BILL ANALYSIS �
SB 1176
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SENATE THIRD READING
SB 1176 (Steinberg)
As Amended June 24, 2014
Majority vote
SENATE VOTE :24-11
HEALTH 14-5 APPROPRIATIONS 12-5
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|Ayes:|Pan, Ammiano, Bonilla, |Ayes:|Gatto, Bocanegra, |
| |Bonta, Chesbro, Gomez, | |Bradford, |
| |Gonzalez, | |Ian Calderon, Campos, |
| |Roger Hern�ndez, | |Eggman, Gomez, Holden, |
| |Lowenthal, Nazarian, | |Pan, Quirk, |
| |Nestande, Ridley-Thomas, | |Ridley-Thomas, Weber |
| |Rodriguez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Maienschein, Ch�vez, |Nays:|Bigelow, Donnelly, Jones, |
| |Mansoor, Patterson, | |Linder, Wagner |
| |Wagner | | |
| | | | |
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SUMMARY : Requires health plans and insurers to track
out-of-pocket costs, as specified, and notify and reimburse
enrollees or insureds when cost sharing reaches the maximum
annual out-of-pocket limit. Specifically, this bill :
1)Requires health plans and insurers that provide coverage for
essential health benefits (EHBs), as specified, to be
responsible for monitoring the accrual of out-of-pocket costs
toward the annual limit defined in current law.
2)Makes health plans and insurers, not consumers, solely
responsible for monitoring the accrual of out-of-pocket costs
for cost sharing attributed to in-network providers, including
contracted vendors.
3)Requires health plans to accept claims from providers or
information about cost sharing from consumers for cost sharing
attributed to out-of-network providers who are providing
emergency services or otherwise providing covered benefits.
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4)Requires health plans and insurers, if cost sharing exceeds
the maximum annual out-of-pocket limits, to notify and
reimburse the enrollee no later than five working days after
the health care service plan is required to reimburse the
claim or notify the claimant that the claim is contested or
denied (currently 30 working days for Preferred Provider
Organizations and 45 working days for Health Maintenance
Organizations).
5)Requires enrollees and insureds to have the opportunity to
review the accrual of cost sharing and provide additional
information regarding cost sharing that should be accrued to
the annual out-of-pocket limit.
EXISTING LAW :
1)Requires health plans and insurers, as specified, to have a
limit on annual out-of-pocket expenses for EHBs, including
out-of-network emergency care, that does not exceed the
out-of-pocket limits specified in the federal Patient
Protection and Affordable Care Act. In 2014, these limits are
$6,350 for an individual and $12,700 for family coverage; the
2015 maximums will be $6,600 for self-only coverage and
$13,200 for family coverage.
2)Requires health plans and insurers to reimburse claims as soon
as practicable, but no later than 30 working days after
receipt of the claim (or 45 days for health maintenance
organizations), unless the plan or insurer contests or denies
the claim, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Costs of about $200,000 per year for the first two years, and
$40,000 per year thereafter for regulations, the review of
plan filings, and enforcement by the Department of Managed
Health Care (Managed Care Fund).
2)Potential minor administrative and enforcement costs to the
California Department of Insurance (Insurance Fund) for the
first two years after implementation.
COMMENTS : The author of this bill writes that, although current
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law limits annual out-of-pocket expenses incurred by consumers
for covered EHBs, the law is unclear or silent on whether it is
the responsibility of the consumer or the health plan to monitor
accrual of out-of-pocket costs in order to determine when the
consumer has met the annual maximum. The author argues that
many consumers currently face grave difficulties and onerous
challenges in monitoring their annual out-of-pocket expenses.
In particular, under the state's autism insurance mandate, many
individuals who receive behavioral intervention therapy for
autism must pay a separate copay for each visit, with up to 20
visits per month, compounding the difficulties of tracking
copays.
This bill is sponsored by the Alliance of California Autism
Organizations, the Association of Regional Center Agencies, the
Autism Health Insurance Project, the California Association of
Physician Groups, and the Center for Autism and Related
Disorders. Supporters of this bill write that currently,
consumers are sometimes forced to gather and submit receipts for
all medical expenses, leading consumers to inadvertently pay
excessive out-of-pocket expenses. Supporters further contend
that, when families do submit reimbursement, it can take plans
months to reimburse overcharged costs. Supporters argue that
health plans are in the best position to track the copays a
consumer has paid and should have the responsibility to advise
their enrollees when the out-of-pocket has been met.
Health plans and insurers, in opposition, argue that plans and
insurers do not always know when services have been rendered and
thus what an enrollee has paid in share of cost. Opponents
argue that there are few integrated systems that allow for real
time notification for this purpose, making this bill costly and
challenging to implement at a time when plans are being
pressured to keep administrative costs as low as possible.
Health insurers further argue that consumers are better able
than insurers to keep track of what services they have utilized
and paid for.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0004844
SB 1176
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