BILL ANALYSIS �
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THIRD READING
Bill No: AB 219
Author: Perea (D), et al.
Amended: 9/4/13 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 7-2, 6/26/13
AYES: Hernandez, Beall, De Le�n, DeSaulnier, Monning, Pavley,
Wolk
NOES: Anderson, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 4-2, 8/12/13
AYES: De Le�n, Hill, Lara, Steinberg
NOES: Walters, Gaines
NO VOTE RECORDED: Padilla
ASSEMBLY FLOOR : 64-9, 4/22/13 - See last page for vote
SUBJECT : Health care coverage: cancer treatment
SOURCE : Susan G. Komen For the Cure, California Affiliates
DIGEST : This bill requires health care service plan (health
plan) contracts and health insurance policies issued on or after
January 1, 2015, that cover prescribed, orally administered
anti-cancer medications to limit an enrollee or insured's total
cost share to no more than $200 per filled prescription, as
specified. Sunsets these provisions on January 1, 2019.
Senate Floor Amendments of 9/4/13 delete the current contents of
the bill, and replace with language that is similar. The
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amendments increase the limit on a health plan or insurance
policy enrollee's total cost share for oral anticancer
medications.
ANALYSIS : Existing federal law establishes the Affordable
Care Act (ACA) to make, among other provisions, statutory
changes affecting the regulation of, and payment for, certain
types of private health insurance and includes coverage for
prescription drugs in the categories of 10 essential health
benefits (EHBs) that all qualified health plans must cover.
Existing state law:
1.Under the Knox-Keene Health Care Service Plan Act of 1975,
regulates and licenses health plans and specialized health
plans by the Department of Managed Health Care (DMHC),
Provides for the regulation of health insurers by the
California Department of Insurance (CDI).
2.Requires health plan contracts and health insurance policies
to provide coverage for all generally medically accepted
cancer screening tests and requires those plans and policies
to also provide coverage for the treatment of breast cancer.
3.Imposes various requirements on health plan contracts and
health insurance policies that cover prescription drug
benefits, such as a requirement to cover "off-label" uses, as
specified, and the requirement to cover previously prescribed
drugs, as specified.
4.Authorizes DMHC to regulate the provision of medically
necessary prescription drug benefits by a health plan to the
extent that the plan provides coverage for those benefits.
Existing regulation requires health plans providing outpatient
prescription drugs to provide all medically necessary
prescription drugs, except as specified in that regulation.
5.Establishes the Kaiser Small Group Health Maintenance
Organization plan as California's EHB along with the following
10 ACA mandated benefits:
A. Ambulatory patient services;
B. Emergency services;
C. Hospitalization;
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D. Maternity and newborn care;
E. Mental health and substance use disorder services,
including behavioral health treatment;
F. Prescription drugs;
G. Rehabilitative and habilitative services and devices;
H. Laboratory services;
I. Preventive and wellness services and chronic disease
management; and
J. Pediatric services, including oral and vision care.
This bill:
1.Makes several Legislative findings and declarations related to
cancer patients and oral medication, including intent of the
Legislature to set a maximum total copayment and coinsurance
amount that health care service plans and health insurers can
require patients to pay for a 30-day supply of oral anticancer
medication. Clarifies that the Legislature does not intend
health care service plans or health insurers to interpret that
maximum to be a target or desirable patient cost.
2.Requires, notwithstanding any other law, an individual or
group health plan contract or health insurance policy issued,
amended, or renewed on or after January 1, 2015, that provides
coverage for prescribed, orally administered anticancer
medications used to kill or slow the growth of cancerous cells
to comply with all of the following:
A. Prohibits, notwithstanding any deductible, the total
amount of copayments and coinsurance an enrollee is
required to pay from exceeding $200 for an individual
prescription of up to a 30-day supply of a prescribed
orally administered anticancer medication covered by the
contract or policy;
B. Requires, for a health plan contract or health insurance
policy that meets the definition of a "high deductible
health plan," as specified, to only apply once an
enrollee's deductible has been satisfied for the year.
C. Clarifies these provisions do not apply to any coverage
under a health plan contract or health insurance policy for
the Medicare Program, as specified.
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D. Authorizes, on January 1, 2016, and on January 1 of each
year thereafter, health plans and insurers to adjust the
$200 limit. Prohibits the adjustment from exceeding the
percentage increase in the Consumer Price Index for that
year.
E. Requires a prescription for an orally administered
anticancer medication to be provided consistent with the
appropriate standard of care for that medication.
1.Establishes a January 1, 2019, sunset date.
Background
Oral anti-cancer medications . According to the California
Health Benefits Review Program (CHBRP), anti-cancer medications
may be administered through an IV, by injection, or orally.
