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 health care service plans and health insurers to provide coverage for prosthetic devices in connection with specified health conditions and procedures.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, to cover cranial prostheses, as defined, for individuals experiencing permanent or temporary medical hair loss. The bill would require a licensed provider to prescribe the cranial prosthesis for an individuals course of treatment for a diagnosed health condition, chronic illness, or injury, as specified. The bill would limit coverage to once every 12 months and $750 for each instance of coverage. The bill would not apply these provisions to a specialized health care service plan or specialized health insurance policy. Because a violation of these requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program.

Existing law also establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Commencing January 1, 2025, this bill would require coverage for cranial prostheses for individuals experiencing permanent or temporary medical hair loss. or treatment for those conditions as a Medi-Cal benefit, subject to the same requirements with respect to provider prescription, coverage frequency, and amount. The bill would not apply these provisions to a specialized health care service plan.

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.

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2668

Author:(Berman) – As Introduced Ver:February 14, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires a health plan, insurer, and Medi-Cal to cover a wig or hairpiece for an individual experiencing permanent or temporary medical hair loss, if prescribed by a licensed provider for a diagnosed health condition. The bill limits coverage to one wig every 12 months, and $750 per wig.

FISCAL EFFECT:

1. The California Health Benefits Review Program (CHBRP) estimates ongoing costs to the Department of Health Care Services of $13,548,000 in premium increases to Medi-Cal managed care plans and county-organized health systems (50% General Fund, 50% federal funds).
2. CHBRP estimates costs of $6,264,000, including $6,186,000 for Department of Managed Health Care (DMHC)-regulated small-group and individual plans and $78,000 for Department of Insurance-regulated small-group policies (General Fund), due to this bill’s requirement for coverage that exceeds the state’s Essential Health Benefits (EHBs).
3. CHBRP estimates this bill will increase CalPERS premiums by $928,000; if the state pays for 60% of these premiums, the cost would be $557,000 (Public Employees Health Care Fund, special funds).
   
4. Costs to DMHC of approximately $64,000 in fiscal year (FY) 2025-26 and $133,000 in FY 2026-27 and annually thereafter (Managed Care Fund). DMHC indicates these costs will be incurred to its Office of Plan Monitoring OPM for clinical and statistical consultant services to develop and maintain survey methodologies and provide clinical and statistical review and assessment for compliance with the requirements of this bill.
   
5. Costs of $6,000 in FY 2024-25 to the Department of Insurance (Insurance Fund).

According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years. 

COMMENTS:

1. Purpose. This bill is co-sponsored by the National Alopecia Areata Foundation and California Advocates for Alopecia. According to the author:

The lack of health insurance coverage for wigs means that Californians with alopecia and other health conditions are forced to pay out of their own pockets. The cost of wigs depend on a number of factors including length and the average cost is approximately $1,500. If patients cannot afford this cost, then they do not have access to a wig, which plays a crucial role in one’s mental health.

To remove this barrier, AB 2668 would provide coverage for a wig if a licensed provider prescribes the wig for treatment for a diagnosed health condition, chronic illness, or injury, including but not limited to alopecia areata. Importantly, this bill includes parameters, which would limit coverage to no more than one wig in a year and cap the amount of coverage for a wig to $750.

1. Background. According to CHBRP, patients with medical hair loss use medical wigs or hairpieces to help restore their physical appearance. The wig or hairpiece may cover the whole scalp or only a portion, be made of synthetic or natural hair, and have many different methods of fixation. These features factor into the cost of the medical wigs, with some costing more than $5,000.
   
   The costs of wigs can be a large barrier to their purchase and use. Patients with alopecia may experience large disease-related financial burdens that negatively impact their well-being. In a survey of 675 members of the National Alopecia Areata Foundation, 57% of respondents reported their financial burden due to alopecia areata was moderately or seriously burdensome. Median out-of-pocket expenditures among respondents was $1,354 for disease-related expenses; headwear and cosmetic options including wigs, makeup, or scarves accounted for the largest single sector expense.
2. CHBRP Analysis. CHBRP reports most baseline utilization of wigs occurs outside of insurance. There are external organizations that provide medical wigs to patients experiencing medical hair loss, often at no cost or at a discounted rate. Additionally, enrollees may be unaware of existing benefit coverage and therefore do not seek coverage for medical wigs they purchase. CHBRP notes it is possible that medical wigs covered under the durable medical equipment (DME) benefit are not being correctly recorded within claims data. For these reasons, CHBRP states its analysis likely overestimates the proportion of utilization that is covered by health insurance at baseline. If claims data accurately reflect baseline utilization, premium impacts due to this bill would be approximately twice as high as estimated.
   
