Bill Text: CA AB812 | 2009-2010 | Regular Session | Amended

---

Bill Title: Health care coverage: medical loss ratio.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-02-02 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB812 Detail]

Download: California-2009-AB812-Amended.html

---

BILL NUMBER: AB 812	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 5, 2009
	AMENDED IN ASSEMBLY  APRIL 14, 2009

INTRODUCED BY   Assembly Member De La Torre

                        FEBRUARY 26, 2009

   An act to add Section 1378.1 to the Health and Safety Code, and to
add Section 10113.11 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 812, as amended, De La Torre. Health care coverage: medical
loss ratio.
   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. Under existing law, a health care
service plan is prohibited from expending for administrative costs,
as defined, an excessive amount of the payments it receives for
providing health care services to its subscribers and enrollees.
Existing law also provides for the regulation of health insurers by
the Department of Insurance. Under existing law, the Insurance
Commissioner is required to withdraw approval of an individual or
mass-marketed policy of disability insurance if the commissioner
finds that the benefits provided under the policy are unreasonable in
relation to the premium charged, as specified.
   This bill would require a health care service plan or health
insurer to annually report to the Director of  the Department of
 Managed Health Care or the Insurance Commissioner the medical
loss ratio of each health care service plan product or health
insurance policy form issued, amended, or renewed by the plan or
insurer in California. The bill would require the director or
commissioner to make the information reported available to the public
 and would require the departments to jointly adopt and amend
regulations to implement these provisions in order to establish
uniform medical loss ratio reporting  .
   Because a willful violation of the bill's requirements with
respect to health care service plans 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 1378.1 is added to the Health and Safety Code,
to read:
   1378.1.   (a)    Commencing January 1, 2010, a
health care service plan shall annually report to the director the
medical loss ratio of each health care service plan product issued,
amended, or renewed by the plan in California. The director shall
make the information reported pursuant to this section available to
the public. 
   (b) The department and the Department of Insurance shall jointly
adopt and amend regulations to implement this section and Section
10113.11 of the Insurance Code to establish uniform reporting of the
medical loss ratio by health care service plans and health insurers.

  SEC. 2.  Section 10113.11 is added to the Insurance Code, to read:
   10113.11.   (a)    Commencing January 1, 2010, a
health insurer shall annually report to the commissioner the medical
loss ratio of each health insurance policy form issued, amended, or
renewed by the insurer in California. The commissioner shall make the
information reported pursuant to this section available to the
public. 
   (b) The department and the Department of Managed Health Care shall
jointly adopt and amend regulations to implement this section and
Section 1378.1 of the Health and Safety Code to establish uniform
reporting of the medical loss ratio by health care service plans and
health insurers. 
  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.