BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1578|
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THIRD READING
Bill No: AB 1578
Author: Pan (D), et al.
Amended: 8/19/14 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE HEALTH COMMITTEE : 6-0, 8/30/14 (Pursuant to Senate Rule
29.10)
ROLL CALL NOT AVAILABLE
SUBJECT : Health: The California Health Benefit Review
Program
SOURCE : Author
DIGEST : This bill requests the California Health Benefit
Review Program (CHBRP), in addition to analyzing the public
health impacts, medical effectiveness, and financial impacts of
legislation proposing to mandate or repeal benefits or services,
to also analyze the impact on essential health benefits (EHB)
and the California Health Benefit Exchange (Covered California).
This bill extends the annual fee assessed on health plans and
insurers for this purpose to fiscal year 2015-16. This bill
extends CHBRP, from June 30, 2015, to June 30, 2016. This bill
contains an urgency clause that will make this bill effective
upon enactment.
ANALYSIS :
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Existing law:
1.Establishes CHBRP to assess legislation that proposes to
mandate or repeal a mandated health benefit or service, as
defined.
2.Requests the University of California (UC) to provide the
analysis to the appropriate policy and fiscal committees of
the Legislature within 60 days after receiving a request for
the analysis.
3.Requests the UC report to the Governor and the Legislature on
the implementation of CHBRP by January 1, 2014.
4.Establishes the Health Care Benefits Fund (Fund) to support
the UC in implementing CHBRP. Imposes an annual charge on
health care service plans and health insurers, as specified,
to be deposited into the Fund. Prohibits the total annual
assessment from exceeding $2,000,000.
5.Repeals the Fund and CHBRP as of June 30, 2015.
This bill:
1.Requests CHBRP, in addition to analyzing the public health
impacts, medical effectiveness, and financial impacts of
legislation proposing to mandate or repeal a benefit or
service, to also analyze the impact on EHBs and Covered
California.
2.Requests CHBRP to assess legislation that impacts health
insurance benefit design, cost sharing, premiums, and other
health insurance topics.
3.Requests analyses be provided to the appropriate policy and
fiscal committees of the Legislature not later than 60 days,
or in a manner and pursuant to a timeline agreed to by the
Legislature and CHBRP.
4.Extends the annual fee assessed on health plans and insurers
to fiscal year 2015-16.
5.Extends CHBRP, from June 30, 2015, to June 30, 2016.
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6.Contains an urgency clause that will make this bill effective
upon enactment.
Comments
According to the author's office, this bill reforms CHBRP to
reflect the new health care environment since the implementation
of federal health care reform. This bill expands the scope of
CHBRP by requiring the mandate studies to examine the impact on
EHB and authorizes CHBRP to undertake research on additional
important health insurance topics such as benefit design, cost
sharing and premiums. This bill also extends for an additional
year the sunset date on CHBRP and the requirement that health
plans and health insurers be assessed a fee to support CHBRP.
The extensions will be through the 2015-16 fiscal year. This
bill also requires a report to the Legislature and the Governor
by January 1, 2016. The studies conducted by CHBRP supply
important information as the Legislature and the Governor
consider the impacts of different health policy issues related
to health insurance.
CHBRP . AB 1996 (Thomson, Chapter 795, Statutes of 2002)
requests UC to assess legislation proposing a mandated benefit
or service (referred to as "mandate bills") and prepare a
written analysis with relevant data on the medical, economic,
and public health impacts of proposed health plan and health
insurance benefit mandate legislation. Since 2004, CHBRP has
analyzed 103 mandate bills, 45 of which were passed by the
Legislature and enrolled to the Governor. 33 of those bills
analyzed were vetoed, and 11 were signed into law. In the past
two years, during CHBRP's analysis of what were thought to be
mandate bills, it determined that a number of those referred
were not, in fact, new mandates. Additionally, a number of the
bills that became law were amended enough by the time they were
sent to the Governor to no longer be considered a new mandated
benefit or service.
EHBs . On March 23, 2010, President Obama signed the Affordable
Care Act (ACA, Public Law 111-148), as amended by the Health
Care and Education Reconciliation Act of 2010 (Public Law
111-152), into law. Among many other provisions, the ACA
requires Medicaid benchmark and benchmark-equivalent plans,
plans sold through Covered California, and health plans and
health insurers providing coverage to individuals and small
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employers to ensure coverage of EHBs, as defined by the federal
Department of Health and Human Services (HHS). HHS is required
to ensure that the scope of EHBs is equal to the scope of
benefits provided under a typical employer plan, as determined
by the Secretary of HHS. Under federal law, EHBs must include
10 general categories and the items and services covered within
the following categories:
1. Ambulatory patient services;
2. Emergency services;
3. Hospitalization;
4. Maternity and newborn care;
5. Mental health and substance use disorder services, including
behavioral health treatment;
6. Prescription drugs;
7. Rehabilitative and habilitative services and devices;
8. Laboratory services;
9. Preventive and wellness services and chronic disease
management; and
10.Pediatric services, including oral and vision care.
On December 16, 2011, the HHS Center for Consumer Information
and Insurance Oversight released a bulletin proposing that EHBs
be defined using a benchmark approach. SB 951 (Hernandez,
Chapter 866, Statutes of 2012) and AB 1453 (Monning, Chapter
854, Statutes of 2012) designated the Kaiser Small Group HMO as
California's benchmark plan to serve as the EHB standard. The
state has to defray the costs of federal subsidies to cover any
mandate enacted that is beyond what is contained in EHBs
pursuant to SB 951 and AB 1453.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, one-time costs
of $2 million to support the California Health Benefits Review
Program (within UC), supported by the assessment on health plans
and health insurers (Health Care Benefits Fund).
SUPPORT : (Verified 8/30/14)
America's Health Insurance Plans
California Association of Health Plans
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JL:k 8/30/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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