New landmark legislation establishes acupuncture health insurance benefits for California citizens. California Governor Jerry Brown signed California State Legislature Assembly Bill AB 1453 into law on September 30th. The bill, authored by Assemblymember Bill Monning (D-Carmel), establishes the details for California’s essential health benefits and takes effect in 2014.
Essential health benefits were defined in the federal Patient Protection and Affordable Care Act (PPACA), often referred to as Obamacare. It is up to individual states to determine the precise details of the essential health benefits that are broadly outlined in the federal law. This new California law defines and enacts provisions for California essential health benefits and includes acupuncture for the treatment of pain and nausea. Other services defined as essential health benefits include ambulatory patient services, hospitalization, maternity care, newborn care, vision screening and tobacco cessation.
This new law and its acupuncture provisions apply to all individual health insurance policies and small group policies including all HMOs and PPOs. Small group policies are all policies written for companies with 50 or less employees. In 2016, the definition of small group policies changes and the new California law will apply to all companies with 100 or less employees.
The new California law does not apply to self-insured plans, grandfathered plans and large employers. Grandfathered plans are those plans officially designated as a grandfathered plan as of March 2010. Any grandfathered plan that has either a change in benefits or cost structure will no longer be considered a grandfathered plan and will no longer be exempt from the new law’s provisions. As a result, the impact of grandfathered plans is expected to be minimal.
The new California health insurance law defines and establishes essential healthcare benefits for California citizens. It does not cover payment issues such as copays, deductibles and payments to providers. As a result, copays and other payment issues may fluctuate up or down from the Kaiser Permanente $30 copay plan from which the new law has been modeled upon. Although this California law does not apply to payment issues, limitations on cost sharing and actuarial value have been implemented in the new federal health reform law. Regulations for the federal law have not been written yet. As a result, upcoming federal regulations have the opportunity to help ease affordability issues for the insured.
The definition of essential health benefits as stated in this new California law was formulated using the Kaiser Permanente Small Group Agreement Plan 1637 Plan 3-N as a basis for determining standard medical provisions for health insurance policies originating in California. Medical treatment limitations can be no greater than those imposed in the Kaiser plan. As a result, no cap on the maximum number of acupuncture office visits per year may be imposed although a physician’s referral may be required by some health insurance plans.
The new law does not have language regarding network limitations such as participation in provider networks. As a result, insurance companies may allow only limited numbers of acupuncturists within a given network to provide acupuncture care. Also, medical necessity limitations may be imposed by insurance providers wherein a service will only be covered if it is deemed medically necessary. Despite these limitations, the new California law establishes a baseline of treatment coverage provided by health insurance policies and is likely to prevent many unwanted surprises when patients get their medical bills.
“With the passage of AB 1453, California is one step closer to the full implementation of federal health care reform," stated Assemblymember Monning. “For many, this action is transformative. This law will prioritize prevention, health and wellness while offering individuals and small businesses comprehensive and affordable healthcare coverage.”
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