Although oral anti-cancer medications have been available for
many years, the number of oral anti-cancer medications approved
by the federal Food and Drug Administration (FDA) has grown by
108% over the past decade. The FDA approved 28 new oral
anti-cancer medications between 2003 and early 2013, which
increased the total number of oral anti-cancer medications on
the market from 26 to 54 medications. According to CHBRP, this
trend is likely to continue. The National Comprehensive Cancer
Network estimates that 400 anti-cancer medications are currently
under development, and approximately 25% of them are planned to
be administered orally.
Medical and pharmacy benefit coverage . According to CHBRP,
coverage for anti-cancer medications can differ in a number of
ways, depending on provisions of a person's health plan contract
or health insurance policy. Anti-cancer medications may be
covered as pharmacy plan benefits or as medical plan benefits,
and most plans and insurers depend on the dispensing site to
determine which will be the form of coverage. For example, IV
anti-cancer medication, which is usually provided in a hospital
or a physician's office, is generally covered as a medical
benefit, while oral anti-cancer pills dispensed by a pharmacy
are usually covered as a pharmacy benefit.
CHBRP Report . CHBRP was created in response to AB 1996
(Thomson, Chapter 795, Statutes of 2002) which requests the
University of California to assess legislation proposing a
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mandated benefit or service, and prepare a written analysis with
relevant data on the public health, medical, and economic impact
of proposed health plan and health insurance benefit mandate
legislation. CHBRP's analysis of this bill assumes that because
this bill specifies prescribed, orally administered anti-cancer
medications, it would only affect drugs specific to the
treatment of cancer and not affect other medications, such as
anti-pain or anti-nausea medications, that a cancer patient
might use during the course of chemotherapy. Among CHBRP's
findings are the following:
Medical Effectiveness - CHBRP finds that the preponderance of
evidence from studies of the effect of cost sharing on the use
of anti-cancer medications suggest that cost sharing has a
small effect on the use of oral anti-cancer medications .
Studies found that cost sharing has a larger effect on
abandonment of and adherence to oral anti-cancer
prescriptions. Abandonment occurs when a patient submits a
prescription to a pharmacy but later reverses the claim. In
one study reviewed, the authors compared persons with seven
levels of cost sharing and found that persons who had cost
sharing greater than $250 per prescription were more likely to
abandon their prescriptions than persons who had cost sharing
of $100 or less. Studies that examined the impact of cost
sharing on adherence concluded that patients who had higher
cost sharing were less likely to be adherent to the oral
anti-cancer medication prescription.
Benefit Coverage, Utilization, and Cost Impacts - CHBRP
estimates that almost all enrollees with health insurance
subject to this bill have at least some coverage for
anti-cancer medications. This bill would affect the health
insurance of about 26 million enrollees whose insurance
provides an outpatient prescription drug benefit. CHBRP notes
that outpatient prescription drug benefits cover oral
anti-cancer medications, though coverage of specific
anti-cancer medications may vary by health plan or insurer.
CHBRP estimates that 0.54% of enrollees with privately
purchased health insurance subject to this bill would use oral
anti-cancer medications during the year following
implementation.
Increases in insurance premiums as a result of this bill vary
by privately purchased market segment, ranging from
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approximately 0.0025% (DMHC-regulated large-group plans) to
0.0047% (CDI regulated individual policies). Increases as
measured by per-member, per-month payments are estimated to be
approximately $0.01 for both DMHC-regulated large-group plans
and CDI-regulated small-group policies. This bill would also
apply to Medi-Cal Managed Care. However, the Department of
Health Care Services, which administers Medi-Cal, would not be
expected to face measurable expenditure or premium increases,
as these plans currently cover oral anti-cancer medication
benefits with minimal or no cost-sharing requirements. CHBRP
states that the estimated premium increases would not have a
measurable impact on the number of persons who are uninsured.
Prior Legislation
AB 1000 (Perea, 2011) would have required a health plan contract
or health insurance policy that provides coverage for
prescription drugs and cancer chemotherapy treatment to limit
enrollee out-of-pocket costs for prescribed, orally administered
anti-cancer medications. AB 1000 was vetoed by Governor Brown,
stating that the bill doesn't distinguish between health plans
and insurers who make these drugs available at a reasonable cost
and those who do not.
SB 961 (Wright, 2010) which was virtually identical to AB 1000,
was vetoed by Governor Schwarzenegger, who stated in his veto
message that the bill would have added costs to increasingly
expensive health insurance premiums and it was unnecessary in
light of federal health reform.
SB 161 (Wright, 2009) would have required a carrier contract or
policy that covers anti-cancer treatment to provide coverage for
a prescribed, orally administered anti-cancer medication on a
basis "no less favorable" than intravenous or injected
anti-cancer medications. SB 161 was vetoed by Governor
Schwarzenegger, citing his concerns that the bill limited a
carrier's ability to control both the appropriateness and cost
of the care by requiring immediate coverage of every medication
upon receipt of federal approval, regardless of the provisions
of the carrier's formulary, and placed carriers at a severe
disadvantage when negotiating prices with drug manufacturers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
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According to the Senate Appropriations Committee:
One-time costs of $70,000 in 2013-14 and $90,000 in 2014-15
for review of health plan filings by DMHC. Ongoing enforcement
costs are expected to be minor (Managed Care Fund).
Minor ongoing enforcement cost by the CDI (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.
SUPPORT : (Verified 9/5/13)
Susan G. Komen - For the Cure, California Affiliates (source)
Albie Aware Inc.
American Cancer Society Cancer Action Network
Association of Northern California Oncologists
BAYBIO
BIOCOM
Breast Cancer Solutions
California Children's Hospital Association
California Communities United Institute
California Healthcare Institute
California Professional Firefighters
Cancer Legal Resource Center
Disability Rights Legal Center
Hurtt Family Health Clinic
Lung Cancer Alliance
Medical Oncology Association of Southern California
National Brain Tumor Society
Ovarian Cancer Alliance
Pacific Islander Health Partnership
PADRES Contra El Cancer
Parker & Friends
Serve the People Community Health Center
TechNet
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OPPOSITION : (Verified 9/5/13)
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
Blue Shield of California
California Association of Health Plans
California Chamber of Commerce
International Myeloma Foundation
National Patient Advocate Foundation
ARGUMENTS IN SUPPORT : The sponsors of this bill, Susan B.
Komen for the Cure California Affiliates and Carrie's TOUCH,
Inc., state that this bill will make oral cancer chemotherapy
treatments more affordable and therefore more accessible to
cancer patients in California. Supporters, representing patient
advocacy groups, providers, and biomedical research companies,
among others, point to research showing that a cap on
cost-sharing requirements for orally administered anti-cancer
medications per filled prescription increases patient compliance
with their doctor prescribed therapy and reduces the likelihood
of treatment abandonment that is associated with higher
cost-sharing amounts. The American Cancer Society Cancer Action
Network notes in support that, typically, orally administered
chemotherapy is covered under a health plan's pharmacy benefit
and oral chemotherapy medications are often classified in the
highest tier of a plan's cost-sharing system. The Association
of Northern California Oncologists writes in support that the
emergence of safe, effective, orally administered anti-cancer
medications has dramatically improved the quality of life for
cancer patients and this bill will make these medicines, which
are often more advanced therapies with fewer side effects than
traditional chemotherapy, more affordable and accessible.
Lastly, biomedical research companies, such as the California
Healthcare Institute and BIOCOM, add that remarkable
breakthroughs in orally administered cancer treatments are only
effective when patients have access to them.
ARGUMENTS IN OPPOSITION : The California Chamber of Commerce,
health plans, and health insurers object to this bill because
they argue that it threatens the efforts of all health care
stakeholders to provide consumers with meaningful health care
choices and affordable coverage options. America's Health
Insurance Plans notes in opposition that cost-sharing is a
crucial part of controlling health care costs and setting an
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arbitrary cost-sharing limit for those who are using oral
chemotherapy medication means more of the cost of these
expensive medications will need to be borne by other enrollees
and the insured in the form of higher premiums. The California
Association of Health Plans (CAHP) contends that this bill does
nothing to control the high underlying cost of pharmaceuticals,
nor does it do anything to encourage drug makers to be more
efficient and lower costs. CAHP further believes that the ACA
provides a more comprehensive solution to lowering consumer
costs without favoring one drug class over another and still
allows for appropriate utilization and benefit management by
health plans. Blue Shield of California adds in opposition that
this bill attempts to carve out special cost sharing rules for a
particular line of pharmaceutical company drugs and will only
exacerbate the affordability crisis by giving special treatment
to certain drug company products.
ASSEMBLY FLOOR : 64-9, 4/22/13
AYES: Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Daly,
Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez,
Gordon, Gorell, Gray, Hall, Harkey, Roger Hern�ndez, Holden,
Jones-Sawyer, Levine, Linder, Maienschein, Medina, Mitchell,
Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan,
Patterson, Perea, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon,
Salas, Skinner, Stone, Ting, Torres, Waldron, Weber,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Conway, Dahle, Donnelly, Beth Gaines, Hagman, Jones,
Melendez, Wagner, Wilk
NO VOTE RECORDED: Achadjian, Ch�vez, Grove, Logue, Lowenthal,
Mansoor, Vacancy
JL:nl 9/5/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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