BILL ANALYSIS �
SB 951
Page 1
SENATE THIRD READING
SB 951 (Ed Hernandez)
As Amended August 20, 2012
Majority vote
SENATE VOTE :25-13
HEALTH 11-5 APPROPRIATIONS 12-5
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|Ayes:|Monning, Atkins, Bonilla, |Ayes:|Gatto, Blumenfield, |
| |Eng, Gordon, Hayashi, | |Bradford, |
| |Roger Hern�ndez, Bonnie | |Charles Calderon, Campos, |
| |Lowenthal, Mitchell, Pan, | |Davis, Fuentes, Hall, |
| |Williams | |Hill, Cedillo, Mitchell, |
| | | |Solorio |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Garrick, Mansoor, |Nays:|Harkey, Donnelly, |
| |Silva, Smyth | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Establishes the Kaiser Foundation Health Plan Small
Group Health Maintenance Organization (HMO) 30 plan contract as
California's Essential Health Benefits (EHB) benchmark plan.
Specifically, this bill :
1)Requires an individual or small group health plan contract or
health insurance policy issued, amended, or renewed on or
after January 1, 2014, to, at a minimum, include coverage for
EHBs, which means all of the following:
a) The benefits and services covered by the Kaiser
Foundation Health Plan Group HMO $30 deductible plan
(Kaiser plan) contract as this contract was offered during
the first quarter of 2012, including, but not limited to,
all of the following:
i) Health benefits covered by the plan contract within
the 10 categories identified in the Patient Protection
and Affordable Care Act (ACA);
ii) Mandated benefits pursuant to statutes enacted
before December 31, 2011, as specified; and,
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iii) Health benefits covered by the Kaiser plan that are
not otherwise required to be covered under existing law,
as specified.
b) Coverage of mental health and substance abuse disorder
services along with any scope and duration limits imposed
on the benefits, in compliance with the Paul Wellstone and
Peter Domenici Mental Health Parity and Addiction Equity
Act of 2008, and all binding regulations, or guidance, as
specified.
c) Habilitative services and health care devices that
assist an individual in partially or fully acquiring or
improving skills and functioning and that are necessary to
address a health deficit or health condition, to the
maximum extent practical. These services address the
skills and abilities needed for functioning in interaction
with an individual's environment, and do not include
respite, day care, recreational care, residential
treatment, social services, custodial care, or education
services of any kind, including, but not limited to
vocational training. Habilitative services shall be
covered under the same terms and conditions applied to
rehabilitative services under the plan contract.
d) Pediatric vision care with same benefits covered under
the Federal Employees Dental and Vision Insurance Program,
and pediatric oral care with the same benefits covered
under Healthy Families including medically necessary
orthodontic care pursuant to the federal Children's Health
Insurance Program Reauthorization.
2)States that an EHB is required to be provided under this bill
only to the extent that federal law or policy does not require
the state to defray the costs of benefits included within the
definition of EHBs.
3)States that this bill shall only be implemented to the extent
EHBs are required pursuant to the ACA.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, costs will be incurred by Department of Managed
Health Care (DMHC) and California Department of Insurance (CDI)
to ensure compliance with EHB standards and respond to a
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changing health care marketplace under federal law. The costs
listed below reflect the costs that will be incurred based on
the imposition of minimum EHB standards. It is difficult to
separate the regulatory and compliance costs related
specifically to this bill from those the state would incur in
absence of this bill.
1)Costs to the DMHC (Managed Care Fund) of $600,000 over the
next three years to review compliance with this bill, to issue
regulations, and to handle increased phone calls and consumer
complaints.
2)Costs to the CDI (Insurance Fund) of $400,000 over the next
three years to review compliance with this bill and review
rate filings for premium changes resulting from this
alteration in benefits.
3)CDI will incur additional one-time costs estimated at $1.5
million (Insurance Fund) to conduct review premium rates for
reasonableness in a highly dynamic market environment.
4)This bill responds to pre-regulatory federal guidance. We
assume it is likely that forthcoming federal regulations will
reflect the guidance issued thus far. If the federal
regulations take a different approach, potential costs of
requiring all individual and small group plans to meet the EHB
standards are unknown but could be significant, to the extent
a different approach requires the state to defray the costs of
state-mandated benefits (as explained further below).
However, given this bill includes protective language that
requires the bill to be implemented only to the extent that
federal law or policy does not require the state to defray the
costs of benefits included within the definition of EHBs, it
should not result in increased state costs related to benefits
that exceed EHBs. There could be minor legal costs to CDI and
DMHC to make this determination.
COMMENTS : According to the author, keeping in mind federal
guidance issued to date and federal health care reform, this
bill uses the following principles to guide the selection of
California's benchmark EHB: recognize the importance of
existing state-mandated benefits and incorporate as many state
mandates as possible; protect California's commitment to
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reproductive services; embrace the consumer-oriented regulatory
framework in place at the DMHC; and, maintain affordability for
consumers. Using these principles and through a process of
comparison, this bill selected the Kaiser Small Group HMO to
serve as the state's benchmark plan. Beginning January 1, 2014,
this bill would require individual and small group health care
service plans and health insurance policy contracts, both inside
and outside of the Exchange, to cover EHB. All services and
benefits covered by the Kaiser Small Group HMO, as of the first
quarter of 2012, will define EHB. These include the 10
categories identified in the ACA, as well as all state mandates
enacted before December 31, 2011.
Many organizations have expressed support for this bill. The
California Psychiatric Association supports this bill because it
includes severe and non-severe mental illness as well as
substance abuse as EHBs. Service Employees International Union
(SEIU) California believes the Kaiser Small Group HMO is a solid
choice for California. The California Pan-Ethnic Health Network
is pleased that the plan is governed by the Knox-Keene Health
Care Service Plan Act of 1974 because it ensures a comprehensive
package of medically necessary basic health services. The
California Association for Behavior Analysis believes this bill
provides much needed clarity on the minimum coverage which must
be offered beginning 2014, particularly with regard to
behavioral health treatment, which includes applied behavior
analysis for autism or pervasive developmental disorder. The
Congress of California Seniors supports efforts to create a
benchmark listing of EHBs for California health plans as
required by ACA. Planned Parenthood Affiliates of California
indicates that their preliminary analysis of the Kaiser Small
Group HMO is positive, including that preventive services such
as family planning counseling, well woman exams, cancer
screenings, and prenatal care are specifically identified as
covered services with no cost sharing. Consumers Union supports
the codification of EHB standard based on upon the most popular
small group plan in California. The California Optometric
Association applauds amendments to supplement pediatric vision
with the Federal Employees Dental and Vision Insurance Program
(FEDVIP) which will allow coverage for corrective lenses for
children. The National Alliance on Mental Illness supports this
bill because it provides an adequate floor for benefits and it
is a good starting point.
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The Council of Acupuncture and Oriental Medicine Associations is
pleased that this bill recognizes acupuncture as an EHB and
requires acupuncture for treatment of pain and nausea in the
individual and small group market but feels this is limiting and
prevents acupuncture for neuromusculoskeletal and smoking
abstinence. Health Access California supports establishing EHBs
and believes that the decision that is made will remain in place
for several decades. HAC supports the Kaiser Small Group HMO
selection at this time coverage.
The California Chiropractic Association asks that the
Legislature reexamine the possible choices for an EHB plan to
select one that includes chiropractic benefits.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0005061