Final Week of Legislative Session: Where We Stand on Key Bills Protecting Consumers

Key patient protection bills hang in the balance this week, as Friday is the deadline for bills to pass from final floor votes in the California legislature to the Governor’s desk.

In this last week of California’s legislative session, amendments have been taken on the key bills impacting health care consumers, but the substance of Health Access’ sponsored bills remains intact: to protect consumers from unfair out-of-pocket costs.

SB 4 #Health4All has been scaled back to include mostly technical enrollment policy and process fixes related to covering all kids in Medi-Cal. Unfortunately, feedback from the Governor’s office has prompted bill author Senator Ricardo Lara to take out a key provision instructing the state to seek a section 1332 waiver to allow undocumented Californians to purchase coverage through Covered CA though with their own money, until next year. This waiver idea has been “parked” in SB 10 (Lara) with another key measure to dedicate state funds to cover all otherwise income-eligible adults regardless of immigration status in Medi-Cal. See SB 4 in its amended version here.

If passed by Friday, September 11, the last day of the session, the Governor would have a month to sign or veto the measures.

AB533 (Bonta) would put an end to the “surprise bills” patients encounter when out-of-network providers administer care within in-network facilities. If patients do the right thing by staying in-network, AB 533 would ensure that they no longer face extreme out-of-network out-of-pocket costs that imperil family finances (see separate AB533 fact sheet.). AB 533 is expected to go to a final floor vote as early as tomorrow. Lined up in support are groups representing consumers, labor, health plans, and others—hopefully enough to counter those opposed, mostly representing some doctors.

Incorporating changes based on conversations with stakeholders as well as on technical assistance from the Administration, last Friday’s amendments include the following:

  • Require health plans to pay out-of-network doctors providing services at in-network hospitals, labs, and other facilities what Medicare pays for the same services.
  • Delay implementation of the prohibition on balance billing by 6 months, beginning July 1, 2016.
  • For consumers who want to consent to out-of-network services, require an estimate of the cost of care at least 3 business days before care is provided.
  • Make technical and clarifying changes.

See current version of AB 533 here.

AB339 (Gordon) would 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.

While some drug cost-sharing would still be high, this legislation would make those costs more manageable. Covered California recently adopted many of these protections, including monthly caps on drug costs, and this bill would extend these patient protections throughout the state (see separate AB339 fact sheet.).

AB 339 has recently taken some amendments and is now on its second reading. It will be eligible to be taken up on the Senate Floor as early as tomorrow with Senator Bill Monning presenting. Recent Amendments include:

  • A January 1, 2020 sunset on the definition of formulary tiers and the cap on cost-sharing: the sunset provides opportunity to adjust the law as the market changes.
  • Recent amendments further specify that the definition of formulary tiers shall only apply to the individual and small group market, which take up a much smaller share of covered lives.
  • Recent amendments also clarify that the definition of formulary tiers need to be aligned with related provisions of the Knox-Keene Act and recent federal guidance confirming that it is in fact discriminatory to place all or most medications that treat a specific medical condition on the highest cost formulary tier.  Based on the latter, the cost sharing cap would prohibit a drug that is on the fourth tier from costing the patient more than $250 out of pocket.
  • To rule out any confusion, AB339 also specifies that drugs can be placed on lower tiers.

See amended version of AB 339 here.

Even with these amendments, AB 339 ends up in a decent place, worth taking all the way to the Governor’s desk. It is important to note that the definition of formulary tiers and the cap on cost-sharing come directly from and mirror the tiers adopted by Covered California earlier this year.  These two provisions reflect an agreement between Assemblymember Gordon and the administration to work within the framework of actions recently taken by Covered California.  This leave the bill in a stronger position when (hopefully) it reaches the Governor’s desk, after Friday.

SB137 (Hernandez), which is co-sponsored by Health Access, Consumers Union, and CPEHN (California Pan-Ethnic Health Network), would 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 when they shop for or change plans or find providers for their care (see separate SB137 fact sheet).  Having taken mostly technical amendments, SB 137 faces the full floor vote today. See SB 137, as amended, here.

AB 1305 (Bonta) Limitations on Cost Sharing in Family Coverage addresses an unfortunate loophole in the ACA affecting individuals enrolled in family coverage. Right now all it takes is one person in the family getting really sick to burn through the family out-of-pocket maximum of $13,200. This leaves healthy family members in the lurch should they need to use any of their benefits.  Leaning on new federal rules and regulations, AB 1305 ensure that each individual patient faces the ACA-set individual out-of-pocket maximum (now $6600), even if they are in a family plan. See amended version of AB 1305 here (also see our fact sheet here). The bill is pending in the Senate.

Already on the Governor’s desk is AB 248 (R. Hernández) Minimum Value Guarantee for Large Employer Coverage, to prohibit the sale of subminimum coverage, defined as coverage with less than 60% actuarial value, by insurers to large employers. Such plans put workers in a double bind: with unmanageable costs for uncovered care; but because they took up that coverage, often unwittingly, they are automatically ineligible for premium subsidies through Covered California. See our fact sheet. This will is sitting on the Governor’s desk.

Tobacco Measures for Public Health and Medi-Cal Financing and Access

A host of tobacco special session bills are up this week, with the tobacco tax measure as the key focus given what it will do to shore up Medi-Cal financing. While the Special Session does not have the same deadlines as the regular order of the legislation, the reality is that legislators will leave Sacramento this Friday not to return until January. Watch our blog for updates on the Special Session tobacco measures as they unfold through the week.