Legislative Bulletin 2024

October 28, 2024

Paul Roberts, REBC
Senior Director of Education & Market Development, Word & Brown
Vice President of Legislation, CAHIP

The California Legislature has officially concluded its 2023-2024 session. By the constitutional deadline of September 30, Governor Newsom acted on nearly 1,000 bills sent to him by the August 31 cutoff. With his signatures and vetoes finalized, most of the signed bills will take effect on January 1, 2025.

This update provides an overview of CAHIP’s key priority bills tracked in 2024, with a full listing available exclusive to CAHIP members online. Before diving into those, we also want to turn attention to the November 5, 2024 elections, which will have significant implications at both the federal and state levels.

California Elections and Propositions

At the state level, half of the California Senate (20 seats) and all 80 Assembly seats are up for election. The outcome of these races, combined with the 10 statewide propositions, will set the stage for the 2025-2026 California Legislative Session, which begins in December 2024.

CAHIP is preparing to engage with the new Legislature, ensuring lawmakers understand the critical role agents play in the health insurance industry and how we can assist as they consider new laws and regulations. New bills will be introduced in January and February 2025, and the CAHIP Executive Board of Directors and the Legislative Council will review these bills to determine our positions and levels of engagement in early March 2025.

California Propositions Overview

This election includes 10 propositions, with two relevant to health care: 

  • Proposition 34: This proposition would restrict the AIDS Healthcare Foundation from using prescription rebates for non-direct patient care, such as housing initiatives.
  • Proposition 35: This proposition addresses the Managed Care Organization (MCO) tax, offering voters the option to either extend it or restrict its funds from being diverted into the general fund for other programs.

While CAHIP remains nonpartisan and does not take positions on ballot measures, we encourage members to review the CalMatters 2024 Voter Guide for nonpartisan analysis of these and other propositions, as well as state and federal races.

Federal Elections and Lame-Duck Session

In addition to the state elections, the federal races will shape the makeup of the 119th U.S. Congress, set to convene on January 3, 2025. The outcomes of these elections will significantly influence the direction of federal legislation. While the President holds agenda-setting powers, Congress is responsible for drafting and passing laws, and tight races across the country could shift the balance of power.

Before the new Congress begins, the lame-duck session – the period between the election and the swearing-in of new members – will be an important opportunity for outgoing lawmakers to push through key legislation. NABIP expects efforts to extend COVID-era telehealth provisions for High Deductible Health Plans (HDHPs) and Medicare during this time.

CAHIP’s 2024 Priority Bills

Now that the legislative session has concluded, we are able to look back at key legislative items that impacted our industry. Below is a summary of the 2024 CAHIP Priority Bills – some of which were signed into law, while others did not advance. For a full listing of 2024 CAHIP priority bills, visit our member-exclusive section online.

