Bill Text: CA AB2042 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Health care coverage: rate changes.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-29 - Vetoed by Governor. [AB2042 Detail]

Download: California-2009-AB2042-Amended.html

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BILL NUMBER: AB 2042	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 6, 2010
	AMENDED IN ASSEMBLY  MARCH 22, 2010

INTRODUCED BY   Assembly Member Feuer

                        FEBRUARY 17, 2010

   An act to add Section 1374.255 to the Health and Safety Code, and
to add Section 10199.49 to the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2042, as amended, Feuer. Health care coverage: rate changes.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
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 act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance. Under
existing law, no change in premium rates or coverage in a health care
service plan contract or a health insurance policy may become
effective without prior written notification of the change to the
contractholder or policyholder. Existing law prohibits a plan or
insurer during the term of a group plan contract or policy from
changing the rate of the premium, copayment, coinsurance, or
deductible during specified time periods.
   This bill would prohibit a health care service plan or health
insurer from altering the rates that apply to individual health care
service plan contracts or individual health insurance policies, or
altering any benefits included in individual contracts or policies,
more than once each calendar year, except as specified.
   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.
   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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1374.255 is added to the Health and Safety
Code, to read:
   1374.255.  (a) For purposes of this section, "rate" includes, but
is not limited to, premiums, copayments, coinsurance obligations,
deductibles, out-of-pocket costs, and any other charges for covered
benefits.
   (b) Notwithstanding any other provision of law, except as required
by changes in state or federal law  or as provided in
subdivision (c)  , a health care service plan shall not do
either of the following more than once each calendar year:
   (1) Alter in any manner the rates that apply to individual plan
contracts.
   (2) Alter in any manner any benefits included in individual plan
contracts. 
   (c) (1) If an enrollee changes geographic region or family
composition, the plan may alter the rates to reflect that change but
shall ensure that the change in the rates offered reflects only the
change in geographic region or family composition.  
   (2) If coinsurance obligations are based on a percentage of the
cost of services, nothing in this section shall prevent a change in
provider rates during the term of the contract even if that change
increases the charge for covered benefits to the enrollee. 

   (c) 
    (d)  This section shall not apply to health care service
plan contracts issued through a publicly funded state health care
coverage program, including, but not limited to, the Medi-Cal program
and the Healthy Families Program, or to Medicare supplement
contracts. 
   (d) 
    (e)  This section shall apply only to health care
service plan contracts issued, amended, or renewed on or after
January 1, 2011.
  SEC. 2.  Section 10199.49 is added to the Insurance Code, to read:
   10199.49.  (a) For purposes of this section, "rate" includes, but
is not limited to, premiums, copayments, coinsurance obligations,
deductibles, out-of-pocket costs, and any other charges for covered
benefits.
   (b) Notwithstanding any other provision of law, except as required
by changes in state or federal law  or as provided in
subdivision (c)  , a health insurer shall not do either of the
following more than once each calendar year:
   (1) Alter in any manner the rates that apply to individual health
insurance policies.
   (2) Alter in any manner any benefits included in individual health
insurance policies. 
   (c) (1) If an insured changes geographic region or family
composition, the health insurance policy may alter the rates to
reflect that change but shall ensure that the change in the rates
offered reflects only the change in geographic region or family
composition.  
   (2) If coinsurance obligations are based on a percentage of the
cost of services, nothing in this section shall prevent a change in
health insurance rates during the term of the policy even if that
change increases the charge for covered benefits to the insured.
 
   (c) 
    (d)  This section shall not apply to health insurance
policies issued through a publicly funded state health care coverage
program, including, but not limited to, the Medi-Cal program and the
Healthy Families Program, or to Medicare supplement policies.

   (d) 
    (e)  This section shall apply only to health insurance
policies issued, amended, or renewed on or after January 1, 2011.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.