State Bill Mandates Maternity Coverage

Deborah Elissagaray thought she was making a smart move this year when she bought health insurance that offered neither prenatal nor maternity benefits.

The exclusion cut the price tag of the coverage just about in half -- an important consideration for the owner of a struggling Sierra foothills winery.

“We were going to have a baby eventually,” she said, “but not right away.”

Elissagaray is now in the fourth month of an unplanned-though-welcome pregnancy. And she has become a vocal advocate of a bill in the state Legislature that would make it illegal to sell individual health insurance without maternity benefits.

The measure by Sen. Jackie Speier (D-Hillsborough) would affect a relatively small number of Californians: the 354,000 who get their health insurance outside of employer-provided group plans and don’t buy maternity coverage.

But the bill, which has passed the Senate and is expected to come up for a vote in the Assembly this week, is the center of a battle that pits women’s groups and consumer, labor and medical organizations against business and insurance lobbyists.

It’s also splitting the healthcare industry. Kaiser Permanente, the state’s largest healthcare provider, thinks maternity care should be part of any basic health service. Slightly smaller rival Blue Cross of California, a subsidiary of WellPoint Health Networks Inc., contends that getting pregnant is a choice and that outlawing the exclusion would drive up insurance costs.

Speier and her supporters say they want to protect women against discrimination and prevent insurance companies from exploiting a legal loophole by covering only certain medical conditions -- a practice known as cherry-picking. (Federal law prohibits insurers from excluding maternity benefits from employer health plans, which cover 97% of Californians who have health insurance.)

“If you’re going to tailor healthcare to the individual ... everybody’s costs would skyrocket,” Speier said. “The reason that healthcare works now is because we spread the risks over the entire population.”

Maternity and prenatal benefits for individual policies are the only ones that can be opted out of, she said. Exclusions aren’t available for other gender-specific conditions such as prostate or ovarian cancer, she noted.

Cut-rate policies that exclude maternity coverage are an example of now-outlawed “gender discrimination” in health insurance, which once denied coverage for female contraceptives and mammograms, Speier said.

Speier said her bill has a good chance of getting out of the Legislature, but acknowledged that it faced an uncertain fate if it reached Gov. Arnold Schwarzenegger’s desk.

Although the governor hasn’t taken an official position, his insurance advisor, Scott K. Reid, wrote a letter to Speier opposing the bill. “This bill would limit choice in the marketplace and increase costs for consumers who desire a lower-cost insurance product that excludes maternity coverage,” he said.

Reid’s rationale is shared by most of the business community, including the California Chamber of Commerce, the California Restaurant Assn. and the National Federation of Independent Businesses.

Blue Cross, which is leading the fight against Speier’s bill, said it sold individual policies with maternity exclusions in five states besides California.

“If any state mandates maternity benefits, we’re unaware of it,” said Robert Scarlett, a Blue Cross statehouse lobbyist.

Blue Cross, he said, developed the maternity exclusion policies to keep premiums affordable for men and women who don’t need high-cost prenatal, pregnancy and postnatal care. If Speier’s measure becomes law, premiums for the company’s cheapest preferred provider organization coverage would jump 46% to $79.19 a month for healthy individuals ages 19 to 39, Blue Cross said.

“There are 4 million uninsured people” in California, Scarlett said. “The sole reason is they can’t afford coverage at today’s prices.”

Deciding what kind of coverage is needed should be a personal choice for women of child-bearing age, he said.

But making the right decision isn’t always easy for someone who is short of money, owns a start-up business and has three kids plus a husband with a hard-to-insure heart condition, Elissagaray said.

She now believes that luring customers with low-cost policies that exclude maternity benefits is discriminatory “because women are the only ones who can get pregnant.”