BILL ANALYSIS                                                                                                                                                                                                    �






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                       Senator Ed Hernandez, O.D., Chair


          BILL NO:       SB 136                                      
          S
          AUTHOR:        Yee                                         
          B
          AMENDED:       As Introduced                               
          HEARING DATE:  April 27, 2011                              
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          CONSULTANT:                                                
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          Orr                                                        
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                                     SUBJECT
                                         
                    Health care coverage: tobacco cessation


                                     SUMMARY
                                         
          Requires a health care services plan (health plan) contract 
          or health insurance policy to cover specified tobacco 
          cessation treatments.  Requests the California Health 
          Benefits Review Program (CHBRP) of the University of 
          California (UC) to prepare an analysis of the cost savings 
          as a result of the provisions of this bill. Requires this 
          bill to become inoperative if the state determines that the 
          requirements of this bill will result in additional costs 
          to the state.  


                             CHANGES TO EXISTING LAW  

          Existing federal law:
          Establishes the Patient Protection and Affordable Care Act 
          (PPACA) (Public Law 111-148) as amended by the Health Care 
          and Education Reconciliation Act (H.R. 4872). PPACA 
          requires health plans and issuers, subject to the minimum 
          interval established by the U.S. Secretary of Health and 
          Human Services (HHS), to provide coverage and not impose 
          cost-sharing requirements for selected preventive services 
          with respect to plan years beginning on and after September 
          23, 2010. 
                                                         Continued---



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          Establishes essential health benefits (EHBs) as a set of 
          health care service categories that must be covered by 
          plans, starting in 2014. 

          Under PPACA, requires each state, by January 1, 2014, to 
          establish an American Health Benefit Exchange (Exchange) 
          that makes qualified health plans available to qualified 
          individuals and qualified employers.  If a state does not 
          establish an Exchange, the federal government administers 
          the Exchange.  Federal law establishes requirements for the 
          Exchange, for health plans participating in the Exchange, 
          and defines who is eligible to receive coverage in the 
          Exchange. 

          Existing state law:
          Provides for regulation of health plans by the Department 
          of Managed Health Care (DMHC) and health insurers by the 
          California Department of Insurance (CDI).  Allows health 
          insurers (but not health plans) to subject treatment for 
          nicotine use to separate deductibles, co-pays, and overall 
          cost limitations.  Pursuant to regulations, allows health 
          plans covering prescription drug benefits to require prior 
          authorization and to establish co-payments or deductibles 
          and, for smoking cessation, require counseling prior to 
          receiving a prescription for cessation pharmaceuticals. 

          Requires DMHC-regulated health plans to provide all 
          medically necessary basic health care services, as defined. 
           Permits DMHC to define the scope of the required services 
          and to exempt plans from this requirement for good cause.   
           

          Establishes the California Health Benefits Exchange 
          (Exchange) within the state government to implement PPACA 
          requirements.

          This bill:
          Requires a health plan contract or health insurance policy 
          issued, amended, renewed, or delivered on or after January 
          1, 2012 to cover a minimum of 2 courses of treatment in a 
          12-month period for all smoking cessation treatments rated 
          "A" or "B" by the United States Preventive Services Task 
          Force (USPSTF), which include counseling, over-the-counter 
          (OTC) medication and prescription pharmacotherapy approved 




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          by the federal Food and Drug Administration (FDA).  For the 
          purposes of this bill, defines "course of treatment" as 
          applied to counseling to include at least 4 counseling 
          sessions lasting at least 10 minutes, and as applied to 
          prescription or OTC medication to include the FDA-approved 
          duration of treatment for that medication. 

          Provides that coverage provided pursuant to this bill is 
          only available upon the order of an authorized provider but 
          that nothing in this bill precludes a health plan from 
          allowing enrollees to access tobacco cessation services on 
          a self-referral basis.  

          Provides that after the patient's first course of 
          treatment, enrollees are not required to enter counseling 
          in order to receive tobacco cessation medications, and that 
          health plan contracts and health insurance policies are 
          prohibited from imposing prior authorization or step 
          therapy requirements on tobacco cessation treatments. 
          
          Excludes Medicare supplement plan contracts and specialized 
          health plan contracts from the requirements in this bill.

