BILL ANALYSIS
AB 1600
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Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1600 (Beall) - As Introduced: January 10, 2010
Policy Committee: Health Vote:13-6
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 at
parity with other medical 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
$691,000 (33% GF).
2)Annual increased premium costs in the private insurance market
of $54 million. These costs reflect increased premiums by
employers for group insurance and premiums paid in the
individual health insurance market. These increased costs are
partially offset by reduced out-of-pocket costs of $18 million
due to reduced co-payments and deductibles.
3)Federal health reform, the Patient Protection and Affordable
Care Act (PL-111-148), may impact the longer term fiscal
impacts of this bill by increasing health coverage generally
and mental health and substance abuse treatment parity
specifically. The federal law requires mental health and
substance abuse treatment to be covered as a basic benefit in
state-run health insurance exchanges that will provide health
coverage to millions of individuals.
COMMENTS
1)Rationale . This bill is supported by a range of mental health
and substance abuse treatment stakeholders. This bill
AB 1600
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increases mental health parity in California and increases
access to substance abuse services. Supporters indicate that,
although these benefits increase costs initially, substantial
savings are likely to accrue to the extent hospitalizations,
homelessness, and incarcerations are reduced. According to
CHBRP estimates, more than five million Californians will be
provided full parity with respect to mental health treatment
as a result of this bill and more than seven million
individuals will gain access to full parity for substance
abuse treatment services.
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. AB 1600 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.
Recent changes to federal law in this area have had impacts on
coverage in California. The Mental Health Parity and Addiction
Equity Act of 2008 went into effect on January 1, 2010 and
requires group health plans with more than 50 employees that
offer both medical and mental health benefits to ensure that
the mental health and substance abuse benefits are no more
restrictive than the medical and surgical benefits.
3)Industry Cost Concerns . Opponents of this bill contend
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. The specific opposition to
this bill may subside due to the federal mandate for parity
across a broad portion of the private health insurance market.
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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 244 (Beall) in 2009, AB 1887 (Beall) in 2008, and AB 423
(Beall) in 2007 were similar to this bill. Each bill was
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 1600. Other proposed health mandates include:
a) AB 1825 (De La Torre): maternity services
b) AB 1826 (Huffman): pain prescriptions
c) AB 1904 (Villines): out-of-state carriers
d) AB 2587 (Berryhill): benefit mandates
e) SB 220 (Yee): tobacco cessation services
f) SB 890 (Alquist): basic health treatment services
g) SB 961 (Wright): cancer treatment
h) SB 1104: diabetes related treatment
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081