CA Consumers Could Save Millions Under Bills Up in Assembly Health Committee Tuesday

On Tuesday, March 26th, the Assembly Health Committee will hear legislation likely to provide significant savings to California patients and the public.
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For Immediate Release: Monday, March 25th, 2019

CONTACT: 

Anthony Wright, executive director, Health Access California, awright@health-access.org, 916-870-4782 (cell)

Rachel Linn Gish, director of communications, Health Access California, rlinngish@health-access.org, 916-532-2128 (cell)

CA ASSEMBLY HEALTH COMMITTEE TO VOTE TUESDAY ON KEY HEALTH CARE COST BILLS, TO SAVE CA CONSUMERS HUNDREDS OF MILLIONS OF DOLLARS, HOLD INSURERS & DRUG COMPANIES ACCOUNTABLE

On Tuesday, CA Assembly Health Committee will vote on AB 731 (Kalra) to collect better data on premiums and enhance health insurance rate review, expanding it to protect 10 million more Californians in large group plans from being charged unreasonable rates.

o    Rate review for individual and small group market has already saved $417 million for a smaller set of California consumers.

Committee will also vote on AB 824 (Wood) to discourage drug companies from paying generic manufacturers to delay the entry of competitive alternatives– a practice that keeps the price of prescriptions artificially high.

o    FTC says Americans pay at least $3.5 billion a year more in drugs because of these “pay for delay” practices. 

SACRAMENTO, CA — On Tuesday, March 26th, the Assembly Health Committee will hear legislation likely to provide significant savings to California patients and the public. Strongly backed by a broad coalition of consumer and community organizations and others, these bills require greater oversight and transparency from insurers and drug companies, building on proven strategies to prevent unreasonable premiums and prescription drug prices.

AB 731, by Assemblymember Ash Kalra, seeks to expand and enhance health plan rate review, which has helped save consumers hundreds of millions of dollars by preventing unreasonable rate increases for those in the individual and small group insurance markets. The bill would require additional information and transparency from health plans, and extend rate review to the large group market of ten million Californians. More health plans would have to justify that their rates are reasonable, and provide more data, including by region, and by how much they pay providers in comparison to Medicare.

Also being heard in committee on Tuesday is AB 824, by Assembly Health Committee chair Jim Wood, and sponsored by Attorney General Xavier Becerra, to prevent harmful “pay for delay” practices. This is when pharmaceutical companies pay generic drug makers to slow down or stop lower-cost alternative medications from entering the marketplace as options for consumers. The bill would put the burden of proof on the drug companies to provide the information that any such payments were not for “pay-for-delay” anti-competitive purposes. The Federal Trade Commission estimated Americans pay $3.5 billion more for medications because of these practices, and many believe the figure has gone up significantly since that finding.

Consumer, community, patient, and purchaser organizations have prioritized this legislation, as part of a broader Care4All California package to get to a universal, affordable, and accountable health care system. Other bills to help lower costs for consumers, such as legislation to crack down on “surprise” emergency room bills, will be heard in Health Committee in the next few weeks.

“By building on proven practices and increasing oversight of health insurers, hospitals, and prescription drug companies, our legislators can provide significant savings of hundreds of millions of dollars for California patients,” said Anthony Wright, Executive Director of Health Access California, the statewide health care consumer advocacy coalition. “While Washington DC debates what to do about drug prices and premiums, California can take action this year with these bills to get us closer to a health system that is affordable and accountable to all.”

ON AB 731, RATE REVIEW: “Health care premiums continue to rise, yet ten million Californians who work for larger employers don’t have the benefit of the state reviewing those rate hikes to ensure they are reasonable. California consumers have saved hundreds of millions of dollars under the existing rate review by regulators, and this bill would expand that oversight and benefit to three times the people,” said Yasmin Peled, policy advocate for Health Access California, a co-sponsor of the AB 731 with California Labor Federation, SEIU, UNITE HERE, and the Teamsters. “On top of extending these oversight protections to ten million more Californians and their employers, AB 731 also improves and enhances that oversight for all California health consumers. This bill will reveal how much providers are getting paid as a percentage of Medicare rates, both to better explore the drivers of high health costs, and the effectiveness of insurers in negotiating better prices.”

ON AB 824, PAY FOR DELAY: “When drug companies pay to prevent a lower-price medication from entering the market, we all pay more, at the pharmacy and in our premiums. With this bill, California can take the lead in preventing this problematic, price-gouging practice of pay-for-delay by the prescription drug companies,” said Ronald Coleman, Policy Director for Health Access California, a strong supporter of AB 824. “It’s bad enough that the drug companies abuse the patents they get by charging sky-high prices, it’s worse when they pay to keep cheaper options off the market to make patients pay more for longer.”

Last month, Governor Newsom proposed a statewide prescription drug purchasing pool, to consolidate the purchasing power of various state agencies, and ultimately other payers, to negotiate the best possible deal on pharmaceutical prices for Californians.

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