AB 2578 - An Act to Amend Section 1386 Of, and to Add Article 6.2 (Commencing with Section 1385.01) to Chapter 2.2 of Division 2 Of, the Health and Safety Code, and to Add Article 4.5 (Commencing with Section 10181) to Chapter 1 of Part 2 of Division 2 of the Insurance Code, Relating to Health Care Coverage.

Health care coverage: rate approval. 2009-2010 Legislature. View bill details
Author(s):
Summary:
Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (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 act a crime. Existing law also provides for the regulation of insurers by the Department of Insurance, including health insurers. Existing law makes the violation of… More
Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (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 act a crime. Existing law also provides for the regulation of insurers by the Department of Insurance, including health insurers. Existing law makes the violation of a final order by the Insurance Commissioner relating to rates imposed by certain insurers, other than health insurers, subject to assessment of a civil penalty and makes the willful violation by those insurers of specified rate provisions a misdemeanor. Under existing law, no change in premium rates or coverage in a health care service plan 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 and 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 require approval by the Department of Managed Health Care or the Department of Insurance of an increase in the amount of the premium, copayment, coinsurance obligation, deductible, and other charges under health care service plan contracts or health insurance policies, other than Medicare supplement, dental-only, or vision-only contracts or policies. The bill would require a plan or insurer to submit to the Department of Managed Health Care or the Department of Insurance, respectively, an application for a rate increase that would be effective on or after January 1, 2012, and would require review of the application in accordance with regulations that each department would be required to adopt no later than January 1, 2012. The bill would subject a rate increase that became effective January 1, 2010, to December 31, 2011, inclusive, to review by the appropriate department.

The bill would require each department to notify the public of a rate application and would deem the application approved within 60 days of the date of that notice unless the department holds a hearing on the application, as specified. The bill would authorize the initiation of, and intervention in, proceedings relating to rate approvals and the award of advocacy fees and costs in those proceedings in specified circumstances. The bill would require the departments to work together in implementation of these provisions and to take specified actions in order to ensure coordination and consistency in implementation.

The bill would authorize each department to assess a charge in connection with its costs associated with a rate application. The bill would direct the deposit of these fees into the respective department’s Health Rate Approval Fund, which would be created by the bill, and would make those funds available to each department for those purposes, upon appropriation. The bill would specify that a violation of its provisions is punishable by criminal sanctions under the Knox-Keene Act and under provisions applicable to insurers and, therefore, 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. Hide
 
Status:
The bill was voted on by the Senate on August 31, 2010. 
Assembly Vote: On Passage

PASSED on June 2, 2010.

voted YES: 43 voted NO: 28
8 voted present/not voting

An Act to Amend Section 1386 Of, and to Add Article 6.2 (Commencing with Section 1385.01) to Chapter 2.2 of Division 2 Of, the Health and Safety Code, and to Add Article 4.5 (Commencing with Section 10181) to Chapter 1 of Part 2 of Division 2 of the Insurance Code, Relating to Health Care Coverage.

AB 2578 — 2009-2010 Legislature

Summary
Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (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 act a crime. Existing law also provides for the regulation of insurers by the Department of Insurance, including health insurers. Existing law makes the violation of a final order by the Insurance Commissioner relating to rates imposed by certain insurers, other than health insurers, subject to assessment of a civil penalty and makes the willful violation by those insurers of specified rate provisions a misdemeanor. Under existing law, no change in premium rates or coverage in a health care service plan 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 and 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 require approval by the Department of Managed Health Care or the Department of Insurance… More
Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (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 act a crime. Existing law also provides for the regulation of insurers by the Department of Insurance, including health insurers. Existing law makes the violation of a final order by the Insurance Commissioner relating to rates imposed by certain insurers, other than health insurers, subject to assessment of a civil penalty and makes the willful violation by those insurers of specified rate provisions a misdemeanor. Under existing law, no change in premium rates or coverage in a health care service plan 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 and 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 require approval by the Department of Managed Health Care or the Department of Insurance of an increase in the amount of the premium, copayment, coinsurance obligation, deductible, and other charges under health care service plan contracts or health insurance policies, other than Medicare supplement, dental-only, or vision-only contracts or policies. The bill would require a plan or insurer to submit to the Department of Managed Health Care or the Department of Insurance, respectively, an application for a rate increase that would be effective on or after January 1, 2012, and would require review of the application in accordance with regulations that each department would be required to adopt no later than January 1, 2012. The bill would subject a rate increase that became effective January 1, 2010, to December 31, 2011, inclusive, to review by the appropriate department.

