Governor Signs Bonta Bill to Require Fair Health Insurance Deductibles for Families, Protecting Consumers

Thursday, October 8, 2015

(Sacramento, CA) - Assemblymember Rob Bonta (D-Oakland) announced today that Governor Brown signed his bill to ensure fair health insurance deductibles and out-of-pocket cost sharing limits.  The bill, AB 1305, prohibits health plans and insurers from giving a person a higher deductible or maximum out-of-pocket cost sharing limit merely because that person is a member of a family enrolled in family coverage. 

Bonta explained, “AB 1305 saves families thousands of dollars in extra out-of-pocket expenses by preventing consumers from having to pay more toward their care because they are in a family plan. The new law will improve the affordability of health insurance coverage by ensuring that individuals do not need to pay the full family deductible or out-of-pocket maximum before getting full coverage under their health plan or insurance policy."

Under some family health care plans and insurance policies, if one family member becomes seriously ill, that family member is required to pay the entire family deductible or reach the whole family out-of-pocket cost sharing limit before coverage kicks in, costing the family thousands more in out-of-pocket expenses than if that same family member had purchased individual coverage.  AB 1305 creates parity between what consumers pay in individual and family plans by capping per-person costs within a family plan at what he or she would be required to pay under individual coverage.

Most health plans and insurers require enrollees to pay deductibles, which must be paid by patients before the plan begins paying toward some or most services, and other out-of-pocket cost sharing, such as copayments, which must be paid by patients at the time they receive services.  Family deductibles and out-of-pocket limits are generally, but not always, twice the amount of deductibles and out-of-pocket limits for individual coverage. 

AB 1305 is consistent with federal regulations which already provide for individual maximum out-of-pocket limits in family plans, and aligns with regulations set by Covered California, which requires the family plans and policies it offers to include individual deductibles and maximum out-of-pocket limits.  AB 1305 will ensure that all health plans and insurance policies sold in the state contain these important consumer protections and help families maintain their financial security.

"As California moves forward with implementation of the Affordable Care Act, I am fighting to ensure that consumers have access to affordable, high-quality care and are protected from hidden costs. AB 1305 advances this effort, and provides important protections so consumers are not unfairly penalized for doing the right thing and ensuring their family is covered," Bonta concluded.

Visit AB 1305 to read the entire text of the bill.