   Overall Costs. CHBRP estimates this bill will result in an increase of total net annual expenditures of $26,503,000 (0.02%) for enrollees with state-regulated health insurance, including an increase of $29,513,000 in premiums paid by employers and enrollees. Increases in employer premiums would range between $0.004 per member per month (PMPM) for CDI-regulated large-group policies to $0.10 PMPM for DMHC-regulated large-group plans.

EHBs. This bill requires coverage for a new state benefit mandate that appears to exceed the definition of EHBs in California. CHBRP reports a state that requires qualified health plans (QHPs – products offered through Covered California) to offer benefits in excess of the EHBs, as this bill appears to do, must make payments to defray the cost of those additionally mandated benefits, either by paying the purchaser directly or by paying the QHP. As a result, CHBRP projects the state may be required to defray the following amounts for each enrollee in a QHP due to this bill:

• 1. $0.13 PMPM for a small-group DMHC-regulated plan.
  2. $0.11 PMPM for an individual DMHC-regulated plan.
  3. $0.11 PMPM for an enrollee in a small-group CDI-regulated policy.

CHBRP estimates these payments add up to a state responsibility of $6,264,000, which includes $6,186,000 in payments for DMHC-regulated small-group and individual plans and $78,000 in payments for CDI-regulated small-group policies.

Public Health. Medical hair loss can lead to a reduction in quality of life and personal well-being. Specifically, it has been documented that people with alopecia areata experience more emotional distress and mental health challenges such as anxiety, depression, self-esteem issues, and lack of confidence. Similarly, patients undergoing chemotherapy have reported hair loss as one of the most distressing side effects of chemotherapy, impacting psychological well-being and overall quality of life. There is some evidence to suggest that use of well-fitting, high-quality wigs can improve quality of life and social well-being for patients experiencing distress from alopecia areata or chemotherapy-induced alopecia.

CHBRP notes there are disparities in the underlying conditions that cause medical hair loss; it is therefore possible that there are disparities in the need for medical wigs. Black women have higher rates of some of the underlying conditions that lead to medical hair loss. CHBRP notes it is not clear if the access provided by this bill would address the needs of Black women, as Black women may be less likely to find medical wigs with the appropriate hair texture and hair styles.

1. Related Legislation.
   1. AB 2753 (Ortega) includes DME, as specified, under EHB coverage of rehabilitative and habilitative services and devices. AB 2753 is pending in this committee.
   2. AB 2914 (Bonta) expresses the intent of the Legislature to review California’s EHB benchmark plan and establish a new benchmark plan for the 2027 plan year. AB 2914 is pending in Assembly Health Committee.
   3. SB 1290 (Roth) is substantially similar to AB 2914. SB 1290 is pending in Senate Appropriations Committee.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 23, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2668

Author:((Berman) – As Introduced Ver:February 14, 2024

SUBJECT: Coverage for cranial prostheses.

SUMMARY: Requires health plan, insurer, and Medi-Cal coverage of cranial prosthesis for individuals experiencing permanent or temporary medical hair loss. Limits coverage to $750. Specifically, this bill:

1. Requires a health, insurer, or Medi-Cal to cover cranial prostheses for individuals experiencing permanent or temporary medical hair loss, in accordance with 2) below.
2. Requires coverage to meet all of the following requirements:
   1. A licensed provider prescribes the cranial prosthesis for an enrollee, insured, or beneficiary’s course of treatment for the diagnosed health condition, chronic illness, or injury, including, but not limited to, alopecia areata, alopecia medicamentosa, scarring alopecia, and lupus. Defines cranial prosthesis as a wig or hairpiece;
   2. The contract or policy provides coverage for a cranial prosthesis to an individual enrollee, insured, or beneficiary no more frequently than once every 12 months; and,
   3. The coverage is limited to seven hundred fifty dollars ($750) for each instance of coverage, and subject to any cost-sharing requirements that are otherwise applicable under the health plan contract or insurance policy.
3. Exempts specialized health plans or insurers from the provisions of this bill.

