California’s New Health Insurance Bills in 2024


In California, more than 2,100 bills were introduced for consideration by lawmakers in the second year of our 2023-2024 legislative session. For a bill to become law, it must pass through both the state Senate and Assembly, typically requiring a majority vote. Bills with costs related to the state budget require a two-thirds supermajority for approval.
The legislative deadline for passing bills is August 31, 2024, after which they proceed to the governor’s desk for signature or veto by September 30, 2024. Most signed bills will take effect on January 1, 2025.

Furthermore, more than 80% of California’s legislative seats are up for re-election in November 2024. Members of the California Assembly serve two-year terms, with all 80 seats up for re-election. State senators serve four-year terms, with half (20 senators) facing re-election every two years. Most legislators are balancing their legislative priorities and political campaign obligations as we approach election day.
Additionally, California is confronting a projected $38 to $68 billion budget deficit, with final figures to be determined in May. These election dynamics and budgetary challenges inevitably influence the legislative process, affecting the state’s capacity to enact new laws.

Despite these obstacles, the California legislature has introduced numerous bills impacting various sectors, including health care and health insurance in California. Below are highlights of some key 2024 bills.
AB 2200: Guaranteed Health Care for All
This bill would institute a Single Payer system in California. If enacted, California would establish a program called “CalCare,” which would mandate a government-run health program – and would abolish all existing health plans, health insurers, hospital systems, Medicare, Medi-Cal, Covered California, group coverage, and the valuable services of insurance professionals within the state. CalCare was introduced in previous legislation two years ago (AB 1400), but it stalled in its house of origin and died in the legislative process.
Notably, this bill does not include a financing mechanism for the Single Payer program’s $500 billion annual cost. However, the bill notes the need to obtain financing before the program can become a reality.
In 2023, the California Legislature passed SB 770, a new law requiring the state to develop plans to petition the White House with a request to divert all federal spending on Medicare and Medicaid in California, to be used to finance a portion of a Single Payer program like CalCare. The framework for such a request must be completed by Fall 2025 and is contingent upon ongoing – and challenging – future presidential administrations’ approvals.
Refer to our previous column for more information on AB 2200 and SB 770: California Achieves Near-Universal Coverage, but Budget Deficits and Single-Payer Proposals Remain.
AB 2028: Medical Loss Ratios (on Dental plans)
This bill would impose an 85% Medical Loss Ratio (MLR) onto California Dental plans, requiring those plans to refund premiums if targets are not met. Established by the Affordable Care Act (ACA), federal MLR ratios require ACA-compliant Medical plans to spend a specific portion of premium dollars on claims or efforts to improve care. Likewise, it limits the amount of Medical premium dollars that can be spent on administrative expenses like commissions, claims processing, and marketing. Small Group plans and Individual & Family Plan have an MLR of 80%, and Large Group plans have an MLR of 85%. Under the ACA, Medical plans that do not meet these MLR targets must rebate premiums.
Dental premiums are significantly lower than Medical premiums, but administrative costs for such plans are similar. While cost control is crucial, imposing 85% MLRs designed for Large Group Medical plans onto all IFP and Group Dental benefits would be detrimental and is opposed by agents represented by California’s Agents and Health Insurance Professionals (CAHIP). Other states, like Massachusetts, have enacted similar measures with troublesome results.

