AB 1917, as amended, Gordon. Outpatient prescription drugs: cost sharing.
Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, PPACA requires that a health insurance issuer offering coverage in the individual or small group market to ensure that the coverage includes the essential health benefits package, as defined. PPACA requires the essential health benefits package to limit cost-sharing for the coverage in a specified manner. PPACA also requires a group health plan to ensure that any annual cost-sharing imposed under the plan does not exceed those limitations. PPACA specifies that certain of its reforms do not apply to grandfathered plans, as defined.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires an individual or group health care service plan contract or health insurance policy, including a specialized plan contract or policy, but excluding a grandfathered health plan, that provides coverage for essential health benefits, as defined, and that is issued, amended, or renewed on or after January 1, 2015, to provide for an annual limit on out-of-pocket expenses for all covered benefits that meet the definition of essential health benefits.
With respect to a health care service plan contract or health insurance policy that is subject to those annual out-of-pocket limits, and is issued, amended, or renewed on or after January 1, 2016, for an individual contract or policy, or July 1, 2015, for a group contract or policy, this bill would require
that the copayment, coinsurance, or any other form of cost sharing for a covered outpatient prescription drug for an individual prescriptionbegin delete for a supply of up to 30 days not exceed end deletebegin delete1⁄24end deletebegin insert not exceed end insertbegin insert1⁄12end insert of the annual out-of-pocket limit for abegin insert
supply of up to 30 days of aend insert drug that does not have a time-limited course of treatment or that has a time-limited course of treatment of more than 3 months. For a drug that has a time-limited course of treatment of 3 months or less, the bill would require that the copayment, coinsurance, or other form of cost sharing not exceed 1⁄2 of the annual out-of-pocket limitbegin insert for the time-limited course of treatmentend insert. The bill would specify that its provisions also apply to specialized plan contracts and policies that offer essential health benefits, as specified. Because a willful violation of the bill’s requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 1367.0095 is added to the Health and
2Safety Code, to read:
(a) (1) With respect to an individual or group
4health care service plan contract subject to Section 1367.006, the
P3 1copayment, coinsurance, or any other form of cost sharing for a
2covered outpatient prescription drug for an individual prescription
3begin delete for a supply of up to 30 daysend delete shall not exceed
the following:
4(A) For a prescription drug that does not have a time-limited
5course of treatment or that has a time-limited course of treatment
6of more than three months,begin delete end deletebegin delete1⁄24end deletebegin insert1⁄12end insert of the annual out-of-pocket limit
7applicable under Section 1367.006begin insert for a supply of up to 30 daysend insert.
8(B) For a prescription drug that has a time-limited course of
9treatment of three months or less, 1⁄2 of the annual out-of-pocket
10limit applicable under Section 1367.006begin insert for the time-limited course
11of treatmentend insert.
12(2) For a health care service plan contract that meets the
13
definition of a high deductible health plan set forth in Section
14223(c)(2) of Title 26 of the United States Code, paragraph (1) shall
15only apply once an enrollee’s deductible has been satisfied for the
16plan year.
17(3) Paragraph (1) shall not apply to coverage under a health care
18service plan contract for the Medicare Program pursuant to Title
19XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et
20seq.).
21(b) The cost-sharing limits established in subdivision (a) shall
22only apply to outpatient prescription drugs covered by the contract
23that constitute essential health benefits, as defined in Section
241367.005.
25(b)
end delete
26begin insert(c)end insert Nothing in this section shall be construed to affect the
27reduction in cost sharing for eligible enrollees described in Section
281402 of PPACA and any subsequent rules, regulations, or guidance
29issued under that section.
30(c)
end delete
31begin insert(d)end insert If an essential health benefit, as defined in Section 1367.005,
32is offered or provided by a specialized health care service plan
33contract, this section shall apply to the outpatient prescription drugs
34covered by
the contract that constitute essential health benefits.
35This section shall not apply to a specialized health care service
36plan contract that does not offer or provide an essential health
37benefit, as defined in Section 1367.005.
38(d)
end delete
39begin insert(e)end insert This section shall only apply to an individual health care
40service plan contract that is issued, amended, or renewed on or
P4 1after January 1, 2016, and to a group health care service plan
2contract that is issued, amended, or renewed on or after July 1,
32015.
