BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 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


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           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  

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             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.

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          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. 

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             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  

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          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  

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          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  

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          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

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