BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1052|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 1052
Author: Torres (D)
Amended: 8/18/14
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 4/24/14
AYES: Hernandez, Beall, De Le�n, DeSaulnier, Evans, Monning,
Wolk
NO VOTE RECORDED: Morrell, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 6-1, 5/23/14
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NOES: Walters
SENATE FLOOR : 30-6, 5/29/14
AYES: Anderson, Beall, Berryhill, Block, Cannella, Corbett,
Correa, De Le�n, DeSaulnier, Evans, Gaines, Galgiani, Hancock,
Hernandez, Hill, Hueso, Jackson, Lara, Leno, Lieu, Liu,
Mitchell, Monning, Nielsen, Padilla, Pavley, Roth, Steinberg,
Torres, Wolk
NOES: Fuller, Huff, Knight, Vidak, Walters, Wyland
NO VOTE RECORDED: Calderon, Morrell, Wright, Yee
ASSEMBLY FLOOR : 74-0, 8/25/14 - See last page for vote
SUBJECT : Health care coverage
SOURCE : American Cancer Society Cancer Action Network
DIGEST : This bill requires health plans and insurers to use a
CONTINUED
SB 1052
Page
2
standard drug formulary template to display their drug
formularies and to post their formularies on their Internet Web
sites. Requires the California Health Benefit Exchange (Covered
California) to provide links to the formularies.
Assembly Amendments (1) add a co-author; (2) delete the
requirement for health care plans and insurers to post changes
to formularies within 72- hours on their Internet Web site; (3)
delete the requirement for the Covered California board to
create a search tool on its Internet Web site that allows a
potential enrollee to search for qualified health plans (QHPs)
by a particular drug; (4) add to the information included to be
required on the standard formulary template; and 5) make other
technical changes.
ANALYSIS :
Existing federal law:
1. Requires under the federal Affordable Care Act (ACA)
non-grandfathered individual and small group health insurance
plans and policies to cover ten essential health benefits
(EHBs), including prescription drugs and under regulatory
guidance, authorizes states to establish a benchmark plan.
2. Establishes under the federal ACA, market places for
individuals and small groups to purchase QHPs, which must
cover EHBs, and meet other federal requirements. Authorizes
states to establish state level health benefit exchanges.
Existing state law:
1. Establishes Covered California as an independent government
entity governed by a five member board of directors to
selectively contract with QHPs and administer premium
assistance and cost sharing subsidies.
2. Authorizes Covered California to adopt standardized QHP
benefit designs.
3. Requires Covered California to maintain an Internet Web site
through which enrollees and prospective enrollees of QHPs may
obtain standardized comparative information on QHPs.
CONTINUED
SB 1052
Page
3
4. Establishes Kaiser Small Group Health Plan as California's
EHB benchmark plan.
5. Establishes the Department of Insurance (CDI) to regulate
health insurance pursuant to the Insurance Code and the
Department of Managed Health Care to regulate health plans
under the Knox-Keene Act.
6. Requires according to CDI regulations on EHBs, an individual
or small group health insurance policy to provide coverage
for prescription drugs that complies with specified state law
and federal regulations. Requires a health insurer to submit
specified information to the CDI Commissioner together with a
health insurance policy form, as specified, and annually on
July 1 thereafter.
7. Requires, under state regulations, a health plan to file an
EHB worksheet to demonstrate compliance with EHB
requirements, including prescription drug benefits, as
required by state law and federal regulations, including the
plan's prescription drug list and/or formulary. Requires the
EHB Filing Worksheet to include a certification that the
plan's drug list meets or exceeds the prescription drug
formulary requirements specified in federal regulations.
Prior Legislation
This bill:
1. Requires health plans and insurers that provide prescription
drug benefits and maintain drug formularies to post the
formulary or formularies for each product offered by the plan
on the plan's Web site in a manner that is accessible and
searchable by potential enrollees, enrollees, and providers.
2. Requires the Department of Managed Health Care (DMHC) and the
CDI to develop a standard formulary template that contains
specified information by January 1, 2017.
