BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 951 (Hernandez) - Health care coverage: essential health
benefits
Amended: April 16, 2012 Policy Vote: Health 6-3
Urgency: No Mandate: Yes
Hearing Date: April 30, 2012
Consultant: Brendan McCarthy
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: SB 951 would select the Kaiser Small Group HMO
plan as the state's essential health benefit benchmark plan,
pursuant to the federal Affordable Care Act.
Fiscal Impact:
No additional costs to subsidize the costs of state benefit
mandates for health plans sold in the Exchange.
One-time costs to the Department of Insurance of $120,000
in 2012-13 and $110,000 in 2013-14 for the review of health
insurance policy filings (Insurance Fund).
Background: Under the federal Patient Protection and Affordable
Care Act (Affordable Care Act), health plans and health insurers
that offer coverage in the individual market or the small group
market must provide coverage that is equivalent to the benefits
of a specified essential health benefits benchmark plan. Federal
guidance allows states to determine which plan will be the
benchmark plan.
Also under the Affordable Care Act, individuals with household
income less than 400 percent of the federal poverty level and
certain small businesses purchasing health plans through the
California Health Benefit Exchange will be eligible for
subsidies. The Affordable Care Act requires the state to pay for
the subsidies attributable to any state-mandated benefits that
are not provided under the benchmark plan.
Proposed Law: SB 951 would require individual or small group
health plans and health insurance policies sold in the Exchange
or the small group market after January 1, 2014 to provide
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benefits at least equal to those provided by the essential
health benefits benchmark plan.
The bill would select the Kaiser Small Group HMO as the state's
essential health benefits benchmark plan. The bill requires
habilitative services (which are not covered by the Kaiser Small
Group HMO) to be covered at parity with rehabilitative services
provided by Kaiser Small Group HMO. In addition, the bill
requires pediatric oral care and pediatric vision care (neither
of which are covered by the Kaiser Small Group HMO) to be
provided at the same level as is provided in certain federal
plans.
Related Legislation:
SB 961 (Hernandez) 2011 requires health plans to comply
with federal requirements in the individual market. That
bill will be heard in this committee.
SB 1321 (Harman) 2011 requires the California Health
Benefit Exchange to select the health plan with the lowest
cost as the essential health benefit benchmark plan. That
bill is in the Senate Health Committee.
SB 1453 (Monning) 2011 is identical to this bill. That bill
is in the Assembly Appropriations Committee.
Staff Comments: Because the bill selects a health plan that is
subject to all state-mandated benefits, the bill does not impose
an obligation on the state to pay for the costs of subsidizing
those benefits for individuals or small employers eligible for
subsidies.
To date, federal guidance on the definition or scope of required
benefits for habilitative services has been limited. Once
additional federal guidance becomes available, the bill may need
to be amended to ensure that it conforms to federal
requirements.
The bill does not impose a reimbursable state mandate because
the only costs that might be incurred by a local agency relate
to a crime or infraction.
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