BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1053|
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THIRD READING
Bill No: SB 1053
Author: Mitchell (D), et al.
Amended: 5/28/14
Vote: 21
SENATE HEALTH COMMITTEE : 6-1, 4/30/14
AYES: Hernandez, De León, DeSaulnier, Evans, Monning, Wolk
NOES: Morrell
NO VOTE RECORDED: Beall, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : Health care coverage: contraceptives
SOURCE : California Family Health Council
National Health Law Program
DIGEST : This bill requires a group or individual health plan
contract or insurance policy, except a specialized health plan
contract or insurance policy, that is issued, amended, or
delivered on or after January 1, 2016, to provide coverage for
all Food and Drug Administration (FDA) approved contraceptive
drugs, devices, and products, including drugs, devices, and
products available over-the-counter as prescribed by the
enrollee's provider, voluntary sterilization procedures, patient
education and counseling on contraception, and follow-up
services related to the drugs, devices, products, and procedures
covered under this bill, including, but not limited to,
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management of side effects, counseling for continued adherence,
and device removal.
ANALYSIS : Existing law:
1. Regulates health plans through the Department of Managed
Health Care (DMHC) and health insurance policies through the
Department of Insurance (CDI).
2. Requires group and individual health plan contracts or
health insurance policies, except specialized plans or
policies, that are issued, amended, renewed, or delivered on
or after January 1, 2000 to provide coverage for a variety of
federal FDA-approved prescription contraceptive methods
designated by the plan, if the plan or policy provides
coverage for outpatient prescription drug benefits.
3. Requires, if the patient's provider determines that none of
the methods designated by the plan or insured is medically
appropriate, the plan or insurer to also provide coverage for
another FDA-approved medically appropriate prescription
contraceptive method prescribed by the patient's provider.
4. Requires outpatient prescription benefits for an enrollee or
insured to be the same for an enrollee's or insured's covered
spouse and non-spouse dependents.
5. Prohibits anything in the law from being construed to
exclude coverage for prescription contraceptive supplies
ordered by a health care provider with prescriptive
authority, for reasons other than contraceptive purposes,
such as decreasing the risk of ovarian cancer or eliminating
symptoms of menopause, or for prescription contraception that
is necessary to preserve the life or health of an enrollee or
insured.
6. Prohibits anything in the law from being construed to deny
or restrict in any way DMHC's or CDI's authority to ensure
plan compliance with the law when a plan or insurer provides
coverage for prescription drugs.
7. Requires #2 to apply to disability insurance policies that
are defined as health benefit plans, as specified, except
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that for accident only, specified disease, or hospital
indemnity coverage, coverage for benefits under #2 apply to
the extent benefits are covered under the general terms and
conditions that apply of all other benefits under the policy.
Prohibits anything in the law from being construed as
imposing a new benefit mandate on accident only, specified
disease, or hospital indemnity insurance.
8. Authorizes a religious employer to request a health plan
contract or insurance policy without coverage for
FDA-approved contraceptive methods that are contrary to the
religious employer's religious tenets, as specified.
This bill:
1. Limits the existing mandate on prescription contraceptive
coverage to plans and insurance policies issued, amended,
renewed, or delivered on or after January 1, 2000 through
December 31, 2015, inclusive.
2. Requires a group or individual health plan contract or
insurance policy, except a specialized health plan contract
or insurance policy, that is issued, amended, or delivered on
or after January 1, 2016, to provide coverage for all
FDA-approved contraceptive drugs, devices, and products,
including drugs, devices, and products available over the
counter, other than male contraceptive drugs, devices, and
products available over the counter, as prescribed by the
enrollee's provider, voluntary sterilization procedures,
patient education and counseling on contraception, and
follow-up services related to the drugs, devices, products,
and procedures covered under this bill, including, but not
limited to, management of side effects, counseling for
continued adherence, and device removal.
.
3. Prohibits a health plan or health insurer, except for a
grandfathered health plan or health insurer subject to this
bill, from imposing a deductible, coinsurance, copayment, or
any other cost-sharing requirement on the coverage provided
pursuant to this bill.
4. Authorizes a health plan or health insurer to cover a
generic drug, device, or product without cost sharing and
impose cost sharing for equivalent non-preferred or branded
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drugs, devices, or products and male voluntary sterilization
procedures. Specifies that, if a generic version of a drug,
device, or product is not available, or is deemed medically
inadvisable by the enrollee's provider, requires a health
plan or health insurer to provide coverage for the
non-preferred or brand name drug, device, or product without
cost sharing.
5. Authorizes a health plan or health insurer to require a
prescription to trigger coverage of FDA-approved
over-the-counter contraceptive methods and supplies, as
defined.
6. Prohibits, except as authorized in these provisions, a
health plan or health insurer from imposing any restrictions
or delays on the coverage specified in #2 above.
7. Requires benefits for an enrollee or insured under the
provisions in #2 above to be the same for an enrollee's or
insured's covered spouse and covered non-spouse dependents.
8. States legislative intent to build on existing state and
federal law to ensure greater contraceptive coverage equity
and timely access to all FDA-approved methods of birth
control, other than male contraceptives available over the
counter, for all individuals covered by health plan contracts
and health insurance policies in California, and medical
management techniques such as denial, step therapy, or prior
authorization in public and private health care coverage can
impede access to the most effective contraceptive methods.
9. Deletes "prescription" before contraceptive supplies, drugs
and contraception in existing law.
10.Replaces "health care provider with prescriptive authority"
with "provider acting within his/her scope of practice" in
existing law.
11.Defines "provider" with respect to health plan contracts or
health insurance policies issued, amended, or renewed on or
after January 1, 2016, as an individual who is certified or
licensed pursuant to the Business and Professions Code, as
specified, or an initiative act referred to in that division,
or the Health and Safety Code, as specified.
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Comments
California Health Benefits Review Program (CHBRP) analysis . AB
1996 (Thomson, Chapter 795, Statutes of 2002) requests the
University of California to assess legislation proposing a
mandated benefit or service and prepare a written analysis with
relevant data on the medical, economic, and public health
impacts of proposed health plan and health insurance benefit
mandate legislation. CHBRP was created in response to AB 1996.
Below are major findings of CHBRP's analysis of the bill as
introduced.
Summary of findings . Over the course of a year, sexually active
women of reproductive age not using contraceptive methods have
an 85% chance of becoming pregnant. Among sexually active women
with previous contraceptive use, the unintended pregnancy rate
is 46% over the course of a year.
Permanent contraceptive methods include surgical sterilization
for men (vasectomy), laparoscopic sterilization for women (tubal
ligation), and hysteroscopic permanent sterilization implant for
women (Essure). Over the course of a year, unintended
pregnancy rates for sterilization range from 0.1% to 0.5%.
Benefit Coverage, Utilization, and Cost Impacts . To perform the
cost analysis for this bill, CHBRP measured current cost sharing
(as a percentage of the total cost) for contraceptives. CHBRP
modeled compliance with the mandate as resulting in the
expansion of benefit coverage, and the prohibition of any cost
sharing for covered contraceptives.
Coverage impacts . Out of the 23.4 million enrollees in
DMHC-regulated plans and CDI-regulated policies subject to state
mandates, 16.2 million enrollees are subject to this bill.
Currently, 97.5% of 16.2 million enrollees have coverage for any
female contraceptives without cost sharing, including coverage
through a family member. Among these 16.2 million enrollees,
99.3% have coverage for vasectomies with a certain level of cost
sharing. Zero percent of these enrollees have coverage for male
condoms.
Utilization impacts . Although the number of covered users is
expected to increase substantially CHBRP projects that 129,547
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or 9.78% additional male enrollees will newly use contraceptives
in 2016 following implementation, compared to the 1,324,245 male
enrollees using contraceptives in 2014 regardless of coverage.
These utilization impacts are estimated based on the two sets of
assumptions below:
For all contraceptive types except male condoms, CHBRP applied
premandate utilization rates among enrollees with coverage for
all enrollees after the mandate regardless of coverage status in
the premandate period. These premandate utilization rates among
enrollees with coverage are based on Milliman's analysis of 2012
California claims data.
CHBRP estimates a 10% increase in male condom utilization based
on increased awareness and marketing of the mandate.
Cost Impacts . CHBRP assumes that the mandate will have no
impact on the per-unit costs for any specific contraceptive
type.
Total net annual expenditures are estimated to increase by
$31,201,000 or 0.024% for enrollees with DMHC-regulated plans
and CDI-regulated policies.
The expected average increase in premiums across the commercial
market segments is between 0.073% and .111% (or $0.35 and $0.71)
per member per month.
The expected average increase in insurance premiums is 0.061%
for CalPERS HMOs plans. For these publicly funded plans, the
increase is estimated at $0.32 PMPM.
The estimated premium increases will not have a measurable
impact on the number of persons who are uninsured.
Short-term impacts . Based on established contraceptive
effectiveness rates, estimates of unintended pregnancy outcomes
from the literature, and projected increases in utilization,
CHBRP calculated the estimated number of unintended pregnancies
and abortions averted by the mandate. Assuming typical use of
each contraceptive method among the projected additional
contraceptive users, CHBRP estimates that this bill will result
in 51,298 averted unintended pregnancies and 20,006 averted
abortions.
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The reduction in unintended pregnancies will also result in a
reduction in negative health outcomes associated with unintended
pregnancy, including delayed prenatal care, low birthweight, and
preterm birth.
The mandate would shift some contraceptive costs from enrollees
to health plans and insurers through reduced cost sharing.
CHBRP estimates a reduction in out-of-pocket expenses of
approximately $50.2 million consisting of a reduction of $46.5
million in enrollee expenditures for previously non-covered
benefits and a reduction of nearly $3.7 million in enrollee
out-of-pocket expenditures for previously covered benefits.
Interaction with the Affordable Care Act (ACA ). The ACA
requires that non-grandfathered group and individual health
insurance plans and policies cover certain preventive services
without cost sharing when delivered by in-network providers and
as soon as 12 months after a recommendation appears in one of
four specified sources. One of the sources that the ACA refers
to in determining which preventive services are required is the
Health Resources and Services Administration (HRSA)-supported
health plan coverage guidelines for women's preventive services.
The HRSA guidelines include language that would require plans
and insurers to cover "all FDA-approved contraceptive methods,
as prescribed by a physician." Depending on how this language
is interpreted, these guidelines could require all FDA-approved
contraceptive types to be covered, or they could be interpreted
to require a broad spectrum of FDA-approved contraceptives,
including at least one contraceptive type in each FDA-approved
contraceptive method category. This bill explicitly requires
coverage of all FDA-approved drugs, devices, and products, as
well as voluntary sterilization procedures, in each FDA-approved
contraceptive category. According to CHBRP, depending on how
the HRSA guidelines are interpreted, CHBRP states that this
mandate could be broader than what is required by the ACA.
Essential health benefits (EHBs) and state benefit mandates .
Effective January 1, 2014, federal law requires Medicaid
benchmark and benchmark equivalent plans, plans sold through
Covered California, and carriers providing coverage to
individuals and small employers to ensure coverage of EHBs, as
defined by the Secretary of the Department of Health and Human
Services. The Department is required to ensure that the scope
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of EHBs is equal to the scope of benefits provided under a
typical employer plan, as determined by the Secretary.
SB 951 (Hernandez, Chapter 866 Statutes of 2012), and AB 1453
(Monning, Chapter 854, Statutes of 2012), designate the Kaiser
Small Group health plan to serve as California's EHB benchmark
plan.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Potential one-time costs up to $150,000 to adopt regulations
and potential ongoing costs in tens of thousands to enforce
the bill's provisions by CDI (Insurance Fund).
One-time costs of $125,000 to review plan filings and minor
ongoing costs to enforce the bill's provisions by DMHC
(Managed Care Fund).
No anticipated costs to the Medi-Cal Program. Under existing
law, Medi-Cal managed care plans are not designated as group
plans and therefore are not subject to the benefit mandate in
this bill.
Increased health care premium costs of about $1 million per
year to CalPERS for state employees and their dependents,
according to CHBRP. These costs would be split between the
General Fund (55%) and various special funds (45%).
Annual costs of about $3.4 million per year to subsidize
coverage for additional benefits for enrollees in Covered
California health plans. Based on the estimated per-member
per-month cost of the new benefit mandate by CHBRP and current
enrollment by consumers who are eligible for subsidies, the
state would likely pay about $3.4 million per year in subsidy
costs. Over time, as enrollment in Covered California grows,
such costs would increase proportionately with enrollment
growth.
