BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1053
AUTHOR: Mitchell
AMENDED: April 22, 2014
HEARING DATE: April 30, 2014
CONSULTANT: Moreno
SUBJECT : Health care coverage: contraceptives.
SUMMARY : Requires a group or individual health plan contract or
insurance policy, except a specialized health plan contract or
insurance policy, that is issued, amended, or delivered on or
after January 1, 2015, to provide coverage for all Food and Drug
Administration approved contraceptive drugs, devices, and
products, including drugs, devices, and products available over
the counter as prescribed by the enrollee's provider, voluntary
sterilization procedures, patient education and counseling on
contraception, and follow-up services related to the drugs,
devices, products, and procedures covered under this bill,
including, but not limited to, management of side effects,
counseling for continued adherence, and device removal.
Existing law:
1.Regulates health plans through the Department of Managed
Health Care (DMHC) and health insurance policies through the
California Department of Insurance (CDI).
2.Requires group and individual health plan contracts or health
insurance policies, except specialized plans or policies, that
are issued, amended, renewed, or delivered on or after January
1, 2000 to provide coverage for a variety of federal Food and
Drug Administration (FDA) approved prescription contraceptive
methods designated by the plan, if the plan or policy provides
coverage for outpatient prescription drug benefits.
3.Requires, if the patient's provider determines that none of
the methods designated by the plan or insured is medically
appropriate, the plan or insurer to also provide coverage for
another FDA approved medically appropriate prescription
contraceptive method prescribed by the patient's provider.
4.Requires outpatient prescription benefits for an enrollee or
insured to be the same for an enrollee's or insured's covered
spouse and non-spouse dependents.
Continued---
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5.Prohibits anything in the law from being construed to exclude
coverage for prescription contraceptive supplies ordered by a
health care provider with prescriptive authority, for reasons
other than contraceptive purposes, such as decreasing the risk
of ovarian cancer or eliminating symptoms of menopause, or for
prescription contraception that is necessary to preserve the
life or health of an enrollee or insured.
6.Prohibits anything in the law from being construed to deny or
restrict in any way DMHC's or CDI's authority to ensure plan
compliance with the law when a plan or insurer provides
coverage for prescription drugs.
7.Requires 2) to apply to disability insurance policies that are
defined as health benefit plans, as specified, except that for
accident only, specified disease, or hospital indemnity
coverage, coverage for benefits under 2) apply to the extent
benefits are covered under the general terms and conditions
that apply of all other benefits under the policy. Prohibits
anything in the law from being construed as imposing a new
benefit mandate on accident only, specified disease, or
hospital indemnity insurance.
8.Authorizes a religious employer to request a health plan
contract or insurance policy without coverage for FDA approved
contraceptive methods that are contrary to the religious
employer's religious tenets, as specified.
This bill:
1.Limits the existing mandate on prescription contraceptive
coverage to plans and insurance policies issued, amended,
renewed, or delivered on or after January 1, 2000 through
December 31, 2014, inclusive.
2.Requires a group or individual health plan contract or
insurance policy, except a specialized health plan contract or
insurance policy, that is issued, amended, or delivered on or
after January 1, 2015, to provide coverage for all FDA
approved contraceptive drugs, devices, and products, including
drugs, devices, and products available over the counter as
prescribed by the enrollee's provider, voluntary sterilization
procedures, patient education and counseling on contraception,
and follow-up services related to the drugs, devices,
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products, and procedures covered under this bill, including,
but not limited to, management of side effects, counseling for
continued adherence, and device removal.
.
3.Prohibits a health plan or health insurer, except for a
grandfathered health plan or health insurer subject to this
bill, from imposing a deductible, coinsurance, copayment, or
any other cost-sharing requirement on the coverage provided
pursuant to this bill.
4.Authorizes a health plan or health insurer to cover a generic
drug, device, or product without cost sharing and impose cost
sharing for equivalent non-preferred or branded drugs,
devices, or products. However, if a generic version of a
drug, device, or product is not available, or is deemed
medically inadvisable by the enrollee's provider, requires a
health plan or health insurer to provide coverage for the
non-preferred or brand name drug, device, or product without
cost sharing.
5.Authorizes a health plan or health insurer to require a
prescription to trigger coverage of FDA approved
over-the-counter contraceptive methods and supplies under this
bill.
6.Prohibits, except as authorized in this bill, a health plan or
health insurer from imposing any restrictions or delays on the
coverage required under this bill.
7.Requires benefits for an enrollee or insured under this bill
to be the same for an enrollee's or insured's covered spouse
and covered non-spouse dependents.
8.Finds and declares that the Legislature intends to build on
existing state and federal law to ensure greater contraceptive
coverage equity and timely access to all FDA-approved methods
of birth control for all individuals covered by health plan
contracts and health insurance policies in California; and
medical management techniques such as denial, step therapy, or
prior authorization in public and private health care coverage
can impede access to the most effective contraceptive methods.
9.Deletes "prescription" before contraceptive supplies, drugs
and contraception in existing law.
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10.Replaces "health care provider with prescriptive authority"
with "provider acting within his or her scope of practice" in
existing law.
11.Defines "provider" with respect to health plan contracts or
health insurance policies issued, amended, or renewed on or
after January 1, 2015, as an individual who is certified or
licensed pursuant to the Business and Professions Code, as
specified, or an initiative act referred to in that division,
or the Health and Safety Code, as specified.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, SB 1053 builds
on current state and federal law to further California's
leadership in expanding access to birth control by requiring
health insurance carriers to cover the full range of FDA
approved contraception for all individuals in California with
health plans without cost sharing, delays or denial of
coverage. The Affordable Care Act (ACA) requires most health
insurance carriers to cover all FDA approved birth control
methods, including sterilization, without out-of-pocket costs
for enrollees. However, lack of clarity in the federal law has
led to inadequate and inconsistent implementation. Federal
regulations permit carriers to employ "reasonable medical
management techniques" but do not define the term or provide
clear guidance about when medical management in the context of
contraceptive coverage can be used. This flexibility and
ambiguity has led to a patchwork of contraceptive coverage
policies throughout the state that disfavor or create barriers
to particular methods, going against the intent of the ACA
contraceptive provision and depriving women of their
reproductive autonomy. The ACA also failed to recognize the
important role men play in preventing unintended pregnancy.
This bill seeks to address this inequity by requiring coverage
of vasectomy and other male birth control services and methods
without cost-sharing.
2.California Health Benefits Review Program (CHBRP) analysis.
AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the
University of California to assess legislation proposing a
mandated benefit or service and prepare a written analysis
with relevant data on the medical, economic, and public health
impacts of proposed health plan and health insurance benefit
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mandate legislation. CHBRP was created in response to AB 1996.
Below are major findings of CHBRP's analysis.
a. Medical Effectiveness. Most of the effectiveness
research related to contraceptive methods is not classified
as high quality as defined by CHBRP methodology. This is
due, in part, to the prevailing opinion that it is not
ethical to randomize women who do not want to get pregnant
into groups using a placebo contraceptive. Therefore, the
comparison between a selected contraceptive and no
contraceptive has to be estimated indirectly using
published data on pregnancy rates among women using no
contraception. Based on the results of these comparisons,
it is reasonable to conclude that using any of the
contraceptive methods listed below is more effective than
not using any contraception in preventing unintended
pregnancies.
Summary of findings
Over the course of a year, sexually active women of
reproductive age not using contraceptive methods have an 85
percent chance of becoming pregnant. Among sexually active
women with previous contraceptive use, the unintended
pregnancy rate is 46 percent over the course of a year.
i. Barrier contraceptive methods. There are six
FDA approved barrier methods: male condom, female
condom, diaphragm, sponge, cervical cap, and
spermicide. Unintended pregnancy rates over the course
of a year for barrier methods range from 12 percent to
24 percent.
ii. Hormonal contraceptive methods. The FDA
approved hormonal methods are oral contraceptives,
contraceptive patch (Ortho Evra), the vaginal
contraceptive ring (NuvaRing), and contraceptive
injections (Depo-Provera, Depo-Subq Provera). Over
the course of a year, unintended pregnancy rates for
hormonal contraceptive methods range from 6 percent to
9 percent.
iii. Emergency contraception. There are two types
of emergency contraceptive pills: levonorgestrel (Plan
B, Plan B One-Step, Next Choice, Next Choice One
Step) and ulipristal acetate (Ella). Among women
taking emergency contraceptive pills, 1.8 percent to
2.6 percent became pregnant. The copper intrauterine
device (IUD) (ParaGard) is also used for emergency
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contraception although it is not FDA approved for this
purpose.
iv. Implanted devices. The FDA approved types are
the copper IUD (ParaGard), the
levonorgestrel-releasing IUD (Mirena) the low dose
levonorgestrel-releasing IUD (Skyla) and the
etonogestrel implantable rod (Implanon, Nexplanon).
Over the course of a year, unintended pregnancy rates
for these contraceptives range from 0.05 percent to
0.8 percent.
v. Permanent contraceptive methods include
surgical sterilization for men (vasectomy),
laparoscopic sterilization for women (tubal ligation),
and hysteroscopic permanent sterilization implant for
women (Essure). Over the course of a year, unintended
pregnancy rates for sterilization range from 0.1
percent to 0.5% percent
a. Benefit Coverage, Utilization, and Cost Impacts. To
perform the cost analysis for this bill, CHBRP measured
current cost sharing (as a percentage of the total cost)
for contraceptives. CHBRP modeled compliance with the
mandate as resulting in the expansion of benefit coverage,
and the prohibition of any cost sharing for covered
contraceptives.
Coverage impacts
i. Out of the 23.4 million enrollees in
DMHC-regulated plans and CDI-regulated policies
subject to state mandates, 16.2 million enrollees are
subject to SB 1053.
ii. Currently, 97.5 percent of 16.2 million enrollees
have coverage for any female contraceptives without
cost sharing, including coverage through a family
member. Among these 16.2 million enrollees, 99.3
percent have coverage for vasectomies with a certain
level of cost sharing. Zero percent of these enrollees
have coverage for male condoms.
iii. Because SB 1053 would expand contraceptive
coverage, CHBRP estimates that 100 percent of these
16.2 million enrollees will have coverage for all
contraceptive methods without any cost sharing after
the mandate.
iv. CHBRP estimates that coverage for contraceptives
would increase:
a. From 97.7 percent to 100 percent among
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female enrollees utilizing female contraceptives.
b. From 99.3 percent to 100 percent for
vasectomies among male enrollees utilizing
vasectomies.
c. From 0 percent to 100 percent among male
enrollees utilizing male condoms.
Utilization impacts
i. 183,332 enrollees would newly use contraceptives
following the implementation - this would be an
increase of 7.4 percent compared to the 2,480,122
enrollees using contraceptives in 2014 regardless of
coverage.
ii. 1,209,662 covered female enrollees would use
contraceptives following implementation - this would
be an increase of 80,190 or 7.1 percent compared to
the 1,129,472 covered females who used contraceptives
in 2014.
iii. 53,785 or 4.65 percent additional female
enrollees will newly use contraceptives in 2015
following implementation, compared to the 1,155,877
female enrollees using contraceptives in 2014
regardless of coverage.
iv. 1,453,972 covered male enrollees would use
contraceptives following implementation. This is an
increase of 1,425,110 or 4,969 percent compared to the
28,862 covered males using contraceptives in 2014,
when male condoms were not a covered benefit.
v. Although the number of covered users is expected
to increase substantially (as described above) CHBRP
projects that 129,547 or 9.78 percent additional male
enrollees will newly use contraceptives in 2015
following implementation, compared to the 1,324,245
male enrollees using contraceptives in 2014 regardless
of coverage. These utilization impacts are estimated
based on the two sets of assumptions below:
a. For all contraceptive types except male
condoms, CHBRP applied premandate utilization rates
among enrollees with coverage for all enrollees
after the mandate regardless of coverage status in
the premandate period. These premandate utilization
rates among enrollees with coverage are based on
Milliman's analysis of 2012 California claims data.
b. CHBRP estimates a 10 percent increase in
male condom utilization based on increased awareness
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and marketing of the mandate.
Cost Impacts
i. CHBRP assumes that the mandate will have no
impact on the per-unit costs for any specific
contraceptive type.
ii. Total net annual expenditures are estimated to
increase by $31,201,000 or 0.024 percent for enrollees
with DMHC-regulated plans and CDI-regulated policies.
iii. The expected average increase in premiums across
the commercial market segments is between 0.073
percent and .111 percent (or $0.35 and $0.71) per
member per month (PMPM).
iv. The expected average increase in insurance
premiums is 0.061 percent for CalPERS HMOs plans. For
these publicly funded plans, the increase is estimated
at $0.32 PMPM.
v. The estimated premium increases would not have a
measurable impact on the number of persons who are
uninsured.
a. Public Health Impacts.
Short-term impacts
i. Based on established contraceptive effectiveness
rates, estimates of unintended pregnancy outcomes from
the literature, and projected increases in
utilization, CHBRP calculated the estimated number of
unintended pregnancies and abortions averted by the
mandate. Assuming typical use of each contraceptive
method among the projected additional contraceptive
users, CHBRP estimates that SB 1053 will result in
51,298 averted unintended pregnancies and 20,006
averted abortions.
ii. The reduction in unintended pregnancies will also
result in a reduction in negative health outcomes
associated with unintended pregnancy, including
delayed prenatal care, low birthweight, and preterm
birth.
iii. There are broad contraceptive and
non-contraceptive benefits beyond preventing
unintended pregnancies. Contraceptive use allows for
delayed childbearing and achieving desired birth
spacing, which is associated with improved maternal
and fetal health outcomes, as well as noncontraceptive
health benefits, including treating
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menstruation-related symptoms, reducing risk of some
cancers, and protecting against sexually transmitted
infections (STIs).
iv. The use of contraceptives is not without harm,
particularly among users of hormonal methods. The
additional enrollees using hormonal contraceptive
methods may be at higher risk of cardiovascular
disease and side effects such as headache and weight
gain. Additionally, some enrollees newly using barrier
methods or some IUDs may be at increased risk of
allergic reaction (to latex, copper, etc.) and
additional enrollees obtaining sterilization may be at
increased risk of possible post-operative
complications (however, these complications are rare).
Any contraceptive-related harm must be weighed against
the broad contraceptive and non-contraceptive benefits
of use.
v. No single contraceptive method is highly
effective at preventing both unintended pregnancy and
protecting against sexually transmitted infections.
While newer contraceptive methods such as IUDs are
highly effective at preventing unintended pregnancy,
male condoms remain the primary method protecting
against STIs. While this mandate may increase
utilization of more effective contraceptive methods,
such as oral contraceptives and IUDs, research has
found that individuals using an effective method as
their primary birth control method are less likely to
use male condoms consistently, which could
theoretically increase the risk of acquiring an STI.
vi. The mandate would shift some contraceptive costs
from enrollees to health plans and insurers through
reduced cost sharing. CHBRP estimates a reduction in
out-of-pocket expenses of approximately $50.2 million
consisting of a reduction of $46.5 million in enrollee
expenditures for previously non-covered benefits and a
reduction of nearly $3.7 million in enrollee
out-of-pocket expenditures for previously covered
benefits.
vii. While there are gender disparities in the
utilization of sterilization and this mandate would
eliminate cost sharing for male sterilization, CHBRP
does not estimate a significant increase in male
sterilization due to this mandate; therefore, SB 1053
would not impact gender disparities.
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viii. Although there are racial/ethnic disparities in
contraceptive utilization and unintended pregnancy
rates, and an increase in utilization is projected,
CHBRP is unable to project utilization by
race/ethnicity due to an unknown baseline
racial/ethnic distribution of the insured population
affected by the mandate. To the extent that SB 1053
reduces disparities that are due to coverage
differences (but not due to preferences about specific
contraceptive coverage) and increases utilization of
more effective contraceptive methods such as IUDs,
CHBRP estimates a reduction in the racial/ethnic
disparity in contraceptive use and unintended
pregnancy in the first year, post-mandate; however,
the magnitude is unknown.
Long-term impacts
i. In the long term, assuming that SB 1053 increases
utilization of contraceptives beyond the first year
post-mandate, CHBRP projects a decrease in the rate of
unintended pregnancies and abortions.
ii. In the long term, assuming that SB 1053 increases
utilization of contraceptives beyond the first year
post-mandate, a decrease in the rate of unintended
pregnancies will decrease the risk of maternal
mortality, adverse child health outcomes, behavioral
problems in children, and negative psychological
outcomes associated with unintended pregnancies for
both the mothers and children. An increase in
contraceptive utilization would also allow women to
delay childbearing and pursue additional education,
spend additional time in their careers and have
increased earning power. Additionally, the increased
contraceptive utilization is likely to produce
substantial long-term cost reduction due to averted
deliveries.
iii. The use of contraceptives is not without harm;
however, any harm must be weighed against the broad
health benefits of contraceptive use. In the long
term, assuming that SB 1053 increases utilization of
contraceptives beyond the first year post-mandate,
individuals using contraceptives may be at higher risk
of cardiovascular disease associated with the use of
specific contraceptives. While increased condom use is
associated with decreased risk of acquiring an STI and
some research indicates that increased utilization of
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effective contraceptive methods decreases condom use,
CHBRP cannot estimate the increased utilization of
specific contraceptive methods beyond the first year
post-mandate and therefore cannot estimate the
directionality of any impact on STIs.
1.Interaction with the ACA. The ACA requires that
non-grandfathered group and individual health insurance plans
and policies cover certain preventive services without cost
sharing when delivered by in-network providers and as soon as
12 months after a recommendation appears in one of four
specified sources. One of the sources that the ACA refers to
in determining which preventive services are required is the
Health Resources and Services Administration (HRSA)-supported
health plan coverage guidelines for women's preventive
services. The HRSA guidelines include language that would
require plans and insurers to cover "all FDA approved
contraceptive methods, as prescribed by a physician."
Depending on how this language is interpreted, these
guidelines could require all FDA approved contraceptive types
to be covered, or they could be interpreted to require a broad
spectrum of FDA approved contraceptives, including at least
one contraceptive type in each FDA approved contraceptive
method category. This bill explicitly requires coverage of
all FDA approved drugs, devices, and products, as well as
voluntary sterilization procedures, in each FDA approved
contraceptive category. According to CHBRP, depending on how
the HRSA guidelines are interpreted, CHBRP states that this
mandate could be broader than what is required by the ACA.
2.Essential health benefits and state benefit mandates.
Effective January 1, 2014, federal law requires Medicaid
benchmark and benchmark equivalent plans, plans sold through
the Exchange, and carriers providing coverage to individuals
and small employers to ensure coverage of EHBs, as defined by
the Secretary of the Department of Health and Human Services
(HHS). HHS is required to ensure that the scope of EHBs is
equal to the scope of benefits provided under a typical
employer plan, as determined by the Secretary. Under federal
law, EHBs must include 10 general categories and the items and
services covered within the categories:
a. Ambulatory patient services;
b. Emergency services;
c. Hospitalization;
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d. Maternity and newborn care;
e. Mental health and substance use disorder
services, including behavioral health treatment;
f. Prescription drugs;
g. Rehabilitative and habilitative services and
devices;
h. Laboratory services;
i. Preventive and wellness services and chronic
disease management; and,
j. Pediatric services, including oral and vision
care.
SB 951 (Hernandez), Chapter 866 Statutes of 2012, and AB 1453
(Monning), Chapter 854, Statutes of 2012, designate the Kaiser
Small Group health plan to serve as California's EHB benchmark
plan.
According to CHBRP, since the requirements of this bill are
potentially broader than what is required in the
HRSA-supported health plan coverage guidelines for women's
preventive services, CHBRP believes that its requirements
could exceed EHBs. Specifically, the bill would require all
health plans and insurers to provide coverage for all FDA
approved contraceptive "drugs, devices, products, and
voluntary sterilization procedures" within each FDA approved
contraceptive method category. The HRSA preventive services
guidelines requires coverage of "all FDA approved
contraceptive methods." To the extent that these guidelines
are interpreted to mean that coverage must be provided for "at
least one" contraceptive type within each method category,
then this bill could exceed what is currently being required
by EHBs.