  • AB 2200 – California “Guaranteed Health Care for All” (Single Payer)
    • CAHIP Position: Oppose
      • This was one of four key bills discussed by CAHIP members with legislators during CAHIP’s Capitol Summit in Sacramento in May 2024.
    • Status: Dead – Assembly Appropriations, 5/16/2024
    • Notes: CAHIP strongly opposed AB 2200, which mandates a government run single payer health care program and abolishes private health insurance, Medi-Cal, Medicare, Covered California, and the valuable advocacy services of insurance professionals and advisors. AB 2200 would have harmed California residents with a $500 billion annual price tag and no guarantee of better healthcare.
  • SB 230 – HSA Contributions in California
    • CAHIP Position: Support
      • This was one of four key bills discussed by CAHIP members with legislators during CAHIP’s Capitol Summit in Sacramento in May 2024.
    • Status: Dead – Revenue and Tax Committee, Assembly, 7/01/2024
    • Notes: CAHIP supported SB 230, which would have entitled income-eligible individuals to a state tax deduction for contributions to a Health Savings Account (HSA) in conformity with federal tax law. HSAs allow individuals to save tax-free dollars to pay for near-term medical expenses and save for future longer-term costs. California is one of only two states that do not conform to federal tax law on HSA deductibility.
    • SB 1180 – Health Care Coverage: Emergency Medical Services
      • CAHIP Position: Support
        • This was one of four key bills discussed by CAHIP members with legislators during CAHIP’s Capitol Summit in Sacramento in May 2024.
      • Status: Chaptered and signed into law, 9/28/2024
      • Notes: CAHIP supported SB 1180, which provides commercial insurance funding for licensed paramedics to provide home support to hospice care patients, and the ability to transport patients directly to a sober center or mental health facility without costly and in many cases, unnecessary emergency room visits.
    • SB 1236 – Medicare Supplement Annual Guarantee-Issue Open Enrollment Periods
      • CAHIP Position: Oppose
        • This was one of four key bills discussed by CAHIP members with legislators during CAHIP’s Capitol Summit in Sacramento in May 2024.
      • Status: Dead – Assembly Appropriations, 5/16/2024
      • Notes: CAHIP strongly opposed SB 1236 which requires Medicare supplement coverage (“Medigap”) to be “guaranteed issue” during an annual 90-day open enrollment period in California. While CAHIP appreciates the intention to give more consumers access to more robust coverage, we have strong concerns that it will also significantly increase premiums and decrease carrier participation as has been the case in other states that have enacted similar legislation (e.g., New York and Connecticut).
    • AB 2028 – Medical Loss Ratios on California Dental Plans
      • CAHIP Position: Oppose
      • Status: Dead – Canceled at the request of the author while in Senate Health Committee, 4/18/2024
      • Notes: CAHIP opposed AB 2028, which aimed to impose a dental loss ratio (DLR) on dental plans, significantly raising out-of-pocket dental costs for Californians. The bill proposed a minimum DLR of 85%, along with rebate requirements, which would have introduced additional financial and administrative burdens. This approach could have led to benefit shifting, higher consumer costs, and a likely reduction in marketplace competition – a trend observed in other states that have implemented similar DLR mandates.
    • AB 4 – Covered California Expansion
      • CAHIP Position: Support
      • Status: Dead – Senate Appropriations Committee, 8/15/2024
      • Notes: CAHIP supported AB 4, which would have brought California closer to our goal of universal coverage without the need to enact single payer. Under this bill, upon appropriation, the Exchange would have administered a program to allow persons otherwise not able to obtain coverage by reason of immigration status to enroll in health insurance coverage in a manner as substantially similar to other Californians as feasible given existing federal law.
    • AB 236 – Provider Directories
      • CAHIP Position: Support
      • Status: Dead – Senate Appropriations, 8/15/2024
      • Notes: CAHIP supported AB 236, which sought to improve provider directory accuracy by requiring health plans to annually verify and remove inaccurate provider listings. The bill would have imposed administrative penalties on health plans failing to meet accuracy standards and required them to provide enrollees and insureds with information about in-network providers upon request. Additionally, it aimed to limit the cost-sharing amounts enrollees must pay for services from those providers.
    • AB 892 – Kern County Hospital Authority
      • CAHIP Position: Neutral
      • Status: Chaptered and signed into law, 9/27/2024
      • Notes: CAHIP closely watched AB 892 which specifies that all entities controlled, owned, administered, or funded by the Kern County Hospital Authority are subject to transparency laws. As the closure of Madera Community Hospital has shown, the loss of public hospitals and medical facilities can strain already limited health care resources and further restrict access to care in California's most disadvantaged communities. The San Joaquin Valley is already in the midst of a health care workforce shortage with an insufficient number of doctors, nurses, and health providers to care for the Valley's growing population. As the area's only Level II Trauma Center, the stability and success of Kern Medical is critical to the overall health care of the entire region. As a public agency, AB 892 requires that the Authority operate in compliance with the Meyers-Milias-Brown Act, Ralph M. Brown Act, and the California Public Records Act to ensure Kern Medical is operated transparently and with accountability to the public and the workforce.
