BILL ANALYSIS Ó
SB 639
Page 1
Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 639 (Ed Hernandez) - As Amended: August 6, 2013
SENATE VOTE : 28-11
SUBJECT : Health care coverage.
SUMMARY : Places in California law provisions of the Patient
Protection and Affordable Care Act (ACA) relating to
out-of-pocket limits on health plan enrollee and health insured
cost-sharing, health plan and insurer actuarial value coverage
levels and catastrophic coverage requirements, and requirements
on health insurers with regard to coverage for out-of-network
emergency services. Applies health plan enrollee and insured
out-of-pocket limits to specialized products that offer
essential health benefits (EHBs), requires the same deductibles
on the same benefits and requires review by health plan and
insurer regulators of individual market products that are not
standardized through the California Health Benefit Exchange
(Exchange). Specifically, this bill :
1)Permits health care service plan contracts to charge
subscribers and enrollees a copayment or a deductible for a
basic health care service consistent with 3) and 4) below.
2)Prohibits a waiver of the obligation of the plan of any
provision of the Knox-Keene Act Health Care Service Plan Act
of 1975 (Knox-Keene Act) when the plan delegates any services
it is required to perform to its medical groups, independent
practice associations, or other contracting entities.
3)Requires a health care service plan contract or a health
insurance policy for nongrandfathered products, except a
specialized health insurance policy, in the individual and
small group market that is issued, amended or renewed on or
after January 1, 2014, to provide for a limit on annual
out-of-pocket expenses for all covered benefits that meet the
definition of EHBs.
4)Requires a health care service plan contract or a health
insurance policy for nongrandfathered products, except a
specialized health insurance policy, in the large group market
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that is issued, amended, or renewed on or after January 1,
2014, to provide for a limit on annual out-of-pocket expenses
for covered benefits, including out-of-network emergency care
consistent with existing law. Limits this provision to EHBs
covered under the policy to the extent that this bill does not
conflict with federal law or guidance on out-of-pocket
maximums for nongrandfathered products in the large group
market.
5)Requires, for the first plan year commencing on or after
January 1, 2014, 4) above to be satisfied if both apply:
a) The product complies with the requirements of 4) with
respect to basic health care services; and,
b) To the extent the product includes an out-of-pocket
maximum on coverage other than basic health care services
that the out-of-pocket maximum also does not exceed the
limit established pursuant to 4) above.
6)Applies the limit described in 3) and 4) above to any
copayment, coinsurance, deductible, incentive payment, and any
other form of cost sharing for all covered benefits, including
prescription drugs, as specified.
7)Prohibits the limit described in 3) and 4) from exceeding the
ACA limit and any subsequent rules, regulations or guidance.
8)States that nothing in this bill should be construed to affect
the reduction of any cost sharing for eligible enrollees
pursuant to the ACA.
9)Applies the limit described in 3) thru 7) above, effective
January 1, 2015, if an EHB is offered by a specialized health
insurance policy so that the total annual out-of-pocket
maximum for all EHBs does not exceed the limit in 3) thru 7).
This does not apply to a specialized health insurance policy
that does not offer EHBs.
10) Prohibits, for a small
employer health, a care service plan contract or health
insurance policy offered, sold, or renewed on or after January
1, 2014, the deductible under the plan or policy from
exceeding $2,000 for a single individual and $4,000 in the
case of any other plan contract or policy. Requires the
dollar amounts to be indexed consistent with the ACA and any
federal rules or guidance. Requires this limitation to be
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applied in a manner that does not affect the actuarial value
of any small employer health care service plan contract.
Allows the Department of Managed Health Care (DMHC) or the
California Department of Insurance (CDI) for small group
products at the bronze level of coverage to offer a higher
deductible in order to meet the actuarial value requirement of
the bronze level. Requires DMHC/CDI to consider affordability
of cost sharing for enrollees and whether enrollees may be
deterred from seeking appropriate care because of higher cost
sharing. States that nothing in this provision allows a plan
contract to have a deductible that applies to preventive
services, as specified.
11) Establishes the following
levels of coverage for the nongrandfathered individual and
small group market:
a) Bronze level - coverage that is actuarially equivalent
to 60% of the full actuarial value of the benefits provided
under the plan contract;
b) Silver level - coverage that is actuarially equivalent
to 70% of the full actuarial value of the benefits provided
under the plan contract;
c) Gold level - coverage that is actuarially equivalent to
80% of the full actuarial value of the benefits provided
under the plan contract; and,
d) Platinum level - coverage that is actuarially equivalent
to 90% of the full actuarial value of the benefits provided
under the plan contract.
12) Requires the actuarial value
for nongrandfathered individual and small group health care
service plan contracts or health insurance policies to be
determined in accordance with the following:
a) Cannot vary by more than plus or minus 2%;
b) Must be determined on the basis of EHBs and as provided
to a standard, nonelderly population (not individuals on
Medi-Cal or Medicare);
c) Allows DMHC/CDI to use the actuarial value methodology
developed consistent with the ACA;
d) Requires, for pediatric dental benefits whether offered
by a full service plan or insurance policy or a specialized
plan or policy, the actuarial value to be consistent with
federal law and guidance;
e) Requires DMHC/CDI, in consultation with each other and
the Exchange, to consider whether to exercise state-level
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flexibility with respect to the actuarial value calculator
in order to take into account the unique characteristics of
the California health care coverage market, including the
prevalence of health care service plans, total cost of care
paid for by the carrier, price of care, patterns of service
utilization, and relevant demographic factors; and,
f) For small group, requires employer contributions toward
health reimbursement accounts and health savings accounts
to count toward the actuarial value of the product in the
manner specified in federal rules and guidance.
13) Requires for all products in
the nongrandfathered individual and small group market
commencing January 1, 2015, any deductible to apply to the
same service for any product in the same level of coverage
whether regulated by DMHC or CDI.
14) Defines a catastrophic plan
as a health care service plan contract or health insurance
policy that provides no benefits for any plan year until the
enrollee has incurred cost-sharing expenses in an amount equal
to the annual limit on out-of-pocket costs as specified in 3)
above except requires that it provide coverage for at least
three primary care visits.
15) Prohibits a carrier that is
not participating in the Exchange from offering, marketing, or
selling a catastrophic plan in the individual market.
16) Authorizes catastrophic plans
or policies to be offered only if either of the following
apply:
a) The individual purchasing the plan has not yet attained
30 years of age; or,
b) The individual has a certificate of exemption from the
federal individual mandate because the individual is not
offered affordable coverage or because the individual faces
hardship.
17) Makes nongrandfathered
products in the individual market which are not standardized
products as provided in the Exchange to be subject to review
by DMHC/CDI consistent with this bill prior to product
approval. Requires this provision to also apply to carriers
offering specialized health insurance policies that provide
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coverage of an EHB, as specified.
18) Requires DMHC/CDI to publicly
post information on nonstandardized products no less than 60
days prior to the date on which the product is approved. For
the purposes of products offered by the Exchange, requires
DMHC/CDI to post nonstandardized products for review 60 days
prior to the finalization of any contract between the Exchange
and the health care service plan.
19) Requires for each proposed
nonstandardized product, the carrier to provide to DMHC/CDI
the following:
a) Whether the product was proposed to the Exchange and any
written information from the Exchange on whether the
product was approved, denied, or modified;
b) The estimated actuarial value of the proposed product
and the actuarial value tier of the proposed product;
c) The anticipated impact on risk mix of plan enrollees
purchasing the proposed product, including information on
the risk mix of enrollees purchasing the same or similar
products in prior years; and,
d) Any benefit to consumers, including anticipated impact
on premiums.
20) Requires DMHC/CDI to review
and take public comment on the nonstandardized products for
the following:
a) Whether the proposed product is likely to affect the
risk adjustment scores or reinsurance amounts for the
product or the plan;
b) Whether the consumer will be provided additional or more
comprehensive benefits;
c) Whether the proposed product has a disproportionate
impact on individuals with high health care needs and the
anticipated impact on premiums; and,
d) Whether the proposed product is otherwise consistent
with existing law.
21) Requires if the product is
approved or modified, the approved product to be posted.
22) Requires nothing in this bill
to be interpreted to prohibit a carrier from offering
supplemental benefits for services that are not included in
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EHBs, including adult dental, adult vision, acupuncture, or
chiropractic, if the plan/insurer demonstrates to the
satisfaction of the director of DMHC or the Insurance
Commissioner that those benefits will not affect the risk
adjustment scores or the reinsurance amounts for the product
or the plan. Requires for a plan/insurer to continue to offer
a supplemental benefit, the plan to annually provide to
DMHC/CDI information necessary to determine whether the
benefit has affected the risk mix in the prior plan year.
23)Requires a group or individual health insurance policy
issued, amended, or renewed on or after January 1, 2014, that
provides or covers any benefits with respect to service in an
emergency department of a hospital to cover emergency services
as follows:
a) Without the need for any prior authorization
determination;
b) Regardless of whether the health care provider
furnishing the services is a participating provider with
respect to those services;
c) In a manner so that, if the services are provided to an
insured by a nonparticipating healthcare provider, with or
without prior authorization; the services will be provided
without imposing any requirement under the policy for prior
authorization of services or any limitation on coverage
that is more restrictive than the requirements or
limitations that apply to providers who do have a
contractual relationship with the insurer; and,
d) If the services are provided to an insured
out-of-network, the cost-sharing requirement, expressed as
a copayment amount or coinsurance rate, is the same
requirement that would apply if the services were provided
in-network.
24)Defines "emergency services" with respect to an emergency
medical condition as:
a) A medical screening examination that is within the
capability of the emergency department of a hospital,
including ancillary services routinely available to the
emergency department to evaluate that emergency condition.
b) Within the capabilities of the staff and facilities
available at the hospital, further medical examination and
treatment as are required under federal law to stabilize
the patient.
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EXISTING LAW :
1)Provides for regulation of health plans by the DMHC under the
Knox-Keene Act and regulation of health insurers by the CDI
under the Insurance Code.
2)Defines basic health care services under the Knox-Keene Act
as:
a) Physician services, including consultation and referral;
b) Hospital inpatient service and ambulatory care services;
c) Diagnostic laboratory and diagnostic and therapeutic
radiologic services;
d) Home health services;
e) Preventive health services;
f) Emergency health care services, including ambulance and
ambulance transport services, and out-of-area coverage;
and,
g) Hospice care, as specified.
3)States that nothing in existing law, as specified, prohibits a
health plan from charging subscribers or enrollees a copayment
or a deductible for a basic health care service or from
setting forth, by contract, limitations on maximum coverage of
basic health care services, provided that the copayments,
deductibles, or limitations are reported to, and held
unobjectionable by, the DMHC Director and set forth to the
subscriber or enrollee pursuant to specified disclosures.
4)Requires a health care service plan that covers hospital,
medical, or surgical expenses, or its contracting medical
providers, to provide 24-hour access for enrollees and
providers including, but not limited to, noncontracting
hospitals, to obtain timely authorization for medically
necessary care, for circumstances where the enrollee has
received emergency services and care is stabilized, but the
treating provider believes that the enrollee may not be
discharged safely.
5)Requires every health care service plan that provides
prescription drug benefits to maintain an expeditious process
by which prescribing providers may obtain authorization for a
medically necessary nonformulary prescription drug. Requires
nonformulary prescription drugs to include any drug for which
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an enrollee's copayment or out-of-pocket costs are different
than the copayment for a formulary prescription drug, except
as otherwise provided by law or regulation or in cases in
which the drug has been excluded in the plan contract pursuant
to existing law.
6)Enacts, in federal law, the ACA to, among other things, make
statutory changes affecting the regulation of, and payment
for, certain types of private health insurance. Includes the
definition of an EHBs package that all qualified health plans
(QHPs) must cover, at a minimum, with some exceptions, and
requires bronze, silver, gold, or platinum levels of coverage.
Prohibits out-of-pocket limits greater than HSAs in all
markets. Under federal guidance only for the first plan year
beginning on or after January 1, 2014, allows for group
coverage the annual limitation on out-of-pocket maximums to be
satisfied if both of the following conditions are satisfied:
a) The plan complies with the requirements with respect to
its major medical coverage (excluding, for example,
prescription drug coverage and pediatric dental coverage);
and,
b) To the extent the plan or any health insurance coverage
includes an out-of-pocket maximum on coverage that does not
consist solely of major medical coverage (for example, if a
separate out-of-pocket maximum applies with respect to
prescription drug coverage), such out-of-pocket maximum
does not exceed HSA limits.
7)Prohibits all health insurance issuers from setting lifetime
limits. Prohibits "restricted annual limits" on coverage
through 2013 subject to oversight by the Secretary of the
federal Department of Health and Human Services with no annual
limits allowed starting in 2014 to new plans in the individual
market, and all new and existing group plans but excludes
self-insured plans.
8)Requires if an insurance issuer covers emergency services, the
issuer to cover emergency services without prior
authorization, whether or not the provider is a participating
provider without imposing any limitation on coverage where the
provider does not have a contractual relationship with the
plan that is more restrictive than the requirements or
limitations that apply to providers who do have a contractual
relationship with the issuer. If such services are provided
out-of-network, the cost-sharing requirement (expressed as a
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copayment amount or coninsurance rate) is the same requirement
that would apply if such services were provided in-network.
9)Establishes the Exchange (now called Covered California) as an
independent entity in state government not affiliated with any
state agency or department, governed by a five member board.
Requires the board to establish and use a competitive process
to select participating carriers and other contractors.
Requires the board to determine the minimum requirements a
carrier must meet to be considered for participation, and the
standards and criteria for selecting QHPs to be offered
through the Exchange that are in the best interests of
qualified individuals and qualified small employers. Requires
in the course of selective contracting for health care
coverage the board to seek to contract with carriers choices
that offer the optimal choice, value, quality, and service.
Authorizes the board to standardize products to be offered in
the Exchange.
10) Requires carriers participating in the Exchange to fairly
and affirmatively offer, market, and sell in the Exchange at
least one product within each of five coverage categories of
the ACA (Bronze, Silver, Gold, Platinum, Catastrophic).
Authorizes the board to require carriers to sell additional
products within each of those levels of coverage. Requires
carriers participating in the Exchange that sell any products
outside the Exchange to fairly, affirmatively offer, market
and sell all individual and small group market products sold
inside the Exchange to individuals and small employers
purchasing outside the Exchange. Requires carriers that do
not participate in the Exchange to offer at least one
standardized product that has been designated by the Exchange
in each of the four levels of coverage (Bronze, Silver, Gold,
and Platinum), only if the board exercises its authority to
standardize products.
11) Establishes as California's EHBs the Kaiser Small Group
HMO plan along with the following 10 ACA mandated benefits:
a) Ambulatory patient services;
b) Emergency services;
c) Hospitalization;
d) Maternity and newborn care;
e) Mental health and substance use disorder services,
including behavioral health treatment;
f) Prescription drugs;
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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.
12) Requires in federal law, under provisions of the federal
Emergency Medical Treatment and Active Labor Act, and in state
law, hospital emergency department to provide emergency
screening and stabilization services without regard to the
patient's insurance status or ability to pay.
FISCAL EFFECT : According the Senate Appropriations Committee,
one-time costs of $400,000 to review plan filings and ongoing
costs of $60,000 for enforcement of the bill's provisions by
DMHC (Managed Care Fund). Potential ongoing costs in the tens
of thousands to low hundreds of thousands for enforcement of the
bill's provisions by CDI. (Insurance Fund).
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the DMHC and
the CDI are currently reviewing and approving Exchange
products with no statutory authority to enforce the
requirements of the ACA with respect to cost sharing. As
such, this bill codifies several provisions of the ACA related
to cost sharing, coverage tiers, and emergency services. The
author states that the ACA limits maximum out-of-pocket costs
for all health insurance to $6500 for an individual and about
$13,000 for a family: these limits are consistent with those
for HSAs. This bill specifies that the maximum out-of-pocket
limits apply to EHBs as defined in state and federal law. All
cost sharing, including not only the deductible but any
copays, coinsurance, or other cost sharing applies toward the
maximum out-of-pocket limit. In addition, consistent with
federal law, this bill codifies the requirement that
deductibles for small employer products are limited to $2,000
for an individual and $4,000 for a family, consistent with the
ACA provisions. This bill codifies the precious metal tiers of
the ACA. The ACA categorizes coverage in the individual and
small employer markets into five tiers (Bronze, Silver, Gold,
Platinum, Catastrophic) based on actuarial value, that is, the
percent of health costs covered across a population.
According to the author, states have the opportunity to adopt
a state-specific actuarial value calculator: because
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utilization is different in California (such as shorter
hospital stays), a California-specific calculator is
important. This bill permits DMHC and CDI to adopt a
California-specific calculator.
This bill also requires insurers and health plans to submit
for review to regulators nonstandardized products to be sold
in the individual market outside the Exchange. The author
indicates that this bill does not eliminate innovation in
benefit design; instead it requires public scrutiny and
debate.
2)FEDERAL HEALTH REFORM . On March 23, 2010, the federal
government enacted the ACA (Public Law 111-148), which was
further amended by the Health Care Education Reconciliation
Act (H.R. 4872). The ACA, as modified by the U.S. Supreme
Court ruling, gives states the option to expand eligibility in
the Medicaid program to include adults without children, and
it contains other required program simplifications. Regarding
the private health insurance market, the ACA primarily
restructures the individual and small group markets, setting
minimum standards for health coverage, providing financial
assistance to individuals with income below 400% of the
federal poverty level (FPL), tax credits for small employers,
and the establishment of Health Benefit Exchanges and EHBs
that are required to be offered by QHPs, which are plans
participating the small group and individual market through
Exchanges and in the market outside Exchanges. Beginning in
2014, QHPs will be required to offer coverage at one of four
levels: bronze, silver, gold, or platinum and a catastrophic
plan which can only be offered by plans participating in the
Exchange. Levels will be based on a specified share of full
actuarial value of the EHBs. These plans will be prohibited
from imposing an annual cost-sharing limit that exceeds the
thresholds applicable to HSA-qualified High Deductible Health
Plans (HDHPs). In 2014, the annual out-of-pocket maximum for
an individual is $6,350 and $12,700 for family coverage.
Catastrophic plans are also permitted only in the individual
market for young adults (under age 30) and for those persons
exempt from the individual mandate, but catastrophic plans
must cover EHBs and have deductibles equal to the amounts
specified as out-of-pocket limits for HSA-qualified HDHPs.
Small group health plans providing QHPs will be prohibited
from imposing a deductible greater than $2,000 for individual
coverage and $4,000 for any other coverage in 2014, adjusted
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annually after.
S ome individuals with income under 400% FPL will receive
advanceable, refundable tax credits toward the purchase of an
Exchange plan. The payment will go directly to the insurer
and will reduce the premium liability for that individual.
Those who qualify for premium credits and are enrolled in an
Exchange plan at the silver tier beginning in 2014 will also
be eligible for assistance in paying any required cost-sharing
for their health services. Limitations on Exchange plans
related to out-of-pocket costs will be based upon HDHPs that
qualify individuals for HSAs. Cost sharing subsidies will
further reduce those out-of-pocket maximums by two-thirds for
qualifying individuals between 100% and 200% FPL, by one-half
for qualifying individuals between 201% and 300% FPL, and by
one-third for qualifying individuals between 301% and 400%
FPL.
3)PEDIATRIC DENTAL EHB . The ACA and subsequent regulations and
federal guidance establish separate requirements for pediatric
dental EHBs provided by specialized dental plans (sometimes
referred to as stand-alone plans). Under federal regulations,
rather than meeting the specific dollar limits that apply to
cost sharing for comprehensive medical QHPs, stand-alone
dental plans certified to be offered in an Exchange will be
required to demonstrate that they have a reasonable annual
limitation on cost-sharing. The final federal rule clarified
that an exchange is responsible for determining the level of
"reasonable" annual limits. For the federal Exchange, the
federal Centers on Medicare and Medicaid Services interprets
reasonable to mean any annual limit on cost sharing that is at
or below $700 for a plan with one child or $1,400 for a plan
with two or more children.
Additionally, the ACA and implementing regulations exclude
stand-alone dental plans from the cost-sharing reduction
requirements placed on medical QHPs. According to federal
guidance, the ACA generally states that any cost sharing
reductions that would be applied to the pediatric dental EHB
in a comprehensive medical QHP will not be applied if the
pediatric dental benefit is provided through a stand-alone
dental plan. With regard to calculation of actuarial value, a
stand-alone plan may not use the federal actual value
calculator. The stand-alone dental plan must demonstrate that
it offers the pediatric EHB at either a low level of coverage
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with an actuarial value of 70% or a high level of coverage
with an actuarial value of 85%, and within a de minimis
variation of plus or minus two percentage points of the 70% or
85%. The Exchange has adopted standard benefit plans for the
pediatric dental EHB that include a $1000 annual out-of-pocket
maximum and determined it to be reasonable.