Total statewide savings projected to be about $55 million per
year in avoided health care costs. CHBRP estimates that
increased access to contraception under the bill increases
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utilization by enrollees and thus reduces unwanted pregnancies
in the state. This reduces health care costs for abortions
and labor and delivery. A small portion of those savings
would accrue to CalPERS, offsetting some or all of the
increased costs to CalPERS. It is important to note that any
cost savings associated with subsidized coverage through
Covered California likely reduces the long-term cost of
coverage, but does not reduce the state's obligation to pay
for the mandated benefit.
SUPPORT : (Verified 5/28/14)
California Family Health Council (co-source)
National Health Law Program (co-source)
American Association of University Women - California
American Civil Liberties Union of California
American Congress of Obstetricians and Gynecologists, District
IX
American Federation of State, County and Municipal Employees,
AFL-CIO
California Academy of Family Physicians
California Communities United Institute
California Latinas for Reproductive Justice
California Nurse Midwives Association
California Primary Care Association
California School Employees Association
California School-Based Health Alliance
Center on Reproductive Rights and Justice at UC Berkeley School
of Law
Los Angeles Trust for Children's Health
NARAL Pro-Choice California
National Council of Jewish Women-California
National Health Law Program
Physicians for Reproductive Health
Planned Parenthood Advocacy Project Los Angeles County
Planned Parenthood Affiliates of California
Planned Parenthood Mar Monte
Planned Parenthood of Orange and San Bernardino Counties
Planned Parenthood of Santa Barbara, Ventura & San Luis Obispo
Counties, Inc.
Planned Parenthood of the Pacific Southwest
Planned Parenthood Pasadena and San Gabriel Valley
Six Rivers Planned Parenthood
Women's Foundation
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OPPOSITION : (Verified 5/28/14)
Alliance of Catholic Health Care
Association of California Life and Health Insurance Companies
California Association of Health Plans
California Catholic Conference
California Chamber of Commerce
California Right to Life Committee, Inc.
Molina Healthcare of California
ARGUMENTS IN SUPPORT : The National Health Law Program states
that this bill builds on current California and federal law to
improve access to a full range of contraceptive methods for
women and men, and to ensure that every individual has access to
their choice of contraception without barriers, delays, or
cost-sharing. A number of Planned Parenthood affiliates write
that the ACA includes a women's preventive care provision that
requires most health insurance carriers to provide the full
range of FDA-approved birth control methods without any
out-of-pocket costs, however a lack of clarity in federal
regulations has led to inadequate and inconsistent
implementation of this law. The Los Angeles Trust for
Children's Health, National Council of Jewish Women-California,
Physicians for Reproductive Health, California Latinas for
Reproductive Justice, California School-Based Health Alliance,
and American Civil Liberties Union of California states that
lack of clarity in the law has led to inadequate and
inconsistent implementation, allowing carriers to employ varying
medical management techniques and practices that create barriers
to access. Supporters state that these practices include
requiring a woman to try a different method before she can get
coverage for her method of choice, wrongfully charging co-pays,
and denials of certain methods. California Nurse-Midwives
Association states that reproductive management needs to remain
between the health care provider and the women based upon her
individual needs according to her history and physical findings
and should be afforded a full range of reproductive choices.
American Association of University Women - California states
that the full access to all contraceptives afforded by this bill
will yield better compliance and better results, allowing women
to be able to lead their lives according to their own
reproductive life plan.
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ARGUMENTS IN OPPOSITION : The California Catholic Conference
states that the "barriers" referenced by the author are not
unique to contraceptives, but familiar to any patient with
insurance and it is important to remember that some barriers
exist in order to protect the health of the user. The Alliance
of Catholic Healthcare stares that this bill contains mandates
that are different than the federal mandate, including in the
definition of religious employer, no accommodation for
non-profit religious organizations, and expanded coverage for
contraceptives. The Association of California Life and Health
Insurance Companies cites CHBRP cost estimates of this bill and
states that they generally oppose all benefit mandates because,
while they sympathize with the intent, mandates increase the
already high cost of care for everyone and eliminate the
flexibility an employer would otherwise have to pick benefits
that best address the needs of his/her employees. The
California Association of Health Plans states that this bill
increases premiums and likely conflicts with federal guidelines.
The California Chamber of Commerce asserts that employers are
already facing tough choices about how best to fulfill their
responsibilities under the ACA and absorb many new health care
cost pressures, and this is the wrong time to add to that burden
a new mandate.
JL:ne 5/28/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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