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COMMITTEE REPORT
May 17, 2000
S. 1041
Introduced by Senators McConnell, Matthews, Courtney, Patterson, Reese, Hayes, Jackson, Passailaigue, Bryan, Hutto, Courson, Richardson, Ravenel, Washington, Giese and Short
S. Printed 5/17/00--H. [SEC 5/22/00 2:58 PM]
Read the first time March 17, 2000.
To whom was referred a Bill (S. 1041), to amend the Code of Laws of South Carolina, 1976, by adding Sections 1-11-760 and 38-71-280 so as to require the state health insurance plan, etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass with amendment:
Amend the bill, as and if amended, Section 1-11-760(A) page 2, line 29 after /disorder / by inserting /social anxiety disorder/ so when amended Section 1-11-760(A)(3) reads:
/ (3) 'Mental health condition' means any mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with that illness, limited to: schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, pervasive developmental disorder or autism, panic disorder, obsessive-compulsive disorder, social anxiety disorder, anorexia, bulimia, asperger's disorder, intermittent explosive disorder, post-traumatic stress disorder, psychosis not otherwise specified when diagnosed in a child under seventeen years of age, Rett's disorder, or Tourette's disorder.
Amend the bill further, Section 1-11-760(B) page 2, line 39 before /treatment/ by inserting /medically necessary/ so when amended Section 1-11-760(B) reads:
/(B) The state health insurance plan shall provide coverage for medically necessary treatment of a mental health condition and alcohol or substance abuse and shall not establish any term or condition that places a greater financial burden on an insured for access to treatment for a mental health condition or alcohol or substance abuse than for access to treatment for a physical health condition. Any deductible or out-of-pocket limits required under the state health insurance plan must be comprehensive for coverage of mental health conditions, alcohol or substance abuse, and physical health conditions./
Amend the bill further, Section 1-11-760(C) page 3, line 8 before /treatment/ by inserting /medically necessary/ so when amended Section 1-11-760(C) reads:
/(C) If the state health insurance plan does not otherwise provide for management of care under the plan or does not provide for the same degree of management of care for all health conditions, it may provide management of care for medically necessary treatment of mental health conditions and alcohol or substance abuse as long as the management of care does not diminish or negate the purpose of this section. The management of care must also ensure that timely and appropriate access to care is available, that the quantity, location, and specialty distribution of health care providers is adequate, and that administrative or clinical protocols do not reduce access to medically necessary treatment for any insured./
Amend the bill further, by deleting SECTION 2 of the bill in its entirety.
Amend the bill further, Section 1-11-760, page 3 by deleting subsection (F) on lines 24-28; on line 29 by deleting / (G) / and inserting / (F) /; and on page 35 by deleting / 3.24 / and inserting / 3.39 / so that when amended subsections (F) and (G) read:
/ (F) The state health insurance plan may opt out of the requirements of this section if, as a result of the application of this section, the total health insurance costs of the state health insurance plan increase by more than:
(1) one percent by the end of the three-year period beginning January 1, 2002, and ending December 31, 2004; or
(2) 3.39 percent at any time beginning January 1, 2002, and ending December 31, 2004. /
Amend the bill further, by deleting SECTION 4 of the bill and inserting:
/SECTION 4. The Budget and Control Board shall conduct a study to assess the impact of this act for the period beginning January 1, 2002 through December 31, 2003, using actual incurred claims for that period as paid through July 1, 2004. The Budget and Control board shall report its findings to the General assembly by December 31, 2004.
SECTION 5. This act takes effect upon approval by the Governor, except that SECTION 1 takes effect January 1, 2002. This act is repealed January 1, 2005./
Renumber sections to conform.
Amend totals and title to conform.
ROBERT W. HARRELL, JR., for Committee.
EXPLANATION OF IMPACT:
Office of Insurance Services - State Budget and Control Board
The office projects that based on the most recent experience and anticipated growth for these services, the total additional cost to the State Health Plan will be approximately $25.1 million per year. (See table below).
Estimated Premiums - Beginning
January 1,2002 (Before increase) $775,000,000
Estimated increase in premiums - 3.2% $25,110,000
Employers' share - 81.5% $20,464,650
Cost to General Fund of the State - 56% $11,460,204
Cost to Federal/Other Funds - 44% $9,004,446
Section 1 (E) of the bill states that a portion of the increase in total health insurance costs resulting from the application of the provisions of the section must be borne by persons covered by the state health insurance plan. Currently, premiums collected from employees represent approximately 18.5% of total premiums collected.
