BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1600|
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THIRD READING
Bill No: AB 1600
Author: Beall (D)
Amended: 8/20/10 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 6-0, 6/23/10
AYES: Alquist, Cedillo, Leno, Negrete McLeod, Pavley,
Romero
NO VOTE RECORDED: Strickland, Aanestad, Cox
SENATE APPROPRIATIONS COMMITTEE : 6-2, 7/15/10
AYES: Kehoe, Corbett, Leno, Price, Wolk, Yee
NOES: Emmerson, Walters
NO VOTE RECORDED: Alquist, Wyland
ASSEMBLY FLOOR : 50-27, 6/1/10 - See last page for vote
SUBJECT : Health care coverage: mental health services
SOURCE : Author
DIGEST : This bill 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, instead of limiting coverage
only for severe mental illness, as in current law, and
requires, the definition of mental illness to be subject to
revision to conform to, in whole or in part, the list of
mental disorders defined in the Diagnostic and Statistical
Manual of Mental Disorders IV, following publication of
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each subsequent volume of the DSM.
Senate Floor Amendments of 8/20/10 allow health plans and
policies to explicitly exclude "V codes", as specified in
the DSM-IV, which are a subset of non-serious mental
illness conditions that include a broad range of diagnoses
such as occupational and academic problems, bereavement,
and adult antisocial behavior.
ANALYSIS : Existing federal law:
1. Under the Mental Health Parity Act of 1996, requires
group health plans with over 50 employees to provide
parity between mental health benefits and
medical/surgical benefits with respect to the
application of aggregate lifetime and annual dollar
limits. The law does not apply to benefits for
substance abuse or chemical dependency.
2. Under the Mental Health Parity and Addiction Equity Act
of 2008 (MHPA), after October 3, 2009, requires a group
health insurance plan, with over 50 employees, that
offers mental health coverage, to cover mental illness
and substance abuse disorders on the same terms and
conditions as other illnesses.
Existing state law:
1. The Knox-Keene Health Care Service Plan Act of 1975
provides for the regulation and licensure of health
plans and specialized health plans by the Department of
Managed Health Care (DMHC) and health insurers by the
California Department of Insurance (CDI).
2. Requires health plans and insurers to cover various
health care services, including basic health care
services, such as physician services, hospital inpatient
and ambulatory care services, diagnostic laboratory
services, preventive health services, emergency health
care services, and hospice care.
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3. Requires health plans and health insurers to provide
coverage for the diagnosis and medically necessary
treatment of certain severe mental illnesses of a person
of any age, and of serious emotional disturbances of a
child, as defined, under the same terms and conditions
that are applied to other medical conditions (commonly
referred to as mental health parity). For covered
conditions, existing law requires health plans to
eliminate any benefit limits and cost-sharing
requirements that make mental health benefits less
comprehensive than physical health benefits. These
include higher co-payments and deductibles, and limits
on the number of outpatient visits or inpatient days
covered. Benefits include outpatient services,
inpatient hospital services, partial hospital services,
and prescription drugs, if the health plan contract
includes coverage for prescription drugs.
4. Describes severe mental illness as several conditions,
including schizophrenia, schizoaffective disorder,
bipolar disorder (sometimes referred to as manic
depressive illness), major depressive disorders, panic
disorder, obsessive-compulsive disorder, pervasive
developmental disorder or autism, anorexia nervosa, and
bulimia nervosa.
5. Defines a child with serious emotional disturbances, as
a child who has one or more mental disorders as
identified in the Diagnostic and Statistical Manual of
Mental Disorders IV (DSM-IV), other than a primary
substance use disorder or developmental disorder that
results in behavior inappropriate to the child's age,
according to expected developmental norms.
6. Defines a specialized plan contract as a contract for
health care services in a single specialized area of
health care, including dental care, for subscribers or
enrollees, or which pays for, or reimburses any part of,
the cost for those services in return for a prepaid or
periodic charge, paid by, or on behalf of, subscribers
or enrollees.
7. Defines specialized health insurance policy as a policy
of health insurance for covered benefits in a single
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specialized area of health care, including dental-only,
vision-only, and behavioral health-only policies. There
is no requirement for health insurers subject to
regulation by CDI to cover medically necessary basic
services or any specific minimum basic benefits.
This bill:
1. Requires health plans and 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, co-payments, and individual and
family deductibles.
2. Defines mental illness as a mental disorder classified
in DSM IV and includes coverage for substance abuse.
3. 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.
4. Requires, following publication of each subsequent
volume of the DSM-IV, the definition of "mental illness"
to be subject to revision to conform to, in whole or in
part, the list of mental disorders defined in the
then-current volume of the DSM-IV.
5. Requires any revision to the definition of "mental
illness" to be established by regulation promulgated
jointly by DMHC and CDI.
6. Allows a health plan or health insurer to provide
coverage for all or part of the mental health coverage
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.
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7. Requires a health plan or health insurer to provide the
mental health coverage in its entire service area and in
emergency situations, as specified.
8. Permits a health plan and health insurer to utilize case
management, network providers, utilization review
techniques, prior authorization, co-payments, or other
share-of-cost requirements, to the extent allowed by law
or regulation, in the provision of benefits required.
9. Exempts contracts between the Department of Health Care
Services and a health plan for enrolled Medi-Cal
beneficiaries.
