BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1052 (Torres) - Health care coverage.
Amended: April 29, 2014 Policy Vote: Health 7-0
Urgency: No Mandate: Yes
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE. AS AMENDED.
Bill Summary: SB 1052 would require health insurers and health
plans to post specified information on their websites regarding
their drug formularies. The bill would require the California
Health Benefit Exchange (Covered California) to post links to
health insurer and health plan drug formularies and to create a
search tool to allow consumers to search for health care
coverage by drug or by therapeutic condition.
Fiscal Impact (as approved on May 23, 2014):
Potential one-time costs up to $150,000 to adopt
regulations by the Department of Insurance (Insurance Fund).
Ongoing enforcement costs are not expected to be
significant.
One-time costs of $140,000 in 2014-15 and $110,000 in
2015-16 to develop standards and adopt regulations by the
Department of Managed Health Care. Ongoing enforcement costs
are not expected to be significant.
One-time costs between $1 million and $5 million for
Covered California to add a search function to its website
and make the underlying improvements to its information
technology systems (federal funds and special funds).
Background: Under current law, health insurers are regulated by
the Department of Insurance and health plans are regulated by
the Department of Managed Health Care. (Collectively health
insurers and health plans are referred to as "carriers").
Under the federal Affordable Care Act states are required to
establish American Health Benefit Exchanges. If a state does not
create an Exchange, the federal government will do so. Within
the Exchanges, individuals will be able to purchase health care
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coverage with standardized benefit packages and actuarial
values. In addition, individuals with incomes between 100
percent and 400 percent of the federal poverty level will be
eligible for subsidies for coverage purchased in the Exchanges.
California has established its own California Health Benefit
Exchange (sometimes referred to as "Covered California").
Covered California has developed a website which allows
consumers to shop for health care coverage and compare health
plan costs and benefits.
Proposed Law: SB 1052 would require carriers to post specified
information on their websites regarding their drug formularies
and require Covered California to take certain, related actions.
Specific provisions of the bill would:
Require a carrier that provides prescription drug benefits
to post its drug formulary on its website and to update that
formulary within 24 hours of making a change;
Require a carrier to use a standard template for displaying
the drug formulary;
Require a carrier to include specified information on cost
sharing, prior authorization requirements, and step therapy
requirements for each drug;
Authorize the Department of Insurance and the Department of
Managed Health Care to develop standard templates and
require carriers to use those standard templates;
Require Covered California to post links on its website to
the drug formularies of all carriers that offer coverage
through Covered California;
Require Covered California to create a search tool on its
website to allow consumers to search for health care
coverage through Covered California by drug or by
therapeutic condition;
Require Covered California to provide additional
information to the Legislature on its marketing efforts.
Staff Comments: The only costs that may be incurred by a local
government under the bill relate to crimes and infractions.
Under the California Constitution, such costs are not
reimbursable by the state.
Author's amendments: delete the requirement that Covered
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California report to the Legislature on its marketing efforts.
Committee amendments: delay the requirement that Covered
California create a search tool on its website until January 1,
2016.