Department of Insurance
The Department of Insurance is required to approve certain forms and rates for licensed health insurers. Because the bill mandates certain additional coverage, current forms and rates that require approval will have to be revised to effect the mandated items and resubmitted for approval. This will result in a temporary increase in volume of work for the department until the affected forms and rates are all revised. The department believes this will result in minimal increase in costs that can be absorbed.
LOCAL GOVERNMENT IMPACT:
Of the total cost of $25.1 million, approximately 11% or $2.76 million would represent an additional cost to local governments.
Approved By:
Don Addy
Office of State Budget
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTIONS 1-11-760 AND 38-71-280 SO AS TO REQUIRE THE STATE HEALTH INSURANCE PLAN AND GROUP HEALTH INSURANCE TO PROVIDE COVERAGE FOR TREATMENT OF MENTAL HEALTH CONDITIONS AND ALCOHOL OR SUBSTANCE ABUSE; TO PROHIBIT ANY TERM OR CONDITION OF THE COVERAGE FROM PLACING ANY GREATER BURDEN ON ACCESS TO TREATMENT FOR A MENTAL HEALTH CONDITION OR FOR ALCOHOL OR SUBSTANCE ABUSE THAN ON ACCESS TO TREATMENT FOR A PHYSICAL HEALTH CONDITION; TO AUTHORIZE MANAGEMENT OF CARE FOR TREATMENT OF MENTAL HEALTH CONDITIONS AND FOR ALCOHOL OR SUBSTANCE ABUSE; AND TO REQUIRE THE DIVISION OF INSURANCE SERVICES OF THE STATE BUDGET AND CONTROL BOARD TO REPORT TO THE GENERAL ASSEMBLY ON THE IMPACT OF THIS COVERAGE ON HEALTH INSURANCE COSTS UNDER THE STATE HEALTH INSURANCE PLAN DURING A THREE-YEAR PERIOD; TO PROVIDE THAT, IF THERE IS A GREATER THAN ONE PERCENT INCREASE IN HEALTH INSURANCE COSTS UNDER THE STATE HEALTH PLAN AT THE END OF THE THREE-YEAR PERIOD OR A 3.4 PERCENT INCREASE AT ANY TIME DURING THAT PERIOD AS A RESULT OF PROVIDING THE COVERAGE REQUIRED BY THIS ACT, THE STATE HEALTH PLAN MAY OPT OUT AND THE REQUIREMENTS APPLICABLE TO GROUP HEALTH INSURANCE PLANS UNDER THIS ACT DO NOT TAKE EFFECT; AND TO PROVIDE THAT, IF THE ACT TAKES EFFECT FOR GROUP HEALTH INSURANCE PLANS, A PLAN MAY OPT OUT IF AT ANY TIME THEREAFTER THE PLAN'S INSURANCE COSTS INCREASE BY MORE THAN THREE PERCENT AS A RESULT OF PROVIDING THIS COVERAGE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 1-11-760. (A) As used in this section:
(1) 'Alcohol or substance abuse' means a condition or disorder involving alcohol or substance abuse that falls under any of the categories listed in the Diagnostic and Statistical Manual IV or subsequent editions.
(2) 'State health insurance plan' means health insurance plans offered or administered by the State Budget and Control Board. This definition does not include dental insurance, accidental death and dismemberment insurance, disability insurance, long-term care insurance, or any other supplemental health insurance plan offered or administered by the State Budget and Control Board.
(3) 'Mental health condition' means any mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with that illness, limited to: schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, pervasive developmental disorder or autism, panic disorder, obsessive-compulsive disorder, anorexia, bulimia, asperger's disorder, intermittent explosive disorder, post-traumatic stress disorder, psychosis not otherwise specified when diagnosed in a child under seventeen years of age, Rett's disorder, or Tourette's disorder.
(4) 'Term or condition' means any lifetime or annual payment limits, deductibles, copayments, coinsurance, out-of-pocket limits, visit limits, or any other cost-sharing requirements.
(B) The state health insurance plan shall provide coverage for treatment of a mental health condition and alcohol or substance abuse and shall not establish any term or condition that places a greater financial burden on an insured for access to treatment for a mental health condition or alcohol or substance abuse than for access to treatment for a physical health condition. Any deductible or out-of-pocket limits required under the state health insurance plan must be comprehensive for coverage of mental health conditions, alcohol or substance abuse, and physical health conditions.
(C) If the state health insurance plan does not otherwise provide for management of care under the plan or does not provide for the same degree of management of care for all health conditions, it may provide management of care for treatment of mental health conditions and alcohol or substance abuse as long as the management of care does not diminish or negate the purpose of this section. The management of care must also ensure that timely and appropriate access to care is available, that the quantity, location, and specialty distribution of health care providers is adequate, and that administrative or clinical protocols do not reduce access to medically necessary treatment for any insured.
