BILL ANALYSIS �
AB 1000
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Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1000 (Perea) - As Introduced: February 18, 2011
Policy Committee: HealthVote:13-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires a health care service plan (health plan)
contract or health insurance 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 plans that cover cancer chemotherapy treatment to
provide coverage for prescribed, orally administered,
nongeneric cancer medication (oral nongeneric anticancer
drugs).
2)Limits the cost sharing for oral anticancer drugs to the lower
of the cost sharing for (a) oral nongeneric anticancer drugs
and (b) intravenous (IV) or injected nongeneric cancer
medications, and limits increases in cost-sharing for oral
nongeneric anticancer drugs.
3)Prohibits the provisions of this bill from being construed to
require a health plan contract or health insurance policy to
provide coverage for any additional medication not otherwise
required by law.
4)Exempts the California Public Employees' Retirement System
(CalPERS) from its provisions.
5)Requires the provisions of this bill to remain in effect only
until January 1, 2016, and as of that date are repealed,
unless a later enacted statute deletes or extends that date.
FISCAL EFFECT
AB 1000
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1)According to the California Health Benefits Review Program
(CHBRP), negligible state costs as a result of this bill.
This bill would not apply to plans offered through Medi-Cal or
to CalPERS plans.
2)Increased employer-funded premium costs in the private
insurance market of approximately $2 million.
3)Increased premium expenditures by employees and individuals
purchasing insurance of $1 million. Increased costs are
estimated to be offset by a reduction in out-of-pocket costs
for policyholders of $2.7 million.
4)Federal regulations implementing the federal health reform
law, the Patient Protection and Affordable Care Act (ACA)
(PL-111-148), may impact the costs of this bill in future
years. At this time, it is unclear whether there may be
additional future state costs associated with this bill.
5)The provisions of this bill sunset January 1, 2016; thus,
there would be no costs directly attributable to the mandate
after this date. However, there would be continued cost
pressure beyond that date in the private insurance market to
maintain the mandated benefit design.
COMMENTS
1)Rationale . According to the author, the intent of AB 1000 is
to increase access to oral chemotherapeutic agents by
requiring that health insurance plans cover oral and IV cancer
treatments on the same basis. The author states that
currently, there are significantly greater patient
out-of-pocket costs for oral cancer therapies covered under
the pharmacy benefit than IV therapies covered under the
medical benefit, and these out-of-pocket costs become a de
facto denial of access.
2)Use and Coverage of Oral Anticancer Drugs . The bill
explicitly states that it does not require carriers to provide
coverage for any additional medications. Thus, it would not
require coverage of oral anticancer drugs, but it would place
limitations on cost-sharing for these drugs. CHBRP indicates
that about 70% of the prescriptions and 31% of the cost for
oral anticancer drugs are associated with treatment for breast
cancer, and the three next most common cancers treated by
AB 1000
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these drugs disproportionately affect non-Hispanic blacks.
Thus, a reduction in cost-sharing for these drugs may reduce
the financial burden of treatment on these groups.
3)Mandates and the Affordable Care Act (ACA) . The ACA creates
new state-run health insurance exchanges that will likely
provide coverage to millions of Californians beginning in
2014, and requires that health plans offered through an
exchange cover certain categories of benefits, called
Essential Health Benefits (EHBs). The Secretary of Health and
Human Services (HSS) is expected to publish guidance later in
2011 and 2012 that will further define these categories. These
definitions will have important fiscal implications for the
state.
The ACA specifies that if states require plans in the exchange
to offer additional benefits that go beyond the defined EHBs,
then states must pay the additional cost related to those
mandates. At this time, there are a number of outstanding
questions related to how federally defined EHBs will interact
with state-level benefit mandates.
Federal law requires the EHB package to include coverage for
prescription drugs. However, since the prescription drug
coverage has not yet been specified, it is unclear whether the
cost-sharing requirements in this bill will comply with the
federally defined benefits. Therefore it is unclear whether,
beginning in 2014, this bill would result in increased state
costs.
4)Related Legislation . SB 961 (Wright) in 2010 and SB 161
(Wright) in 2009 were substantially similar to this bill.
They were both vetoed due to affordability concerns with
regard to health coverage and the premium pressures created by
this and other health mandates.
5)Other Mandates in the Current Session . There are 14 health
mandates proposed this year, including AB 1000. Other mandates
in the current session include:
a) AB 72 (Eng): Acupuncture
b) AB 137 (Portantino): Mammography
c) AB 154 (Beall): Mental Health Services
d) AB 171 (Beall): Autism
e) AB 185 (Hernandez): Maternity Services
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f) AB 310 (Ma): Prescription Drugs
g) AB 369 (Huffman): Pain Prescriptions
h) AB 428 (Portantino): Fertility Preservation
i) AB 652 (Mitchell): Child Health Assessments
j) SB 136 (Yee): Tobacco Cessation
aa) SB 155 (Evans): Maternity Services
bb) SB 173 (Simitian): Mammograms
cc) SB 255 (Pavley): Breast Cancer
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081