BILL ANALYSIS Ó SB 999 Page 1 SENATE THIRD READING SB 999 (Pavley) As Amended August 1, 2016 Majority vote SENATE VOTE: 29-6 ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Health |13-0 |Wood, Maienschein, | | | | |Bonilla, Campos, | | | | |Chiu, | | | | | | | | | | | | | | |Roger Hernández, | | | | |Lackey, Nazarian, | | | | |Olsen, | | | | | | | | | | | | | | |Ridley-Thomas, | | | | |Rodriguez, Thurmond, | | | | |Waldron | | | | | | | |----------------+-----+----------------------+--------------------| |Business & |13-2 |Salas, Baker, Bloom, |Brough, Jones | |Professions | |Campos, Chávez, Dodd, | | SB 999 Page 2 | | |Eggman, Gatto, Gomez, | | | | |Holden, Mullin, Ting, | | | | |Wood | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |15-3 |Gonzalez, Bloom, |Bigelow, Jones, | | | |Bonilla, Bonta, |Wagner | | | |Calderon, Daly, | | | | |Eggman, Eduardo | | | | |Garcia, Holden, | | | | |Obernolte, Quirk, | | | | |Santiago, Weber, | | | | |Wood, Chau | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Requires coverage for up to a 12-month supply of Food and Drug Administration (FDA) approved, self-administered hormonal contraceptives (contraceptives) and permits pharmacists to dispense these contraceptives consistent with existing protocols and upon a patient's request. FISCAL EFFECT: According to the Assembly Appropriations Committee: 1)According to the California Health Benefits Review Program (CHBRP), this bill will result in overall health savings in the health care industry due to reduced office visits and reduced unintended pregnancies, which will reduce prenatal care, abortions, and labor and delivery costs. Costs by payer are as follows: a) No significant costs or savings to Medi-Cal managed care (General Fund (GF)/federal). CHBRP notes utilization of SB 999 Page 3 hormonal contraceptives by Medi-Cal enrollees is not expected to increase significantly, 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. b) Annual premium cost savings to California Public Employees' Retirement System of about $2 million per year, due to reduced health care costs associated with unintended pregnancies (GF/ special/ federal/ local). Cost savings are split approximately 50/50 between state and local government. c) Annual employer-funded premium cost savings in the private insurance market of approximately $12.5 million. d) Decreased premium expenditures by employees and individuals purchasing insurance of $9.4 million, and reduced total out-of-pocket expenses of $18.7 million. 1)The Department of Health Care Services (DHCS) notes an impact to fee-for-service Medi-Cal and Family Planning Access to Care and Treatment (Family PACT) in the amount of $38.3 million ($7.9 million GF/remainder federal). Based on CHBRP's analysis of the impact of a 12-month supply on unintended pregnancies, this cost appears likely to be fully offset by reductions in costs for unintended pregnancies, office visits, abortions, and other services. 2)Minor costs to the California Department of Insurance (CDI Insurance Fund) and the Department of Managed Health Care (DMHC Managed Care Fund) to verify plans and insurers comply with this requirement. SB 999 Page 4 COMMENTS: According to the author, California has required insurance coverage for FDA-approved contraception since 1998, but many hurdles remain. Under current law, health insurance companies and plans must limit coverage of birth control to a one or three month supply. This practice can lead to unwanted gaps in birth control use and an increased incidence of unintended pregnancies. The author cites a University of California San Francisco study that found that women who received a full year's worth of birth control pills at one time were 30% less likely to have an unintended pregnancy than women who received a one or three month supply. The author states that there is growing momentum nationwide to provide annual dispensing. CHBRP analysis. CHBRP estimates that in 2016, 25.2 million Californians have state-regulated coverage that would be subject to this bill. CHBRP estimates that total net annual expenditures would decrease by $42.8 million or 0.03% for enrollees with DMHC-regulated plans and CDI-regulated policies. This represents the anticipated savings in 2017 due to the avoidance of unintended pregnancies (leading to reduced delivery, miscarriage, and abortion costs) and the reduced number of office visits in the first year postmandate. The decrease in total expenditures is due to a $24 million decrease in total health insurance premiums paid by employers and enrollees, along with a decrease in enrollee out-of-pocket expenditures ($18.7 million), for an overall net decrease of $42.8 million. Additionally, there is a preponderance of evidence to indicate that dispensing oral contraceptives in larger quantities leads to a reduction in unintended pregnancy and related outcomes. However, fewer studies examine the effect of the amount of dispensed supply of self-administered hormonal contraceptives, the primary impact of this bill. SB 999 Page 5 California Family Planning Program. Family PACT is a reproductive health program for clinical family planning services. Family PACT provides comprehensive family planning services to women and men including all FDA-approved forms of contraception, emergency contraception, pregnancy testing with counseling, preconception counseling, male and female sterilization, limited infertility services, sexually transmitted infection testing and treatment, cancer screening, and human immunodeficiency disorder (HIV) screening. Individual client reproductive health education and counseling is an ongoing component of all services. Family PACT clients are female and male residents of California with a family income at or below 200% of the federal poverty level with no other source of family planning coverage. Clients are individuals with a medical necessity for family planning services who do not have Medi-Cal and do not have access to health insurance. Medi-Cal clients with an unmet share of cost may also be eligible. Eligibility determination and enrollment are conducted at the provider's office with point of service activation of a client membership card. Medi-Cal requirements. According to a recently revised All Plan Letter (APL) issued by the DHCS, effective May 1, 2016, Medi-Cal managed care plans (MCPs) must pay for up to 13 cycles of oral contraceptives, up to 12 patches in a 90 day period, and up to four vaginal rings in a 90 day period if such quantity is dispensed in an onsite clinic and billed by a qualified family planning provider, including out-of-plan providers. The APL also states that under federal law, a primary care case management system, a health maintenance organization, or a similar entity shall not restrict the choice of the qualified person from whom the individual may receive such services under 42 United States Code 1396d(a)(4)(C). Therefore MCP SB 999 Page 6 beneficiaries must be allowed freedom of choice of family planning providers, and may receive such services from any qualified family planning provider, including out-of-plan providers, without prior authorization. In addition to applying to MCPs, this bill requires DHCS to issue APLs or similar instructions to implement this bill. Other states. Currently, only Oregon and the District of Columbia have laws in effect that are similar to this bill. At the time of CHBRP's publication of its analysis, several other states have considered such legislation, including Alaska, New York, Rhode Island, Washington, and Wisconsin. Additionally, some state Medicaid programs and state family planning programs for low-income residents already require a 12-month supply of contraceptives to be dispensed at one time, including the Oregon Contraceptive Care program. This bill is sponsored by Planned Parenthood Affiliates of California, NARAL Pro-Choice California, and the California Family Health Council, who believe this bill will reduce burdens on women, as well as lead to more consistent contraceptive use and fewer unintended pregnancies. The Association of California Life and Health Insurance Companies and California Association of Health Plans are opposed unless amended, seeking amendments to allow a health insurer to request that a patient be stabilized on the medication prior to the 12-month supply being filled as well as a one-year implementation delay. The California Right to Life Committee is in opposition. SB 999 Page 7 Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0003758