California Governor Jerry Brown has signed into law an important patient protection to prevent unexpected mid-year hikes in cost-sharing. SB 923 by Senator Hernandez prohibits a health plan or insurer from changing any cost sharing requirements (such as co-pays and deductibles) during a plan year, extending a law that is already in place for premium increases.
Being able to plan and budget for their annual out-of-pocket expenses for medical services and prescription drugs, ensures that consumers are not blindsided by an unexpected increase in the middle of a plan year. This new law will give families peace of mind in the predictability of their health care costs.
SB 923 received strong bipartisan support in both legislative houses.
Prior to the implementation of Affordable Care Act in California, health plans routinely increased premiums multiple times in a year, as well as changed benefits and cost-sharing. California’s implementation of the Affordable Care Act now prevents these mid-year premium increases by enacting a “rate year” so the premium is the same for an entire year, so that the 2.3 million consumers who purchase their own coverage and the 11.8 million Californians who get coverage through employment can predict their yearly health care costs, and make appropriate shopping comparisons during open enrollment. SB 923 extends this predictability and security to cost-sharing designs as well. Cost-sharing design refers to what the copays or coinsurance are for a specific benefit: for example, the copay for a generic drug is $10 or $25, the copay for the brand name drug is $20 or $50 while the coinsurance for a hospital stay is 20% of the cost.
This bill is part of a package of bills aimed at protecting patients’ rights that have been sent to the governor or still pending in the legislature.
SB 923 will take effect on January 1, 2017.