under which the individual would be covered after the  
          renewal or transfer occurs. Unless an individual is applying for  










          transfer to a different contract or policy under the same health  
          plan or insurer without medical underwriting, this bill would  
          require health plans and health insurers to notify an individual  
          applying to change to a different individual contract or policy  
          that the application could result in a review of the applicant's  
          medical history, an offer of a higher premium, or a denial of  
          coverage.

          To date, neither DMHC nor CDI has received a complaint relating  
          to these prohibitions. However, if DMHC was to receive a  
          significant enough amount of complaints to warrant an  
          investigation, which could entail the discovery of facts and  
          comparisons of the levels of compensation among plans, the  
          department could need approximately $200,000 in FY 2009-2010,  
          $375,000 in FY 2010-2011, and $350,000 in FY 2011-2012. Ongoing  
          costs would likely be minor and absorbable. Costs to CDI to  
          enforce these provisions would be minor and absorbable.