BILL ANALYSIS
AB 1543
Page 1
Date of Hearing: May 28, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1543 (Committee on Health) - As Amended: May 21, 2009
Policy Committee: Health Vote:19-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill conforms Medicare supplement contract and policy
requirements to recently enacted federal law, the Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA).
Medicare supplement policies, also known as Medigap plans pay
for medical expenses not covered or only partially covered by
Medicare. Specifically, this bill:
1)Establishes requirements for 11 standardized Medigap policies
and makes other changes to standards applied to Medigap
policies pursuant to MIPPA.
2)Establishes guaranteed issue (health coverage issued
regardless of health status) for specified dual eligibles who
are eligible for both Medicare and Medi-Cal and establishes
guaranteed issue under specified conditions related to
employer provided health coverage.
3)Requires Medigap issuers to adhere to genetic
non-discrimination requirements recently established in
federal law.
4)Clarifies specified Medicare Part C plans must be licensed by
the California Department of Managed Health Care (DMHC).
FISCAL EFFECT
No direct fiscal impact to DMHC or CDI to continue oversight of
Medigap insurance policies and enforce conformance with recent
changes to federal law.
COMMENTS
AB 1543
Page 2
1)Rationale . This bill is sponsored by CDI to conform various
aspects of Medigap policies, oversight, and underwriting to
recently enacted federal law. MIPPA made changes to Medicare
Advantage plans, offered beneficiary improvements, increased
access for low-income beneficiaries, and modified prescription
drug benefits and physician services. This bill ensures that
California's health insurance regulators continue to have
authority over the Medigap market regulated by the state.
2)Recent Amendments are generally technical and address health
insurer requests for health information and Medicare Advantage
licensure.
3)Medicare is a 100% federally funded health insurance program
that provides coverage to eligible beneficiaries through
fee-for-service (FFS) and managed care arrangements. Most
individuals 65 and over are automatically entitled to Medicare
Part A if they or their spouse are eligible for Social
Security payments. People under 65 who receive Social Security
cash payments due to a disability are eligible for Medicare
after a two-year waiting period. Medicare beneficiaries pay
for their benefits through premiums, deductibles, coinsurance,
and co-payments. In California, of the more than 4 million
Medicare enrollees, 87% are elderly and 13% are disabled.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081