California Governor Jerry Brown yesterday signed four patient protection bills that will address unfair out-of-pocket costs, including out-of-network bills due to inaccurate provider directories, huge cost-sharing for specialty drugs, double deductibles in family plans, as well as extend protections against “junk insurance” to benefits offered by large employers.
These Health Access-sponsored bills address some of the most common complaints we continue to hear from consumers. Under these new laws, patients will have better information, less out-of-pocket costs, and more financial security. These bills include:
- SB 137 (Hernandez) will require updated, standardized, and accurate provider directories. Co-sponsored by California Pan-Ethnic Health Network, Consumers Union, and Health Access California (see separate SB137 fact sheet), SB 137 will address the common insurance industry practice of posting inaccurate, out-of-date, and misleading provider directories. Without up-to-date directories, health care consumers cannot make decisions about what plan they are buying, or which provider to go to. Without an accurate directory of the network, consumers can’t be sure they are staying in-network and avoiding significant out-of-network costs. We don’t allow grocery stores to sell food mislabeled with the wrong ingredients; we shouldn’t allow insurers to sell health plans without accurate provider directories.
- AB 339 (Gordon) will require insurers to cover medically necessary prescription drugs and limit cost-sharing on specialty drugs and other needed medications. The bill ensures coverage for drugs for which there is no therapeutic equivalent; prohibits placing most or all of the drugs to treat a condition on the highest cost tiers of a formulary; requires formularies to be based on clinical guidelines and peer-reviewed scientific evidence; places monthly cap on specialty drug cost sharing; and more. This new law will help patients with chronic conditions get the medications they need, without facing extreme cost-sharing (see separate AB339 fact sheet).
- AB 1305 (Bonta) will ensure an individual patient does not face higher out-of-pocket costs just because they are in family plans, closing a potential loophole in the out-of-pocket maximum protections in the Affordable Care Act (see separate AB1305 fact sheet). The bill will ensure that the $6,600 maximum out-of-pocket cost cap applies to individuals in family plans, not just individual plans.
- AB 248 (Roger Hernández) will extend consumer protections to ensure large employers do not offer “junk insurance” that does not cover basic benefits. Federal and state law already hold insurance sold to small employers and individuals to a basic standard (60% actuarial value), but under current law insurers are free to sell large employers “junk” plans. When large employers offer such subminimum plans, employees are stuck with thousands of dollars in out-of-pocket costs. If an employee accepts that coverage, even if it is subminimum coverage, the employee is automatically ineligible for premium subsidies through Covered California—and the employer gets off the hook on the employer responsibility penalty (see AB 248 fact sheet). Employer responsibility is foundational to the success of the Affordable Care Act and California’s more ambitious health reform goals—but this responsibility needs to be shared by employers, large and small. With this new law, large employers will no longer exploit the loophole in the ACA that leaves mostly low-income workers without the guarantees that the federal law is intended to provide.
This legislation signed by Governor Brown will provide relief for Californians who shop for coverage; for patients with chronic conditions and expensive medications; for individuals enrolled in family plans; for workers in small firms; and the health system as a whole. These protections are even more crucial now with more newly covered low and middle income families living paycheck to paycheck, with nothing left to pay for unintended out-of-network costs, uncovered benefits, or an extreme cost sharing for prescription drugs.
Together these bills take another critical step in addressing excessive out-of-pocket costs, one of the top complaints and concerns that consumer advocates continue to hear about. These bills close loopholes in Obamacare, and in fact use the new law as a platform for improved patient protection.VIEW THE FILE Insurers