BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1586
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          Date of Hearing:   May 3, 2005

                            ASSEMBLY COMMITTEE ON HEALTH
                                  Wilma Chan, Chair
                 AB 1586 (Koretz) - As Introduced:  February 22, 2005
          SUBJECT  :   Insurers: health care service plans: discrimination.

           SUMMARY  :   Defines the term "sex" to include, but be not limited  
          to, a person's gender, as specified, under existing law that  
          prohibits health care service plans (health plans) and insurers  
          from specified discriminatory acts.  

           EXISTING LAW  

          1)Defines "gender" to mean sex, and includes a person's gender  
            identity and gender related appearance and behavior whether or  
            not stereotypically associated with the person's assigned sex  
            at birth.

          2)Provides for the licensure and regulation of health plans by  
            the Department of Managed Health Care (DMHC) and of health  
            insurers by the Department of Insurance (DOI).

          3)Requires health plans to cover a number of basic health care  
            services and permits DMHC to define the scope of the services  
            and to exempt plans from the requirement for good cause.

          4)Prohibits health plans from refusing to enter into any  
            contract or canceling or declining to renew or reinstate any  
            contract because of the race, color, national origin,  
            ancestry, religion, sex, marital status, sexual orientation,  
            or age of any contracting party, prospective contracting  
            party, or person reasonably expected to benefit from that  
            contract as a subscriber, enrollee, member, or otherwise. 

          5)Prohibits the terms of any health plan contract from being  
            modified, and the benefits or coverage of any contract from  
            being subject to any limitations, exceptions, exclusions,  
            reductions, copayments, coinsurance, deductibles,  
            reservations, or premium, price, or charge differentials, or  
            other modifications because of the race, color, national  
            origin, ancestry, religion, sex, marital status, sexual  
            orientation, or age of any contracting party, potential  
            contracting party, or person reasonably expected to benefit  


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            from that contract as a subscriber, enrollee, member, or  
            otherwise.  Exempts premium, price, or charge differentials  
            because of the sex or age of any individual when it is based  
            on objective, valid, and up-to-date statistical and actuarial  

          6)Prohibits health plans from charging different premium rates  
            to individual enrollees within the same group solely on the  
            basis of the enrollee's sex. 

          7)Prohibits insurers from failing or refusing to accept an  
            application for, or issuing a policy to an applicant for,  
            health insurance (unless such insurance is to be issued to the  
            applicant by another insurer under the same management and  
            control), or canceling such insurance, under conditions less  
            favorable to the insured than in other comparable cases,  
            except for reasons applicable alike to persons of every  
            marital status, sex, race, color, religion, national origin,  
            or ancestry.  Prohibits sex, race, color, religion, national  
            origin, or ancestry of itself from constituting a condition or  
            risk for which a higher rate, premium, or charge may be  
            required of the insured for such insurance.

           FISCAL EFFECT  :   None.

           COMMENTS  :   

           1)PURPOSE OF THIS BILL  .  According to the author, despite  
            existing anti-discrimination statutes, many people in  
            California continue to experience discrimination by insurance  
            companies and health plans on the basis of gender,  
            particularly members of California's transgender community.   
            The author states that simply because they are transgender,  
            many people are denied the ability to purchase insurance or  
            are denied coverage for medically necessary procedures under  
            contracts they are able to secure.  This bill will add  
            additional language to existing anti-discrimination provisions  
            under state law prohibiting insurance companies and health  
            care service plans from discriminating on the basis of gender  
            in the creation or maintenance of service contracts or the  
            provision of benefits or coverage.

           2)BACKGROUND .  According to the Gay and Lesbian Alliance Against  
            Defamation (GLAAD) "transgender" is an umbrella term for  
            people whose gender identity and/or gender expression differs  


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            from the sex they were assigned at birth.  Transgender people  
            can be female-to-male (FTM) or male-to-female (MTF) and may or  
            may not choose to alter their bodies hormonally and/or  
            surgically.  According to the Transgender Law Center,  
            transition-related health care and services can include blood  
            work, hormones, mental health therapy, and gender confirmation  
            surgery.  Surgery can include "top surgery," which for FTMs  
            means removal of the breasts and chest reconstruction to a  
            male chest, and for MTFs, breast augmentation.  "Bottom  
            surgery" refers a number of options for genital  
            reconstruction.  In 2002, the Transgender Law Center and the  
            National Center for Lesbian Rights released a report titled  
            "Trans Realities: A Legal Needs Assessment of San Francisco's  
            Transgender Communities," which stated that 93% of the  
            transgender people surveyed have utilized medical services as  
            a part of their transition.  The study also found that  
            transgender people in the San Francisco Bay Area face  
            significant barriers to accessing transition-related health  
            care and often experience discrimination in accessing other  
            forms of health care.  Nearly one in three respondents  
            experienced some form of health care-related gender identity  
            discrimination, including routine denial of coverage by health  
            insurers for transition-related procedures, and discriminatory  
            or inappropriate behavior by health care providers and office  

