Governor Newsom Signs New Law to Help Californians Track Their Out-of-Pocket Health Costs

Today, California Governor Gavin Newsom signed into law a key patient protection bill, Senate Bill 368 (Limón), which would require consumers to receive timely and accurate information about their progress over the course of a year in meeting their deductible, out-of-pocket maximum, and other spending limits.
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For Immediate Release: Wednesday, October 6, 2021

CONTACT:
Rachel Linn Gish, Director of Communications, Health Access California, rlinngish@health-access.org, 916-532-2128 (cell)

 NEW LAW WILL HELP CALIFORNIANS TRACK OUT-OF-POCKET HEALTH CARE SPENDING

Governor Newsom today signed SB 368 (Limón), to provide health consumers information on how close they are to meeting their deductible and other out-of-pocket spending limits, helping them better plan for their health care and other financial needs

SACRAMENTO, CA – Today, California Governor Gavin Newsom signed into law a key patient protection bill, Senate Bill 368 (Limón), which would require consumers to receive timely and accurate information about their progress over the course of a year in meeting their deductible, out-of-pocket maximum, and other spending limits.

“SB 368 provides Californians with accurate and timely information regarding the costs of their health care needs,” said Senator Limón. “The signing of this bill comes at a much-needed time as healthcare is in the minds of many across our state. I am thankful for our sponsors and supporters as this becomes law.”

Most consumers with health coverage still have to pay out-of-pocket for care through co-payments and deductible. The Affordable Care Act placed an cap on annual out-of-pocket spending, a huge relief for many patients who faced high-cost medical needs and were often forced into bankruptcy to cover medical bills. These Californians need timely and updates information for when the cap is reached, in order to make financial planning decisions for themselves and their family, and better manage their conditions. Similarly, the increasing number of California consumers with deductibles need to know if they are about to reach their deductible, and when coverage will finally kick in to cover the care they need. Currently health plans already track this information for their records, but it is not shared with consumers unless explicitly requested. The new law will require health plans regulated by the Department of Managed Health Care to track and communicate these accruals to enrollees.

“Patients already experiencing significant health needs should have access to the same up-to-date deductible information health plans have available. This new law will shift the burden for tracking these accruals from people to the health plans,” said Diana Douglas, policy advocate for Health Access California, sponsor of SB 368. “With these regular communication on spending towards these limits, Californians can better stay on top of their health and financial well-being.”

Tracking health care spending for some can be significant, given the size of the cost-sharing these days. Many deductibles are over $1,000 and Covered California silver-level plans have deductibles of $4,000 for hospital stays. Consumers in the individual market may have “bronze” plans with deductibles as high as $7,000 or even $8,000. On top of this, every Californian with private coverage has a maximum out-of-pocket limit for covered essential health benefits. Though only a small percentage of people incur costs that put them close to their out-of-pocket limit, those that do meet this limit are the ones with the most burdensome and expensive-to-treat conditions. Major health care needs that add up quickly could include those relying on MS drugs, those with HIV/AIDS and someone undergoing cancer treatment.

Despite the significant financial impact of deductibles and maximum out-of-pocket limits, consumers have often been left with little help from insurance plans in tracking their accrual towards these amounts — even while their health plans have ready access to this information. Underserved communities particularly suffer from this lack of transparency and face additional challenges, such as language barriers and health and financial literacy, that make keeping track of their payments even more difficult. With this signature, this new law will help Californians by providing this practical, timely, and important information.

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