4(e)
end delete
5begin insert(f)end insert For purposes of this section, the following definitions shall
6apply:
7(1) “Outpatient prescription drug” means a drug approved by
8the federal Food and Drug Administration, and prescribed by a
9licensed health care professional acting within his or her scope of
10practice, that is self-administered by a patient, administered by a
11licensed health care professional in an outpatient setting, or
12administered in a clinical setting that is not an inpatient setting.
13(2) For nongrandfathered health care service plan contracts in
14the group market, “plan year” has the meaning set forth in Section
15144.103 of Title 45 of the Code of Federal
Regulations. For
16nongrandfathered health care service plan contracts sold in the
17individual market, “plan year” means the calendar year.
18(3) “PPACA” means the federal Patient Protection and
19Affordable Care Act (Public Law 111-148), as amended by the
20federal Health Care and Education Reconciliation Act of 2010
21(Public Law 111-152), and any rules, regulations, or guidance
22issued thereunder.
Section 10112.298 is added to the Insurance Code, to
24read:
(a) (1) With respect to an individual or group
26health insurance policy subject to Section 10112.28, the copayment,
27coinsurance, or any other form of cost sharing for a covered
28outpatient prescription drug for an individual prescriptionbegin delete for a shall not exceed
the following:
29supply of up to 30 daysend delete
30(A) For a prescription drug that does not have a time-limited
31course of treatment or that has a time-limited course of treatment
32of more than three months,begin delete end deletebegin delete1⁄24end deletebegin insert1⁄12end insert of the annual out-of-pocket limit
33applicable under Section 10112.28begin insert for a supply of up to 30 daysend insert.
34(B) For a prescription drug that has a time-limited course of
35treatment of three months or less, 1⁄2 of the annual out-of-pocket
36limit applicable under Section 10112.28begin insert for the time-limited course
37of treatmentend insert.
38(2) For a health insurance policy that meets the
definition of a
39high deductible health plan set forth in Section 223(c)(2) of Title
P5 126 of the United States Code, paragraph (1) shall only apply once
2an insured’s deductible has been satisfied for the plan year.
3(3) Paragraph (1) shall not apply to coverage under a health
4insurance policy for the Medicare Program pursuant to Title XVIII
5of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
6(b) The cost-sharing limits established in subdivision (a) shall
7only apply to outpatient prescription drugs covered by the policy
8that constitute essential health benefits, as defined in Section
910112.27.
10(b)
end delete
11begin insert(c)end insert Nothing in this section shall be construed to affect the
12reduction in cost sharing for eligible insureds described in Section
131402 of PPACA and any subsequent rules, regulations, or guidance
14issued under that section.
15(c)
end delete
16begin insert(d)end insert If an essential health benefit, as defined in Section 10112.27,
17is offered or provided by a specialized health insurance policy,
18this section shall apply to the outpatient prescription drugs covered
19by the policy that
constitute essential health benefits. This section
20shall not apply to a specialized health insurance policy that does
21not offer or provide an essential health benefit, as defined in
22Section 10112.27.
23(d)
end delete
24begin insert(e)end insert This section shall only apply to an individual health insurance
25policy that is issued, amended, or renewed on or after January 1,
262016, and to a group health insurance policy that is issued,
27amended, or renewed on or after July 1, 2015.
28(e)
end delete
29begin insert(f)end insert For purposes of this section, the following definitions shall
30apply:
31(1) “Outpatient prescription drug” means a drug approved by
32the federal Food and Drug Administration, and prescribed by a
33licensed health care professional acting within his or her scope of
34practice, that is self-administered by a patient, administered by a
35licensed health care professional in an outpatient setting, or
36administered in a clinical setting that is not an inpatient setting.
37(2) For nongrandfathered health insurance policies in the group
38market, “plan year” has the meaning set forth in Section 144.103
39of Title 45 of the Code of Federal Regulations.
For
P6 1nongrandfathered health insurance policies sold in the individual
2market, “plan year” means the calendar year.
3(3) “PPACA” means the federal Patient Protection and
4Affordable Care Act (Public Law 111-148), as amended by the
5federal Health Care and Education Reconciliation Act of 2010
6(Public Law 111-152), and any rules, regulations, or guidance
7issued thereunder.
No reimbursement is required by this act pursuant to
9Section 6 of Article XIII B of the California Constitution because
10the only costs that may be incurred by a local agency or school
11district will be incurred because this act creates a new crime or
12infraction, eliminates a crime or infraction, or changes the penalty
13for a crime or infraction, within the meaning of Section 17556 of
14the Government Code, or changes the definition of a crime within
15the meaning of Section 6 of Article XIII B of the California
16Constitution.
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