4)SUPPORT . Proponents describe this bill as implementing and
improving upon the federal ACA. Today some health insurance
provides no limit on out-of-pocket costs and consumers end up
owing tens of thousands of dollars for necessary health care
even when they have insurance. Health Access California
indicates that this bill says that if a specialized plan
offers any of the EHBs, then it is subject to the consumer
protections provided under this bill. This is because, for
many years, it has been routine in California to exempt
specialized health plans from consumer protections on the
grounds that the benefits offered were incidental or
supplemental or just not that important but in 2014, pediatric
dental and pediatric vision will be part of the EHBs required
under state and federal law.
The National Multiple Sclerosis Society supports this bill
because it will establish cost sharing limits on health
insurance and will help people living with chronic diseases
like MS who are frequent users of the health care system and
rely on expensive medicines. Four of the disease modifying
therapies used to treat MS are routinely placed on specialty
tiers and require patients to pay coinsurance, which can force
patients with chronic conditions to make desperate choices
between vital medical care and mortgage and groceries. The
Western Center on Law and Poverty says that California has
already implemented many elements of the ACA, but the state
must still codify cost-sharing. The California HealthCare
Foundation found in 2011 that 70% of California's uninsured
are low to moderate income. This bill helps provide peace of
mind to consumers for what they are purchasing and how much
they will pay for it, regardless of if they get coverage in or
out of the Exchange.
5)OPPOSITION . Opponents argue that this bill contains
provisions that conflict with or go beyond requirements of the
ACA and federal guidance. They believe that certain other
provisions differ from the out-of-pocket requirements in
federal law or restrict the use of incentives. America's
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Health Insurance Plans states that this bill would establish
that any deductible applies to all benefits, and that the ACA
permits carriers to apply different deductibles for benefits
that are not part of EHBs. Implementing separate deductibles
for non-EHBs enables carriers to offer additional benefits
desired by consumers while keeping the health care product
affordable.
The Association of California Life and Health Insurance
Companies (ACLHIC) indicates that this bill will severely
impede an insurer's ability to offer unique benefit options to
consumers, as it creates a far more arduous regulatory
approval process for non-standardized plan designs in the
individual market. ACLHIC states that with no regard for the
proprietary nature of the information, this measure requires
CDI to publically post information on non-standardized
products no less than 60 days prior to approval and requires
CDI to open up that process to public comment for an
unspecified period of time. Certainly, this in and of itself
is concerning as it will make it almost impossible for
insurers to adjust quickly to the demands of the market as it
further delay's what is often a very involved and complex
process.
6)RELATED LEGISLATION . AB 18 (Pan) would have required a
specialized health plan contract or insurance policy providing
pediatric oral care benefits to waive the applicable dental
out-of-pocket maximum upon notification from a QHP on behalf
of an enrollee that the applicable out-of-pocket maximum under
the QHP has been satisfied, and beginning January 1, 2015,
would have prohibited the combined out-of-pocket maximums for
dental and a QHP from exceeding those limits established under
the ACA. Would have required the plans to develop a method
for coordinating and tracking cost sharing that limits the
burden on the subscriber. AB 18 was amended to delete those
provisions and instead establish medical loss ratio and rate
review requirements on specialized plans offering pediatric
oral care benefits. AB 18 is pending in the Assembly
Appropriations Committee.
7)PREVIOUS LEGISLATION .
a) AB 1800 (Ma) would have implemented provisions of the
ACA related to prohibitions on health plans and health
insurers from imposing out-of-pocket maximum caps which
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exceed specified levels. AB 1800 was held in the Senate
Appropriations Committee.
b) AB 310 (Ma) of 2011 would have prohibited health plan
contracts and health insurance policies that cover
outpatient prescription drugs from requiring coinsurance,
as defined, as a basis for cost sharing for outpatient
prescription drug benefits and imposes specified
limitations on copayments, as defined, and out-of-pocket
expenses for outpatient prescription drugs. AB 2011 was
held in Assembly Appropriations Committee.