Note: This bill died in the CA Assembly on Friday, 4/26. It was held in the Assembly Health Committee and was not heard by its constitutional deadline, permanently dismissing this bill for the 2023-2024 legislative cycle. This is one of many ways bills die in the legislative process.
AB 4 – Covered California: Expansion
This proposal aims to authorize the California Exchange, Covered California, to administer a program enabling individuals who are unable to obtain coverage due to immigration status to enroll in Health Insurance coverage in a manner similar to other Californians, in compliance with existing federal law – including the opportunity to apply for subsidies if eligible. Note: This is a two-year bill that was introduced in 2023.
AB 236 – Health Care Coverage: Provider Directories
This bill would require health plans to annually audit and delete inaccurate provider listings. Plans that fail to meet prescribed benchmarks for accuracy would be subject to administrative penalties. The bill further requires health plans to provide information about in-network providers to enrollees upon request and limits the cost-sharing enrollees must pay for services from those providers. Note: This is a two-year bill that was introduced in 2023.
AB 2180 – Health Care Coverage: Cost Sharing
This bill aims to protect patient access to prescription medications. The bill would require all California health plans, insurers, and pharmacy benefit managers (PBMs) to apply any amounts paid by the enrolled, insured, or third-party patient assistance programs (also known as the value of copay assistance received) for chronically ill or terminally ill patients toward that patient’s deductible and out-of-pocket maximum expenses.
AB 2435 – California Health Benefit Exchange
This bill proposes to extend, from January 1, 2025, to January 1, 2030, Covered California's authority to establish essential rules and regulations in response to emergency situations, allowing the Exchange to promptly address federally mandated adjustments. Additionally, it aims to prolong the Office of Administrative Law's (OAL) authorization to approve more than two re-adoptions of emergency regulations from January 1, 2030, to January 1, 2035.
AB 2668 – Coverage for Cranial Prosthesis
This bill would require insurers, including Medi-Cal, to cover cranial prosthesis (wigs) prescribed for patients diagnosed with specified medical conditions. Coverage would be subject to the insurer’s cost-sharing provisions and subject to a yearly cap of $750.
AB 2753 – Rehabilitative and Habilitative Services: Durable Medical Equipment
This bill aims to classify coverage for Durable Medical Equipment (DME) as an Essential Health Benefit (EHB) within the "Rehabilitative and Habilitative Services" category for Individual and Family Plans (IFP) and Small Group plans regulated by the Department of Managed Health Care (DMHC), as well as policies overseen by the California Department of Insurance (DOI).
AB 3221 – Department of Managed Health Care: Review of Records
This bill would mandate that health plans and designated entities must furnish electronic media, encompassing records, books, papers, etc., upon request from the DMHC director. The format should be digitally searchable to the greatest extent feasible, and the bill further stipulates auditing of these records.
AB 3260 – Health Care Coverage: Reviews and Grievances
This bill would require a determination of “urgency” made by a health care provider, with respect to a decision to approve a health care service for prior authorization, to be binding on the health plan. It would allow enrollees to proceed with a grievance if a health plan fails to approve, modify, or deny the request for authorization within the specified timeframes in existing law. Furthermore, the law considers a determination of “urgency” made by a health care provider be binding on a plan or insurer for grievances.
The bill considers a request to be “urgent” when the enrollee faces an imminent and serious threat to the enrollee’s physical or behavioral health, including but not limited to severe pain or the potential loss of life, limb, or other major bodily function. Or, when the normal timeframe for the decision-making process in existing law could be detrimental to the enrollee’s life or physical or behavioral health, cause severe pain, or jeopardize the enrollee’s ability to either regain maximum function or to minimize any loss of function.
SB 1236 – Medicare Supplement Coverage: Open Enrollment Periods
In this proposal, Medicare supplement coverage (“Medigap”) would become available on a “guaranteed issue” basis in an annual 90-day Open Enrollment period in California.
How to Get Involved
If you're looking to become active in the legislative process, I encourage you to consider joining the health insurance industry’s largest association, the National Association of Benefits and Insurance Professionals (NABIP), California Agents and Health Insurance Professionals association (CAHIP), and your local CAHIP chapter. (There are 10 chapters throughout California. Find your nearest on the CAHIP website.) NABIP and CAHIP collectively champion the interests of health insurance agents and their clients on both state and federal levels. The state and regional chapters offer you local connections, networking, and education opportunities in your state and local communities. All of these groups work collaboratively and your membership in the national or state group gives you automatic membership in your local chapter. I am a highly active member of NABIP and CAHIP and am serving as Vice President of Legislation on the CAHIP Board of Directors.
I also encourage you to consider joining us at CAHIP’s Capitol Summit in Sacramento, scheduled May 13th to May 15th. During this event, we’ll delve into discussions about the bills mentioned above and much more, and we will have the opportunity to meet with our Assemblymembers and State Senators in their Sacramento offices to discuss our priorities. The event is a lot of fun – and I’ll be hosting a new CE, “Legislation 101 for Insurance Agents” while in Sacramento. We’d love to see you there!

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