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. 
Senate Vote: On Passage

PASSED on August 30, 2010.

voted YES: 37 voted NO: 0
2 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
select this voteAssemblyAB 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
currently selectedSenateAssembly 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.)
select this voteAssembly 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
currently selectedSenate 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 Senators from interest groups that…

14 Organizations Supported and 6 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.: Assembly 3rd Reading AB2578 Jones Reconsider

14 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.
American Federation of State, County and Municipal Employees
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
American Federation of Teachers
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
California Chiropractic Association
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
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.
Disability Rights Legal Center
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
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.
International Brotherhood of Teamsters
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
International Longshore and Warehouse Union
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
Planned Parenthood Action Funds in California
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
San Bernardino Public Employees Association
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
United Food and Commercial Workers International Union
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.

6 organizations opposed this bill

California Academy of Family Physicians
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
California Advocates
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
California Chamber of Commerce
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
Civil Justice Association of California
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.
Consumer Federation of California
Consumer Federation of California (n.d.). CFC Supports AB 2578 (Jones) - Regulating Insurance Rates . Retrieved August 19, 2010, from CFC.
WellPoint
Senate Rules Committee (2010, August 17). Bill Analysis AB 2578 8-17-2010. Retrieved September 8, 2010, from Leg Info.

Need proof?

View citations of support and opposition

Includes reported contributions to campaigns of Senators in office on day of vote, from interest groups invested in the vote according to MapLight, January 1, 2007 – December 31, 2010.
Contributions data source: FollowTheMoney.org

Contributions by Legislator

Namesort iconPartyDistrict$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Sam AanestadRCA-4$2,000$47,750Yes
Elaine AlquistDCA-13$65,826$22,330Yes
Roy AshburnRCA-18$0$0Yes
Sam BlakesleeRCA-15$13,800$34,750Yes
Ron CalderonDCA-30$28,300$60,350Yes
Gilbert CedilloDCA-22$35,400$8,500Yes
Dave CogdillRCA-14$13,350$55,100Yes
Ellen CorbettDCA-10$64,700$20,100Yes
Lou CorreaDCA-34$64,350$87,446Yes
Mark DeSaulnierDCA-7$96,455$16,200Yes
Jeff DenhamRCA-12$5,900$33,650Yes
Denise DuchenyDCA-40$0$0Yes
Bob DuttonRCA-31$18,460$52,400Yes
Bill EmmersonRCA-37$15,650$40,850Yes
Dean FlorezDCA-16$0$4,500Yes
Loni HancockDCA-9$98,450$18,000Yes
Tom HarmanRCA-35$19,200$71,833Yes
Dennis HollingsworthRCA-36$1,000$14,500Yes
Bob HuffRCA-29$6,100$49,280Yes
Christine KehoeDCA-39$70,950$5,750Yes
Mark LenoDCA-3$112,025$25,700Yes
Carol LiuDCA-21$57,028$11,800Yes
Alan LowenthalDCA-27$77,950$9,550Yes
Gloria Negrete McLeodDCA-32$42,521$76,540Yes
Jenny OropezaDCA-28$27,650$8,800Not Voting
Alex PadillaDCA-20$78,200$83,440Yes
Fran PavleyDCA-23$68,900$21,500Yes
Curren PriceDCA-26$51,714$27,850Yes
Gloria RomeroDCA-24$29,750$9,100Yes
George RunnerRCA-17$17,770$85,823Yes
Joe SimitianDCA-11$74,200$23,675Yes
Darrell SteinbergDCA-6$154,500$72,400Yes
Tony StricklandRCA-19$43,450$116,350Yes
Mimi WaltersRCA-33$20,000$94,150Yes
Pat WigginsDCA-2$26,000$9,600Not Voting
Lois WolkDCA-5$116,753$25,540Yes
Rod WrightDCA-25$57,600$56,527Yes
Mark WylandRCA-38$1,710$50,900Yes
Leland YeeDCA-8$103,445$87,210Yes

Add Data Filters:

Legislator Filters
Legislator Filters
Show All
NamePartyDistrict$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Sam AanestadRCA-4$2,000$47,750Yes
Elaine AlquistDCA-13$65,826$22,330Yes
Roy AshburnRCA-18$0$0Yes
Sam BlakesleeRCA-15$13,800$34,750Yes
Ron CalderonDCA-30$28,300$60,350Yes
Gilbert CedilloDCA-22$35,400$8,500Yes
Dave CogdillRCA-14$13,350$55,100Yes
Ellen CorbettDCA-10$64,700$20,100Yes
Lou CorreaDCA-34$64,350$87,446Yes
Mark DeSaulnierDCA-7$96,455$16,200Yes
Jeff DenhamRCA-12$5,900$33,650Yes
Denise DuchenyDCA-40$0$0Yes
Bob DuttonRCA-31$18,460$52,400Yes
Bill EmmersonRCA-37$15,650$40,850Yes
Dean FlorezDCA-16$0$4,500Yes
Loni HancockDCA-9$98,450$18,000Yes
Tom HarmanRCA-35$19,200$71,833Yes
Dennis HollingsworthRCA-36$1,000$14,500Yes
Bob HuffRCA-29$6,100$49,280Yes
Christine KehoeDCA-39$70,950$5,750Yes
Mark LenoDCA-3$112,025$25,700Yes
Carol LiuDCA-21$57,028$11,800Yes
Alan LowenthalDCA-27$77,950$9,550Yes
Gloria Negrete McLeodDCA-32$42,521$76,540Yes
Jenny OropezaDCA-28$27,650$8,800Not Voting
Alex PadillaDCA-20$78,200$83,440Yes
Fran PavleyDCA-23$68,900$21,500Yes
Curren PriceDCA-26$51,714$27,850Yes
Gloria RomeroDCA-24$29,750$9,100Yes
George RunnerRCA-17$17,770$85,823Yes
Joe SimitianDCA-11$74,200$23,675Yes
Darrell SteinbergDCA-6$154,500$72,400Yes
Tony StricklandRCA-19$43,450$116,350Yes
Mimi WaltersRCA-33$20,000$94,150Yes
Pat WigginsDCA-2$26,000$9,600Not Voting
Lois WolkDCA-5$116,753$25,540Yes
Rod WrightDCA-25$57,600$56,527Yes
Mark WylandRCA-38$1,710$50,900Yes
Leland YeeDCA-8$103,445$87,210Yes

Interest Groups that supported this bill

$ Donated
State & local government employee unions$942,015
Teachers unions$373,485
Health care services$159,378
Teamsters unions$112,730
Chiropractors$69,475
Merchant marine & longshoremen unions$47,650
Health & welfare policy$44,699
Women's issues$25,400
Minority & ethnic groups$6,050
Elderly issues & Social Security$175
Food service & related unions$0

Interest Groups that opposed this bill

$ Donated
Accident & health insurance$765,163
Physicians$547,948
Chambers of commerce$101,555
Fiscal & tax policy$74,000
Pro-business organizations$51,077
Consumer groups$0
Loading…
Date Range of Contributions
Enter a custom date range