BILL ANALYSIS �
AB 1800
Page 1
ASSEMBLY THIRD READING
AB 1800 (Ma)
As Amended May 25, 2012
Majority vote
HEALTH 13-6 APPROPRIATIONS 11-6
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|Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Bonilla, Eng, Gordon, | |Bradford, Charles |
| |Hayashi, | |Calderon, Campos, Davis, |
| |Roger Hern�ndez, Bonnie | |Ammiano, Hill, Lara, |
| |Lowenthal, Mitchell, Pan, | |Mitchell, Solorio |
| |V. Manuel P�rez, Williams | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Garrick, Mansoor, |Nays:|Harkey, Donnelly, Gatto, |
| |Nestande, Silva, Smyth | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Implements provisions of the Patient Protection and
Affordable Care Act (ACA) related to prohibitions on health
plans and health insurers from imposing out-of-pocket maximum
caps which exceed specified levels. Specifically, this bill :
1)Requires a health plan contract or a health insurance policy,
except a specialized health plan contract or policy that is
issued, amended, or renewed on or after January 1, 2014, to
provide for a limit on annual out-of-pocket expenses for
covered benefits.
2)Requires the limits described above to apply to any copayment,
coinsurance, deductible, and any other form of cost sharing
for any covered benefits, including prescription drugs, if
covered.
3)Prohibits the limits described above from exceeding the limit
described in the ACA and any subsequent rules, regulations, or
guidance, as specified.
4)Provides that nothing in this bill shall be construed to
affect the reduction in cost sharing for eligible insureds
described in Section 1402 of the ACA and any subsequent rules,
regulations, or guidance, as specified.
AB 1800
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor costs, potentially in the range of $50,000 to
the Department of Managed Health Care (DMHC) to modify
regulations related to drug exclusions, workload costs to DMHC
and the California Department of Insurance of $100,000,
combined, to ensure plan filings reflect these changes.
CalPERS, Medi-Cal, Healthy Families, and other
state-administered health plans already comply with the
requirements of this bill related to out-of-pocket maximums, so
no fiscal impact is expected from this provision.
COMMENTS : On March 23, 2010, the federal government enacted ACA
(Public Law 111-148), which was further amended by the Health
Care Education Reconciliation Act (H.R.#4872). Regarding the
private health insurance market, the ACA primarily restructures
the individual and small group markets, setting minimum
standards for health coverage, providing financial assistance to
individuals with income below 400% of the federal poverty level,
including reduced cost sharing, tax credits for small employers,
and the establishment of Health Benefit Exchanges and Essential
Health Benefits (EHBs) that are required to be offered by
Qualified Health Plans (QHPs), which are plans participating in
the small group and individual market through the exchanges and
in the market outside the exchanges. Beginning in 2014, QHPs
will be required to offer coverage at one of four levels:
bronze, silver, gold, or platinum. Levels will be based on a
specified share of full actuarial value of the EHBs. These
plans will be prohibited from imposing an annual cost-sharing
limit that exceeds the thresholds applicable to Health Saving
Account-qualified High Deductible Health Plans (HDHPs). In
2013, the annual out-of-pocket maximum for an individual is
$6,050 and $12,100 for family coverage. Catastrophic plans are
also permitted only in the individual market for young adults
(under age 30) and for those persons exempt from the individual
mandate, but catastrophic plans must cover EHBs and have
deductibles equal to the amounts specified as out-of-pocket
limits for HSA-qualified HDHPs. Small group health plans
providing QHPs will be prohibited from imposing a deductible
greater than $2,000 for individual coverage and $4,000 for any
other coverage in 2014, adjusted annually after.
AB 1800
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Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0003959