BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1825|
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THIRD READING
Bill No: AB 1825
Author: De La Torre (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 : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : 48-25, 6/2/10 - See last page for vote
SUBJECT : Maternity services
SOURCE : American Congress of Obstetricians &
Gynecologists,
District IX
California Commission on the Status of Women
DIGEST : This bill allows individual or group health
policies issued, amended or renewed between July 1, 2011
and December 31, 2013 to contain a 12-month exclusionary
period for maternity services, as specified, requires
insurers of such a policy to provide a written disclosure
to the consumer informing them of the 12-month exclusionary
period at the point of sale, as specified, and sunsets the
CONTINUED
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provisions relating to the 12-month exclusionary period on
January 1, 2014.
Senate Floor Amendments of 8/20/10 amend provisions
requiring every individual or group health insurance policy
to provide coverage for maternity services to correspond
with federal health reform law and related regulation,
allow individual or group health policies issued, amended
or renewed between July 1, 2011 and December 31, 2013 to
contain a 12-month exclusionary period for maternity
services, as specified, requires insurers of such a policy
to provide a written disclosure to the consumer informing
them of the 12-month exclusionary period at the point of
sale, as specified, and sunsets the provisions relating to
the 12-month exclusionary period on January 1, 2014.
ANALYSIS :
Existing federal law:
1. Requires employers, under the Federal Civil Rights Act,
that offer health insurance, and have 15 or more
employees, to cover maternity services benefits at the
same level as other health care benefits.
2. Defines, under the federal health reform law, the
Patient Protection and Affordable Care Act, a list of
"essential health benefits package," including maternal
and newborn care, which health insurance coverage and
group health plans must provide, beginning in 2014.
Existing law:
1. Provides for the regulation of health plans and insurers
by the Department of Managed Health Care (DMHC) and the
Department of Insurance (CDI), respectively.
2. Requires DMHC-regulated health plans to provide all
medically necessary basic health care services, as
defined. Permits DMHC to define the scope of the
services and to exempt plans from the requirement for
good cause.
3. Specifies that basic health care services include
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maternity services necessary to prevent serious
deterioration of the health of the enrollee or the
enrollee's fetus, and preventive health care services,
specifically including prenatal care. No similar
provision is applicable to health insurers regulated by
CDI.
4. Prohibits health plans and insurers from issuing
contracts and policies that contain a copayment or
deductible for inpatient hospital or ambulatory care for
maternity services that exceeds the most common amount
charged for the same type of care and service provided
for other covered medical conditions.
5. Prohibits health plans and insurers that provide
maternity benefits from attaching any exclusions,
reductions, or limitations to coverage for involuntary
complications of pregnancy, unless those provisions
apply to all of the benefits paid by the plan or
insurer.
This bill:
1. Allows individual or group health policies issued,
amended or renewed between July 1, 2011 and December 31,
2013 to contain a 12-month exclusionary period for
maternity services, as specified, requires insurers of
such a policy to provide a written disclosure to the
consumer informing them of the 12-month exclusionary
period at the point of sale, as specified, and sunsets
the provisions relating to the 12-month exclusionary
period on January 1, 2014.
2. Requires a group or individual health insurance policy
issued, amended or renewed between July 1, 2011 and
December 31, 2013 to provide coverage for maternity
services. Also requires such policies to comply with
any other maternity coverage requirements imposed by
federal law or regulation.
3. Requires, to the extent required under federal law,
group or individual health insurance policies issued,
amended, or renewed on or after January 1, 2014 to cover
maternity services consistent with rules and regulations
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issued pursuant to the federal Patient Protection and
Affordable Care Act.
4. Allows, to the extent permitted under federal law, an
individual insurance policy issued, amended, or renewed
on or after July 1, 2011 that applies a preexisting
condition provision, a waiting or affiliation period, or
a waivered condition provision to include a 12-month
exclusionary period for maternity services, except for
maternity services required under federal law and those
services covered under the policy before July 1, 2011.
Also requires an insurer to credit the time an
individual was covered under creditable coverage against
the 12-month exclusionary period, provided that the
individual becomes eligible for coverage under the
succeeding insurance policy within 62 days of
terminating prior coverage, exclusive of any waiting or
affiliation period, and applies for coverage under the
succeeding insurance policy within the applicable
enrollment period.
