BILL ANALYSIS Ó AB 210 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 210 (Roger Hernández) As Amended September 1, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | | |SENATE: |25-11|(September 2, | | | | | | |2011) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: HEALTH SUMMARY : Requires every group health insurance policy to provide coverage for maternity services. The Senate amendments delete the Assembly approved version of this bill and instead: 1)Delete Assembly Member Solorio as the author. 2)Make Assembly Member Roger Hernández the author. 3)Add Assembly Members Alejo, Ammiano, Blumenfield, Carter, Huffman, Bonnie Lowenthal, and Williams as coauthors. 4)Require every group health insurance policy to provide coverage for maternity services for all insureds covered under the policy on or before July 1, 2012. 5)Define "maternity services" to include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. 6)Require the definition of "maternity services" from 5) above to remain in effect until federal regulations and guidance issued according to the federal health reform law, the Patient Protection and Affordable Care Act (PPACA), define the scope of benefits to be provided under the maternity benefit requirement and at that time the PPACA definition is to apply. 7)Exempt from the provisions of this bill specialized health insurance, Medicare supplement insurance, short-term limited duration health insurance, Civilian Health and Medical Program AB 210 Page 2 of the Uniformed Services-supplement insurance, or TRI-CARE supplemental insurance, or hospital indemnity, accident-only, or specified disease insurance. 8)Make the following findings and declarations: a) Health care service plans (health plans) are required by the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene) to provide maternity services as a basic health care benefit; b) Existing law does not require health insurers to provide designated basic health care services and, therefore, they are not required to provide coverage for maternity services; and, c) It is essential to clarify that all health coverage made available to California consumers, whether issued by health plans regulated by the Department of Managed Health Care (DMHC) or disability insurers who sell health insurance regulated by the Department of Insurance (CDI), must include maternity services. 9)Require that the provisions of this bill become inoperative only if Senate Bill 222 (Evans and Alquist) of the 2011-12 Regular Session is also enacted and take effect. EXISTING FEDERAL LAW : 1)Requires employers, under the Federal Civil Rights Act, that offer health insurance, and have 15 or more employees, to cover maternity services benefits at the same level as other health care benefits. 2)Defines, under PPACA, a list of "essential health benefits package," including maternal and newborn care, which health insurance coverage and group health plans must provide, beginning in 2014. EXISTING STATE LAW : 1)Provides for the regulation of health plans by DMHC under Knox-Keene and for the regulation of health insurers by CDI under the Insurance Code. AB 210 Page 3 2)Requires health plans under Knox-Keene to cover a number of basic health care services and permits DMHC to define the scope of the services and to exempt plans from the requirement for good cause. 3)Provides, under Knox-Keene, that "basic health care services" include: a) physician services, including consultation and referral; b) hospital inpatient services and ambulatory care services; c) diagnostic laboratory and diagnostic and therapeutic radiological services; d) home health services; e) preventive health services; f) emergency health care services, including ambulance and ambulance transport services and out-of-area coverage; and, g) hospice care. 4)Requires, under Knox-Keene, health plans to provide all medically necessary basic health care services, including maternity services necessary to prevent serious deterioration of the health of the enrollee or the enrollee's fetus, and preventive health care services, specifically including prenatal care. 5)Prohibits health plans and health insurers from issuing contracts and policies that contain a copayment or deductible for inpatient hospital or ambulatory care maternity services that exceed the most common amount charged for the same type of care and services provided for other covered medical conditions. 6)Prohibits health plans and health insurers providing maternity benefits for a person covered continuously from conception from attaching any exclusions, reductions, or limitations to coverage for involuntary complications of pregnancy unless those provisions apply to all of the benefits paid by the plan or insurer. FISCAL EFFECT : According to the Assembly Appropriations Committee analysis of AB 185 (Roger Hernández), which contained similar provisions, this bill will result in the following costs: 1)According to the California Health Benefits Review Program, no direct state fiscal impact for publicly supported health coverage provided through Medi-Cal, California Public Employees' Retirement System, or Healthy Families/Access for Infants and Mothers. AB 210 Page 4 2) Increased premium costs in the individual insurance market of approximately $110 million. Increased premium costs are estimated to be offset by a reduction in out-of-pocket costs for women who would otherwise pay for a variety of services not covered by insurance in the absence of this mandate. 3)Federal regulations implementing PPACA may reduce the fiscal impact of this bill in future years. PPACA requires maternity services to be covered as a basic benefit in state-run health insurance exchanges that will provide health coverage to millions of individuals. AS PASSED BY THE ASSEMBLY , this bill revised existing statute relating to the role of city, county or fire districts with regard to prehospital emergency medical services. COMMENTS : According to the author, preterm birth is the leading cause of newborn deaths in the United States (U.S.). The author cites the Centers for Disease Control and Prevention which stated in 2008 that, 10.5% of all child births in California were preterm births. Moreover, 11% or 57,770 of all preterm child births in the U.S. were in California. In addition to a high preterm birth rate, California has the highest number of all babies born with low-birth weight; 37,598 out of 347,209 births. The author argues that these birth complications are exacerbated by the lack of proper prenatal and postnatal care for expecting mothers. The author maintains that low income minority communities are especially impacted by the lack of maternity care making this a significant pregnancy-related health disparity. The author argues that health plans under the Knox-Keene are required to cover "basic health care services," including maternity services, while insurers in the individual insurance markets exclude maternity care within their basic plan benefits. According to the author, this bill would ensure fair and affordable access to quality maternity coverage in all health insurance policies. Numerous studies have shown that prenatal care pays for itself by helping to minimize the prevalence and severity of low- and very low-birth weight babies. A 2004 study in the Journal of Perinatal and Neonatal Nursing evaluated the effects of AB 210 Page 5 augmented prenatal care on women at high risk for having a low-birth weight baby who were enrolled in a special program that provided basic prenatal care, prenatal education, and case management. The program saved about $13,962 per single low-birth weight birth prevented, and, after program costs were considered, the return on investment equaled 37%; for every dollar invested in the program $1.37 was saved. In addition, a March of Dimes report indicated that hospital charges for premature, low-birth weight infants totaled $37.7 billion nationally in 2003. The report stated that premature birth was among the most common, serious, and costly problems facing infants in the U.S. and is responsible for about half of all infant hospitalizations. Recent significant amendments . The previous version of this bill dealt with emergency medical services. The September 1, 2011 amendments to this bill deleted the prior version of this bill and inserted the above analyzed provisions. The above analyzed provisions have already been heard by an Assembly policy committee. Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916) 319-2097 FN: 0002575