BILL ANALYSIS �
SB 1053
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Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 1053 (Mitchell) - As Amended: June 18, 2014
SENATE VOTE : 25-11
SUBJECT : Health care coverage: contraceptives.
SUMMARY : Requires a group or individual health plan contract or
insurance policy, to provide coverage for all Food and Drug
Administration (FDA) approved methods of birth control for
women, 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 contraception. Specifically, 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, 2015, 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, 2016, to provide coverage for women for all
FDA-approved contraceptive drugs, devices, and products.
Includes over the counter contraception, if prescribed by the
enrollee's provider, voluntary sterilization procedures,
patient education and counseling on contraception, and related
follow-up services, including, but not limited to, management
of side effects, counseling for continued adherence, and
device removal.
3)Prohibits, except as authorized in these provisions, a health
plan or health insurer from imposing any restrictions or
delays on the coverage.
4)Requires benefits for an enrollee or insured to be the same
for an enrollee's or insured's covered spouse and covered
non-spouse dependents.
5)Prohibits a health plan or health insurer, except for a
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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.
6)Authorizes a health plan or health insurer to cover a generic
or preferred drug, device, or product without cost sharing and
impose cost sharing for equivalent non-preferred or branded
drugs, devices, or products. Specifies that, 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.
7)States legislative intent to build on existing state and
federal law to promote gender equity, ensure greater
contraceptive coverage equity, and timely access to all
FDA-approved methods of women's birth control for all
individuals covered by health plan contracts and health
insurance policies in California.
8)States legislative intent that 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)Defines "provider" with respect to health plan contracts or
health insurance policies issued, amended, or renewed on or
after January 1, 2016, 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.
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 FDA-approved
prescription contraceptive methods designated by the plan, if
the plan or policy provides coverage for outpatient
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prescription drug benefits.
3)Requires 2) above 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) above to
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
4)Requires a plan or insurer to also provide coverage for
another FDA-approved medically appropriate contraceptive
method, prescribed by the patient's provider, if the provider
determines that none of the methods designated by the plan or
insurer is medically appropriate.
5)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.
6)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, eliminating symptoms of menopause, or for
prescription contraception that is necessary to preserve the
life or health of an enrollee or insured.
7)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.
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.
FISCAL EFFECT : According to the Senate Appropriations Committee
for a previous version of this bill:
1)Potential one-time costs up to $150,000 to adopt regulations
and potential ongoing costs in tens of thousands to enforce
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the bill's provisions by CDI (Insurance Fund).
2)One-time costs of $125,000 to review plan filings and minor
ongoing costs to enforce the bill's provisions by DMHC
(Managed Care Fund).
3)No anticipated costs to the Medi-Cal Program. Under current
law, Medi-Cal managed care plans are not designated as group
plans and therefore are not subject to the benefit mandate in
this bill.
4)Increased health care premium costs of about $1 million per
year to the California Public Employees' Retirement System
(CalPERS) for state employees and their dependents, according
to the California Health Benefit Review Program (CHBRP).
These costs would be split between the General Fund (55%) and
various special funds (45%).
5)Annual costs of about $3.4 million per year to subsidize
coverage for additional benefits for enrollees in Covered
California health plans. Based on the estimated per member
per month cost of the new benefit mandate by CHBRP and current
enrollment by consumers who are eligible for subsides, the
state would likely pay about $3.4 million per year in subsidy
costs. Over time, as enrollment in Covered California grows,
such costs would increase proportionately with enrollment
growth.
6)Total statewide savings projected to be about $55 million per
year in avoided health care costs. CHBRP estimates that
increased access to contraception under the bill will increase
utilization by enrollees and thus reduce unwanted pregnancies
in the state. This will reduce health care costs for
abortions and labor and delivery. A small portion of those
savings would accrue to CalPERS, offsetting some or all of the
increased costs to CalPERS. It is important to note that any
cost savings associated with subsidized coverage through
Covered California would likely reduce the long-term cost of
coverage, but would not reduce the state's obligation to pay
for the mandated benefit.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill
builds on current state and federal law to further
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California's leadership in expanding access to birth control
by requiring health insurance carriers to cover the full range
of FDA-approved contraception for women without cost sharing,
delays or denial of coverage. The Patient Protection and
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. The author asserts that
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.
2)BACKGROUND . 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 mandate legislation. CHBRP was
created in response to AB 1996. The CHBRP analysis was
performed on the as introduced version of the bill, which
included coverage for male contraception, including
vasectomies and male condoms. The current version of the bill
is far more limited in scope, which will reduce cost impact.
a) Coverage impacts. Over the course of a year, sexually
active women of reproductive age not using contraceptive
methods have an 85% chance of becoming pregnant. Among
sexually active women with previous contraceptive use, the
unintended pregnancy rate is 46% over the course of a year.
The list of FDA-approved contraception includes 20
different types in five contraceptive method categories.
Categories of contraception for women include barrier
methods (such as diaphragms), hormonal contraceptive
methods (such as oral birth control, rings, or patches),
emergency contraceptive methods (such as Plan B),
implanted devices (such as IUD), or permanent contraceptive
methods (such as tubal ligation).
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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 this bill. Currently,
97.5% of the 16.2 million enrollees have coverage for any
female contraceptives without cost sharing, including
coverage through a family member.
b) Cost impacts. Total net annual expenditures are
estimated to increase by $32.2 million or 0.024%.
Increased premiums are estimated to total $81 million, with
the expected average increase in premiums across the
commercial market segments between $0.35 and $0.71 per
member per month. The cost savings due to averted
deliveries through increased use of contraceptives are
estimated to be $149 million. These estimates were based on
the introduced version of the bill, and will decrease due
to removal of male contraceptive coverage.
c) Public health impacts. 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 this bill will result in 51,298
averted unintended pregnancies and 20,006 averted
abortions. 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.
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.
3)SUPPORT . California Family Health council and National Health
Law Program, the cosponsors of the bill, write that this bill
would improve access to the full range of FDA-approved methods
of contraception for all individuals in California with health
insurance by building on current state and federal law to
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require insurance coverage for all FDA-approved methods,
voluntary sterilization, and comprehensive contraceptive
counseling without restrictions or cost-sharing. The
California Primary Care Association states that according
prevailing standards of care, a woman's choice in consultation
with her health care provider should be the primary factor in
determining her contraceptive method. Planned Parenthood and
other groups in support point out that insurance-related
denials or delays in access to a chosen method increase the
risk of unintended pregnancy and undermine the intent of the
contraceptive coverage requirement.
4)OPPOSITION . The Alliance of Catholic Healthcare states 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 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. Molina
Healthcare asserts that by requiring them to cover all
FDA-approved contraceptives, the mandate of this bill would
limit their negotiating leverage with pharmaceutical
manufacturers and disrupt their pharmacy cost-reduction
strategies.
5)PREVIOUS LEGISLATION . AB 2348 (Mitchell), Chapter 460,
Statutes of 2012, allows registered nurses to dispense and
administer hormonal contraceptives under a standardized
procedure, as specified, and allows registered nurses to
dispense drugs and devices upon an order by a certified
nurse-midwife, a nurse practitioner, or a physician assistant
while functioning within specified clinic settings.
REGISTERED SUPPORT / OPPOSITION :
Support
California Family Health Council (cosponsor)
National Health Law Program (cosponsor)
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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 Academy of Physician Assistants
California Communities United Institute
California Latinas for Reproductive Justice
California Nurse Midwives Association
California Primary Care Association
California School Employees 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 Affiliates of California
Planned Parenthood Mar Monte
Planned Parenthood of Orange and San Bernardino Counties
Planned Parenthood of Santa Barbara, Ventura & San Luis Obispo
Counties, Inc.
Planned Parenthood of the Pacific Southwest
Planned Parenthood Pasadena and San Gabriel Valley
Six Rivers Planned Parenthood
Women's Foundation
2 individuals
Opposition
Alliance of Catholic Health Care
Association of California Life and Health Insurance Companies
California Association of Health Plans
California Catholic Conference
California Chamber of Commerce
California Right to Life Committee, Inc.
Molina Healthcare of California
Analysis Prepared by : Dharia McGrew / HEALTH / (916) 319-2097
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