California Assembly Bill AB2028

California 2023-2024 Regular Session

• Introduced: 2/1/24
• Refer: 2/12/24

Caption

Medical loss ratios.

Impact

This bill impacts state laws by expanding the application of minimum MLRs to specialized dental policies, which previously were not subject to such requirements. It represents a significant move toward standardizing financial accountability and transparency in health care plans. The proposed changes also align state regulations more closely with federal standards set out in the Affordable Care Act, thus reinforcing compliance across the board for health care service plans.

Summary

Assembly Bill 2028, introduced by Assembly Member Ortega (co-authored by Senator Durazo), aims to amend certain provisions regarding medical loss ratios (MLRs) specifically for specialized dental health care service plans and insurance policies. The bill insists that any healthcare service plan or insurer offering dental services adhere to a minimum medical loss ratio of 85%. Should the expenditure on dental services and quality improvement activities fall below this threshold, the insurer would be required to provide annual rebates to the enrollees based on a specified calculation, ensuring consumers receive adequate value from their premiums.

Contention

Although supporters argue that AB 2028 will enhance oversight of dental health plans and improve consumer protections by ensuring that a larger share of premium revenues is directed towards patient care rather than administrative costs, there might be contention regarding the operational impact on insurers. Concerns have been raised about the financial burden this could impose on smaller insurance providers, particularly in terms of administrative costs associated with compliance and the potential for increased premium rates for enrollees.