BILL ANALYSIS                                                                                                                                                                                                    

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          Date of Hearing:  April 28, 2015

                            ASSEMBLY COMMITTEE ON HEALTH

                                  Rob Bonta, Chair

          AB 1254  
          (Grove) - As Amended April 6, 2015

          SUBJECT:  Health care service plans:  abortion coverage.

          SUMMARY:  Provides that a health care service plan (plan) is not  
          required to include abortion as a covered benefit, and would  
          prohibit the Director of the Department of Managed Health Care  
          (DMHC) from denying, suspending, or revoking a plan's license,  
          or from otherwise imposing discipline on a plan, if the plan  
          excludes coverage for abortions.   

          EXISTING LAW:  

          1)Establishes the Knox-Keene Health Care Service Plan Act of  
            1975 (Knox-Keene Act), which provides for the licensure and  
            regulation of health care service plans by DMHC.

          2)Requires a health plan contract to provide to enrollees "basic  
            health care services" defined as:

             a)   Physician services;
             b)   Hospital inpatient services and ambulatory care  
             c)   Diagnostic laboratory and diagnostic and therapeutic  
               radiologic services;


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             d)   Home health services;
             e)   Preventive health services;
             f)   Emergency health care services, as specified; and,
             g)   Hospice care.

          3)Provides that the Director of the DMHC may, for good cause, by  
            rule or order, exempt a plan contract or any class of plan  
            contracts from the requirement to provide basic health care  
            service either unconditionally, upon specified terms and  
            conditions, or for specified periods of time, if the Director  
            finds the action to be in the public interest and not  
            detrimental to the protection of enrollees, and that the  
            regulation of the plan contracts is not essential to the  
            purposes of Knox-Keene Act.

          4)Establishes the California Reproductive Privacy Act, which  
            provides that the state shall not deny or interfere with a  
            women's right to choose or obtain an abortion prior to  
            viability of the fetus, or when the abortion is necessary to  
            protect the life or health of the woman, and makes legislative  
            findings and declarations that every individual possesses a  
            fundamental right of privacy with respect to personal  
            reproductive decisions, and that every woman has the  
            fundamental right to choose to bear a child or to choose and  
            to obtain an abortion, as specified.

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


          1)PURPOSE OF THIS BILL.  According to the author, no one,  
            especially religious organizations with moral objections,  
            should be forced to pay for abortions in their health care  
            plans.  The author states that, not only is this an  
            unconscionable assault on our most fundamental freedoms, it  
            flagrantly violates federal law.  The author argues that  


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            unelected state officials knew about this federal requirement,  
            but decided to break the law instead, and as a result,  
            California could lose tens of billions in federal health care  
            dollars for this violation hurting people throughout the state  
            who depend on that money.  The author argues that California  
            exempts certain religious employers from requirements to  
            include contraception coverage in their health plans, but this  
            exemption does not exist for abortions.  The author concludes  
            that this bill will ensure that a health plan is not required  
            to include abortion as a covered benefit, and prohibit DMHC  
            from taking disciplinary action on, or denying a license to, a  
            plan that excludes coverage for abortion. 

             a)   Knox-Keene Act coverage requirements.  The Knox-Keene  
               Act requires coverage of basic health care services, which  
               include physician services, inpatient hospital services,  
               ambulatory care services, outpatient hospital services, and  
               preventive services.  Plans are required to provide these  
               basic health care services to its enrollees where medically  
               necessary.  Existing regulations further define basic  
               health care services, and specify that they must include a  
               variety of family planning services.  Applying the American  
               Medical Association's definition of "medical necessity,"  
               any legal abortion clearly qualifies, as the procedure is a  
               clinically appropriate health care service provided by a  
               prudent physician to treat pregnancy.  
             b)   Relevant case law.  Over four different terms, beginning  
               in 1978, California's Budget Act changed provisions in the  
               California Constitution that limited Medi-Cal coverage for  
               abortion, yet still covered the medical expenses of  
               indigent women who carried their child to term.  The  
               Committee to Defend Reproductive Rights filed suit in 1978,  
               arguing that the denial of this coverage was a violation of  
               California's constitutional right to privacy.  The Superior  
               Court agreed, ruling in Committee to Defend Reproductive  
               Rights v. Myers, 29 Cal.3d 252 (1981) (CDRR v. Myers), "By  
               virtue of the explicit protection afforded an individual's  


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               inalienable right of privacy by Article I, Section 1 of the  
               California Constitution?the decision whether to bear a  
               child or to have an abortion is so private and so intimate  
               that each woman in this state - rich or poor - is  
               guaranteed the constitutional right to make that decision  
               as an individual, uncoerced by governmental intrusion."   
               The court held that the abortion funding restrictions in  
               the Medi-Cal program, which resulted in the funding of  
               childbirth but not abortion, infringed the woman's exercise  
               of her right of procreative choice. There is nothing to  
               suggest that the state's regulatory authority for health  
               care service plans is not subject to the same  
               constitutional principle as its funding authority.

             c)   Federal law.  The Federal Hyde Amendment is a  
               legislative provision barring the use of certain federal  
               funds to pay for abortions except if a pregnancy arises  
               from incest or rape. The requirement is renewed annually as  
               a "rider" that, in various forms, has been routinely  
               attached to annual appropriations bills since 1976.  The  
               Hyde Amendment applies only to funds allocated by the  
               annual appropriations bill for the Department of Health and  
               Human Services and primarily affects Medicaid.  The cutoff  
               of federal Medicaid funds prompted some states to provide  
               public funding for abortion services from their own  
               budgets, without federal funding.  Over time the number of  
               states doing so has gradually expanded, either through  
               legislation or consequent to judicial rulings mandating  
               equal access to health care for low-income women. As of  
               2007, 17 of the 50 states provide such funding; four of  
               these states provide such funds voluntarily and 13 of these  
               states do so pursuant to a court order.  California is one  
               of the 13 states that does so by court order, per CDRR v.  

