Health care coverage: denials: premium rates.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, 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. Existing law requires a health care service plan that offers health care coverage in the individual market to provide an individual to whom it denies coverage or enrollment or offers coverage at a rate higher than the standard rate with the specific reason or reasons for that decision in writing. Existing law also prohibits a health care service plan or a health insurer offering coverage in the individual or group market from changing the premium rate or coverage without providing specified notice to the policyholder or subscriber at least 30 days prior to the effective date of the change. This bill would require a health care service plan that offers coverage in the group market and a health insurer that offers health care coverage in the individual or group market to provide an applicant to whom it denies coverage or enrollment, as specified, or offers coverage at a rate higher than the standard rate or standard employee risk rate with the specific reason or reasons for that decision in writing. With respect to both health insurers and health care service plans issuing individual or group policies or contracts, the bill would require that the reasons for a denial or a higher than standard rate be stated in clear, easily understandable language. The bill would require notice of a change to the premium rate of coverage to be provided at least 60 days prior to the effective date of the change. Existing law, the federal Patient Protection and Affordable Care Act, requires the United States Secretary of Health and Human Services to establish a process for the annual review of unreasonable increases in premiums for health insurance coverage in which health insurance issuers submit to the secretary and the relevant state a justification for an unreasonable premium increase prior to implementation of the increase. The act requires the secretary to carry out a program to award grants to states during the 5-year period beginning with fiscal year 2010 to assist states in carrying out this process, as specified. This bill would require a health care service plan or health insurer in the individual, small group, or large group markets to file rate information with the Department of Managed Health Care or the Department of Insurance, as specified, and would require that the information be certified by an independent actuary, as specified, and be made publicly available, except as specified. The bill would authorize the departments to review these filings and issue guidance regarding compliance, require the departments to consult with each other regarding specified actions, and require the departments to post certain findings on their Internet Web sites. The bill would enact other related provisions. Existing law, the federal Patient Protection and Affordable Care Act (PPACA) , specifies that grandfathered health plans, as defined, are subject only to certain provisions of the act, and specifies that policies sold in the group and individual markets to new entities or individuals on or after March 23, 2010, are not grandfathered plans even if the products sold to those subscribers were offered in the group or individual market before March 23, 2010. Existing law requires a plan or insurer to fairly and affirmatively offer, market, and sell all of the plan's contracts or the insurer's benefit plan designs that are sold to small employers to all small employers in each service area in which the plan or insurer provides or arranges for the provision of health care services. This bill would deem a plan or insurer to be in compliance with that requirement with respect to a plan contract or benefit plan design that qualifies as a grandfathered health plan under PPACA if certain requirements are met. Because a willful violation of the bill's requirements relative to health care service plans would be a crime, 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.