BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 219 (Perea) - Health care coverage: cancer treatment.
          
          Amended: July 2, 2013           Policy Vote: Health 7-2
          Urgency: No                     Mandate: Yes
          Hearing Date: August 12, 2013                           
          Consultant: Brendan McCarthy    
          
          This bill does not meet the criteria for referral to the  
          Suspense File.
          
          
          Bill Summary: AB 219 would require health plans and health  
          insurers the cover orally-administered anti-cancer medications  
          to limit enrollee costs to no more than $100 per filled  
          prescription.

          Fiscal Impact: 
              One-time costs of $70,000 in 2013-14 and $90,000 in 2014-15  
              for review of health plan filings by the Department of  
              Managed Health Care. Ongoing enforcement costs are expected  
              to be minor (Managed Care Fund).

              Minor ongoing enforcement cost by the Department of  
              Insurance (Insurance Fund).

              No costs to state-run health care programs. The Medi-Cal,  
              Healthy Families, and Access for Infants and Mothers  
              programs have limited or no cost sharing. CalPERS health  
              plans all have enrollee copayment amounts for prescription  
              drugs that are less than $100 per prescription.

              No costs to provide subsidies for mandated benefits in the  
              California Health Benefit Exchange (General Fund). See  
              below.

          Background: Under current law, health plans are regulated by the  
          Department of Managed Care and health insurers are regulated by  
          the Department of Insurance. Current law and regulation place a  
          variety requirements and restrictions on health plans and health  
          insurers.

          Under current law and practice, intravenous anticancer  








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          medications may be treated differently than oral anticancer  
          medication when it comes to cost-sharing by patients. Often,  
          intravenous anticancer medications are provided in a doctor's  
          office or hospital and are covered as a medical benefit. On the  
          other hand, oral anticancer medications are often covered under  
          a pharmacy benefit. It is common for health plans and health  
          insurers to have limited copayment requirements or coinsurance  
          requirements for medical benefits; whereas larger copayment  
          requirements or significant coinsurance requirements may apply  
          to pharmacy benefits. Thus, a patient could pay significantly  
          more in out-of-pocket costs for oral anticancer drugs than  
          intravenous anticancer drugs.

          Under the federal Patient Protection and Affordable Care Act  
          (Affordable Care Act), health plans and health insurers that  
          offer coverage in the individual market or the small group  
          market must provide coverage that is equivalent to the benefits  
          of a specified essential health benefits benchmark plan. Federal  
          guidance allows states to determine which plan will be the  
          benchmark plan. The state has selected the Kaiser Small Group  
          HMO as the state's essential health benefit benchmark plan.

          Also under the Affordable Care Act, individuals with household  
          income less than 400 percent of the federal poverty level and  
          certain small businesses purchasing health plans through the  
          California Health Benefit Exchange will be eligible for  
          subsidies. The Affordable Care Act requires a state to pay for  
          the subsidies attributable to any state-mandated benefits that  
          are not provided under the benchmark plan.

          Proposed Law: AB 219 would require health plans and health  
          insurers the cover orally-administered anti-cancer medications  
          to limit enrollee costs to no more than $100 per filled  
          prescription.

          Specific provisions of the bill would:
              Implement the cost limitations for health plans and  
              insurance policies in the large group market on January 1,  
              2014;
              Implement the cost limitations for health plans and  
              insurance policies in the small group or individual market  
              on January 1, 2015;
              Exempt high-deductible health plans and insurance policies  
              when the deductible has not been met.








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          Related Legislation: 
              AB 1000 (Perea, 2011) would have prohibited health plans  
              and health insurers that cover prescription drugs and  
              chemotherapy treatment from imposing higher copayments,  
              deductibles, or coinsurance for oral anticancer drugs than  
              would be imposed for intravenous anticancer drugs. That bill  
              was vetoed by Governor Brown.
              SB 961 (Wright, 2010) was substantially similar to AB 1000  
              (Perea, 2011). That bill was vetoed by Governor  
              Schwarzenegger.
              SB 161 (Wright, 2009) was substantially similar to AB 1000  
              (Perea, 2011). That bill was vetoed by Governor  
              Schwarzenegger.
              AB 460 (Ammiano) would add non-discrimination language to  
              the current mandate to offer infertility treatment. That  
              bill will be heard in this committee.
              AB 889 (Frazier) would limit the ability of health insurers  
              and health plans to use step therapy protocols for  
              prescription drugs. That bill will be heard in this  
              committee.
              AB 912 (Quirk-Silva) would require large group health plans  
              or health insurance policies to provide coverage for  
              fertility preservation services when a necessary medical  
              treatment may cause infertility in the patient. That bill  
              will be heard in this committee.
          
          Staff Comments: According to the California Health Benefits  
          Review Program, the changes to enrollee cost-sharing in AB 219  
          do not constitute a new or expanded benefit mandate, as defined  
          in federal law or regulation. Therefore, there would be no  
          obligation on the state to provide subsidies for coverage  
          through the California Health Benefit Exchange.

          Under the bill, the only costs that may be incurred by a local  
          agency relate to crimes or infractions. Under the California  
          Constitution, such costs are not reimbursable by the state.

          Proposed Author Amendments: Would delay implementation of the  
          cost limitations in the large group market until January 1,  
          2015.











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