BILL ANALYSIS
SB 220
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 220 (Yee) - As Amended: June 24, 2010
Policy Committee: Health Vote:14-5
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes a health plan and health insurer mandate
to provide coverage for a variety of smoking cessation
treatments. Specifically, this bill:
1)Requires health plans and insurers (carriers) that provide
coverage for outpatient prescription drug benefits to provide
coverage for specified tobacco cessation services. Prohibits
the imposition of copayments, coinsurance, deductibles, prior
authorization, or step therapy related to those services.
2)Requires cessation services to include two courses of
treatment in a 12-month period, including counseling and all
prescription and over-the-counter-medications approved by the
FDA.
FISCAL EFFECT
1)According to the California Health Benefits Review Program
(CHBRP), increased costs of $2.2 million (58% GF) to CalPERS
to comply with the mandate established by this bill. Increased
costs of $103,000 (33% GF) to the Healthy Families Program and
Major Risk Medical Insurance Program (MRMIP). No increased
costs to the Medi-Cal program because the Medi-Cal program
already provides the treatments addressed in this bill.
2)Increased premium costs in the employer-based and individual
insurance markets of $66 million, partially offset by a
reduction in out-of-pocket costs paid by individuals under
current law for smoking cessation treatments.
3)The cost impacts established by CHBRP may be reduced in the
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coming years as federal health reform, the Patient Protection
and Affordable Care Act (PL-111-148), is implemented. Federal
regulations published last week require health plans to cover
specified preventive care services without charging
participants deductibles, copayments, or similar cost-sharing
amounts. The regulations include smoking cessation services
rated by the United States Preventive Services Task Force as a
part of preventive services.
COMMENTS
1)Purpose . This bill is co-sponsored by the American Cancer
Society, the American Heart Society, and the American Lung
Association. The author and sponsors indicate this bill will
reduce the number of smokers in California, reduce health
costs, and improve the quality of life for former smokers.
According to federal data, smoking contributes to more than
430,000 deaths nationally each year and although California
features one of the lowest smoking rates in the country,
smoking is still a leading cause of death in the state. This
bill reduces barriers to smoking cessation treatment across
the health care market.
2)Industry Cost Concerns . Opponents of this bill indicate
legislatively mandated health benefits increase costs and
limit insurer, employer, and individual choices with respect
to a variety of health benefits. Opponents indicate health
mandates can hinder compliance with evidence-based medical
standards that reflect new medical technology or other
advances in knowledge. Specific concerns about this mandate
include that this bill establishes a policy for smoking
cessation drugs that differs from all other medications. In
addition health carriers indicate the cumulative impact of
medication mandates inhibit insurers' use of formularies and
flexible product designs.
3)Related Legislation . SB 576 (Ortiz) in 2005 was similar to
this bill. SB 576 was vetoed due to concerns about cost
increases without an accompanying increase in the utilization
of smoking cessation benefits.
There are more than two dozen current law health mandates,
established over the last two decades, to provide coverage for
specified services such as cancer screenings and treatment.
There are another handful of mandates to offer coverage for a
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number of other health services. Several current law mandates
address both cancer treatment and prescription drug coverage.
4)Other Health Mandates in the Current Session . There are nine
health mandates under legislative consideration this year,
including SB 220. Other proposed health mandates include:
a) AB 1600 (Beall): mental health parity is pending in the
Senate
b) AB 1825 (De La Torre): maternity services is pending in
the Senate Appropriations Committee
c) AB 1826 (Huffman): pain prescriptions is pending in the
Senate Appropriations Committee
d) AB 1904 (Villines): out-of-state carriers failed passage
in the Assembly Health Committee
e) AB 2587 (Berryhill): benefit mandates was never heard in
the Assembly Health Committee
f) SB 890 (Alquist): basic health treatment services is
also being heard in this committee today
g) SB 961 (Wright): oral chemotherapy is also being heard
in this committee today
h) SB 1104 (Cedillo): diabetes-related treatment was held
on the Senate Appropriations Committee Suspense File
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081