5. Requires an insurer that offers individual policies with
an exclusionary period for maternity services to
provide, at the time of solicitation and as part of the
sales material for the policy, a specific disclosure in
12-point type informing the consumer that they may be
enrolling in a policy that contains a 12-month
exclusionary period for maternity benefits.
6. Exempts specialized health insurance, Medicare
supplement insurance, short-term limited duration health
insurance, CHAMPUS-supplement insurance, or TRI-CARE
supplement insurance, or hospital indemnity,
accident-only or specified disease insurance from the
provisions related to the 12-month exclusionary period
for maternity benefits.
7. Requires that the corresponding policy, issued, amended,
or renewed on or after 30 days following CDI's approval
of the revised form, to include coverage for maternity
services.
8. Defines maternity services to include prenatal care,
ambulatory care maternity services, involuntary
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complications of pregnancy, neonatal care, and inpatient
hospital maternity care, including labor and delivery,
and postpartum care.
9. Exempts specialized health insurance, Medicare
supplement insurance, short-term limited duration health
insurance, Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS)-supplemental insurance, or
TRI-CARE supplemental insurance, or hospital indemnity,
accident-only, or specified disease insurance.
10.Sunsets the provisions related to the 12-month
exclusionary period for maternity benefits on January 1,
2014.
11.Makes various findings and declarations.
Background
Numerous studies have shown that prenatal care pays for
itself by helping to minimize the prevalence and severity
of low- and very low-birth weight babies. A 2004 study in
the Journal of Perinatal and Neonatal Nursing evaluated the
effects of augmented prenatal care on women at high risk
for having a low-birth weight baby who were enrolled in a
special program that provided basic prenatal care, prenatal
education, and case management. The program saved
approximately $13,962 per single, low-birth weight birth
prevented, and, after program costs were considered, the
return on investment equaled 37 percent; for every dollar
invested in the program $1.37 was saved.
An American College of Obstetricians and Gynecologists
study of over 3,000 women estimated that each dollar cut
from prenatal care could cost taxpayers up to $3.33 in
neonatal care for sick babies. The March of Dimes reports
that premature birth is among the most common, serious, and
costly problems facing infants in the United States, and is
responsible for about half of all infant hospitalizations.
According to the Department of Public Health, in 2006, 85.9
percent of births were to mothers who initiated prenatal
care in the first trimester. Only 0.6 percent of
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California women received no prenatal care. Overall in
California, there are approximately 75 maternal
pregnancy-related deaths and 3,000 infant deaths per year.
Infant mortality is most frequently caused by birth defects
(23.5 percent of deaths), followed by prematurity and
low-birth weight (15.6 percent of deaths), maternal
complications of pregnancy (6.0 percent of deaths), and
SIDS (5.2 percent of deaths).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
CDI review of policies $75 $145
$0Special*
Cost pressure to provide care
$47-$467$93-$934$93-$934 County/**
for newly insured persons Federal
* Insurance Fund
**Costs could be shared equally between county and federal
funds, or could be all county funds.
SUPPORT : (Verified 8/13/10) (Unable to reverify)
American Congress of Obstetricians & Gynecologists,
District IX (co-source)
California Commission on the Status of Women (co-source)
American Federation of State, County and Municipal
Employees, AFL-CIO
Blue Shield of California
California Academy of Family Physicians
California Medical Association
California Nurses Association
California School Employees Association
California Teachers Association
Commission on the Status of Women
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Health Access California
Kaiser Permanente
March of Dimes
Planned Parenthood Affiliates of California
Planned Parenthood of Santa Barbara, Ventura and San Luis
Obispo Counties
OPPOSITION : (Verified 8/13/10) (Unable to reverify)
Anthem Blue Cross
Association of California Life & Health Insurance Companies
California Chamber of Commerce
Department of Finance
Department of Managed Health Care
ARGUMENTS IN SUPPORT : The co-sponsor of this bill, the
California Commission on the Status of Women, writes that
women should not have to pay more for what amounts to
essential medical care, and this bill will ensure fair,
affordable access to maternity coverage in all health
insurance policies. The American College of Obstetricians
and Gynecologists, District IX, also a co-sponsor, asserts
that women should not be required to pay significantly more
for coverage for their basic medical needs that are part of
their biology, and such gender discrimination is
exacerbated by a lesser ability to pay for these policies
when women still earn less than 80-cents on the dollar, of
that of men.
