BILL ANALYSIS �
AB 151
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 151 (Monning)
As Amended June 29, 2011
Majority vote
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|ASSEMBLY: |49-25|(May 26, 2011) |SENATE: |23-15|(August 18, |
| | | | | |2011) |
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Original Committee Reference: HEALTH
SUMMARY : Allows an individual to drop Medicare Advantage (MA)
coverage and enroll in Medicare supplement coverage of the same
issuer, or the issuer's parent company, if the MA issuer
increases premiums. If Medicare supplement coverage is not
available from the same issuer, or parent company, allows an
individual under limited circumstances to enroll in Medicare
supplement coverage of an unaffiliated issuer. Deletes obsolete
references in law and recognizes two new Medicare supplement
plans (M and N).
The Senate amendments :
1)Narrow the circumstances under which an individual is eligible
for Medicare supplement provided by a different issuer to when
the individual's MA plan:
a) Increases the premium by 15% or more;
b) Increases physician, hospital, or drug copayments by 15%
or more;
c) Reduces any benefits under the plan; or,
d) Discontinues, for other than good cause relating to
quality of care, its relationship or contract under the
plan with a provider who is currently furnishing services
to the individual.
2)Limit enrollment in a Medicare supplement of an unaffiliated
issuer to the annual election period for a Medicare Advantage
plan, except where the Medicare Advantage plan has
discontinued its relationship with a provider currently
furnishing services to the individual.
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3)State that this bill not be construed to authorize an
individual to enroll in a group Medicare supplement policy if
the individual does not meet the eligibility requirements for
the group.
EXISTING LAW allows an individual enrolled in a MA plan that
reduces any of its benefits, increases cost sharing, or
terminates certain relationships with providers, to enroll in
Medicare supplement coverage that is issued by the same issuer
of his or her MA plan or by a subsidiary of, or a network that
contracts with, the parent company of that issuer.
AS PASSED BY THE ASSEMBLY , this bill allowed an individual
enrolled in a MA plan to drop MA coverage because of increases
in premium and to enroll in Medicare supplement coverage by the
same issuer of the MA plan, and if the MA plan issuer, did not
offer Medicare supplement coverage allowed the individual to
enroll in Medicare supplement coverage from any issuer under
specified circumstances.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : According to the author, the recent federal Patient
Protection and Affordable Care Act, among other things, will
begin to reduce the subsidy paid to Medicare Advantage plans in
2012 and use the savings to close the prescription drug coverage
gap, provide additional Medicare preventive services, and
implement other improvements. MA plans have been paid about 13%
more than the amount paid for coverage in Original Medicare, a
subsidy that will be reduced under a complex formula. This
subsidy has enabled Medicare Advantage plans in different
geographic areas to provide coverage or benefits that would not
have been possible without the subsidy. The author states that
in some cases this has meant plans offer coverage in higher
costs areas that they would otherwise have shunned. In other
cases, this has meant that plans offered additional benefits
that would not otherwise have been offered. The new formula
will provide less total subsidy to these Medicare Advantage
plans, but will provide additional payments to high performing
plans. The author states that this bill will ensure that all
Medicare recipients in a Medicare Advantage plan facing
increased costs or reduced benefits have the option to enroll in
Original Medicare and purchase a Medigap plan to help cover the
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costs of coinsurance, copayments, and deductibles.
Proponents (American Association of Retired Persons, the sponsor
of this bill, California Health Advocates, American Federation
of State, County and Municipal Employees, Health Access
California, Congress of California Seniors and others) support
this bill because it ensures Medicare enrollees have the option
to switch to plans that are the most affordable and meet their
needs.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0001980