BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1826 (Huffman)
Hearing Date: 8/2/2010 Amended: 5/28/2010
Consultant: Katie Johnson Policy Vote: Health 5-2
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BILL SUMMARY: AB 1826 would require health care service plans
and health insurers that cover outpatient prescription drug
benefits to provide coverage for a drug that has been prescribed
for the treatment of pain. The bill would prohibit health plans
and insurers from requiring the subscriber or enrollee to first
use an alternative prescription drug or an over-the-counter
drug, as specified.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
MRMIB programs $1,050 $2,100 $2,100General/*
increased costs Federal/
Special
Medi-Cal increased costs $4,050 $8,100 $8,100General/**
Federal
*Healthy Families: 35 percent General Fund; 65 percent federal
funds
AIM: 35 percent Proposition 99 tobacco taxes and premiums; 65
percent federal funds
MRMIP: 40 percent Proposition 99 tobacco taxes; 60 percent
subscriber premiums
**Medi-Cal: 50 percent General Fund; 50 percent federal funds
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
This bill would require health care service plans and health
insurers that cover outpatient prescription drug benefits to
provide coverage for a drug that has been prescribed for the
treatment of pain and would prohibit health plans and insurers
from requiring an individual to first use an alternative
prescription drug or over-the-counter drug, as specified. Costs
to the California Department of Insurance and the Department of
Managed Health Care to continue to provide oversight of the
insurance industry would be minor and absorbable.
According to an analysis performed by the California Health
Benefits Review Program (CHBRP) on this bill, there would be
annual costs of up to $2.1 million to the Healthy Families
Program (Healthy Families), the Access for Infants and Mothers
(AIM) program, and the Major Risk Medical Insurance Program
(MRMIP). Since Healthy Families has roughly 800,000 enrollees to
AIM and MRMIP's 7,000 enrollees each, the majority of the costs
would be Healthy Families'. CHBRP estimated an annual cost of
$8.1 million to Medi-Cal managed care plans. Amendments were
made to the bill after the publication of the CHBRP analysis to
address cost concerns relating to the bill being construed to
prohibit generic drug substitutions. However, costs to both the
Healthy Families Program and Medi-Cal would remain largely
unchanged. This bill would exempt the California Public
Employees Retirement System (CalPERS).