          Becomes inoperative on the date that the state determines 
          that, taking into account any state savings identified in 
          the CHBRP report, the requirements of this bill will result 
          in the state assuming additional costs pursuant to 
          specified requirements of the PPACA.

          Requests that the UC, as part of CHBRP, prepare a report by 
          December 31, 2014, to determine any state savings as a 
          result of the requirements of this bill, and to make the 
          report available to the Legislature, DMHC and CDI.

          Makes specified findings and declarations regarding the 
          costs of tobacco use in California and the benefits of 
          tobacco cessation services. 
                                  FISCAL IMPACT  

          According to the CHBRP analysis, among publicly funded 
          DMHC-regulated health plans, CHBRP estimates that premium 
          increases for Medi-Cal Managed Care Plans (MMCPs), MRMIB 
          plans, and CalPERS HMOs would range from averages of 0.00 
          percent to 0.05 percent. Specifically the CHBRP report 
          estimates:




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                 Premium expenditures by persons with group 
               insurance, CalPERS HMOs, Healthy Families Program, AIM 
               or MRMIP would increase by $3,601,000, representing a 
               change of 0.0237 percent; 
                 CalPERS HMO employer expenditures would increase by 
               $1,592,000, representing a change of 0.0459 percent;  
                 MRMIB plan expenditures would increase by $153,000, 
               representing a change of 0.0146 percent;
                 MMCP expenditures would not change; and
                 Total net health expenditures would increase by 
               $16.4 million, representing a change of 0.017 percent. 
                


                            BACKGROUND AND DISCUSSION
                                         
          The author claims that tobacco is the greatest cause of 
          disease and premature death in America today and it is 
          responsible for more than 435,000 deaths annually. The 
          costs of tobacco-related death and disease approach $96 
          billion annually in medical expenses and $97 billion in 
          lost productivity. 

          The author claims that in 2009, 47 percent of smokers 
          reported trying to quit in the last year. The author 
          believes that smoking cessation treatment is not 
          one-size-fits all and that everyone responds to treatment 
          differently, which is why patients try more than one 
          treatment option before finding the right one. Therefore, 
          the author believes patients should have the full range of 
          treatment options available to them to personally tailor 
          their treatment. The author claims that California has an 
          opportunity to ensure access to a comprehensive cessation 
          benefits package that includes at minimum 
          nicotine-replacement therapies, non-nicotine medications 
          and counseling. The author believes that a comprehensive 
          smoking cessation benefit package reduces the long-term 
          cost of smoking and thus financial liability for health 
          care plans. 
          
          Tobacco use and cessation
          Tobacco use, cigarette smoking in particular, is the 
          leading preventable cause of death in the United States. 
          Tobacco use results in more than 400,000 deaths annually 




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          from cardiovascular disease, respiratory disease, and 
          cancer. Smoking during pregnancy results in the deaths of 
          about 1,000 infants annually and is associated with an 
          increased risk for premature birth and intrauterine growth 
          retardation. Environmental tobacco smoke contributes to 
          death in an estimated 38,000 people annually. 

          Despite significant efforts to reduce smoking in 
          California, nicotine use remains prevalent, particularly 
          among ethnic communities.  While fifteen percent of all 
          Californians smoke, Native Americans smoke at twice this 
          rate and one in five African Americans smoke.  Nicotine is 
          highly addictive and difficult to quit.  According to the 
          HHS, 70 percent of smokers attempt to quit each year, but 
          only 7 percent remain smoke free for one year after 
          attempting to quit.  

          Cessation significantly reduces the risk of suffering from 
          smoking-related diseases, such as cancer (especially of the 
          lung), coronary heart disease, stroke, peripheral vascular 
          disease, and chronic obstructive pulmonary disease.  
          Tobacco dependence is a chronic condition that often 
          requires repeated interventions, but effective treatments 
          and helpful resources exist. Comprehensive tobacco 
          cessation services include telephone, group, or individual 
          counseling, and all prescription and OTC medication 
          approved by the FDA.  
          FDA-approved tobacco cessation products include OTC and 
          prescription nicotine replacement therapy administered by 
          gum, patch, nasal spray, inhaler and lozenge, and 
          prescription non-nicotine medications varenicline 
          (Chantix) and bupropion SR (Zyban), an antidepressant 
          medication used in smoking cessation. There are other 
          medications, including clonidine and nortriptyline, that 
          have been found to be effective for smoking cessation but 
          that have a greater risk of side effects than the 
          abovementioned medications and have not been approved by 
          the FDA for smoking cessation. Numerous studies show that 
          behavioral and pharmacological treatments and combinations 
          of the two significantly improve quit rates and increase 
          the likelihood of sustained abstinence from smoking.  

          Patient Protection and Affordable Care Act 
          On March 23, 2010, the federal government enacted PPACA, 
          which was further amended by the Health Care Education 




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          Reconciliation Act (H.R. 4872).  Under PPACA, effective 
          2011, Medicaid covers tobacco cessation counseling and 
          pharmacotherapy for pregnant women.  

          PPACA requires all new plans (as opposed to grandfathered 
          plans) to provide coverage of certain preventive services, 
          including tobacco use counseling and interventions with 
          zero cost-sharing effective September 23, 2010.  Tobacco 
          use counseling and interventions services include tobacco 
          use counseling for pregnant women and tobacco use 
          counseling and interventions for non-pregnant adults.  This 
          means that any new plan developed after September 23, 2010 
          must include tobacco cessation services for both pregnant 
          women and non-pregnant adults and cannot incorporate 
          cost-sharing for those services. 

          SB 136 does not make a distinction between grandfathered 
          plans and new plans and requires all DMHC- and 
          CDI-regulated plans in California to include tobacco 
          cessation, including grandfathered plans which are exempt 
          from this requirement under the federal law. SB 136 is 
          silent on cost-sharing, which means that plans classified 
          as grandfathered under federal law would be required to 
          offer cessation services, but could choose to incorporate 
          cost-sharing and still be in compliance with both state and 
          federal law.

          Essential health benefits
          EHBs are described in PPACA as a set of health care service 
          categories that must be covered by certain plans, starting 
          in 2014. PPACA defines EHBs to include at least the 
          following: ambulatory patient services; emergency services; 
          hospitalization; maternity and newborn care; mental health 
          and substance use disorder services, including behavioral 
          health treatment; prescription drugs; rehabilitative and 
          habilitative services and devices; laboratory services; 
          preventive and wellness services and chronic disease 
          management; and pediatric services, including oral and 
          vision care.' Insurance policies must cover these benefits 
          in order to be certified and offered in exchanges, and all 
          Medicaid state plans must cover these services by 2014.  

          It is currently unknown if these EHBs will include certain 
          benefits and services mandated by SB 136. For example, 
          smoking cessation prescription drugs could be considered 




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          covered under the prescription drug EHB; counseling could 
          be considered under behavioral health treatment, and any 
          benefit or service included in SB 136 might be considered 
          covered under substance abuse disorder services. 

          In the near future, the Secretary of HHS will define what 
          constitutes EHBs. When making the determination, the 
          Secretary must ensure that the scope of EHBs is equal to 
          the scope of benefits provided under a typical employer 
          plan. However, using carrier surveys, CHBRP found 
          variations in cessation coverage in typical employer plans, 
          such as the type of counseling services provided and 
          inclusion of OTC smoking cessation items. 

          PPACA allows states to require health plans offered in the 
          exchange to include additional benefits not already 
          included in the EHB package, but requires that the state 
          make payments to defray the cost of those additionally 
          mandated benefits to persons receiving coverage through the 
          exchange.

          California Health Benefits Review Program analysis of SB 
          136
          Pursuant to AB 1996 (Thomson), Chapter 795, Statutes of 
          2002 and SB 1704 (Kuehl), Chapter 684, Statutes of 2006, 
          the UC is requested to assess legislation proposing a 
          mandated benefit or service, or the repeal of a mandated 
          benefit or service, through CHBRP.  CHBRP prepares a 
          written analysis of the public health, medical, and 
          economic impacts of such measures.  CHBRP analyzed SB 136 
          in several categories: efficacy of smoking cessation 
          treatments; effects of coverage for smoking cessation 
          treatments; impacts to benefit coverage, utilization, cost, 
          and public health; EHBs offered by qualified health plans 
          in the health insurance exchange; and preventive benefits 
          as required under PPACA. 

