BILL ANALYSIS
SB 961
Page 1
SENATE THIRD READING
SB 961 (Wright)
As Amended June 10, 2010
Majority vote
SENATE VOTE :26-6
HEALTH 13-6 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Bradford, |
| | | |Huffman, Coto, Davis, De |
| |De La Torre, De Leon, | |Leon, Gatto, Hall, |
| |Eng, Hayashi, Hernandez, | |Skinner, Solorio, |
| |Jones, Bonnie Lowenthal, | |Torlakson, Torrico |
| |Nava, V. Manuel Perez, | | |
| |Salas | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fletcher, Conway, Gaines, |Nays:|Conway, Harkey, Miller, |
| |Smyth, Audra Strickland, | |Nielsen, Norby |
| |Gilmore | | |
| | | | |
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SUMMARY : Requires a health care service plan contract or health
insurance policy (collectively carrier contract or policy) that
provides coverage for cancer chemotherapy treatment to establish
limits on enrollee out-of-pocket costs for prescribed, orally
administered, nongeneric cancer medication. Specifically, this
bill :
1)Requires a carrier contract or policy issued, amended, or
renewed on or after January 1, 2011, that provides coverage
for cancer chemotherapy treatment, to provide coverage for
prescribed, orally administered, nongeneric cancer medication,
used to kill or slow the growth of cancerous cells.
2)Requires the carrier contract or policy referenced in 1)
above, to review the percentage cost share for oral nongeneric
cancer medication and intravenous (IV) or injected nongeneric
cancer medications and apply the lower of the two as the
cost-sharing provision for oral nongeneric cancer medications.
3)Prohibits a carrier contract or policy from providing an
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increase in enrollee cost sharing for nongeneric cancer
medications to any greater extent than the contract or policy
provides for an increase in enrollee cost sharing for other
nongeneric covered medications.
4)Defines "cost share" as copayment, coinsurance, or deductible
provisions applicable to coverage for oral, IV, or injected
nongeneric cancer medications.
5)Prohibits the provisions of this bill from being construed to
require a carrier contract or policy to provide coverage for
any additional medication not otherwise required by law.
6)Clarifies that provisions of this bill do not prohibit a
carrier contract or policy from removing a prescription drug
from its formulary of covered prescription drugs.
7)Prohibits the provisions of this bill from applying to a
carrier contract or policy that does not provide coverage for
prescription drugs.
8)Prohibits the provision of this bill from applying to a health
care benefit plan or contract entered into with the Board of
Administration of the Public Employees' Retirement System
(CalPERS) pursuant to the Public Employees' Medical and
Hospital Care Act.
9)Requires the provisions of this bill to remain in effect only
until January 1, 2015, and as of that date are repealed,
unless a later enacted statute deletes or extends that date.
EXISTING LAW :
1)Provides for the regulation of health plans by the Department
of Managed Health Care (DMHC) and regulation of health
insurers by the California Department of Insurance.
2)Requires health plan contracts and health insurance policies
to provide coverage for all generally medically accepted
cancer screening tests and requires those plans and policies
to also provide coverage for the treatment of breast cancer.
3)Imposes various requirements on contracts and policies that
cover prescription drug benefits, such as a requirement to
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cover "off-label" uses, as specified, and a requirement to
cover previously prescribed drugs, as specified.
4)Authorizes DMHC to regulate the provision of medically
necessary prescription drug benefits by a health plan to the
extent that the plan provides coverage for those benefits.
Existing regulation requires health plans providing outpatient
prescription drugs to provide all medically necessary
prescription drugs, except as specified in that regulation.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)No fiscal impacts to CalPERS, Medi-Cal, or the Healthy
Families Program. CalPERS is specifically exempted from the
mandate established by this bill and Medi-Cal and the Healthy
Families Program already provide oral chemotherapy treatment
under current law.
2)Increased premium costs in the employer-based and individual
insurance markets of $18 million, largely offset by a
reduction in out-of-pocket costs paid under current law by
individuals for oral chemotherapy treatments that are not a
covered benefit or with less favorable cost sharing
requirements.
COMMENTS : According to the author, the emergence of safe,
clinically effective, orally administered anticancer medication
has significantly increased the treatment options for cancer
patients; however, many barriers currently impede the adoption
of orally administered treatment as the main form of cancer
therapy. The author maintains that one of the most significant
barriers is greater patient out-of-pocket costs for oral
therapies covered under the pharmacy benefit than IV therapies
covered under the medical benefit. The author further maintains
that, where IV administered anticancer medications are typically
covered under a plan's medical benefit, most patients are only
responsible for an office co-payment for each episode of care
and are not required to pay a separate fee for the IV drug. The
author argues that, in contrast, orally administered anticancer
medications are typically covered under a plan's pharmacy
benefit, where many of these agents are placed on a 4th or
specialty tier of a prescription plan's formulary. The author
points out that, according to the Kaiser Family Foundation, the
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average coinsurance rate for 4th tier drugs is 28%, which, for a
$3,000 per month oral anticancer medication, could expose a
patient to $900 in out-of-pocket spending. The author believes
that this disparity is likely to affect increasing numbers of
cancer patients, because 25% of 400 chemotherapy drugs in the
development pipeline are oral.
The author additionally points out that, in 2007, the Oregon
State Senate passed similar legislation (S.B. 8 (Courtney),
Chapter 566, 2007 Laws), and that, upon enactment of S.B. 8 in
January 2008, the top state plans eliminated their high
coinsurance rates. Most Oregon plans established separate oral
anticancer therapy coverage under their pharmacy benefit, and
patients with no pharmacy benefits gained access to oral
anticancer agents through their medical benefit. The author
further notes that, Colorado, Hawaii, Indiana, Iowa, Kansas,
Minnesota, Vermont, Washington D.C., and Connecticut have all
passed similar legislation.
Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097
FN: 0006026