SB 57

Bill Subjects

Abstract

(1) Existing law establishes the California Major Risk Medical Insurance Program (MRMIP) that is administered by the Managed Risk Medical Insurance Board (MRMIB) to provide major risk medical coverage to residents, as defined, who, among other matters, have been rejected for coverage by at least one private health plan. Existing law authorizes MRMIB to provide that coverage through participating health plans, including health insurers and health care service plans, and authorizes MRMIB to provide or purchase stop-loss coverage under which MRMIP and participating health plans share the risk for health plan expenses that exceed plan rates. This bill would require that a person either be rejected for coverage by at least 3 different health plans or have a qualified medically uninsurable condition, as specified, in order to be eligible for MRMIP and would also revise the definition of the term "resident" for purposes of MRMIP eligibility, as specified. The bill would require MRMIB to offer at least 4 different options for major risk medical coverage, including at least one Health Savings Account-compatible option, and would authorize MRMIB to subsidize the Health Savings Account-compatible option, as specified. The bill would also authorize MRMIB, until a specified date and if sufficient funds are available, to participate in deductible and out-of-pocket maximum reinsurance using specified products. The bill would require MRMIB to release all program actuarial data for 2004 to 2007, inclusive, to the Legislative Analyst's Office, as requested by that office. Existing law specifies the minimum scope of benefits offered by participating health plans in MRMIP and requires the exclusion of benefits that exceed $75,000 in a calendar year or $750,000 in a lifetime, as specified. Existing law requires MRMIB to establish program contribution amounts for each category of risk for each participating health plan. Under existing law, the risk categories are based on age and geographic region. This bill would, until January 1, 2015, increase the annual benefit limit to $150,000 and the lifetime benefit limit to $1,000,000, and would require the board to adopt regulations eliminating the annual benefit limit if sufficient funds are available, as specified. The bill would authorize MRMIB, by regulation, to develop additional risk categories based on morbid obesity and tobacco use, as specified, and would also require MRMIB to adopt regulations that allow participating health plans to incorporate wellness programs, case management services, and disease management services, and offer enrollee rewards based on health risk reduction. The bill would require that those regulations remain in effect until January 1, 2015. Existing law creates the Major Risk Medical Insurance Fund, continuously appropriates the fund to MRMIB for purposes of MRMIP, and requires specified moneys to be deposited annually in the fund from the Cigarette and Tobacco Products Surtax Fund. This bill would increase the moneys to be deposited into the fund from the Cigarette and Tobacco Products Surtax Fund by a specified amount, thereby making an appropriation. (2) Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (the Knox-Keene Act) , provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the Knox-Keene Act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. This bill would, commencing July 1, 2010, require each health care service plan and health insurer to add a surcharge to each life covered by an individual health plan contract or individual health insurance policy, as specified, and would require the deposit of those revenues in the Major Risk Medical Insurance Fund, a continuously appropriated fund, thereby making an appropriation. The bill would require the suspension of the assessment if state funds appropriated to MRMIP are less than a certain amount. The bill would require health care service plans and health insurers to report to the Department of Managed Health Care or the Department of Insurance, and MRMIB, the number of lives covered by the plan's or insurer's individual health care service plan contracts or individual health insurance policies annually, as specified. The bill would repeal these provisions on January 1, 2015. Because a willful violation of these requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program. Existing law prohibits health care service plan contracts and health insurance policies from excluding coverage on the basis of a preexisting condition provision for more than a specified period of time. This bill would authorize MRMIB to create a rider pool consisting of applicants with no more than 2 health conditions that made them uninsurable in the private market, as specified. The bill would authorize an individual health care service plan contract or individual health insurance policy issued to one of the rider pool members to temporarily or permanently exclude coverage for those conditions. The bill would repeal these provisions on January 1, 2015. Existing law requires a health care service plan or a health insurer offering individual plan contracts or individual insurance policies to fairly and affirmatively offer, market, and sell certain individual contracts and policies to all federally eligible defined individuals, as defined, in each service area in which the plan or insurer provides or arranges for the provision of health care services. For those contracts and policies that offer services through a preferred provider arrangement, existing law requires that the premium not exceed the average premium paid by a similar subscriber of MRMIP, as specified. For all other contracts and policies, existing law requires that the premium not exceed 170% of the standard premium charged to a similar individual, as specified. This bill would require that the premium for all contracts and policies not exceed 170% of the standard premium charged to a similar individual, as specified, regardless of whether services are offered through a preferred provider arrangement, and would make related changes. Because a willful violation of these requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program. (3) This bill would result in a change in state taxes for the purpose of increasing state revenues within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.