BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 999 (Pavley) - Health insurance: contraceptives: annual supply ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 18, 2016 |Policy Vote: B., P. & E.D. 7 - | | | 0, HEALTH 7 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 2, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill does not meet the criteria for referral to the Suspense File. Bill Summary: SB 999 would require health insurers and health plans to cover up to a 12-month supply of self-administered hormonal contraceptives. Fiscal Impact: Minor costs to review information from health insurers by the Department of Insurance (Insurance Fund). No significant costs are anticipated to review health plan information by the Department of Managed Health Care (Managed Care Fund). No significant costs or savings are projected for the Medi-Cal program (General Fund and federal funds). According to an analysis of the bill by the California Health Benefits Review SB 999 (Pavley) Page 1 of ? Program, utilization of hormonal contraceptives by Medi-Cal enrollees is not expected to increase significantly. This is because Medi-Cal already covers up to a 12-month supply of oral contraceptives and utilization of the other covered forms of contraception is very low. Therefore, there is no significant increase in utilization anticipated nor is there an anticipated reduction in health care services related to unintended pregnancy. Annual premium savings to the CalPERS system of about $2 million per year, due to reduced health care costs associated with unintended pregnancies (General Fund, special funds, local funds). About half of those savings would accrue to the state General Fund and special funds and half would accrue to local governments. No state costs to subsidize coverage through Covered California are anticipated. Under federal law, the costs of any state-imposed benefit mandate that exceeds the essential health benefits included in the state's benchmark plan is a state responsibility. In other words, if the state imposes a new benefit mandate on health plans or health insurers that sell coverage through Covered California, the state is obligated to pay for the cost to subsidize that benefit mandate for enrollees receiving federal subsidies. Because the bill does not impose a new benefit mandate, but only changes the terms of an existing mandate to cover contraceptives, the bill does not expand the state's essential health benefits. Background: Current law requires all health insurance policies or health plans issued after January 1, 2016 to provide coverage for all FDA-approved contraceptive drugs, devices, and other products for women. Current law prohibits imposing cost-sharing requirements on enrollees when receiving those benefits. (Current law prohibits cost sharing in the Medi-Cal program generally.) Current regulation governing the Medi-Cal program requires Medi-Cal managed care plans to provide coverage for up to a 12-month supply of oral contraceptives. Under the Affordable Care Act, the federal government provides subsidies for coverage purchased through health benefit SB 999 (Pavley) Page 2 of ? exchanges, based on the applicant's income level. Federal law and guidance provide that the subsidies will include the costs of any state-imposed benefit mandates that are covered under the essential health benefits benchmark plan. Should a state adopt any new benefit mandate after January 1, 2012 federal subsidies would not be available to pay for the cost of that benefit. In other words, whenever the state mandates a new benefit on health insurers or health plans in Covered California, the state will have to pay the cost to subsidize that additional benefit. Proposed Law: SB 999 would require health insurers and health plans to cover up to a 12-month supply of self-administered hormonal contraceptives. Specific provisions of the bill would: Permit a pharmacist who furnishes self-administered hormonal contraception to dispense up to a 12-month supply; Require health insurance policies and health plans issued after January 1, 2017 to cover up to a 12-month supply of FDA-approved, self-administered hormonal contraceptives; Specify that the bill does not require a health insurer or health plan to cover contraceptives provided by an out-of-network provider; Specify that the bill does not require a provider to prescribe, furnish, or dispense a 12-month supply at one time. Related Legislation: AB 1954 (Burke) would require health insurers and health plans to provide coverage for reproductive and sexual health care services through out-of-network providers. That bill is pending in the Assembly. Staff Comments: According to the California Health Benefits Review Program, the bill will result in overall health savings in the health care industry. This is due to reduced office visits needed to get a prescription for contraception and due to reduced unintended pregnancies, which will reduce prenatal care costs, abortions, and labor and delivery costs. SB 999 (Pavley) Page 3 of ? The only costs that may be incurred by a local agency relate to crimes and infractions. Under the California Constitution, such costs are not reimbursable by the state. -- END --