EXISTING LAW:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 and the California Department of Insurance (CDI) to regulate health insurers. [Health and Safety Code (HSC) § 1340, et seq., and (Insurance Code (INS) § 106, et seq.]
2. Establishes as California's essential health benefits (EHBs) benchmark under the Patient Protection and Affordable Care Act (ACA), the Kaiser Small Group Health Maintenance Organization, existing California health insurance mandates, and the ten ACA mandated benefits. [HSC § 1367.005 and INS § 10112.27]
3. Includes, in regulations, durable medical equipment (DME) for home use as other health benefits that EHBs must cover. [Title 28 Code of Regulations §1300.67.005]
4. Defines “basic health care services” as all of the following:
   1. Physician services, including consultation and referral;
   2. Hospital inpatient services and ambulatory care services;
   3. Diagnostic laboratory and therapeutic radiologic services;
   4. Home health services;
   5. Preventive health services;
   6. Emergency health care services, including ambulance and ambulance transport services and out-of-area coverage; and,
   7. Hospice care, as specified. [HSC § 1345]
5. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which low-income individuals are eligible for medical coverage. [Welfare and Institutions Code (WIC) § 14000, et seq.] Establishes a schedule of benefits under the Medi-Cal program, which includes benefits required under federal law and benefits provided at state option but for which federal financial participation is available. [WIC §14132]

FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, the lack of health insurance coverage for wigs means that Californians with alopecia and other health conditions are forced to pay out of their own pockets. The cost of wigs depends on a number of factors including length and the average cost is approximately $1,500. If patients cannot afford this cost, then they do not have access to a wig, which plays a crucial role in one’s mental health. To remove this barrier, this bill would provide coverage for a wig if a licensed provider prescribes the wig for treatment for a diagnosed health condition, chronic illness, or injury, including but not limited to alopecia areata (an autoimmune disease of hair follicles that causes nonscarring patches of hair loss). Importantly, the author concludes, this bill includes parameters, which would limit coverage to no more than one wig in a year and cap the amount of coverage for a wig to $750.
2. BACKGROUND. According to the California Health Benefits Review Program (CHBRP), patients going through medical hair loss may use medical wigs or hairpieces to help restore their physical appearance. Depending on the needs of the person and the type and degree of hair loss, many different styles of medical wigs exist. The wigs or hairpieces may cover the whole scalp or only a portion, be made of synthetic or natural hair, and have many different methods of fixation. All these features factor into the cost of the medical wigs, with some costing upwards of $5,000. Maintenance of the medical wig is required for longevity. Medical wigs are maintained in the same manner as a head of hair, where they are cleaned with shampoo and warm water, conditioned, air-dried, and then brushed into the style or position.
   1. Barriers. The costs of wigs can be a large barrier to their purchase and use. More broadly, patients with alopecia may experience high financial burdens related to their disease that negatively impact their well-being, including but not limited to the costs of wigs. In a survey of 675 members of the National Alopecia Areata Foundation, 31.7% and 25.2% of respondents reported that their financial burden due to alopecia areata was moderately or seriously burdensome. Median out-of-pocket expenditures among respondents was $1,354 for disease-related expenses; headwear and cosmetic options including wigs, makeup, or scarves accounted for the largest single sector expense. Respondents reported spending a median of $450 annually on this category. Another survey found that the average cost of wigs was $1,530. To address the financial burden associated with medical wigs, several organizations may offer free or discounted medical wigs for patients with medical conditions, including nonprofit entities such as the American Cancer Society. Several organizations also provide medical wigs to patients with alopecia areata and other medical hair loss, such as Children With Hair Loss, which provides medical wigs to children and young adults at no charge. Access to medical wigs may vary on a variety of factors, including location, availability, access to vendors supplying free or discounted products, knowledge of such resources, and affordability of discounted prices. Beyond wigs, individuals with alopecia can experience costs related to their disease, such as lost income from work absenteeism and transportation costs related to medical appointments. Patients may also dedicate substantial time related to concealment of their hair loss. Additionally, there is some cross-sectional, survey-based evidence that indicates higher financial burdens among women than men.
   2. CHBRP analysis. AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the University of California to assess legislation proposing a mandated benefit or service and prepare a written analysis with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP was created in response to AB 1996. SB 125 (Hernandez), Chapter 9, Statutes of 2015, added an impact assessment on EHBs, and legislation that impacts health insurance benefit designs, cost sharing, premiums, and other health insurance topics. CHBRP’s analysis of this bill includes the following:
      1. Assumptions. CHBRP indicates that a vast majority of baseline utilization is happening outside of insurance. There are external organizations that provide medical wigs to patients experiencing medical hair loss, often at no cost or at a discounted rate. Additionally, enrollees may be unaware of existing benefit coverage and therefore do not seek coverage for medical wigs they are purchasing out of pocket. It is also possible that medical wigs that are covered under the DME benefit are not being correctly recorded within claims data. Therefore, this analysis likely overestimates the proportion of utilization that is covered by an enrollee’s health insurance at baseline. Should claims data accurately reflect baseline utilization, premium impacts due to this bill would be approximately twice as high.
         1. Impact on expenditures. This bill would result in an increase of total net annual expenditures of $26,503,000 (0.02%) for enrollees with state-regulated health insurance. Total premiums paid by employers and enrollees would increase by $29,513,000. Increases in employer premiums would range between $0.004 per member per month (PMPM) for CDI-regulated large-group policies to $0.10 PMPM for DMHC-regulated large-group plans. Enrollee premiums would increase between $0.001 PMPM for CDI-regulated large-group policies and $0.06 PMPM for DMHC-regulated individual plans. At baseline, enrollee expenses for noncovered benefits are approximately $22 million. Postmandate, these expenses would be partially paid for by an increase in premiums as well as by an increase in cost sharing for covered benefits. Cost sharing would increase by $19 million and includes an enrollee’s cost share of the $750 benefit amount, as well as additional expenses should an enrollee purchase a medical wig that is more expensive than $750. On average, enrollee cost sharing would increase between $0.006 PMPM for enrollees in CDI-regulated large-group policies and $0.14 PMPM for enrollees in DMHC-regulated large-group plans. Expenses for noncovered benefits would decrease by $0.007 PMPM for enrollees in CDI-regulated large-group policies and $0.17 PMPM for enrollees in DMHC-regulated large-group plans.