           3)TRANSGENDER COMMUNITY HEALTH PROJECT  .  In 1999, the  
            Transgender Community Health Project, which is part of the  
            Center for HIV Information at the University of California,  
            San Francisco, published a report based on a survey they  
            administered to transgender persons in collaboration with a  
            number or entities, including public health clinics, the San  
            Francisco Department of Public Health, and HIV/AIDS advocacy  
            and community groups.  The report indicated that transgender  
            individuals face complex social, physical and mental health,  
            and substance use issues.  Drug use was common among  
            interviewees, as was mental health intervention  
            (hospitalization and/or medication).  The researchers found  
            that 52% of MTF and 57% of FTM subjects were uninsured.   
            Thirteen percent of MTF and 39% of FTM interviewees reported  
            being denied or having difficulties obtaining health care.
          4)SELECT COMMITTEE ON LGBT FAMILIES  .  In November 2004 and  
            February 2005, the Assembly Select Committee on Lesbian, Gay,  
            Bisexual and Transgender (LGBT) Families held informational  


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            hearings on transgender health care.  At the hearings,  
            community members presented information on anti-transgender  
            bias among some health care professionals, a lack of basic  
            information concerning transgender health care, health  
            insurance plans that explicitly exclude coverage for  
            transition related health care, health insurers who deny  
            applications for policies based on the applicants history of  
            receiving transition-related medical care, and ways that state  
            and local governments can partner with the community to  
            address these concerns.
          5)EXAMPLE OF DENIAL  .  According to the author, transgender  
            applicants have been denied individual policies because they  
            have a previous diagnosis of gender dysphoria.  The author  
            reports that in one case, a transgender FTM person in his  
            mid-30s who was starting his own business applied for an  
            individual policy with a major California health insurer for  
            catastrophic coverage with a $2,000 deductible.  The insurer  
            sent a denial letter on July 30, 2002 stating they were unable  
            to offer "enrollment in any of our medically underwritten  
            health insurance plans."  The reason cited was a health  
            history of "gender identity disorder of adolescent or ADU  
            treated with testosterone." The policy applied for already  
            excluded coverage for any treatment related to gender identity  
            disorder, including hormones.  

          6)PREVIOUS LEGISLATION  .  AB 1999 (Kuehl), Chapter 933, Statutes  
            of 1998, defined "gender" in the Penal Code as this bill  
            proposes to do in the Health and Safety and Insurance Codes,  
            AB 537 (Kuehl, et al), Chapter 587 Statutes of 1999, did so in  
            the Education Code, and AB 196 (Leno), Chapter 164, Statutes  
            of 2003, amended the California Fair Employment and Housing  
            Act (FEHA) to refer to the definition of "gender" established  
            in the Penal Code under AB 1999.

           7)SUPPORT  .  According to the sponsor of this bill, Equality  
            California, despite existing anti-discrimination statutes,  
            many people in California continue to experience  
            discrimination by insurance companies and health plans on the  
            basis of gender, particularly members of the transgender  
            community.  Equality California, the Grey Panthers, Stop AIDS  
            Project, Transgender Resources and Neighborhood Space, Asian  
            and Pacific Islander American Health Forum, AIDS Legal  
            Referral Panel, the Gay and Lesbian Adolescent Social  
            Services, Inc., the Asian and Pacific Islander Wellness  


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            Center, the Filipino Task Force on AIDS, Lambda Letters  
            Project, the San Francisco Labor Council, AFL-CIO, and  
            numerous other organizations write that by clarifying that the  
            definition of sex is the same as that found in FEHA and other  
            provisions of California law, this bill will insure that  
            insurance companies and health plans understand their legal  
            obligation to refrain from discriminating against transgender  
            people in the creation and maintenance of contracts and the  
            provision of services and benefits.  The California  
            Psychological Association supports this bill and its aim to  
            discourage discrimination of enrollees and insureds, thus  
            increasing individuals gaining access to necessary mental and  
            health services.  Planned Parenthood Affiliates of California  
            writes that this bill is in keeping with Planned Parenthood's  
            mission to preserve and protect the essential privacy and  
            rights of each individual and to provide programs which  
            enhance understanding of individual and societal implications  
            of human sexuality.


          Equality California (Sponsor)
          Access Institute of Research
          AIDS Legal Referral Panel
          Asian and Pacific Islander American Health Forum
          Asian & Pacific Islander Wellness Center
          Being Alive South Bay
          California Medical Association
          California Psychological Association
          Dimensions Collaboration at Castro Mission Health Center
          Filipino Task Force on AIDS
          Gay and Lesbian Adolescent Social Services, Inc.
          Gay-Straight Alliance Network
          Gender Education & Advocacy, Inc.
          Gray Panthers
          Harvey Milk Lesbian, Gay, Bisexual, and Transgender Democratic  
          Orange County Transgender Coalition
          Lambda Legal
          Lambda Letters Project


                                                                  AB 1586
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          Lavender Youth Recreation & Information Center
          Metropolitan Community Church Los Angeles
          Ministry in Action Commission, St. Mark's United Methodist  
          National Center for Lesbian Rights
          Parents, Families and Friends of Lesbians and Gays Central Coast  
          Parents, Families and Friends of Lesbians and Gays Los Angeles
          Planned Parenthood Affiliates of California
          San Francisco Labor Council, AFL-CIO
          San Francisco Lesbian Gay Bisexual Transgender Community Center
          San Francisco Lesbian Gay Bisexual Transgender Pride Celebration  
          Committee, Inc.
          Southern California Nevada Conference of the United Church of  
          Stonewall Democratic Club of Greater Sacramento
          Stop AIDS Project
          The Center - San Diego County
          Transgender Law Center
          Transgender Resources and Neighborhood Space Project, University  
          of California San Francisco, Center for AIDS Prevention Studies
          Tri-City Health Center
          UNITE HERE Local 11
          31 Individuals

          None on file.
          Analysis Prepared by  :    Melanie Moreno / HEALTH / (916)