BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1053| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 1053 Author: Mitchell (D) Amended: 8/18/14 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 SENATE FLOOR : 25-11, 5/29/14 AYES: Beall, Block, Corbett, Correa, De León, DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill, Hueso, Jackson, Lara, Leno, Lieu, Liu, Mitchell, Monning, Padilla, Pavley, Roth, Steinberg, Torres, Wolk NOES: Anderson, Berryhill, Cannella, Gaines, Huff, Knight, Morrell, Nielsen, Vidak, Walters, Wyland NO VOTE RECORDED: Calderon, Fuller, Wright, Yee ASSEMBLY FLOOR : 54-22, 8/20/14 - See last page for vote SUBJECT : Health care coverage: contraceptives SOURCE : California Family Health Council National Health Law Program CONTINUED SB 1053 Page 2 DIGEST : This bill requires, effective January 1, 2016, most health plans and insurers to cover a variety of Food and Drug Administration (FDA)-approved contraceptive drugs, devices, and products for women, as well as related counseling and follow-up services and voluntary sterilization procedures. Prohibits cost-sharing, restrictions, or delays in the provision of covered services, but allows cost-sharing and utilization management procedures if a therapeutic equivalent drug or device is offered by the plan with no cost-sharing. Assembly Amendments 1) authorize cost-sharing for equivalent non-preferred drugs, devices, products unless, the enrollee is a Medi-Cal beneficiary; 2) include Medi-Cal managed plans in the definition of a health care service plan; 3) require utilization controls for family planning services for Medi-Cal managed care plans to be subject to cost-sharing requirements; and 4) make other, technical changes. 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 CONTINUED SB 1053 Page 3 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 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.Requires a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2016, to provide coverage for women for all prescribed and FDA-approved female contraceptive drugs, devices, and products, as well as voluntary sterilization procedures, contraceptive education and counseling, and related follow-up services. 2.Prohibits a nongrandfathered plan contract or health insurance policy from imposing any cost-sharing requirements or other restrictions or delays with respect to this coverage, as specified. 3.Includes Medi-Cal managed plans, as specified, in the definition of a health care service plan. CONTINUED SB 1053 Page 4 4.Retains the provision authorizing a religious employer to request a contract or policy without coverage of FDA-approved contraceptive methods that are contrary to the employer's religious tenets. 5.Requires utilization controls for family planning services for Medi-Cal managed care plans to be subject to cost-sharing requirements, as described. Comments 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 of Health and Human Services is required to ensure that the scope 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 Assembly Appropriations Committee: 1.According to the California Health Benefits Review Program, annual fiscal impact in the private insurance market as follows: A. $65 million in increased premiums for private health care coverage statewide, including: $37 million in premium costs to private employers. $26 million in premium costs to individuals. $2 million in premium costs to CalPERS. CONTINUED SB 1053 Page 5 A. $216 million in cost savings due to averted deliveries and abortion services. Assuming these costs savings are proportionate to increased expenditures: $123 million in savings to private employers. $86 million in savings to individuals. $7 million in savings to CalPERS. 1.Estimated Medi-Cal managed care costs of $10 million (10% General Fund (GF)/90% federal), and projected cost savings of $56 million (about 45% GF/55% federal) annually after implementation due to an estimated 6,000 additional pregnancies averted. 2.Estimated potential increased state costs exceeding $5 million to pay the costs of this contraceptive coverage on behalf of enrollees in Covered California. 3.Costs to DMHC of $300,000 to verify compliance and clarify coverage requirements via regulation (Managed Care Fund). Ongoing costs should be minor, in the range of $50,000 annually (Managed Care Fund). 4.Minor ongoing costs to CDI to oversee compliance, in the range of $50,000 annually (Insurance Fund). 5.Cost savings are likely to accrue to state and local governments in a variety of health, social services, and education programs, including Medi-Cal, due to reduced demand for these services as a result of over 20,000 fewer unintended pregnancies statewide. About half of pregnancies end in delivery. These cost savings are beyond the scope of this analysis but will be cumulative and are likely to be significant. SUPPORT : (Verified 5/28/14)(Unable to reverify at time of writing) 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 CONTINUED SB 1053 Page 6 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 OPPOSITION : (Verified 5/28/14)(Unable to reverify at time of writing) 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 CONTINUED SB 1053 Page 7 cost-sharing. A number of Planned Parenthood affiliates write that the Affordable Care Act (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. 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 CONTINUED SB 1053 Page 8 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. ASSEMBLY FLOOR : 54-22, 8/20/14 AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger Hernández, Holden, Jones-Sawyer, Levine, Lowenthal, Medina, Mullin, Muratsuchi, Nazarian, Pan, Perea, John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada, Atkins NOES: Bigelow, Chávez, Conway, Dahle, Donnelly, Fox, Beth Gaines, Gorell, Hagman, Harkey, Jones, Linder, Logue, Maienschein, Mansoor, Melendez, Nestande, Olsen, Patterson, Wagner, Waldron, Wilk NO VOTE RECORDED: Achadjian, Allen, Grove, Vacancy JL:nl 8/20/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED