BILL ANALYSIS �
AB 2350
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Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2350 (Monning) - As Amended: April 11, 2012
SUBJECT : Health care coverage.
SUMMARY : Requires health care service plans (health plans) and
health insurers annually, commencing March 31, 2013, to provide
specified information regarding their plan contracts or policies
to the Department of Managed Health Care (DMHC) or the
California Department of Insurance (CDI), as applicable,
including claims payment policies and practices, periodic
financial disclosures, and data on enrollment and disenrollment,
as specified. Specifically, this bill :
1)Requires health plans and health insurers annually, commencing
March 1, 2013, to provide DMHC, and CDI, respectively, the
following information:
a) Claims payment policies and practices;
b) Periodic financial disclosures;
c) Data on enrollment;
d) Data on disenrollment;
e) Data on the number of claims that are denied;
f) Data on rating practices;
g) Information on cost-sharing and payments with respect to
any out-of-network coverage;
h) Information on enrollee rights; and,
i) Enrollee cost sharing transparency.
2)States that the data on enrollment as specified in 1) c) above
must include the number of enrollees as of December 31 of the
prior year, that receive health care coverage under a health
plan contract or a health insurance policy that covers the
following:
a) Individuals;
b) A small group health plan contract or insurance policy,
as specified;
c) A large group health plan contract or insurance policy,
as specified; and,
d) Administrative services only lines.
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3)Requires for purposes of the data on enrollment specified in
1) c) above the following:
a) For health plans and health insurers to include the
unduplicated enrollment data in specific product lines as
determined by DMHC and the Commissioner of CDI, as
specified.
b) For DMHC and CDI to do the following: i) determine the
form and manner of the reporting, as specified; ii)
publicly report the data provided, including posting the
data on their Internet Website; and, iii) consult with each
other to ensure that the data reported is comparable and
consistent.
4)States legislative intent that the reporting requirements for
health plans and health insurers be consistent with the
reporting requirements, including the form and manner, imposed
on qualified health plans pursuant to federal regulations.
EXISTING LAW :
1)Establishes DMHC to regulate health plans and CDI to regulate
health insurance.
2)Establishes the California Health Benefit Exchange pursuant
to the federal Patient Protection and Affordable Care Act
(ACA) which authorizes states to establish health benefit
exchanges for individuals and small business to compare
health insurance products and purchase policies from among
four categories: Bronze, Silver, Gold, and Platinum, and for
some purchasers, to obtain subsidies and tax credits.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . The author is the sponsor of this
measure. According to the author, this bill is a consumer
transparency measure that would codify the reporting
requirements for qualified health plans under the ACA and
apply those to all health plans and health insurers that serve
Californians. Disclosure of information such as claim payment
policies and practices, information on cost sharing and
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payments for out-of-network coverage would assist consumers in
determining the better health plan or policy for their needs,
and give them a better and broader understanding of their
health coverage. Additionally, this bill would establish a
more consistent and better coordinated data reporting approach
to ensure more precise private health coverage enrollment
estimates for purposes of the ACA in California.
Additionally, the reporting of enrollment data for the
specified categories of health plan contracts or health
insurance policies would establish a more consistent and
better coordinated data reporting approach to ensure more
precise private health coverage enrollment estimates for
purposes of the ACA in California. All of these policy
changes will have an impact on the market which will make it
important for California policy makers to monitor for
irregularities and unintended consequences.
2)BACKGROUND .
a) ACA . On March 23, 2010, President Obama signed the ACA
(Public Law 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152).
Among other provisions, the new law requires most U.S.
citizens and legal residents to have health insurance;
creates state-based American Health Benefit Exchanges
through which individuals can purchase coverage, with
premium and cost sharing credits, as specified, and creates
separate exchanges through which small businesses can
purchase coverage. According to estimates, the ACA will
extend health coverage to approximately 4-6 million
Californians. Starting in 2014, new health coverage
options will be available in the private health insurance
market and in the Exchange. As part of ACA implementation
there are many new requirements on health insurers and
plans such as elimination of preexisting conditions
requirements, limitations on enrollee cost sharing,
guaranteed issue of plans and policies, and restrictions on
the factors health plans and insurers can use to determine
premium rates. Additionally, the Exchange will create
better information and more competition in the insurance
market.
b) Federal Rules on Transparency in Coverage . In February
2012, a final rule was issued implementing the ACA
requirement that all health plans provide a uniform summary
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of coverage for all enrollees and applicants.
Specifically, the federal rules require the Exchange to
collect information relating to coverage transparency from
Qualified Health Plan (QHP) issuers, and from multi-state
plans, as specified. Specifically, a QHP issuer must
provide the following information: Claims payment policies
and practices; Periodic financial disclosures; Data on
enrollment; Data on disenrollment; Data on the number of
claims that are denied; Data on rating practices;
Information on cost-sharing and payments with respect to
any out-of-network coverage; Information on enrollee
rights; and, Enrollee cost sharing transparency. The
federal rules require that the information provided must be
in plain language and contain no fine print.
3)SUPPORT . In support, Health Access California states it has
been frustrated for years by the lack of basic information
about health coverage in California, and regulators are unable
to determine how many Californians have individual coverage or
coverage through a small employer or large employer. The
Western Center on Law and Poverty points out it is important
to have baseline information about enrollment in different
plans and products for policy development and to measure
changes in enrollment overtime. Both organizations point out
that the data that will be collected pursuant to this bill
will assist policy makers in the implementation of ACA.
4)RELATED LEGISLATION . AB 1083 (Monning), pending in the
Senate, includes a provision that would require health plans
and health insurers to report similar data on enrollment.
5)PREVIOUS LEGISLATION . SB 1163 (Leno), Chapter 661, Statutes
of 2010, among other provisions, requires health plans and
health insurers to file with the DMHC and CDI specified rate
information for individual and small group at least 60 days
prior to implementing any rate change, as specified.
REGISTERED SUPPORT / OPPOSITION :
Support
Health Access California
Service Employees International Union, California
Western Center on Law and Poverty
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Opposition
None on file.
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097