                 Medical effectiveness of cessation treatments
               According to CHBRP, the literature on the 
               effectiveness of tobacco cessation treatments, 
               including counseling and certain pharmacological 
               agents, is clear and convincing that it improves quit 
               rates and increases the likelihood of sustained 
               abstinence from smoking.  CHBRP also claims there is 
               clear and convincing evidence that this bill would 




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               contribute to the reduction in premature death from 
               smoking-related conditions such as cancer, low birth 
               weight infants, and cardiovascular and respiratory 
               disease. 

                 Impacts on utilization and effects of cessation 
               coverage
               The increase of utilization of smoking cessation 
               treatment would occur amongst the estimated 1.93 
               million adult smokers with DMHC- or CDI-regulated 
               plans or policies, since they will be the population 
               who might seek cessation services.  Of the population 
               affected by this mandate, CHBRP says 82.5 percent of 
               enrollees have mandate-compliant coverage for 
               cessation related counseling and 98.8 percent have 
               mandate-compliant coverage for prescription smoking 
               cessation treatment, but only 62 percent have 
               mandate-compliant coverage for OTC smoking cessation 
               treatment.  CHBRP estimates that of the insured adult 
               smokers, SB 136 would increase utilization of 
               counseling services by 9.2 percent, OTC treatments by 
               19.8 percent, and prescription treatments by 0.6 
               percent.  CHBRP estimates this bill would likely 
               produce a positive public health benefit by increasing 
               the number of successful quitters by 2,364 enrollees 
               annually.

               CHBRP notes that the rates of abstinence from smoking 
               found in randomized clinical trials may be greater 
               than those that would be achieved under this bill 
               because some studies may have excluded some smokers 
               who would have had coverage for these treatments under 
               this bill, and smokers enrolling in these studies may 
               have been more motivated than an average smoker to 
               quit.

                 Impacts on cost and coverage
               According to CHBRP, the average cost per course of 
               smoking cessation treatment is on average $200 for 
               counseling, $236 for OTC medications, and $240 for 
               prescriptions. CHBRP assumes that the available supply 
               of services would meet the slightly increased demand 
               and that costs for services would not increase. CHBRP 
               estimates per member per month premiums would vary 
               depending on the type of market, but overall increases 




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               will range between 0.0 percent up to 0.17 percent.  
               Total net health expenditures are projected to 
               increase by $16.4 million according to CHBRP 
               estimates. 

               CHBRP estimates that the percentage of enrollees with 
               mandate-compliant benefit coverage would increase from 
               62 percent who currently have any coverage for all 
               smoking cessation treatment types to 100 percent in 
               the CDI- and DMHC-regulated markets.  However, the 
               increase is mostly among people who moved from no 
               coverage to partial coverage of counseling and/or OTC 
               smoking cessation treatments, since SB 136 does not 
               expressly prohibit cost-sharing. Therefore, the impact 
               of the marginal changes in utilization and premiums is 
               less than might be expected were the smoking cessation 
               benefits mandated without cost-sharing.

                 Potential impacts of federal health care reform
               CHBRP states that it is uncertain whether federal 
               regulations and guidance would deem all the services 
               mandated under SB 136 as being included under the EHB 
               package. They recommend the state examine differences 
               in the scope of benefits in the final EHB package 
               compared to the scope of benefits in this bill, the 
               number of enrollees in qualified health plans sold in 
               the health exchange, and the methods used to define 
               and calculate the cost of additional benefits. 

          U.S. Preventive Services Task Force 
          The U.S. Preventive Services Task Force (USPSTF) is the 
          leading independent panel of private-sector experts in 
          prevention and primary care.  The USPSTF conducts rigorous, 
          impartial assessments of the scientific evidence for the 
          effectiveness of a broad range of clinical preventive 
          services, and makes recommendations that certain services 
          be provided based on the risk and benefit of the service 
          and the level of evidence supporting the provision of the 
          service. 

          Services rated "A" and "B" by USPSTF mean that at least 
          fair scientific evidence suggests that the benefit of the 
          clinical service outweighs the potential risks and that 
          clinicians should discuss the service with eligible 
          patients. Tobacco use counseling and interventions are 




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          classified by USPSTF as preventive services that fall under 
          "A" and "B" benefits. The USPSTF recommends that clinicians 
          ask all adults about tobacco use and provide tobacco 
          cessation interventions for those who use tobacco products, 
          and recommends that clinicians ask all pregnant women about 
          tobacco use and provide augmented, pregnancy-tailored 
          counseling to those who smoke. In non-pregnant adults, the 
          USPSTF found convincing evidence that smoking cessation 
          interventions, including brief behavioral counseling 
          sessions (less than ten minutes) and pharmacotherapy 
          delivered in primary care settings, are effective in 
          increasing the proportion of smokers who successfully quit 
          and remain abstinent for one year. Although less effective 
          than longer interventions, even minimal interventions (less 
          than three minutes) have been found to increase quit rates.
          
          Massachusetts tobacco cessation coverage 
          In July 2006, Massachusetts passed a comprehensive health 
          reform law that mandated tobacco cessation coverage for its 
          Medicaid population.  The coverage, which included 
          behavioral counseling and all FDA approved medications has 
          been utilized by over 70,000 Medicaid users, or 37 percent 
          of all Medicaid smokers.  A recent report, entitled 
          "Medicaid Coverage for Tobacco Dependence Treatments in 
          Massachusetts and Associated Decreases in Smoking 
          Prevalence," found that smoking rates decreased from 38 
          percent in the pre-benefit period to 28 percent in the 
          post-benefit period, representing a decline of 26 percent.  
          The authors of the report concluded that providing access 
          to tobacco cessation coverage, combined with broad 
          promotion, can significantly reduce smoking prevalence. 

          An additional study, "A Longitudinal Study of Medicaid 
          Coverage for Tobacco Dependence Treatments in Massachusetts 
          and Associated Decreases in Hospitalizations for 
          Cardiovascular Disease," found that the use of the tobacco 
          cessation pharmacotherapy benefit was associated with a 46 
          percent annual decrease in hospitalizations for acute 
          myocardial infarction and a 49 percent annual decrease in 
          hospitalizations for coronary atherosclerosis. The cost of 
          tobacco treatments and promotions was $5.1 million for 
          21,656 subscribers over 2 years, but the savings from 
          decreased hospitalizations for cardiovascular conditions 
          alone was $10.2 million, yielding a $2.00 return on 
                                                                                 investment for every dollar spent in the first 2 years. 




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          Related bills
          SB 330 (Padilla) would impose an additional tax on the 
          distribution of cigarettes
          at the rate of $0.075 for each cigarette (approximately 
          $1.50 per pack) distributed which would be reset by the 
          State Board of Equalization each fiscal year to reflect any 
          increase in the California Consumer Price Index. Pending in 
          the Senate Health Committee.
          
          SB 575 (DeSaulnier) would remove specified exemptions in 
          existing laws that allow tobacco smoking in certain indoor 
          workplaces and restrict indoor tobacco smoking in 
          owner-operated businesses. Pending in the Senate 
          Appropriations Committee.

          AB 217 (Carter) would narrow an exemption in current law 
          authorizing smoking in "patient smoking areas" in long-term 
          health care facilities, to only allow patient smoking in 
          outdoor areas that meet specified conditions.  Pending in 
          the Assembly Appropriations Committee.
          
          AB 1030 (Achadjian) would subject a person who fails to pay 
          a tax liability in violation of the Cigarette and Tobacco 
          Products Tax Law to suspension of any distributor's license 
          and seizure of any assets related to tobacco distribution. 
          Pending in the Assembly Revenue and Taxation Committee.
          
          Prior legislation
          SB 220 (Yee) of 2010 is substantially similar to this bill. 
          SB 220 was vetoed with the following message: "This bill 
          represents a costly health mandate that goes beyond current 
          federal law and removes the ability to manage the 
          ever-increasing costs of prescription drugs. Instead, I am 
          signing Assembly Bill 2345 to ensure that the new federal 
          health reform legislation for preventive services is fairly 
          and consistently enforced by the Department of Managed 
          Health Care and Department of Insurance?. Because Senate 
          Bill 220 goes beyond federal requirements, it will expose 
          California to potentially significant unreimbursed mandate 
          costs in 2014 when the remaining provisions of federal 
          reform take effect."

          AB 2345 (De la Torre), Chapter 657, Statutes of 2010, 
          requires health plan contracts and health insurance 




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          policies issued, amended, renewed, or delivered on or after
          September 23, 2010, to comply with the provisions of PPACA 
          regarding coverage of, and cost-sharing for, preventive 
          services and any rules or regulations issued pursuant to 
          those provisions to the extent required under federal law. 

