California Assembly Bill AB2042 Amended / Bill

 BILL NUMBER: AB 2042AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 22, 2010 INTRODUCED BY Assembly Member Feuer FEBRUARY 17, 2010 An act to  amend Section 123195 of   add Section 1374.255 to  the Health and Safety Code,  relating to public health.   and to add Section 10199.49 to the Insurance Code, relating to health care coverage.  LEGISLATIVE COUNSEL'S DIGEST AB 2042, as amended, Feuer.  Personal health care: catastrophic health insurance.   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.   Existing law requires the State Public Health Officer, in consultation with, and approval of, the Department of Insurance, to contract with an insurer or insurers to provide any California resident, as defined, catastrophic health insurance. Existing law provides that a contract for catastrophic health insurance shall not be required to cover a preexisting medical condition of a resident during the first 10 months of coverage and that charges for a preexisting medical condition shall not apply toward the deductible during the first 10 months of coverage.   This bill would, instead, provide that the contract shall not be required to cover a preexisting medical condition of a resident during the first 6 months of coverage and that charges for a preexisting medical condition shall not apply toward the deductible during the first 6 months of coverage.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  no   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, 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) 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) 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, 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) 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) 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.   SECTION 1.   Section 123195 of the Health and Safety Code is amended to read: 123195. (a) A contract provided for by this chapter shall not be required to cover a preexisting medical condition of the resident during the first six months the resident is covered by catastrophic health insurance provided under this chapter. Charges for a preexisting condition shall not apply toward the deductible during the first six months of coverage. Charges for other conditions during that initial period shall apply toward the deductible. (b) The contract shall also prohibit the insurer from discriminating against prospective insureds in their underwriting practices on the basis of demographic factors, such as age, or preexisting medical conditions.