            1. Medi-Cal. According to DHCS, medical wigs may be covered for Medi-Cal beneficiaries under age 21 through the Early and Periodic Screening, Detection, and Treatment benefit when determined to be medically necessary, which could include cancer treatment. Additionally, for all other Medi-Cal members, if a Medi-Cal provider believes that medical wigs may be appropriate for a Medi-Cal member for a specific condition, which could include cancer treatment, then the provider may submit an authorization request to determine if medical necessity is established. However, CHBRP notes based on responses from the Medi-Cal managed care plans, there is a discrepancy in whether managed care plans provide coverage even for beneficiaries under aged 21. For Medi-Cal beneficiaries enrolled in DMHC-regulated plans and County Organized Health Systems, premiums would increase by $0.11 PMPM.
            2. California Public Employees' Retirement System (CalPERS). For enrollees associated with CalPERS in DMHC-regulated plans, employer premiums would increase by $0.09 PMPM and enrollee premiums would increase by $0.02 PMPM. Enrollee cost sharing for CalPERS enrollees would increase by $0.12 PMPM and expenses for noncovered benefits would decrease by $0.13 PMPM.
            3. Number of Uninsured in California. CHBRP estimates this bill would have no measurable impact on the number of uninsured persons.
      2. EHBs. This bill requires coverage for a new state benefit mandate that appears to exceed the definition of EHBs in California. CHBRP estimates that the state would potentially be required to defray the following amounts due to this bill:
         1. $0.13 PMPM for each qualified health plan (QHP – products offered on Covered California) enrollee in a small-group DMHC-regulated plans;
         2. $0.11 PMPM for each QHP enrollee in an individual DMHC-regulated plan; and,
         3. $0.11 PMPM for each QHP enrollee in a small-group CDI-regulated policy. CHBRP estimates that this translates to a state responsibility of $6,264,000 total, which includes:
            1. $6,186,000 in payments to DMHC-regulated small-group and individual plans; and,
            2. $78,000 in payments to CDI-regulated small-group policies
      3. Utilization. For patients with alopecia areata and scarring alopecia, CHBRP relied on a 2022 survey of patients with alopecia areata, which found that 85.7% obtained a medical wig and 93.1% of respondents considered getting a medical wig. Of those who did not obtain a medical wig, the reason most commonly cited was cost. CHBRP assumed that 76% of enrollees with alopecia areata and scarring alopecia without insurance coverage obtain medical wigs at baseline and 93.1% of enrollees with alopecia areata and scarring alopecia would obtain a wig postmandate.
         1. For enrollees experiencing alopecia medicamentosa (widespread hair loss commonly as a result of chemotherapy), CHBRP used a study that examined wig use among patients with cancer. This study found that among patients experiencing hair loss, 77% purchased a wig and 97% purchased a head covering (including a medical wig). CHBRP assumed that at baseline 77% of enrollees experiencing alopecia medicamentosa use medical wigs. Postmandate, 97% of enrollees with alopecia medicamentosa would obtain medical wigs.
         2. Based on responses to CHBRP’s survey of California insurers, 29% of enrollees have coverage for medical wigs at baseline. The terms of benefit coverage vary among those with existing coverage. Most enrollees have baseline benefit coverage with no limit on cost per medical wig, while a small portion of enrollees have coverage with a benefit cap of $350 or $1,000 per medical wig. Some enrollees are required to obtain medical wigs through specific vendors. Additionally, how the benefit is structured varies; most coverage of medical wigs is through the DME benefit, although some enrollees have coverage under other benefit categories. Baseline benefit coverage is not limited to enrollees with certain conditions, diagnoses, or treatments. Postmandate, all enrollees would have benefit coverage for medical wigs for $750 per medical wig.
      4. Public health. Medical hair loss can lead to a reduction in quality of life and personal well-being. Specifically, it has been documented that people with alopecia areata experience more emotional distress and mental health challenges such as anxiety, depression, self-esteem issues, and lack of confidence. Similarly, patients undergoing chemotherapy have reported hair loss as one of the most distressing side effects of chemotherapy, impacting psychological well-being and overall quality of life. There is some evidence to suggest that use of well-fitting, high-quality wigs can improve quality of life and social well-being for patients experiencing distress from alopecia areata or chemotherapy-induced alopecia.
      5. Long-term impacts. For enrollees with alopecia medicamentosa, some enrollees will seek a new medical wig each year, while others will use one total. A 2019 study found that the mean period of wig use among patients with cancer was 12.5 months. Approximately half of the patients who used wigs bought one wig, 25% bought two wigs, and 14% bought three or more wigs. The overall population of patients experiencing hair loss due to cancer treatment or other drug-induced hair loss is likely to remain similar over time. For enrollees with permanent or long-term hair loss due to alopecia areata or scarring alopecia, utilization of medical wigs may be greater than in the first year postmandate. The number of enrollees with these conditions at baseline will likely remain similar over time; however, this population will grow as new enrollees experience these medical conditions and associated hair loss. As a result of the increase in utilization in the long term, long-term cost impacts of this bill would likely be higher than the first year postmandate. It is possible that unit cost of medical wigs would be impacted due to the increase in insurance coverage:
         1. Insurers may negotiate the unit cost of medical wigs, potentially driving down unit cost. One way that insurers may drive down unit cost is through requiring enrollees to obtain medical wigs through specified vendors. If these vendors provide a selection of medical wigs that are lower than the $750 benefit limit, unit cost would be lower than the first year postmandate estimate provided above;
         2. Alternately, if no vendor requirements exist or the vendors offer medical wigs up to and above the benefit coverage limit, enrollees may choose wigs with prices close to the benefit coverage limit of $750, which would contribute to long-term expenditures meeting the high-end estimates of the first year postmandate. Over time, as inflation grows, $750 per medical wig may no longer be adequate to purchase a product that meets the enrollee’s satisfaction, thereby limiting the value of benefit coverage for enrollees seeking a medical wig for medical hair loss.