          SB 576 (Ortiz) of 2005 would have required health plans and 
          health insurers to provide coverage for two courses of 
          tobacco cessation treatments per year, including counseling 
          and prescription and OTC medications, and would have 
          prohibited plans and insurers from applying deductibles but 
          allowed specified co-payments for those benefits.  SB 576 
          was vetoed by Governor Schwarzenegger, who stated that the 
          bill would impose costs on employers, plans, and 
          individuals with only a small increase in utilization of 
          cessation benefits.  

          Arguments in support
          The American Heart Association, the American Lung 
          Association, and Breathe California all are co-sponsors of 
          this measure and agree that health plans should be 
          obligated to fully cover smoking cessation for their 
          members.  They claim that, each year, tobacco costs 
          billions in health care costs and lost productivity, but 
          cessation treatments can return $1.40 for every $1 
          invested.  Supporters state that, of the approximately 4 
          million adult smokers, nearly 75 percent say they would 
          like to quit, and that a person's chance of successfully 
          quitting smoking more than doubles when an evidence-based 
          tobacco cessation service or treatment is used, such as 
          those proposed by this bill. 

          The American Academy of Pediatrics believes this bill 
          acknowledges that tobacco use is a major public health 
          concern and moves to ease the financial burden of quitting. 
          They believe there is no safe way to use tobacco, nor is 
          there a safe level of exposure to second-hand smoke, citing 
          the U.S. Environmental Protection agency classification of 
          second-hand smoke as a Class A known human carcinogen.  The 
          California Medical Association (CMA) believes it is 
          critical to support patients in their efforts to quit 
          smoking and preserve access to medications that physicians 
          deem necessary to assist in that process. CMA claims this 
          bill will help reduce health care costs both in the short- 
          and long-term.  




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          The California State Firefighters Association argues that 
          not only is smoking detrimental to health, but that 
          cigarettes are also the number one cause of fatal fires in 
          California which unnecessarily claim human life (including 
          many firefighters), inflict significant property damage and 
          have a catastrophic impact on natural forests. They claim 
          that according to the California Department of Forestry, 
          fires caused by smoking damage more than 34,000 acres of 
          land annually in California and cost taxpayers more than 
          one billion dollars in 2008 alone. 

          Arguments in opposition
          The California Association of Health Plans (CAHP) opposes 
          this bill because they believe it is an expensive new 
          mandate that would eliminate a plan's ability to require 
          coverage authorization for drugs that are not on a health 
          plan formulary. CAHP believe "it is the wrong time for the 
          legislature to consider enacting new benefit mandates, and 
          points out that the cost of any additional benefits 
          required by state law that exceed the federal EHB package 
          must be borne by the states." CAHP also questions 
          provisions in the bill that render the bill inoperative 
          under specified circumstances, claiming that authorizing 
          and then repealing coverage of services in this manner will 
          disrupt the continuity of care for health plan enrollees. 

          The Association of California Life and Health Insurance 
          Companies (ACLHIC) generally opposes all benefit mandates 
          because they believe mandates increase the already high 
          cost of care for everyone, and mandates eliminate the 
          flexibility an employer would otherwise have to choose the 
          benefits that best address the needs of his or her 
          employees. ACLHIC believes that requiring all plans to 
          include specific benefits is counterproductive to their 
          members' efforts to make health insurance more affordable 
          and available to Californians.  The California Chamber of 
          Commerce believes that benefit mandates make insurance less 
          affordable, and they believe this bill will further 
          exacerbate the problem of rising health care costs and thus 
          contribute to the increasing number of uninsured 
          Californians.

          
                                     COMMENTS




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          1.  Differences between PPACA and SB 136. PPACA requires 
          that any new plans (as opposed to grandfathered plans) 
          developed after September 23, 2010 must include tobacco 
          cessation services for both pregnant women and non-pregnant 
          adults, and prohibits cost-sharing for these services.  SB 
          136 does not make a distinction between grandfathered plans 
          and new plans. Should SB 136 become law, grandfathered 
          plans that are currently exempt from federal requirements 
          to provide tobacco cessation will be required to provide 
          tobacco cessation services under California law.  

