BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, 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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