BILL ANALYSIS �
AB 154
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Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 154 (Beall) - As Amended: March 24, 2011
Policy Committee: HealthVote:12-5
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. Additionally, the bill specifies that
it shall not be deemed to require that a health plan
participating in the California Health Benefits Exchange provide
any greater coverage than is required pursuant to the minimum
essential benefits package as defined by the federal government.
FISCAL EFFECT
1)According to the California Health Benefits Review Project
(CHBRP), annual costs to the Major Risk Medical Insurance
Program (MRMIP) and Access for Infants and Mothers (AIM)
program of $134,00 (approximately $30,000 General Fund (GF)).
2)Annual increased premium costs in the private insurance market
of $60 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 $26 million
due to reduced co-payments and deductibles.
3)Federal regulations implementing the federal health reform
law, the Patient Protection and Affordable Care Act (ACA)
(PL-111-148), may reduce the fiscal impact of this bill in
future years. The federal law requires mental health and
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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
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.
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 154 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. The mandate
excludes coverage for treatment of nicotine addiction and
various other non-severe mental health diagnoses listed in the
DSM-IV.
Recent changes to federal law in this area have had impacts on
coverage in California. The Mental Health Parity and Addiction
Equity Act (MHPEA) 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.
Thus, this bill impacts individuals who receive their health
insurance through the small-group or individual market.
3)Mandates and the Affordable Care Act . The ACA creates new
state-run health insurance exchanges that will likely provide
coverage to millions of Californians, and requires that health
plans offered through an exchange cover certain categories of
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benefits, called essential health benefits (EHBs). The
Secretary of Health and Human Services (HSS) is expected to
publish guidance later in 2011 and 2012 that will further
define these categories. These definitions will have important
fiscal implications for the state. The ACA specifies that if
states require plans in the exchange to offer additional
benefits that go beyond the defined EHBs, then states must pay
the additional cost related to those mandates. At this time,
there are a number of outstanding questions related to how
federally defined EHBs will interact with state-level benefit
mandates.
One of the required categories of EHBs is "mental health and
substance abuse disorder services, including behavioral health
treatment." To the extent that the EHBs as defined by federal
regulations include those services mandated by this bill, it
would reduce the impact and cost of this bill for the
population affected by this bill that would later receive
coverage through the exchange. The bill includes a statement
preventing it from being deemed to require greater coverage
than the minimum essential benefits package.
4)Industry 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. 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. Furthermore, insurers and
health plans note that at this time, it is unclear whether it
would be technically possible to exempt plans in the exchange
from the requirements of the bill, due to a provision in the
federal law requiring insurers and health plans to offer the
same products inside and outside of the exchange to minimize
the potential for adverse risk selection.
5) 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
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vetoed due to concerns about the costs of health mandates.
6)Other Health Mandates in the Current Session . There are 14
health mandates under legislative consideration this year,
including AB 154. Other proposed health mandates include:
a) AB 72 (Eng): Acupuncture
b) AB 137 (Portantino): Mammography
c) AB 171 (Beall): Autism
d) AB 185 (Hernandez): Maternity Services
e) AB 310 (Ma): Prescription Drugs
f) AB 369 (Huffman): Pain Prescriptions
g) AB 428 (Portantino): Fertility Preservation
h) AB 652 (Mitchell): Child Health Assessments
i) AB 1000 (Perea): Cancer Treatment
j) SB 136 (Yee): Tobacco Cessation
aa) SB 155 (Evans): Maternity Services
bb) SB 173 (Simitian): Mammograms
cc) SB 255 (Pavley): Breast Cancer
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081