(D) To be eligible for coverage under this section for the treatment of a mental health condition or alcohol or substance abuse, the treatment must be rendered by a licensed health professional who is acting within the scope of his or her license and in accordance with the provisions of the plan or contract.
(E) A portion of the increase in total health insurance costs resulting from the application of the provisions of the section must be borne by persons covered by the state health insurance plan.
(F) Before July 1, 2005, the Division of Insurance Services of the State Budget and Control Board shall report to the General Assembly on the impact of the provisions of this section on total health insurance costs beginning January 1, 2002, and ending December 31, 2004.
(G) The state health insurance plan may opt out of the requirements of this section if, as a result of the application of this section, the total health insurance costs of the state health insurance plan increase by more than:
(1) one percent by the end of the three-year period beginning January 1, 2002, and ending December 31, 2004; or
(2) 3.24 percent at any time beginning January 1, 2002, and ending December 31, 2004."
SECTION 2. The 1976 Code is amended by adding:
"Section 38-71-280. (A) As used in this section:
(1) 'Alcohol or substance abuse' means a condition or disorder involving alcohol or substance abuse that falls under any of the categories listed in the Diagnostic and Statistical Manual IV or subsequent editions.
(2) 'Health insurance plan' means a group health insurance plan offered by an insurer or a health maintenance organization which provides health insurance coverage as defined in Section 38-71-840(14). This definition excludes coverage offered to small employers as defined in Section 38-71-1330(17).
(3) 'Mental health condition' means any mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with that illness, limited to: schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, pervasive developmental disorder or autism, panic disorder, obsessive-compulsive disorder, anorexia, bulimia, asperger's disorder, intermittent explosive disorder, post-traumatic stress disorder, psychosis not otherwise specified when diagnosed in a child under seventeen years of age, Rett's disorder, or Tourette's disorder.
(4) 'Term or condition' means any lifetime or annual payment limits, deductibles, copayments, coinsurance, out-of-pocket limits, visit limits, or any other cost-sharing requirements.
(B) A health insurance plan that provides coverage for the treatment of any type of psychiatric condition, as defined in Section 38-71-737(D), shall provide coverage for the treatment of a mental health condition and alcohol or substance abuse and shall not establish any term or condition that places a greater financial burden on an insured for access to treatment for a mental health condition or alcohol or substance abuse than for access to treatment for a physical health condition. Any deductible or out-of-pocket limits required under the health insurance plan must be comprehensive for coverage of mental health conditions, alcohol or substance abuse, and physical health conditions.
(C) If the health insurance plan does not otherwise provide for management of care under the plan or does not provide for the same degree of management of care for all health conditions, it may provide management of care for treatment of mental health conditions and alcohol or substance abuse as long as the management of care does not diminish or negate the purpose of this section. The management of care must also ensure that timely and appropriate access to care is available, that the quantity, location, and specialty distribution of health care providers is adequate, and that administrative or clinical protocols do not reduce access to medically necessary treatment for any insured.
(D) To be eligible for coverage under this section for the treatment of a mental health condition or alcohol or substance abuse, the treatment must be rendered by a licensed health professional, who is acting within the scope of his or her license and in accordance with the provisions of the health insurance plan or contract.
(E) This section does not take effect if, as a result of the application of Section 1-11-760, the total health insurance costs of the state health insurance plan increase, as reported to the General Assembly pursuant to Section 1-11-760(F), by more than:
(1) one percent by the end of the three-year period beginning January 1, 2002, and ending December 31, 2004; or
(2) 3.24 percent at any time beginning January 1, 2002, and ending December 31, 2004.
If the increases provided for in this section do not occur, this section takes effect on the next policy anniversary for plan years after December 31, 2005.
(F) If total health insurance costs of a health insurance plan increase by more than three percent at any time after December 31, 2005, as a result of the application of this section, the health insurance plan may opt out of the requirements of this section."
SECTION 3. If any provision of this act or the application of a provision to any person or circumstance is held to be unconstitutional, the remainder of this act and its application to any person or circumstance shall not be affected thereby.
SECTION 4. This act takes effect upon approval by the Governor; except that Section 1 of this act takes effect on January 1, 2002; and Section 2 of this act takes effect on plan years after December 31, 2005, if the increase in health insurance costs of the state health insurance plan, as reported by the Division of Insurance Services of the State Budget and Control Board to the General Assembly pursuant to Section 1-11-760 of the 1976 Code, as added by Section 1 of this act, does not exceed one percent by the end of the three-year period beginning January 1, 2002, and ending December 31, 2004, or does not exceed 3.24 percent at any time beginning January 1, 2002, and ending December 31, 2004.
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