California could soon require health plans to cover enrollees’ dependent parents
Pending final approval from Gov. Gavin Newsom, California is positioned to require private, state-regulated health plans to offer health insurance coverage to eligible dependent adults.
AB 570, or the “Parent Healthcare Act,” authored by Asm. Miguel Santiago and sponsored by the California Department of Insurance (CDI), will require health plans to provide coverage to a beneficiary’s parent or stepparent who meets the federal statutory definition of a “qualifying relative.” In other words, a parent needs to rely on their children for 50 percent or more of their financial support in order to be eligible. There is no age requirement.
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The bill will apply to any plan issued, amended, or renewed after Jan. 1, 2023. It aims to supplement the Affordable Care Act (ACA) requirement for plans to offer coverage to dependents up to the age of 26. Santiago says adding parents and stepparents as covered dependents will save California families thousands of dollars in medical expenses.
The bill only applies to health plans in the individual market and not employer-sponsored plans. It doesn’t apply to Medicare supplement insurance, CHAMPUS supplement insurance, TRICARE supplement insurance, or to hospital-only, accident-only, or specified disease insurance policies that reimburse for hospital, medical, or surgical benefits.
During the bill’s hearing in the Senate Health Committee in June, CDI Senior Deputy Executive Commissioner Michael Martinez explained that while working families can buy separate policies for their parents, existing law requires them to pay separate out-of-pocket costs and meet separate deductibles — one each for the family and the parent.
“AB 570 would change this by allowing the family, including the dependent parent, to be on one single policy, thus combining their out-of-pocket costs as well as their deductible to save them money.”
The legislation also requires health plans on the California Health Benefit Exchange to provide information on the Health Insurance Counseling and Advocacy Program (HICAP) to applicants who seek to add a parent who is eligible for or enrolled in Medicare to their plan. They’re required to explain that HICAP provides free health insurance counseling to senior Californians.
Since individuals are no longer eligible for Covered California once they’re Medicare-eligible — and thus ineligible for enrolling in their child’s plan as a dependent — this provision was added to ensure beneficiaries are aware of their dependent parent’s coverage options.
As California Insurance Commissioner Ricardo Lara said in a statement earlier this year, the bill is a response to the rising number of seniors without health coverage, which has increased substantially due to the pandemic.
“Health insurance for young adults caring for dependent parents can be extremely costly if they become sick or lose their health coverage. The Parent Healthcare Act will save money for many California families, especially during the current COVID-19 pandemic when so many people have lost their jobs and access to health care is even more crucial.”
Gov. Gavin Newsom has not taken a position on AB 570. He has until Oct. 10 to sign this session’s passed bills into law.