Calif. Bill Would Mandate Maternity Coverage in Individual Health Plans

August 26, 2011 — Many individual health insurance policies in California no longer offer maternity benefits, but that could change next year if state lawmakers pass a bill (SB 155) to require maternity coverage in all individual plans, the Ventura County Star reports. Seven years ago, about 82% of health plans offered in the individual market included maternity coverage. That rate has fallen in California to 13% of policies. Federal law requires employer-sponsored group policies to include maternity coverage.

The legislation, proposed by state Sen. Noreen Evans (D), would require all individual policies to offer maternity benefits. In an analysis, the California Health Benefits Review Program estimated that the bill would extend coverage to about 8,574 pregnancies and affect the policies of 2.9 million California residents. The analysis also estimated that rates for individual policies would increase by 3.5%, or $7 each month, as a result of broader maternity coverage.

Maternity coverage was named as an essential benefit under the federal health reform law (PL 111-148). If the California bill is enacted, it would be implemented ahead of 2014, when the federal mandate would take effect.

Opponents of the measure -- including several Republican state senators -- have said individuals should be able to purchase lower-priced policies that exclude certain coverage. The insurance industry criticized earlier versions of the legislation but has dropped its opposition because of the impending federal mandate.

Supporters of the bill have said it makes sense to broaden the risk pool for such a common medical service (Herdt, Ventura County Star, 8/24).