          This bill also prohibits plans and insurers from requiring 
          stepped-care or prior authorization, and from requiring 
          enrollees to enter counseling prior to receiving cessation 
          medications after the patient's first course of treatment.  
          It is possible that, if tobacco cessation is included in 
          the EHB package, the federal requirements for offering such 
          services will differ from these requirements in SB 136.  
          Future changes in federal law and guidance concerning EHBs, 
          or changes made by the USPSTF, could potentially result in 
          federal requirements that are either narrower or more 
          expansive than those contained in SB 136. CHBRP also notes 
          that while Medi-Cal Managed Care Plans (MMCPs) generally 
          provide mandate-compliant smoking cessation treatment, that 
          some individual MMCPs may need to be amended to comply with 
          specific provisions of this bill, including restrictions on 
          prior authorization.

          2.  Cost-sharing. Unlike federal law, which prohibits 
          cost-sharing for preventive services (including tobacco 
          counseling and interventions), SB 136 is silent on 
          cost-sharing.  Should SB 136 become law, plans classified 
          as grandfathered under federal law but that would be 
          required to offer specified cessation services under 
          California law, could potentially choose to incorporate 
          cost-sharing provisions for enrollees and insured 
          individuals and still be in compliance with both state and 
          federal law.
          
          3.  Tobacco cessation services. CHBRP's analysis assumes 
          that the demand for tobacco cessation services would 
          increase only slightly, that the available supply of 
          services would meet the demand, and that costs for services 
          would not increase. Many health plans and insurers offer 




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          some cessation coverage now, but they have the option to 
          choose which products and services will be offered to 
          enrollees and insured individuals. By requiring all 
          FDA-approved cessation medications to be covered by plans 
          and insurers, SB 136 could lead to a change in demand for 
          cessation products and services, especially those not 
          already offered by insurers or plans, which could cause 
          changes in prices. SB 136 could also limit a plan or 
          insurer's ability to negotiate rates for cessation products 
          with pharmaceutical companies, which could also cause 
          changes in prices. 

          4.  Condition for SB136 becoming inoperative is vague.  SB 
          136 provides that the provisions of the bill will become 
          inoperative if the state determines that there are 
          additional costs.  However, the bill does not specify which 
          state entity will make that determination (i.e. the 
          Governor, the Legislature and the Governor, CDI and/or 
          DMHC). The author may wish to clarify the intended state 
          entity. 

          5.  Technical amendment. The USPSTF recommendations 
          describe tobacco use counseling and interventions for 
          non-pregnant adults and tobacco use counseling for pregnant 
          women as preventive services. To be more consistent with 
          the USPSTF, the author may wish to change "smoking 
          cessation treatments" to "tobacco cessation preventive 
          services," on page 2, line 30 and page 4, line 8. 

          
                                    POSITIONS  

          Support:  American Heart Association (co-sponsor)
                    American Lung Association in California 
               (co-sponsor)
                    Breathe California (co-sponsor)
                    American Academy of Pediatrics, California 
          District
                    American Bone Health
                    American Cancer Society
                    American Civil Liberties Union
                    American GI Forum of California
                    American Russian Medical Association
                    Association of Northern California Oncologists
                    BayBio




          STAFF ANALYSIS OF SENATE BILL 136 (Yee)               Page 
          16


          

                    California Academy of Family Physicians
                    California Academy of Physician Assistants
                    California Center for Public Health Advocacy
                    California Chapter of American College of 
               Cardiology
                    California Dental Association
                    California Medical Association
                    California Psychiatric Association
                    California Psychological Association
                    California State Firefighters' Association
                    Coalition of Lavender-Americans on Smoking & 
               Health
                    First 5 LA
                    Foundation for Osteoporosis Research and 
                    Education 
                    Los Angeles County Board of Supervisors
                    Los Angeles County Medical Association
                    Los Angeles Society of Allergy, Asthma & Clinical 
               Immunology
                    Orange County Medical Association
                    Pharmacists Planning Service, Inc.
                    San Francisco Asthma Task Force
                    San Francisco Fire Fighters Local 798
                    San Francisco Tobacco Free Coalition
                    State Building and Construction Trades Council, 
               AFL-CIO
                    Four individuals
                    
          Oppose:   America's Health Insurance Plans
                    Association of California Life and Health 
                    Insurance Companies
                    California Association of Health Plans
                    California Chamber of Commerce
                    Health Net
                    Molina Healthcare of California


                                   -- END --