10.Exempts accident-only, specified disease, hospital
indemnity, Medicare supplement, dental-only, or
vision-only insurance policies.
11.Prohibits a health care benefit plan, contract, or
health insurance policy with the Board of Administration
of the Public Employees' Retirement System 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.
12.Excluded the following non-serious mental illness
diagnoses from the health care coverage required in the
bill, as defined in the manual:
A. Noncompliance With Treatment.
B. Partner Relational Problem.
C. Physical/Sexual Abuse of an Adult.
D. Parent-Child Relational Problem.
E. Child Neglect.
F. Physical/Sexual Abuse of a Child.
G. Sibling Relational Problem.
H. Relational Problem Related to a Mental Disorder
or General Medical Condition.
I. Occupational Problem.
J. Academic Problem.
K. Acculturation Problem.
L. Relational Problems.
M. Bereavement.
N. Physical/Sexual Abuse of an Adult.
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O. Borderline Intellectual Functioning.
P. Phase of Life Problem.
Q. Religious or Spiritual Problem.
R. Malingering.
S. Adult Antisocial Behavior.
T. Child or Adolescent Antisocial Behavior.
U. There is not a Diagnosis or a Condition on Axis
I.
V. There is not a Diagnosis on Axis II.
W. Nicotine Dependence.
Background
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.
Pursuant to MHPA, the federal Departments of Labor, Health
and Human Services, and the Treasury issued an interim
final rule and accompanying guidelines governing
implementation of MHPA on February 2, 2010, that included a
90-day public comment period that closed May 3, 2010. The
MHPA does not require group health plans to provide mental
health coverage. However, if a plan does offer mental
health coverage, the MHPA requires equity in financial
requirements, such as deductibles, co-payments,
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, equity
in out-of-network coverage.
The 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 AB 1600 defines mental
illness as those disorders identified in the DSM-IV, the
MHPA does not specify a definition for mental health and
substance abuse disorders.
According to a March 2010 report by Advocates for Human
Potential, Inc., a research and consulting firm that
provides a preliminary operational analysis of the MHPA
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interim final rule, the MHPA is expected to affect
approximately 111 million participants in 446,400 federally
regulated group health plans; 29 million participants in
approximately 20,300 state and local government employer
group health plans; 460 health insurers that provide
substance use disorder or mental health benefits in the
group health insurance market; and, 120 managed behavioral
health care organizations that provide substance use
disorder or mental health benefits to group health plans.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
DHHC regulations update $135 $125
$0Special*
*Managed Care Fund
SUPPORT : (Verified 6/23/10)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Academy of Family Physicians
California Association of Alcohol and Drug Program
Executives, Inc
California Medical Association
California Mental Health Directors Association
California School Employees Association, AFL-CIO
California State Association of Counties
California Psychological Association
County Alcohol and Drug Program Administrators Association
of California
Drug Policy Alliance
National Alliance on Mental Illness, California
National Association of Social Workers - California Chapter
OPPOSITION : (Verified 6/23/10)
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Association of California Life & Health Insurance Companies
California Association of Health Plans
California Association of Health Underwriters
California Association of Joint Powers Authorities
California Chamber of Commerce
Health Net
ARGUMENTS IN SUPPORT : The California Mental Health
Directors Association (CMHDA) and the California State
Association of Counties (CSAC) state that numerous studies
have shown that mental illness is not only treatable, but
that appropriate and timely treatment reduces costly
hospitalizations, incarcerations, homelessness, and most
importantly, human suffering.
CMHDA and CSAC add that a large percentage of mental health
clients also have co-occurring substance abuse disorders
and that treating one without treating the other is not
cost-effective. Individuals who do not receive appropriate
treatment are more likely to self-medicate with drugs
and/or alcohol. CMHDA and CSAC contend that AB 1600 would
help ensure that private health plans treat individuals
with co-occurring disorders in a comprehensive manner, and
argue that many health plans fall short of meeting their
obligations under California's mental health parity.
California Psychological Association states that the costs
of increasing coverage to provide full parity for mental
disorders is negligible and likely outweighed significantly
by the costs of non-treatment.
National Alliance on Mental Illness, California states that
AB 1600 would fill an important gap in coverage, and adds
that families cannot afford the financial and emotional
burdens caused by mental illness.
ARGUMENTS IN OPPOSITION : The California Association of
Health Underwriters (CAHU) states that AB 1600 would add a
mandate for expanded mental health coverage, and adds that
it has a long history of opposition to additional health
coverage mandates. CAHU argues that this bill would be
counterproductive to making insurance more affordable for
Californians.
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ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Coto, Davis, De La Torre, De
Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani,
Galgiani, Hall, Hayashi, Hernandez, Hill, Huber, Huffman,
Jones, Lieu, Bonnie Lowenthal, Ma, Mendoza, Monning,
Nava, V. Manuel Perez, Portantino, Ruskin, Salas,
Saldana, Skinner, Solorio, Swanson, Torlakson, Torres,
Torrico, Yamada, John A. Perez
NOES: Adams, Anderson, Bill Berryhill, Blakeslee, Conway,
Cook, DeVore, Emmerson, Fletcher, Fuller, Gaines,
Garrick, Gilmore, Hagman, Harkey, Jeffries, Knight,
Logue, Miller, Nestande, Niello, Nielsen, Norby, Silva,
Smyth, Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Audra Strickland
CTW:nlk 8/23/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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