    • AB 2434 – MEWAs (Engineering, Surveying or Design Industry Only)
      • CAHIP Position: Support
      • Status: Chaptered and signed into law, 9/22/2024
      • Notes: CAHIP supported AB 2434, as amended on July 3, 2024, which authorizes, until January 1, 2029, an association of employers sponsoring a fully insured multiple employer welfare arrangement (MEWA) to register with DMHC by June 1, 2025, to offer large group plan contracts to small employers in the engineering, surveying, or design industry. The bill mandates that DMHC analyze MEWA impacts on the small employer health insurance market, potentially in coordination with the Department of Insurance. It also requires health plans, insurers, and MEWAs to respond to information requests and for DMHC to post a summary report by July 1, 2026.
    • AB 2435 – Covered California Emergency Rulemaking Authority
      • CAHIP Position: Support
      • Status: Chaptered and signed into law, 9/14/2024
      • Notes: CAHIP supported AB 2435, which extends Covered California’s authority to implement emergency rulemaking packages until January 1, 2030. Without this critical measure, Covered California’s emergency rulemaking authority would have expired at the end of 2024.
    • AB 2668 – Coverage for Cranial Prosthesis (Wigs)
      • CAHIP Position: Support
      • Status: Dead – Assembly Appropriations, 5/16/2024
      • Notes: CAHIP supported AB 2668, which would have required insurers, including MediCal, to cover cranial prosthesis (wigs) prescribed for patients with specified medical conditions, subject to cost-sharing provisions of the insurer and subject to a $750 cap once per year
    • AB 2753 – Rehabilitative and Habilitative Services: DME
      • CAHIP Position: Watch/Neutral
      • Status: Dead – Assembly Appropriations, 5/16/2024
      • Notes: CAHIP closely watched AB 2753 which would have considered Durable Medical Equipment (“DME” – undefined in the bill, but examples include wheelchairs, hearing aids, ventilators, etc.) to be covered under the Essential Health Benefit (EHB) category “rehabilitative and habilitative services” for Individual and Family Plans (IFP) and Small Group plans regulated by DHMC and policies by CDI.  CAHIP is mindful of increased benefits provided to consumers, while cautious about premium increases that would be necessary to implement the bill as drafted
    • AB 3221 – DMHC: Review of Records
      • CAHIP Position: Watch/Neutral
      • Status: Chaptered and signed into law, 9/27/2024
      • Description: CAHIP closely watched AB 3221, which would have required health plans and other specified entities to submit electronic media (including records, books, papers) upon request from the DHMC director – in a format that is digitally searchable, to the greatest extent feasible – and conduct a diligent review of such records. While CAHIP appreciates the modernization of record review that currently takes place by the director during business hours, CAHIP closely watched the bill for the more substantial future impact the bill may have as the first step to make all health plan data public and searchable.
    • AB 3260 – Health Care Coverage: Reviews and Grievances
      • CAHIP Position: Watch/Neutral
      • Status: Dead – Senate Appropriations, 5/16/2024
      • Description: CAHIP closely watched AB 3260 which would have improved patient communication and timely access to care through various changes to the prior authorization, grievance, and Independent Medical Review (IMR) processes for commercial health care coverage. These changes include tightening the timeline for reviewing missing documents during the prior authorization process, making a provider’s determination of urgency binding on the plan or insurer, automating the filing of a grievance when authorization timelines are not met, automating approvals of services when the grievance timeline is not met, eliminating exemptions from the grievance process, and requiring additional documentation to be shared with the enrollee or insured after an IMR is filed. While CAHIP supports the proposed improvements in concept, we are cautious of unintended consequences which may include an increase of denials which would cause clinical and financial concerns for consumers.
    • SB 263 – Requirements for Agents Selling Annuities and Life
      • CAHIP Position: Support
      • Status: Chaptered and signed into law, 2/29/2024
      • Description: CAHIP watched SB 263 which was amended to reflect a compromise amongst stakeholders. Now the bill will enhance and update the existing Annuity Suitability law and make it the strongest suitability law in the country. Additionally, the language contains enhanced training requirements for life agents who sell life insurance products that tend to be more complex than the traditional term life products. This consumer protection will help to ensure that agents have the proper training to help consumers make educated decisions about their life insurance needs.