3. Requires health plans and insurers to use the standard
formulary template within six months of the date the template
is developed by DMHC and CDI.
4. Requires health plans and insurers to update their posted
formularies with any change to those formularies on a monthly
CONTINUED
SB 1052
Page
4
basis.
Prior Legislation
SB 639 (Hernandez, Chapter 316, Statutes of 2013), codifies
provisions of the ACA relating to out-of-pocket maximums on
cost-sharing, health plan and insurer actuarial value coverage
levels and catastrophic coverage requirements, and requirements
on health insurers for coverage of out-of-network emergency
services.
AB 1453 (Monning, Chapter 854, Statutes of 2012) and SB 951
(Hernandez, Chapter 866, Statutes of 2012) establish
California's EHBs.
AB 219 (Perea, Chapter 661, Statutes of 2013) limits the total
amount of copayments and coinsurance an enrollee or insured is
required to pay for orally administered anticancer medications
to $200 for an individual prescription of up to a 30-day supply.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
Potential one-time costs up to $150,000 to adopt regulations
by CDI (Insurance Fund).
One-time costs of $250,000 to develop standards and adopt
regulations by DMHC (Managed Care Fund).
Ongoing monitoring and enforcement costs to DMHC and CDI
(Managed Care Fund/Insurance Fund) could be in the range of
$50,000 per year for each department for the first two years,
but should be less on an ongoing basis once systems are
routinized.
SUPPORT : (Verified 8/26/14)
American Cancer Society Cancer Action Network (source)
Association of Northern California Oncologists
CONTINUED
SB 1052
Page
5
BayBio
Biocom
California Arthritis Foundation Council
California Chronic Care Coalition
California Healthcare Institute
California Manufacturers and Technology Association
California Pharmacists Association
California Primary Care Association
California Urological Association
Health Access
Hemophilia Council of California
Huntington's Disease Society of America
Lupus Foundation of Southern California
Medical Oncology Association of Southern California
National Multiple Sclerosis Society
Pharmaceutical Research and Manufacturers of America
Project Inform
The Leukemia and Lymphoma Society
OPPOSITION : (Verified 8/26/14)
Aetna
America's Health Insurance Plan
Anthem Blue Cross
Association of California Life and Health Insurance Companies
California Association of Health Plans
Pharmaceutical Care Management Association
ARGUMENTS IN SUPPORT : The American Cancer Society Cancer
Action Network, the sponsor of this bill, writes that currently,
obtaining information to confirm whether a person's drugs are
covered by a qualified health plan is impossible or incredibly
time consuming. BayBio and Biocom, in support, assert this bill
is especially important for patients who may have gone through a
number of therapeutics before finding a specific product that
best manages their condition. For these people, these
supporters argue, having coverage for the right drug becomes a
basic quality of life issue.
ARGUMENTS IN OPPOSITION : In opposition, health plans and
insurers argue that this bill's requirements are unworkable and
in conflict with other requirements related to formularies and
suggest that policymakers should instead focus on controlling
the underlying cost pressures of prescription drugs, considering
CONTINUED
SB 1052
Page
6
the alarmingly high price tag of many new specialty drugs.
Pharmaceutical benefit managers, also in opposition, argue that
the standard formulary template required by this bill differs
from standard formats used nationwide and that implementation of
this bill will be technologically difficult.
ASSEMBLY FLOOR : 74-0, 8/25/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chesbro, Conway, Cooley, Dababneh,
Daly, Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto,
Gomez, Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Hall,
Harkey, Roger Hern�ndez, Holden, Jones, Jones-Sawyer, Levine,
Linder, Logue, Lowenthal, Maienschein, Medina, Melendez,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, John A. P�rez, V. Manuel P�rez, Quirk, Quirk-Silva,
Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting,
Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada,
Atkins
NO VOTE RECORDED: Ch�vez, Dahle, Donnelly, Beth Gaines,
Mansoor, Vacancy
JL:d 8/26/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED