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.

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

• Julia Brownley
• Felipe Fuentes
• Mary Salas
• Lori Saldana
• Mark Leno

Subjects

• Health care coverage: rate approval

Major Actions

Introduced	2/19/2010
Referred to Committee
Passed Assembly Committee on Health	3/23/2010
Passed Assembly Committee on Appropriations	5/28/2010
Passed Assembly	6/02/2010
Passed Senate Committee on Health	6/23/2010
Passed Senate Committee on Appropriations	7/15/2010
Passed Senate Committee on Appropriations	8/12/2010
Failed passage in Senate	8/30/2010
Passed Senate	8/30/2010
Failed passage in Senate	8/31/2010

Bill History

• All Votes
• All Actions

	Chamber/Committee	Motion	Date	Result
select this vote	Assembly Committee on Health	Do pass and be re-referred to the Committee on Appropriations.	3/23/2010	This motion PASSED the Assembly Committee on Health 13 voted YES 5 voted NO 1 voted present/not voting
select this vote	Assembly Committee on Appropriations	Do pass as amended.	5/28/2010	This motion PASSED the Assembly Committee on Appropriations 12 voted YES 5 voted NO 0 voted present/not voting
select this vote	Assembly	AB 2578 JONES Assembly Third Reading	6/02/2010	This bill PASSED the Assembly 43 voted YES 28 voted NO 8 voted present/not voting
select this vote	Senate Committee on Health	Do pass, but re-refer to the Committee on Appropriations.	6/23/2010	This motion PASSED the Senate Committee on Health 5 voted YES 1 voted NO 3 voted present/not voting
select this vote	Senate Committee on Appropriations	Placed on Appropriations Suspense file.	7/15/2010	This motion PASSED the Senate Committee on Appropriations 8 voted YES 0 voted NO 3 voted present/not voting
select this vote	Senate Committee on Appropriations	Do pass as amended.	8/12/2010	This motion PASSED the Senate Committee on Appropriations 7 voted YES 4 voted NO 0 voted present/not voting
select this vote	Senate	Assembly 3rd Reading AB2578 Jones By Lowenthal	8/30/2010	This bill DID NOT PASS the Senate 17 voted YES 17 voted NO 5 voted present/not voting
select this vote	Senate	Assembly 3rd Reading AB2578 Jones Reconsider	8/30/2010	This bill PASSED the Senate 37 voted YES 0 voted NO 2 voted present/not voting
currently selected	Senate	Assembly 3rd Reading AB2578 Jones By Lowenthal	8/31/2010	This bill DID NOT PASS the Senate 16 voted YES 19 voted NO 4 voted present/not voting

	Action	Date	Description
	Introduced	2/19/2010
		2/19/2010	Introduced. To print.
		2/21/2010	From printer. May be heard in committee March 23.
		2/22/2010	Read first time.
		3/18/2010	Referred to Com. on HEALTH. From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended.
		3/22/2010	Re-referred to Com. on HEALTH.
select this vote	Vote	3/23/2010	Do pass and be re-referred to the Committee on Appropriations.
		3/24/2010	From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 13. Noes 5.) (March 23).
		4/21/2010	In committee: Set, first hearing. Referred to APPR. suspense file.
select this vote	Vote	5/28/2010	Do pass as amended.
		5/28/2010	From committee: Amend, and do pass as amended. (Ayes 12. Noes 5.) (May 28). Read second time and amended. Ordered returned to second reading.
		6/01/2010	Read second time. To third reading.
		6/02/2010	Read third time, passed, and to Senate. (Ayes 43. Noes 28. Page 5525.)
select this vote	Assembly Vote on Passage	6/02/2010	AB 2578 JONES Assembly Third Reading
		6/03/2010	In Senate. Read first time. To Com. on RLS. for assignment.
		6/10/2010	Referred to Com. on HEALTH.
select this vote	Vote	6/23/2010	Do pass, but re-refer to the Committee on Appropriations.
		6/24/2010	From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 5. Noes 1.) (June 24).
select this vote	Vote	7/15/2010	Placed on Appropriations Suspense file.
		7/15/2010	In committee: Placed on APPR suspense file.
select this vote	Vote	8/12/2010	Do pass as amended.
		8/16/2010	From committee: Amend, and do pass as amended. (Ayes 7. Noes 4.) (August 12).
		8/17/2010	Read second time and amended. Ordered to third reading.
		8/30/2010	Reconsideration 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 vote	Senate Vote on Passage	8/30/2010	Assembly 3rd Reading AB2578 Jones By Lowenthal
select this vote	Senate Vote on Passage	8/30/2010	Assembly 3rd Reading AB2578 Jones Reconsider
		8/31/2010	Read third time, passage refused. (Ayes 16. Noes 19. Page 5114.)
currently selected	Senate Vote on Passage	8/31/2010	Assembly 3rd Reading AB2578 Jones By Lowenthal