There are disparities in the underlying conditions that cause medical hair loss. It is therefore possible that there are disparities in need for medical wigs. Black women, in particular, have higher rates of some of the underlying conditions that lead to medical hair loss. While this bill would be expected to expand access to medical wigs, it is not clear if this expanded access would specifically address the needs of Black women, especially as it has been reported that Black women are less likely to find medical wigs with the appropriate hair texture and hair styles. Therefore, it is unknown to what extent this bill would reduce these disparities either in the short or long term.

• 1. Other states. According to CHBRP, a number of states require coverage of medical wigs for enrollees in state-regulated individual and group health plans. Connecticut, Maryland, Massachusetts, Oklahoma, and Rhode Island require coverage for medical wigs for enrollees experiencing hair loss due to cancer, leukemia, and/or chemotherapy and radiation therapy. Meanwhile, New Hampshire’s requirements are similar to this bill in that coverage for medical wigs is applicable to enrollees experiencing hair loss due to medical conditions including but not limited to chemotherapy-induced hair loss. New Hampshire requires coverage for patients with hair loss resulting from cancer or leukemia treatment as well as for patients experiencing alopecia areata, alopecia totalis, or permanent loss of scalp hair due to injury. Minnesota and Delaware require coverage of medical wigs for patients with alopecia areata. Coverage in most of these states is generally subject to certain terms and conditions, such as one prosthesis per year per enrollee, often up to a certain dollar amount.

1. SUPPORT. The National Alopecia Areata Foundation, cosponsor of this bill, writes that the lack of health insurance coverage for wigs means that Californians with alopecia and other health conditions are forced to pay out of their own pockets. The cost of wigs depend on a number of factors including length and the average cost is approximately $1,500. If patients cannot afford this cost, then they do not have access to a wig, which plays a crucial role in one’s mental health. Stanford Medicine Children’s Health (Stanford) writes that alopecia areata has two peaks of onset- one in childhood and one in adulthood- but it has been reported in all ages. As with other autoimmune conditions, there is likely a genetic basis to alopecia areata with unknown triggers that result in the loss of hair. For children or young adults, this can be a difficult time and although there is medication to treat, there is no cure. Stanford believes that individuals with alopecia areata, including children and youth should be given every resource to reclaim their confidence and identity.
2. SUPPORT IF AMENDED. The California Society of Dermatology and Dermatologic Surgery writes that what needs further analyzing is whether there are certain conditions or patients for whom the benefit is primarily physical and/or psychological (that is, “medically necessary” and warranting coverage), as compared to cases where a wig would be mainly cosmetic or elective (with the benefit perhaps being less warranted).
3. OPPOSITION. The California Association of Health Plans (CAHP), the Association of California Life and Health Insurance Companies (ACLHIC), and America’s Health Insurance Plans (AHIP) oppose mandates for health plans and insurers to cover specific services, as well as bills that eliminate cost sharing and limit utilization management, which have similar cost impacts as coverage mandates. Moreover, they will increase costs, reduce choice and competition, and further incent some employers and individuals to avoid state regulation by seeking alternative coverage options. These bills will lead to higher premiums, harming affordability and access for small businesses and individual market consumers. CAHP, ACLHIC, and AHIP write that state mandates increase costs of coverage, especially for families who buy coverage without subsidies, small business owners who cannot or do not wish to self-insure, and California taxpayers who foot the bill for the state’s share of those mandates.
4. RELATED LEGISLATION.
   1. AB 2753 (Ortega) includes DME, as specified, under EHBs coverage of rehabilitative and habilitative services and devices. AB 2753 is pending in Assembly Appropriations Committee.
   2. AB 2914 (Bonta) expresses the intent of the Legislature to review California’s EHB benchmark plan and establish a new benchmark plan for the 2027 plan year. Limits the applicability of the current benchmark plan benefits to plan years on or before the 2027 plan year. AB 2914 is pending in Assembly Health Committee.
   3. SB 1290 (Roth) is substantially similar to AB 2914. SB 1290 is pending in Senate Appropriations Committee.
5. POLICY COMMENT. EHBs. According to CHBRP, a number of ACA provisions have the potential to or do interact with state benefit mandates. In California, nongrandfathered individual and small-group health insurance are generally required to cover EHBs. States may require state-regulated health insurance to offer benefits that exceed EHBs. The state’s benchmark plan, which determines which services are included as a part of California’s EHBs, does not include coverage for wigs. Coverage for wigs appears to exceed EHBs, and therefore may trigger the ACA requirement that the state defray the cost of additional benefit coverage for enrollees in QHPs in Covered California (individual and small group products sold on the Exchange). If this bill were enacted, this bill could trigger this requirement, and would require the state to defray related costs as described above. It should be noted that the state has not yet triggered this ACA requirement.

REGISTERED SUPPORT / OPPOSITION:

Support

California Advocates for Alopecia (cosponsor)
National Alopecia Areata Foundation (cosponsor)
California Agents & Health Insurance Professionals (CAHIP)
San Francisco Women's Political Committee
Scarring Alopecia Foundation

Stanford Medicine Children's Health

Opposition

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097