BILL ANALYSIS �
AB 1636
Page 1
ASSEMBLY THIRD READING
AB 1636 (Monning)
As Introduced February 9, 2012
Majority vote
HEALTH 13-5 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Bonilla, Eng, Gordon, | |Bradford, Charles |
| |Hayashi, | |Calderon, Campos, Davis, |
| |Roger Hern�ndez, Bonnie | |Gatto, Ammiano, Hill, |
| |Lowenthal, Mitchell, Pan, | |Lara, Mitchell, Solorio |
| |V. Manuel P�rez, Williams | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Mansoor, Nestande, |Nays:|Harkey, Donnelly, |
| |Silva, Smyth | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires the Department of Managed Health Care (DMHC),
in collaboration with the California Department of Insurance
(CDI), the California Health Benefit Exchange (Exchange), and
the California Department of Public Health (DPH) to convene a
special committee (committee) to review and evaluate health and
wellness incentive and rewards programs offered by health care
service plans (health plans), health insurers, and employers.
Requires the first meeting of the committee to be conducted by
March 30, 2013. Specifically, this bill :
1)Requires the DMHC, in collaboration with the CDI, the
Exchange, and DPH, to convene a committee to review and
evaluate health and wellness incentive and rewards programs
offered by health plans, health insurers, and employers.
2)Requires the committee to focus on the study of programs that
provide incentives and rewards for enrollees, insureds, and
employees to become more engaged in their health care and make
choices that support health promotion and wellness, including
worksite wellness programs and programs that offer or require
health risk appraisals, screening services, smoking cessation,
health premium reductions, differential copayment or
coinsurance amounts, and cash payments related to health
promotion activities.
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3)Requires the committee to evaluate these programs for
effectiveness based upon scientific evidence, and examine the
extent to which these programs may result in discrimination
based upon income, age, gender, race, ethnicity, medical
condition, genetic information, claims experience, medical
history, evidence of insurability, or any other health
status-related factor.
4)Requires the committee to meet publicly and engage experts and
stakeholders in its deliberations, with the first meeting to
be conducted no later than March 30, 2013.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, depending upon the makeup of the committee, the depth
and scientific rigor of the evaluation performed, and the extent
and type of stakeholder engagement, costs could range from
$50,000 at the low end to over $200,000 annually (Managed Care
Fund).
COMMENTS : According to the author, federal health reform
includes many provisions emphasizing health promotion and
wellness. Often because of cost, people use preventive services
at about half the recommended rate. Yet chronic diseases, such
as heart disease, cancer, and diabetes - which are responsible
for seven of 10 deaths among Americans each year and account for
75% of the nation's health spending - often are preventable.
Cost sharing (including deductibles, coinsurance, or copayments)
reduces the likelihood that preventive services will be used.
The Patient Protection and Affordable Care Act (ACA) prohibits
issuers selling insurance products in the individual and small
group markets from rating premiums based on health status, but
permits premiums to vary for tobacco use (by no more than a 1.5
to 1 ratio) and in the group market specified wellness programs
with rewards capped at 30% of the cost of employee coverage if
certain health factor standards are met. While wellness
incentive programs can be instrumental in controlling the rise
of chronic health conditions and their associated costs, it is
important to ensure that these programs are not subterfuge for
discrimination based on health status. Wellness incentive
programs should not result in financial barriers that prevent
participants from accessing the health care needed to manage
chronic conditions. The author believes this bill is necessary
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to advance a public policy conversation in California about the
evidence basis for wellness incentive programs tied to health
insurance and to determine if the wellness incentive provisions
in the ACA should be implemented in California.
The American Diabetes Association (ADA) supports this bill
because a scientific evaluation of wellness programs in
California will be helpful in analyzing which types of wellness
programs do achieve the goal of encouraging a healthier
lifestyle without discriminating against individuals based on
race, age, or medical condition. The ADA supports
evidence-based wellness programs which encourage individuals to
adopt healthy lifestyles. However, the ADA strongly opposes
tying premium ratings to achieving health goals (i.e., lower
blood pressure or cholesterol or weight loss). According to
ADA, there is no evidence that wellness programs tied to premium
variations are effective. The California Pan-Ethnic Health
Network expresses concern that some incentives or rewards
programs may actually worsen health outcomes and further
contribute to inequities in the health care system. Health
Access California is deeply concerned that most versions of
wellness incentives are backdoor underwriting based on health
status - and the eagerness of some insurers to have the
opportunity to rate based on so-called wellness incentives
further deepens their concerns. The California Arthritis
Foundation Council supports this bill because it will help
ensure that Californians have access to effective evidence-based
health and wellness programs without fear of discrimination.
Consumers Union supports this bill because programs that are not
properly structured result in a disproportionate impact on
low-income individuals, communities of color, and older
populations.
QUALCOMM writes in opposition that it is concerned with the lack
of specificity about the composition of the committee; there is
no detail explaining the committee size, which key stakeholder
groups would be represented and how representatives will be
selected; and, is further concerned about the committee taking
an advocacy role in recommending legislation that would mandate
what type of wellness incentive programs a business could offer.
Safeway Inc., believes this bill diverts scarce state funds
away from direct services to review and evaluate a program that
is effective under federal law seems unnecessary. Safeway
argues that there is no assurance this study will be done in a
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fair and accurate way.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0003971