c) SB 961 (Wright) of 2010 would have required a health
plan contract or health insurance policy that provides
coverage for cancer chemotherapy treatment to establish
limits on enrollee out-of-pocket costs for prescribed,
orally administered, nongeneric cancer medication. SB 961
was vetoed by the Governor Schwarzenegger. In his veto
message he indicated that his concerns about adding costs
to our increasingly expensive health insurance premiums had
not been addressed, and that SB 961 is unnecessary in light
of the provisions of the federal health reform act that
will take effect on January 1, 2014 and cap out-of-pocket
costs for both individuals and families.
d) SB 161 (Wright) of 2009 would have required a health
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. In his
veto message, Governor Schwarzenegger stated, "For those
patients fortunate enough to have health coverage in
today's economic environment, health plans already provide
coverage for oral anticancer medications. This bill limits
a plan's ability to control both the appropriateness of the
care and the cost by requiring them to immediately cover
every medication as soon as it receives federal approval
regardless of the provisions of the health plan's formulary
placing them at a severe disadvantage when negotiating
prices with drug manufacturers. I do believe that oral
anticancer medications can be more cost-effective and
efficacious in some instances. If there is a way to
provide greater access without increasing overall costs, I
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would be willing to reconsider such a measure next year. I
would encourage
a collaborative approach with my Administration, the health
plans, and the pharmaceutical manufacturers next year on
this topic."
e) AB 2170 (Bonnie Lowenthal) of 2010 would have prohibited
health plans and health insurers that cover prescription
drugs and use a formulary from increasing applicable
copayments or deductibles for prescription drugs for the
length of the contract, including, but not limited to,
during an open enrollment period. AB 2170 died on the
Assembly Appropriations Committee Suspense File.
f) AB 2052 (Goldberg), Chapter 336, Statutes of 2002,
prohibits health plans and health insurers from making any
change in premium rates or cost sharing after acceptance of
a contract or policy or after the annual open enrollment
period.
g) AB 974 (Gallegos), Chapter 68, Statutes of 1998,
prohibits health plans from limiting coverage for a drug
that had previously been approved by the plan and requires
specified disclosures regarding the use and contents of
drug formularies.
h) AB 1453 (Monning), Chapter 854, Statutes of 2012, and SB
951 (Hernandez), Chapter 866, Statutes of 2012, establish
California's EHBs.
i) AB 1602 (John A. Pérez), Chapter 655, Statutes of 2010,
establishes the Exchange as an independent public entity to
purchase health insurance on behalf of Californians,
including those with incomes of between 100% and 400% of
the FPL and small businesses. Clarifies the powers and
duties of the board governing the Exchange relative to the
administration of the Exchange, determining eligibility and
enrollment in the Exchange, and arranging for coverage
under qualified insurers.
j) SB 900 (Alquist), Chapter 659, Statues of 2010,
establishes the Exchange and requires the Exchange to be
governed by a five-member board, as specified.
8)TECHNICAL AMENDMENTS .
a) Page 9, line 20 the cross reference should be to 1366.6
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not 1366.1.
b) Page 13, line 22 the cross reference should be to
10112.27 not 1367.005.
c) Page 9, line 13 and Page 16, line 8: add after "age"
before the beginning of the plan year.
d) Page 13, line 2, Section 10112.28 (a) (2) (B) after
"basic health care services" add "as defined in Health and
Safety Code Section 1345 (b)"
e) Page 8, line 24 and Page 11, line 31 add after
"guidance" applicable to the plan type.
f) Page 15, line 19 and Page 18, line 26 add after
"guidance" applicable to the policy type.
REGISTERED SUPPORT / OPPOSITION :
Support
Health Access California (sponsor)
American Cancer Society Cancer Action Network
American Federation of State, County and Municipal Employees,
AFL-CIO
California Optometric Association
California Pan-Ethnic Health Network
California Teachers Association
National Multiple Sclerosis Society
United Nurses Associations of California/Union of Health Care
Professionals
Western Center on Law and Poverty
Opposition
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
California Association of Dental Plans
California Association of Health Plans
California Association of Health Underwriters
California Chamber of Commerce
Independent Insurance Agents and Brokers of California
National Association of Insurance and Financial Advisors of
California
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
SB 639
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