AB 1218 — Health care coverage: rate approval.

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 health insurers by the Department of Insurance and makes the violation of a final order by the Insurance Commissioner relating to rates subject to assessment of a civil penalty and makes the willful violation 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 plan contract or policy from changing the rate of the premium, copayment, coinsurance, or deductible during specified time periods. This bill would, subject to specified exceptions, 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 a health care service plan or health insurance policy. 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, 2011, and would require review of the application in accordance with regulations that each department would be required to adopt no later than January 1, 2011. The bill would subject a rate increase that became effective January 1, 2009, to December 31, 2010, inclusive, to review by the appropriate department. This 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 certain conditions exist and 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. This 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 continuously appropriate that revenue to each department, thereby making an appropriation. Because this bill would specify that its violation is punishable by criminal sanctions under the Knox-Keene Act and under provisions applicable to insurers, 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.

Bill Text

Action History

1. February 02, 2010

   From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

2. January 31, 2010

   Died pursuant to Art. IV, Sec. 10(c) of the Constitution.

3. April 28, 2009

   In committee: Set second hearing. Failed passage. Reconsideration granted.

4. April 21, 2009

   In committee: Set, first hearing. Hearing canceled at the request of author.

5. March 31, 2009

   Referred to Com. on HEALTH.

6. March 02, 2009

   Read first time.

7. March 01, 2009

   From printer. May be heard in committee March 30.

8. February 27, 2009

   Introduced. To print.

Sponsors

• Jones · Primary

Votes

Subjects