BILL ANALYSIS
AB 88
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ASSEMBLY THIRD READING
AB 88 (Thomson)
As Amended February 24, 1999
Majority vote
HEALTH 10-3 APPROPRIATIONS 14-6
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|Ayes:|Gallegos, Aanestad, |Ayes:|Migden, Cedillo, Davis, |
| |Corbett, Firebaugh, | |Hertzberg, Kuehl, Papan, |
| |Kuehl, Steinberg, | |Romero, Shelley, |
| |Thomson, Cedillo, Wayne, | |Steinberg, Thomson, |
| |Wildman | |Wesson, Wiggins, Wright, |
| | | |Aroner |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Baugh, Bates, Strickland |Nays:|Brewer, Ashburn, Battin, |
| | | |Pescetti, Maldonado, |
| | | |Runner |
| | | | |
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SUMMARY : Requires a health care service plan (health plan)
contract or disability insurance policy to provide coverage for
severe mental illnesses, and for the serious emotional
disturbances of a child. Specifically, this bill :
1)Requires every health plan or disability insurer contract
issued, amended, or renewed on or after January 1, 2000, that
provides hospital, medical, or surgical coverage, to provide
coverage for diagnosis and medically necessary treatment of
severe mental illnesses and for the serious emotional
disturbances of a child.
2)Defines "severe mental illnesses" as including:
a) Schizophrenia;
b) Schizoaffective disorder;
c) Bipolar disorder (manic depressiveness);
d) Major depressive disorders;
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e) Panic disorder;
f) Obsessive-compulsive disorder;
g) Pervasive developmental disorder or autism;
h) Anorexia nervosa; and,
i) Bulimia nervosa.
3)Defines "serious emotional disturbances of a child" as one or
more mental disorders, other than substance abuse or
developmental disability, identified in the Diagnostic and
Statistical Manual of Mental Disorders.
4)Requires severe mental illness benefits to include outpatient
and inpatient services, hospital services, and prescription
drugs if a plan contract or insurance policy otherwise covers
prescription drugs.
5)Requires terms for maximum lifetime benefits, copayments and
deductibles to be applied equally to all benefits under a plan
contract or insurance policy.
6)Exempts specialized health plan contracts and insurance
policies, including Medicare supplement policies, and Medi-Cal
contracts from the requirements of this bill.
EXISTING LAW requires a health plan contract or disability
insurance policy covering hospital, medical or surgical services
to cover the diagnosis and treatment of specified physical
conditions.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis, the Public Employees Retirement System
indicates a one-half of 1% premium increase that could occur
would result in annual state costs of $1.6 million.
COMMENTS :
1)The author intends this bill to prohibit discrimination
against people with biologically-based mental illnesses,
dispel scientifically unsound distinctions between mental and
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physical illnesses, and require equitable mental health
coverage among all plans and insurers to prevent adverse risk
selection.
2)At least 19 states require equitable coverage for mental
illnesses. Benefits range from all mental illnesses, plus
chemical dependency, to covering only selected severe
illnesses. This bill requires equitable coverage for selected
severe mental illnesses.
3)An April 1998 U.S. Department of Health and Human Services
report indicates that full parity for mental health and
substance abuse in managed care plans would increase premiums
less than 1%.
In 1996, the Congressional Budget Office (CBO) projected
premium increases of 3.2% would result from mental health
parity, and increases of 4% would result from full parity
including chemical dependency coverage. These findings are
disputed by the RAND Corporation, because the CBO projections
"did not incorporate any cost distinction between managed care
or fee-for-service care" and concluded the CBO projections
likely "overestimate the cost effects of parity legislation .
. . ."
4)The California Alliance for the Mentally Ill (CAMI), the
sponsor, argues that this bill would benefit employers by
improving worker productivity, reducing homelessness, and
lowering criminal justice costs. The California Psychiatric
Association (CPA) argues that nearly all health plans
discriminate against patients with brain disorders such as
schizophrenia, depression and manic depression. The
California Psychological Association supports this bill in
concept, and is sponsoring SB 468 (Polanco), which would
require coverage for all mental illnesses.
5)The California Association of Health Plans (CAHP) opposes this
bill unless amended. CAHP is urging the author to exclude
individuals and small employers from the coverage requirements
in this bill. The California Network of Mental Health Clients
is opposed to this bill unless amended to exclude coverage of
involuntary treatment. The Citizens Commission on Human Rights
(CCHR), established by the Church of Scientology to address
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psychiatric violations of human rights, argues this bill will
mandate dubious science, increase the ranks of the uninsured,
and provide a gateway to insurance fraud.
Analysis Prepared by : Ann Blackwood / HEALTH / (916) 319-2097
FN: 0001253