CHBRP also states that the HRSA preventive services guidelines
do not require plans and insurers to provide coverage for male
contraceptives, such as condoms and vasectomies. Both Basic
Health Care Services and Kaiser HMO 30 include coverage for
vasectomies with cost-sharing requirements, but do not include
coverage for male condoms. Since SB 1053 would require all
plans and insurers to provide coverage for all FDA approved
male contraceptives, including male condoms, CHBRP believes
that the bill's mandate would likely exceed the current
requirements of EHBs.
1.Support. The National Health Law Program states that this
bill builds on current California and federal law to improve
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access to a full range of contraceptive methods for women and
men, and to ensure that every individual has access to their
choice of contraception without barriers, delays, or
cost-sharing. A number of Planned Parenthood affiliates write
that the ACA includes a women's preventive care provision that
requires most health insurance carriers to provide the full
range of FDA-approved birth control methods without any
out-of-pocket costs, however a lack of clarity in federal
regulations has led to inadequate and inconsistent
implementation of this law. The Los Angeles Trust for
Children's Health, National Council of Jewish
Women-California, Physicians for Reproductive Health,
California Latinas for Reproductive Justice, California
School-Based Health Alliance, and American Civil Liberties
Union of California states that lack of clarity in the law has
led to inadequate and inconsistent implementation, allowing
carriers to employ varying medical management techniques and
practices that create barriers to access. Supporters state
that these practices include requiring a woman to try a
different method before she can get coverage for her method of
choice, wrongfully charging co-pays, and denials of certain
methods. California Nurse-Midwives Association states that
reproductive management needs to remain between the health
care provider and the women based upon her individual needs
according to her history and physical findings and should be
afforded a full range of reproductive choices. American
Association of University Women - California states that the
full access to all contraceptives afforded by this bill will
yield better compliance and better results, allowing women to
be able to lead their lives according to their own
reproductive life plan.
6.Opposition. The California Catholic Conference states that
the "barriers" referenced by the author are not unique to
contraceptives, but familiar to any patient with insurance and
it is important to remember that some barriers exist in order
to protect the health of the user. The Alliance of Catholic
Healthcare stares that this bill contains mandates that are
different than the federal mandate, including in the
definition of religious employer, no accommodation for
non-profit religious organizations, and expanded coverage for
contraceptives. The Association of California Life and Health
Insurance Companies cites CHBRP cost estimates of this bill
and states that they generally oppose all benefit mandates
because, while they sympathize with the intent, mandates
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increase the already high cost of care for everyone and
eliminate the flexibility an employer would otherwise have to
pick benefits that best address the needs of his or her
employees. The California Association of Health Plans states
that this bill increases premiums and likely conflicts with
federal guidelines. The California Chamber of Commerce
asserts that employers are already facing tough choices about
how best to fulfill their responsibilities under the ACA and
absorb many new health care cost pressures, and this is the
wrong time to add to that burden a new mandate.
SUPPORT AND OPPOSITION :
Support: California Family Health Council (co-sponsor)
National Health Law Program (co-sponsor)
American Association of University Women - California
American Civil Liberties Union of California
American Congress of Obstetricians and Gynecologists,
District IX
American Federation of State, County and Municipal
Employees, AFL-CIO
California Academy of Family Physicians
California Communities United Institute
California Latinas for Reproductive Justice
California Nurse Midwives Association
California Primary Care Association
California School-Based Health Alliance
Center on Reproductive Rights and Justice at UC
Berkeley School of Law
Los Angeles Trust for Children's Health
NARAL Pro-Choice California
National Council of Jewish Women-California
National Health Law Program
Physicians for Reproductive Health
Planned Parenthood Advocacy Project Los Angeles County
Planned Parenthood Mar Monte
Planned Parenthood Affiliates of California
Planned Parenthood of Orange and San Bernardino
Counties
Planned Parenthood of the Pacific Southwest
Planned Parenthood of Santa Barbara, Ventura & San
Luis Obispo Counties, Inc.
Planned Parenthood Pasadena and San Gabriel Valley
Six Rivers Planned Parenthood
Oppose: Alliance of Catholic Health Care
Association of California Life and Health Insurance
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Companies
California Association of Health Plans
California Catholic Conference
California Chamber of Commerce
California Right to Life Committee, Inc.
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