The bill would require each department to notify the public of a rate application and would deem the application approved within 60 days of the date of that notice unless the department holds a hearing on the application, as specified. The bill would authorize the initiation of, and intervention in, proceedings relating to rate approvals and the award of advocacy fees and costs in those proceedings in specified circumstances. The bill would require the departments to work together in implementation of these provisions and to take specified actions in order to ensure coordination and consistency in implementation.

The bill would authorize each department to assess a charge in connection with its costs associated with a rate application. The bill would direct the deposit of these fees into the respective department’s Health Rate Approval Fund, which would be created by the bill, and would make those funds available to each department for those purposes, upon appropriation. The bill would specify that a violation of its provisions is punishable by criminal sanctions under the Knox-Keene Act and under provisions applicable to insurers and, therefore, 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. Hide
Learn More
At LegInfo.ca.gov
Title
An Act to Amend Section 1386 Of, and to Add Article 6.2 (Commencing with Section 1385.01) to Chapter 2.2 of Division 2 Of, the Health and Safety Code, and to Add Article 4.5 (Commencing with Section 10181) to Chapter 1 of Part 2 of Division 2 of the Insurance Code, Relating to Health Care Coverage.
Author(s)
Dave Jones, Mike Feuer
Co-Authors
Subjects
  • Health care coverage: rate approval
Major Actions
Introduced2/19/2010
Referred to Committee
Passed Assembly Committee on Health3/23/2010
Passed Assembly Committee on Appropriations5/28/2010
Passed Assembly6/02/2010
Passed Senate Committee on Health6/23/2010
Passed Senate Committee on Appropriations7/15/2010
Passed Senate Committee on Appropriations8/12/2010
Failed passage in Senate8/30/2010
Passed Senate8/30/2010
Failed passage in Senate8/31/2010
Bill History
Chamber/CommitteeMotionDateResult
select this voteAssembly Committee on HealthDo pass and be re-referred to the Committee on Appropriations.3/23/2010This motion PASSED the Assembly Committee on Health
13 voted YES 5 voted NO 1 voted present/not voting
select this voteAssembly Committee on AppropriationsDo pass as amended.5/28/2010This motion PASSED the Assembly Committee on Appropriations
12 voted YES 5 voted NO 0 voted present/not voting
currently selectedAssemblyAB 2578 JONES Assembly Third Reading6/02/2010This bill PASSED the Assembly
43 voted YES 28 voted NO 8 voted present/not voting
select this voteSenate Committee on HealthDo pass, but re-refer to the Committee on Appropriations.6/23/2010This motion PASSED the Senate Committee on Health
5 voted YES 1 voted NO 3 voted present/not voting
select this voteSenate Committee on AppropriationsPlaced on Appropriations Suspense file.7/15/2010This motion PASSED the Senate Committee on Appropriations
8 voted YES 0 voted NO 3 voted present/not voting
select this voteSenate Committee on AppropriationsDo pass as amended.8/12/2010This motion PASSED the Senate Committee on Appropriations
7 voted YES 4 voted NO 0 voted present/not voting
select this voteSenateAssembly 3rd Reading AB2578 Jones By Lowenthal8/30/2010This bill DID NOT PASS the Senate
17 voted YES 17 voted NO 5 voted present/not voting
select this voteSenateAssembly 3rd Reading AB2578 Jones Reconsider8/30/2010This bill PASSED the Senate
37 voted YES 0 voted NO 2 voted present/not voting
select this voteSenateAssembly 3rd Reading AB2578 Jones By Lowenthal8/31/2010This bill DID NOT PASS the Senate
16 voted YES 19 voted NO 4 voted present/not voting
ActionDateDescription
Introduced2/19/2010
2/19/2010Introduced. To print.
2/21/2010From printer. May be heard in committee March 23.
2/22/2010Read first time.
3/18/2010Referred to Com. on HEALTH. From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended.
3/22/2010Re-referred to Com. on HEALTH.
select this voteVote3/23/2010Do pass and be re-referred to the Committee on Appropriations.
3/24/2010From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 13. Noes 5.) (March 23).
4/21/2010In committee: Set, first hearing. Referred to APPR. suspense file.
select this voteVote5/28/2010Do pass as amended.
5/28/2010From committee: Amend, and do pass as amended. (Ayes 12. Noes 5.) (May 28). Read second time and amended. Ordered returned to second reading.
6/01/2010Read second time. To third reading.
6/02/2010Read third time, passed, and to Senate. (Ayes 43. Noes 28. Page 5525.)
currently selectedAssembly Vote on Passage6/02/2010AB 2578 JONES Assembly Third Reading
6/03/2010In Senate. Read first time. To Com. on RLS. for assignment.
6/10/2010Referred to Com. on HEALTH.
select this voteVote6/23/2010Do pass, but re-refer to the Committee on Appropriations.
6/24/2010From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 5. Noes 1.) (June 24).
select this voteVote7/15/2010Placed on Appropriations Suspense file.
7/15/2010In committee: Placed on APPR suspense file.
select this voteVote8/12/2010Do pass as amended.
8/16/2010From committee: Amend, and do pass as amended. (Ayes 7. Noes 4.) (August 12).
8/17/2010Read second time and amended. Ordered to third reading.
8/30/2010Reconsideration granted. (Ayes 37. Noes 0. Page 5034.) Read third time, passage refused. (Ayes 17. Noes 17. Page 5033.) Motion to reconsider made by Senator Lowenthal.
select this voteSenate Vote on Passage8/30/2010Assembly 3rd Reading AB2578 Jones By Lowenthal
select this voteSenate Vote on Passage8/30/2010Assembly 3rd Reading AB2578 Jones Reconsider
8/31/2010Read third time, passage refused. (Ayes 16. Noes 19. Page 5114.)
select this voteSenate Vote on Passage8/31/2010Assembly 3rd Reading AB2578 Jones By Lowenthal

Total contributions given to Assemblymembers from interest groups that…

$61,787
$51,347
$39,950
$0
$153,084
5.9 times as much
$609,168
$67,775
$231,082
$0
$908,025
5 Organizations Supported and 5 Opposed; See Which Ones

Organizations that took a position on
An Act to Amend Section 1386 Of, and to Add Article 6.2 (Commencing with Section 1385.01) to Chapter 2.2 of Division 2 Of, the Health and Safety Code, and to Add Article 4.5 (Commencing with Section 10181) to Chapter 1 of Part 2 of Division 2 of the Insurance Code, Relating to Health Care Coverage.: AB 2578 JONES Assembly Third Reading

5 organizations supported this bill

AARP
Lifsher, Marc (2010, March 24). California panel wants say on health insurance rate hikes. LA Times. Retrieved August 19, 2010, from http://articles.latimes.com/2010/mar/24/business/la-fi-health-insure24-2010mar24.
California NOW
CANOW (2010, July 7). Legislative Update. Retrieved August 19, 2010, from CANOW.
CALPIRG
CalPIRG (2010, June 3). Public Interest Bills Did Well This Week In Sacramento. Retrieved August 19, 2010, from CalPIRG.
Greenlining Institute
Greenlining.org (2010, April 7). Pass AB 2758 to give health care reform a boost in California. Retrieved August 19, 2010, from Greenlining.org.
Health Access
Health-Access (2010, July 12). Fulfilling the Promise: Implementing and Improving Health Reform in California. Retrieved August 19, 2010, from Health Access.

5 organizations opposed this bill

California Academy of Family Physicians
CAFP (n.d.). Positions on Legislation. Retrieved August 19, 2010, from Family Docs.
California Chamber of Commerce
Assembly Committee on Appropriations (2010, March 18). AB 2578 Bill Analysis. Retrieved August 19, 2010, from California Senate.
California Hospital Association
Assembly Committee on Appropriations (2010, March 18). AB 2578 Bill Analysis. Retrieved August 19, 2010, from California Senate.
California Medical Association
Assembly Committee on Appropriations (2010, March 18). AB 2578 Bill Analysis. Retrieved August 19, 2010, from California Senate.
Consumer Federation of California
Consumer Federation of California (n.d.). CFC Supports AB 2578 (Jones) - Regulating Insurance Rates . Retrieved August 19, 2010, from CFC.

Need proof?

View citations of support and opposition

Includes reported contributions to campaigns of Assemblymembers in office on day of vote, from interest groups invested in the vote according to MapLight, January 1, 2009 – December 31, 2010.
Contributions data source: FollowTheMoney.org

Contributions by Legislator

Namesort iconPartyDistrict$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Anthony AdamsRCA-59$0$0No
Tom AmmianoDCA-13$0$7,800Yes
Joel AndersonRCA-77$1,500$20,700No
Juan ArambulaICA-31$0$0Not Voting
Karen BassDCA-47$34,950$44,300Yes
Jim BeallDCA-24$0$2,500Yes
Bill BerryhillRCA-26$1,000$13,300No
Tom BerryhillRCA-25$0$11,200Not Voting
Sam BlakesleeRCA-33$0$0No
Marty BlockDCA-78$0$0Not Voting
Bob BlumenfieldDCA-40$0$5,500Yes
Steven BradfordDCA-51$1,000$2,000Yes
Julia BrownleyDCA-41$0$500Yes
Joan BuchananDCA-15$9,900$11,800No
Anna CaballeroDCA-28$12,700$5,548Yes
Charles CalderonDCA-58$0$6,500Not Voting
Wilmer Amina CarterDCA-62$0$3,000Yes
Wesley ChesbroDCA-1$2,483$8,500Yes
Connie ConwayRCA-34$1,000$28,400No
Paul CookRCA-65$0$7,500No
Joe CotoDCA-23$0$0Yes
Mike DavisDCA-48$0$1,000Yes
Hector De La TorreDCA-50$0$31,501Yes
Kevin De LeonDCA-45$1,000$19,600Yes
Chuck DeVoreRCA-70$0$0No
Bill EmmersonRCA-63$0$4,050No
Mike EngDCA-49$1,000$20,690Yes
Noreen EvansDCA-7$0$3,000Yes
Mike FeuerDCA-42$0$3,950Yes
Nathan FletcherRCA-75$0$35,950No
Paul FongDCA-22$3,500$4,800Yes
Felipe FuentesDCA-39$3,000$23,300Yes
Jean FullerRCA-32$2,000$22,550No
Warren FurutaniDCA-55$6,900$3,000Yes
Ted GainesRCA-4$1,000$9,400No
Cathleen GalgianiDCA-17$5,900$8,400Not Voting
Martin GarrickRCA-74$1,500$27,750No
Danny GilmoreRCA-30$0$0No
Curt HagmanRCA-60$0$21,700No
Isadore HallDCA-52$1,459$24,473Not Voting
Diane HarkeyRCA-73$1,000$11,975No
Mary HayashiDCA-18$3,000$32,908Yes
Ed HernandezDCA-57$2,500$11,000Yes
Jerry HillDCA-19$1,000$3,700Yes
Alyson HuberDCA-10$4,900$0Yes
Jared HuffmanDCA-6$0$7,800Yes
Kevin JeffriesRCA-66$0$2,250No
Dave JonesDCA-9$600$56,575Yes
Steve KnightRCA-36$0$19,898No
Ted LieuDCA-53$6,500$29,499Not Voting
Dan LogueRCA-3$0$7,600No
Bonnie LowenthalDCA-54$0$16,150Yes
Fiona MaDCA-12$3,000$12,650Yes
Tony MendozaDCA-56$0$9,400Yes
Jeff MillerRCA-71$0$11,450No
Bill MonningDCA-27$3,000$14,650Yes
Pedro NavaDCA-35$0$15,700Yes
Brian NestandeRCA-64$0$10,600No
Roger NielloRCA-5$500$6,500No
Jim NielsenRCA-2$1,000$13,600No
Chris NorbyRCA-72$0$4,900No
John PerezDCA-46$3,608$26,804Yes
Manuel PerezDCA-80$2,000$15,950Yes
Anthony PortantinoDCA-44$500$19,550Yes
Ira RuskinDCA-21$0$0Yes
Mary SalasDCA-79$6,537$9,287Yes
Lori SaldanaDCA-76$0$0Yes
Jim SilvaRCA-67$0$5,350No
Nancy SkinnerDCA-14$1,500$6,400Yes
Cameron SmythRCA-38$1,500$12,400No
Jose SolorioDCA-69$2,469$10,250Yes
Audra StricklandRCA-37$0$0Not Voting
Sandre SwansonDCA-16$4,800$1,000Yes
Tom TorlaksonDCA-11$0$2,650Yes
Norma TorresDCA-61$3,378$13,050Yes
Alberto TorricoDCA-20$6,000$4,700Yes
Van TranRCA-68$0$0No
Mike VillinesRCA-29$0$36,550No
Mariko YamadaDCA-8$2,000$1,117Yes

Add Data Filters:

Legislator Filters
Legislator Filters
Show All
NamePartyDistrict$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Anthony AdamsRCA-59$0$0No
Tom AmmianoDCA-13$0$7,800Yes
Joel AndersonRCA-77$1,500$20,700No
Juan ArambulaICA-31$0$0Not Voting
Karen BassDCA-47$34,950$44,300Yes
Jim BeallDCA-24$0$2,500Yes
Bill BerryhillRCA-26$1,000$13,300No
Tom BerryhillRCA-25$0$11,200Not Voting
Sam BlakesleeRCA-33$0$0No
Marty BlockDCA-78$0$0Not Voting
Bob BlumenfieldDCA-40$0$5,500Yes
Steven BradfordDCA-51$1,000$2,000Yes
Julia BrownleyDCA-41$0$500Yes
Joan BuchananDCA-15$9,900$11,800No
Anna CaballeroDCA-28$12,700$5,548Yes
Charles CalderonDCA-58$0$6,500Not Voting
Wilmer Amina CarterDCA-62$0$3,000Yes
Wesley ChesbroDCA-1$2,483$8,500Yes
Connie ConwayRCA-34$1,000$28,400No
Paul CookRCA-65$0$7,500No
Joe CotoDCA-23$0$0Yes
Mike DavisDCA-48$0$1,000Yes
Hector De La TorreDCA-50$0$31,501Yes
Kevin De LeonDCA-45$1,000$19,600Yes
Chuck DeVoreRCA-70$0$0No
Bill EmmersonRCA-63$0$4,050No
Mike EngDCA-49$1,000$20,690Yes
Noreen EvansDCA-7$0$3,000Yes
Mike FeuerDCA-42$0$3,950Yes
Nathan FletcherRCA-75$0$35,950No
Paul FongDCA-22$3,500$4,800Yes
Felipe FuentesDCA-39$3,000$23,300Yes
Jean FullerRCA-32$2,000$22,550No
Warren FurutaniDCA-55$6,900$3,000Yes
Ted GainesRCA-4$1,000$9,400No
Cathleen GalgianiDCA-17$5,900$8,400Not Voting
Martin GarrickRCA-74$1,500$27,750No
Danny GilmoreRCA-30$0$0No
Curt HagmanRCA-60$0$21,700No
Isadore HallDCA-52$1,459$24,473Not Voting
Diane HarkeyRCA-73$1,000$11,975No
Mary HayashiDCA-18$3,000$32,908Yes
Ed HernandezDCA-57$2,500$11,000Yes
Jerry HillDCA-19$1,000$3,700Yes
Alyson HuberDCA-10$4,900$0Yes
Jared HuffmanDCA-6$0$7,800Yes
Kevin JeffriesRCA-66$0$2,250No
Dave JonesDCA-9$600$56,575Yes
Steve KnightRCA-36$0$19,898No
Ted LieuDCA-53$6,500$29,499Not Voting
Dan LogueRCA-3$0$7,600No
Bonnie LowenthalDCA-54$0$16,150Yes
Fiona MaDCA-12$3,000$12,650Yes
Tony MendozaDCA-56$0$9,400Yes
Jeff MillerRCA-71$0$11,450No
Bill MonningDCA-27$3,000$14,650Yes
Pedro NavaDCA-35$0$15,700Yes
Brian NestandeRCA-64$0$10,600No
Roger NielloRCA-5$500$6,500No
Jim NielsenRCA-2$1,000$13,600No
Chris NorbyRCA-72$0$4,900No
John PerezDCA-46$3,608$26,804Yes
Manuel PerezDCA-80$2,000$15,950Yes
Anthony PortantinoDCA-44$500$19,550Yes
Ira RuskinDCA-21$0$0Yes
Mary SalasDCA-79$6,537$9,287Yes
Lori SaldanaDCA-76$0$0Yes
Jim SilvaRCA-67$0$5,350No
Nancy SkinnerDCA-14$1,500$6,400Yes
Cameron SmythRCA-38$1,500$12,400No
Jose SolorioDCA-69$2,469$10,250Yes
Audra StricklandRCA-37$0$0Not Voting
Sandre SwansonDCA-16$4,800$1,000Yes
Tom TorlaksonDCA-11$0$2,650Yes
Norma TorresDCA-61$3,378$13,050Yes
Alberto TorricoDCA-20$6,000$4,700Yes
Van TranRCA-68$0$0No
Mike VillinesRCA-29$0$36,550No
Mariko YamadaDCA-8$2,000$1,117Yes

Interest Groups that supported this bill

$ Donated
Women's issues$61,787
Health & welfare policy$51,347
Minority & ethnic groups$39,950
Elderly issues & Social Security$0

Interest Groups that opposed this bill

$ Donated
Physicians$609,168
Hospitals$231,082
Chambers of commerce$67,775
Consumer groups$0
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