Consumer Protection Bills Move Forward, Mixed News on Transparency

Good news (mostly) for California’s health care consumers and for efforts to improve on the Affordable Care Act (ACA) out of the California Assembly Committee on Health yesterday. The Committee passed two bills designed to extend cost sharing protections to consumers in circumstances not addressed by the ACA.

AB339 (Gordon), a Health Access-sponsored bill, protects consumers, particularly those for whom specialty medications are key to managing chronic conditions, from excessive out-of-pocket costs (get our fact sheet).

As noted by Health Access’ Sawait Hezchias-Seyoum in testimony, the average consumer has $2300 in their savings account. “How can they spend more than what they have in the bank,” she asked the committee, “on a single prescription?” AB339 takes the consumer out of the middle of the payment fight between insurers and drug companies, she argued. Assemblymember Gordon explained, consumers who depend on these drugs should not have to pay the price—and they should have the ACA cost sharing protections as other Californians.

As Anne Donnelly of Project Inform explained in her co-sponsors testimony, AB339 effectively halts discrimination against people with chronic illness. People with HIV or Hepatitis C need a range of medications available so they may be used, as needed, in different combinations. Capping out-of-pocket costs, she said, is the only way to ensure adequate access to these life-sustaining medications.

The bill was opposed by the California Association of Health Plans and some others (CVS, California Chamber of Commerce, Pharmaceutical Care Management Association). Kaiser Permanente opposes the bill to await and conform to the same level of changes proposed in Covered California. The opposition’s principal claims, that AB339 would significantly raise premiums or other cost-sharing, were not borne out, said Beth Capell for Health Access. Recent actuarial analysis completed by Covered California showed that, given the small number of patients that use expensive specialty medications, the impact on the rest of the community-rated market and premiums is minimal. Therefore, adds Capell, there is no need to increase cost sharing to meet the actuarial value standard.

AB339 passed 12-5, along party lines and next goes to Appropriations Committee.

Another bill on specialty drugs, AB463 (Chiu), was held. The bill would have facilitated transparency on the different components or cost centers that make up the final price of specialty drugs: the cost of production, research and development, clinical trials and regulatory and acquisition costs, materials and manufacturing, marketing and advertising, and total profits. Supporters, including Health Access, consumer groups, insurers, labor unions, and business groups, hoped that such intelligence would help lay the groundwork for deeper solutions to the increasingly vexing problem of high cost specialty medications.

Assemblyman Chiu supported the Gordon bill, but indicated in that discussion that there needed to be a “long term solution” to the issue of high prescription drug costs–implicitly invoking his bill–one that will be up for consideration next year. Assemblymember Bonilla pointed out the other side’s argument: “We want innovation! This why (the drugs are) so expensive. Do we want a cure or not?” While all appreciate the benefits of these new medicines, the profit margins of pharmaceutical industry suggest to patient groups and purchasers that the prices need to be as high as they are.

Another important Health Access-sponsored bill, AB1305 Limitations on Cost Sharing in Family Coverage, passed committee unanimously (17-0). AB1305 ensures that the ACA individual out-of-pocket maximum (now $6,600) will apply to individual patients, even if they are in a family plan (which has an overall family out-of-pocket max of $13,200). If it’s just one person in the family that got sick, they shouldn’t be penalized for being in a family plan rather than an individual one—more than enough reason to build on yesterday’s momentum for this bill.

Cost and Quality Database Gets Second Green Light!

The Senate Judiciary Committee passed SB26 Health Care Cost and Quality Database (Hernández) out 6-0 with one absent, taking the next critical step towards transparency on cost and quality in California’s health care systems. SB26 passed its first Senate Health Committee hearing last week. Incorporating several amendments from Health Access and other key stakeholders. SB26 will make valid, timely, and comprehensive health care performance information publicly available and for use to improve the safety, appropriateness, and medical effectiveness of health care, and to provide care that is safe, medically effective, patient-centered, timely, affordable, and equitable. The amendments taken yesterday dealt with equity, the social determinants of health, and privacy. The need for stronger governance still has yet addressed. See our recent blog entry for more details and watch for our forthcoming issue brief.

Other Bills of Interest to Consumers

The same committee passed AB73 Prescriber Prevails (Waldron) and AB68 Medi-Cal: Patient Access to Prescribed Epilepsy Treatments Act (also Waldron), with Health Access amendments adopted, which removed our opposition.