Planned Parenthood Affiliates of California writes that
women who buy insurance without maternity coverage may
still find themselves in need of this coverage, as almost
half of all pregnancies are unintended. Lack of insurance
often results in inadequate prenatal care, which is a
factor in the premature birth of one in ten California
babies. They also point out that a woman with late or no
prenatal care is three times more likely than normal to
have a premature baby.
The California Medical Association asserts that
reproductive health coverage is preventive medicine and its
absence can pose significant health problems for both the
mother and baby. The California Academy of Family
Physicians (CAFP) asserts that the point of insurance is to
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pool resources and risk, share the cost of medical care,
and protect individuals from financial harm due to a
medical condition. CAFP further maintains that women will
never need treatment for prostate cancer as men will never
need treatment for cervical cancer and childless couples
will never need pediatric care. CAFP argues that it is to
all of our advantage to be included in a collective risk
pool. The California Nurses Association argues that
insurance products in the individual market that do not
carry comprehensive maternity coverage offer selective
health care that is not in the best interest of women.
Blue Shield of California notes that, while it does not
generally support benefit mandates, maternity services are
a fundamental health care need that should always be a part
of any insurance coverage. Blue Shield also points out
that allowing some policies to exclude maternity services
will only exacerbate existing access and affordability
problems. The effect of allowing insurers to offer
individual policies without such coverage undermines a
basic purpose of insurance, which is to spread treatment
costs for fundamental health care needs over a large
population in order to keep costs reasonable for all.
Health Access California states that this bill closes a gap
in existing law; and if an insurer fails to provide
maternity coverage, the state picks up the cost, whether
for prenatal care provided through a public program or the
costs associated with lack of prenatal care.
ARGUMENTS IN OPPOSITION : The Association of California
Life and Health Insurance Companies (ACLHIC) contends that,
since federal law already requires group insurance policies
to include maternity benefits, the mandate in this bill is
an individual market competition issue, rather than a
health insurance access or equity issue. ACLHIC notes that
approximately 93 percent of births in California are
covered by some form of insurance, and current law also
ensures maternity benefits are offered on the same terms
and conditions as other health benefits so there is no
consumer equity issue that needs to be addressed.
Anthem Blue Cross writes that, by eliminating choice, this
bill negatively impacts women and men who have made a
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conscious decision not to buy maternity services, or women
who are unable to have children, by forcing them to
purchase coverage for services they do not want or need.
They also point out that it provides their members the
opportunity to shift from a non-maternity health coverage
product to one that includes maternity services, if the
member does become pregnant.
The California Chamber of Commerce states that this bill is
premature and could further exacerbate California's budget
crisis if the benefits mandated in this bill exceed the
benefits mandated in federal health care reform. The
Chamber further asserts that this bill will increase costs
in the private sector at a time when this state is still
struggling through an economic crisis, as evidenced by one
of the highest unemployment rates in the nation.
The Department of Finance writes that this bill will likely
result in increased medical insurance premiums, which will
force Californians who purchase their own coverage out of
the health insurance market altogether. DMHC raises
concerns that this legislation may not conform to the
Patient Protection and Affordable Care Act, as the scope of
services for maternity and newborn care has not yet been
defined in federal regulations. Unless amended to ensure
conformity to federal law, DMHC is opposed to this bill.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jones, 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, Blakeslee, Conway, Cook, DeVore,
Emmerson, Fletcher, Fuller, Gaines, Garrick, Gilmore,
Hagman, Harkey, Jeffries, Knight, Logue, Miller,
Nestande, Niello, Nielsen, Silva, Smyth, Tran, Villines
NO VOTE RECORDED: Bill Berryhill, Tom Berryhill, Charles
Calderon, Lieu, Norby, Audra Strickland, Vacancy
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CTW:mw 8/23/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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