BILL NUMBER: AB 2042	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 22, 2010

INTRODUCED BY   Assembly Member Feuer

                        FEBRUARY 17, 2010

   An act to  amend Section 123195 of   add
Section 1374.255 to  the Health and Safety Code, 
relating to public health.   and to add Section 10199.49
to the Insurance Code, relating to health care coverage. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2042, as amended, Feuer.  Personal health care:
catastrophic health insurance.   Health care coverage:
rate changes.  
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance. Under
existing law, no change in premium rates or coverage in a health care
service plan contract or a health insurance policy may become
effective without prior written notification of the change to the
contractholder or policyholder. Existing law prohibits a plan or
insurer during the term of a group plan contract or policy from
changing the rate of the premium, copayment, coinsurance, or
deductible during specified time periods.  
   This bill would prohibit a health care service plan or health
insurer from altering the rates that apply to individual health care
service plan contracts or individual health insurance policies, or
altering any benefits included in individual contracts or policies,
more than once each calendar year, except as specified.  
   Because a willful violation of these requirements by a health care
service plan would be a crime, the bill would impose a
state-mandated local program.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   Existing law requires the State Public Health Officer, in
consultation with, and approval of, the Department of Insurance, to
contract with an insurer or insurers to provide any California
resident, as defined, catastrophic health insurance. Existing law
provides that a contract for catastrophic health insurance shall not
be required to cover a preexisting medical condition of a resident
during the first 10 months of coverage and that charges for a
preexisting medical condition shall not apply toward the deductible
during the first 10 months of coverage.  
   This bill would, instead, provide that the contract shall not be
required to cover a preexisting medical condition of a resident
during the first 6 months of coverage and that charges for a
preexisting medical condition shall not apply toward the deductible
during the first 6 months of coverage. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1374.255 is added to the 
 Health and Safety Code   , to read:  
   1374.255.  (a) For purposes of this section, "rate" includes, but
is not limited to, premiums, copayments, coinsurance obligations,
deductibles, out-of-pocket costs, and any other charges for covered
benefits.
   (b) Notwithstanding any other provision of law, except as required
by changes in state or federal law, a health care service plan shall
not do either of the following more than once each calendar year:
   (1) Alter in any manner the rates that apply to individual plan
contracts.
   (2) Alter in any manner any benefits included in individual plan
contracts.
   (c) This section shall not apply to health care service plan
contracts issued through a publicly funded state health care coverage
program, including, but not limited to, the Medi-Cal program and the
Healthy Families Program, or to Medicare supplement contracts.
   (d) This section shall apply only to health care service plan
contracts issued, amended, or renewed on or after January 1, 2011.

   SEC. 2.    Section 10199.49 is added to the 
 Insurance Code   , to read:  
   10199.49.  (a) For purposes of this section, "rate" includes, but
is not limited to, premiums, copayments, coinsurance obligations,
deductibles, out-of-pocket costs, and any other charges for covered
benefits.
   (b) Notwithstanding any other provision of law, except as required
by changes in state or federal law, a health insurer shall not do
either of the following more than once each calendar year:
   (1) Alter in any manner the rates that apply to individual health
insurance policies.
   (2) Alter in any manner any benefits included in individual health
insurance policies.
   (c) This section shall not apply to health insurance policies
issued through a publicly funded state health care coverage program,
including, but not limited to, the Medi-Cal program and the Healthy
Families Program, or to Medicare supplement policies.
   (d) This section shall apply only to health insurance policies
issued, amended, or renewed on or after January 1, 2011. 
   SEC. 3.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  
  SECTION 1.    Section 123195 of the Health and
Safety Code is amended to read:
   123195.  (a) A contract provided for by this chapter shall not be
required to cover a preexisting medical condition of the resident
during the first six months the resident is covered by catastrophic
health insurance provided under this chapter. Charges for a
preexisting condition shall not apply toward the deductible during
the first six months of coverage. Charges for other conditions during
that initial period shall apply toward the deductible.
   (b) The contract shall also prohibit the insurer from
discriminating against prospective insureds in their underwriting
practices on the basis of demographic factors, such as age, or
preexisting medical conditions.