BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           161 (Wright)
          
          Hearing Date:  5/26/2009        Amended: 5/21/2009
          Consultant: Katie Johnson       Policy Vote: Health 11-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 161 would require a health care service plan  
          contract or health insurance policy issued, amended, or renewed  
          after January 1, 2010, that provides coverage for cancer  
          chemotherapy treatment to provide coverage for an orally  
          administered cancer medication no less favorably than  
          intravenously administered or injected cancer medications  
          covered under the contract or policy.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
                                                                  
          DMHC regulations               up to $50 - 150           
          $5-10$5-10             Special*
          and oversight

          *Managed Care Fund
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  

          Existing law establishes Medi-Cal, California's version of the  
          federal Medicaid program, which provides comprehensive health  
          insurance to low-income persons. Existing law establishes the  
          Healthy Families Program (HFP), California's version of the  
          federal Children's Health Insurance Program (CHIP), which  
          provides low-cost health insurance to children.

          Existing law provides for the licensure and regulation of health  
          care service plans by the Department of Managed Health Care  
          (DMHC). Depending on the complexity of any necessary  
          regulations, it could cost the DMHC $50,000 - $150,000 to  
          promulgate regulations to implement this bill. Existing law  
          provides for the regulation of health insurers by the California  
          Department of Insurance (CDI). Costs to the CDI to implement  










          this bill would be minor and absorbable.

          This bill would require that health plans and insurers provide  
          coverage for orally administered anticancer medications no less  
          favorably than intravenously administered or injected anticancer  
          medications.

          This bill would require health plans and insurers to review the  
          percentage cost share for oral medications and compare it with  
          that of intravenous or injected medications. This bill would  
          then require the health plans and insurers to apply the lower of  
          the two numbers as the cost-sharing provision for oral  
          medications. There are currently 38 oral anticancer medications  
          approved by the Food and Drug Administration (FDA) that are used  
          to treat 52 different types of cancer and there are  
          approximately 100 new oral 

          Page 2
          SB 161 (Wright)

          anticancer medications under development. The most frequently  
          prescribed oral medications are used to treat breast, ovarian,  
          endometrial, and uterine cancers.

          This bill would define "cost share" as copayment, coinsurance,  
          or deductible provisions applicable to coverage for oral,  
          intravenous, or injected anticancer medications.

          This bill would provide that these provisions do not apply to a  
          health plan contract entered into or an insurance policy  
          purchased by the California Public Employees' Retirement System  
          (CalPERS). 

          In a 2009 analysis by the California Health Benefits Research  
          Program (CHBRP), it was estimated that 97.8 percent of  
          Californians with health care coverage had some coverage for  
          oral anticancer medications. 

          In terms of a publicly funded coverage impact, CHBRP estimates  
          that premiums associated with the health plans and policies held  
          by CalPERS would increase at a cost of $282,000 to the state.  
          However, since this bill specifically exempts CalPERS' plans and  
          policies, there would be no fiscal effect on the agency and,  
          therefore, on the state as a result of this mandate. 

          The report also predicted that would be no fiscal effect on the  










          Medi-Cal program or the Healthy Families Program because they  
          already cover oral cancer medications at no charge. To the  
          extent that there would be an effect on premiums paid by the  
          Major Risk Medical Insurance Program (MRMIP) and the Access to  
          Infants and Mothers (AIM) program, each program has regulations  
          in place that would allow for a cap on enrollment and the  
          provision of a waitlist in the event that the cost of the  
          program exceeded available funds. MRMIP and AIM are primarily  
          funded by prescriber contributions and monies from tobacco  
          taxes, as provided for by Proposition 99 of 1998. MRMIP also  
          receives a specified portion of fines and penalties assessed on  
          health plans licensed by the DMHC.