             d)   Recent DMHC actions.  In August 2014, DMHC sent letters  
               to seven plans it determined had language in their  


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               contracts that may discriminate against women by limiting  
               or excluding coverage for termination of pregnancies.  The  
               letters were issued after it became known that two  
               California universities limited employee coverage for  
               abortions only to those necessary to protect a woman's  

               In the letter, DMHC stated that it had erroneously approved  
               or failed to object to the discriminatory language in the  
               plans' evidence of coverage filings.  DMHC reminded plans  
               that the Knox-Keene Act "requires the provision of basic  
               health care services, and that the California Constitution  
               prohibits health plans from discriminating against women  
               who choose to terminate a pregnancy."  DMHC also stated,  
               "?all health plans must treat maternity services and legal  
               abortion neutrally."  Additionally, DMHC stated that  
               exclusions and limitations on abortion coverage are  
               incompatible with the California Reproductive Privacy Act  
               and multiple court rulings that have "unambiguously  
               established under the California Constitution that every  
               pregnant woman has the fundamental right to choose to  
               either bear a child or to have a legal abortion."  DMHC  
               also clarified that a plan is not required to cover  
               abortions that would be considered unlawful.

               DMHC directed the plans to review all current plan  
               documents to ensure they are compliant with the Knox-Keene  
               Act with regard to legal abortion, including any plan  
               documents previously approved or not rejected by the  
               department.  DMHC also required plans to amend health plan  
               documents to remove discriminatory coverage exclusions and  
               limitations, including but not limited to, any exclusion of  
               coverage for "voluntary" or "elective" abortions and/or any  
               limitation of coverage to only "therapeutic" or "medically  
               necessary" abortions.  


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          3)SUPPORT.  The California Right to Life Committee, Inc. (CRLC)  
            states that this bill recognizes that under the Patient  
            Protection and Affordable Care Act, a licensee does not have  
            to provide abortion as essential benefit coverage.  Further,  
            the CRLC states that this bill offers a choice to a licensee  
            who may choose to exclude or restrict abortion coverage, but  
            would not prohibit any health insurance companies from  
            offering this coverage.  CRLC argues that California citizens  
            should have the opportunity to select health care service  
            plans in keeping with their medical needs and ethical values,  
            and insurance companies should not be discriminated against  
            for not including abortion coverage.

          4)OPPOSITION.  Opponents state that abortion is a health  
            condition requiring medical care, and abortion, like  
            childbirth, is an individual decision that a woman may make  
            about how to treat her pregnancy.  Opponents argue that  
            abortion is a legally and constitutionally protected medical  
            option: under the California Constitution, the government  
            cannot weigh a woman's decision to carry a pregnancy to term  
            or obtain an abortion, and under state law the state may not  
            interfere with a woman's right to choose or obtain an  
            abortion.  Opponents assert that if the state required plans  
            to cover childbirth, but not abortion, it would weight a  
            woman's individual decision about how to treat her pregnancy,  
            and interfere with her right to choose any legally available  
            and medically necessary treatment for pregnancy.  Opponents  
            contend that the state must treat abortion and childbirth  
            neutrally, and cannot require insurance coverage of the  
            medical expenses for women who decided to continue a  
            pregnancy, while excluding coverage for abortion.  Further,  
            opponents cite CDRR v. Myers which disallows Medi-Cal program  
            from excluding coverage for abortions defined as not medically  
            necessary while subsidizing all other prenatal and delivery  
            expenses, and argues that DMHC is subject to the same  
            constitutional principle.  Opponents argue that plans are  
            required to cover basic health care services, which includes a  
            "variety of voluntary family planning services" which  


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            encompasses abortion, and that any legal abortion qualifies  
            under Knox-Keene's medical necessity criteria, which triggers  
            coverage, because the procedure is a clinically appropriate  
            service provided by a physician to treat pregnancy.


             a)   AB 2336 (Grove) of 2014, would have prohibited a person  
               from performing, or attempting to perform an abortion if  
               they know the pregnant woman is seeking the abortion on  
               account of the gender of the unborn child.  AB 2336 failed  
               passage in the Assembly Health Committee.

             b)   ACA 5 (Grove), of 2014, would have prohibited, except in  
               the case of an emergency, a physician from performing an  
               abortion on an unemancipated minor unless the physician has  
               notified one of her parents, or a judge has granted the  
               unemancipated minor a waiver of the notification  
               requirement.  ACA 5 failed passage in the Assembly Health  



          California Right to Life Committee, Inc.


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          Capitol Resource Institute

          Faith and Public Policy


          American Civil Liberties Union of California

          National Health Law Program
          Planned Parenthood Advocacy Project Los Angeles
          Planned Parenthood Affiliates of California
          Planned Parenthood Mar Monte
          Planned Parenthood Northern California Action Fund
          Planned Parenthood of Orange and San Bernardino Counties

          Planned Parenthood Pasadena and San Gabriel Valley

          Planned Parenthood of Santa Barbara, Ventura & San Luis Obispo  

          Analysis Prepared by:Paula Villescaz/Kelly Green / HEALTH /  
          (916) 319-2097


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