California Gov. Gavin Newsom signed a major state major medical insurance benefits bill into law this week.
The Democrat also vetoed some health benefits bills, arguing that those bills would do too much to weaken health plan care utilization management efforts and increase plan costs.
The new EHB package law could have a direct effect on fully insured group health plan benefits.
It may also end up influencing the default benefits package that some employers with self-insured health plans offer.
The EHB package law: The new law created by Assembly Bill 224 sets guidelines for the state’s “essential health benefits” package for 2027.
The Affordable Care Act requires each state to approve an EHB package, or standard benefits package.
The ACA divides major medical policies into bronze, silver, gold and platinum “metal levels” based on the percentage of the value of the EHB package that they cover.
Calfiornia’s new EHB package defines treatment of infertility, coverage for hearing aids and coverage for durable medical equipment, such as wheelchairs, as essential health benefits.
One group, the Center for Bioethics and Culture Network, lobbied against inclusion of treatment for infertility in the EHB package. The group said defining elective reproductive health technologies as medically necessary care raises serious ethical and financial concerns, according to a summary prepared by California Assembly legislative analysts.
The vetoes: The list of EHB package bills Newsom vetoed includes bills that would have added coverage for HIV prevention products, coverage for menopause management and coverage for behavioral health services for survivors of wildfires as essential health benefits.
The perimenopause care bill and the wildfire survivor behavioral health bill would have kept health plans from managing utilization of those services.
Newsom said he objects to the utilization management exemptions and the costs that could be imposed by the bills.
“At a time when consumers are facing double-digit rate increases in their health care premiums across the nation, passing additional policies that would lead to further premium increases would be irresponsible,” Newsom said.
What it means: Newsom did agree to classify hearing aid benefits as essential, and he recently signed a major pharmacy benefit manager regulation bill.
The Pharmaceutical Care Management Association has predicted that the new PBM law could increase health plan costs by $1,800 per enrollee per year.
For employers and benefits managers in California, Newsom’s bill signings and vetoes may raise questions about how Newsom decides whether a proposed mandate looks too expensive.