Bill Text: CA AB948 | 2023-2024 | Regular Session | Chaptered
Bill Title: Prescription drugs.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2023-10-13 - Chaptered by Secretary of State - Chapter 820, Statutes of 2023. [AB948 Detail]
Download: California-2023-AB948-Chaptered.html
Assembly Bill
No. 948
CHAPTER 820
An act to amend Section 1342.73 of the Health and Safety Code, and to amend Section 10123.1932 of the Insurance Code, relating to health coverage.
[
Approved by
Governor
October 13, 2023.
Filed with
Secretary of State
October 13, 2023.
]
LEGISLATIVE COUNSEL'S DIGEST
AB 948, Berman.
Prescription drugs.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance.
Existing law prohibits the copayment, coinsurance, or any other form of cost sharing for a covered outpatient prescription drug for an individual prescription from exceeding $250 for a supply of up to 30 days, except as specified. Existing law requires a health care service plan contract or health insurance policy for a nongrandfathered individual or small group product that maintains a drug formulary grouped into tiers, and that includes a 4th tier, to define each tier of the drug formulary, as specified. Existing law
defines Tier 4 to include, among others, drugs that are biologics. Existing law repeals these provisions on January 1, 2024.
This bill would delete drugs that are biologics from the definition of Tier 4. The bill would require a health care service plan or a health insurer, if there is a generic equivalent to a brand name drug, to ensure that an enrollee or insured is subject to the lowest cost sharing that would be applied, whether or not both the generic equivalent and the brand name drug are on the formulary. The bill also would delete the January 1, 2024, repeal date of the above provisions, thus making them operative indefinitely. Because extension of the bill’s requirements relative to health care service plans would extend the existence of a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for
certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 1342.73 of the Health and Safety Code is amended to read:1342.73.
(a) (1) With respect to an individual or group health care service plan contract subject to Section 1367.006, the copayment, coinsurance, or any other form of cost sharing for a covered outpatient prescription drug for an individual prescription for a supply of up to 30 days shall not exceed two hundred fifty dollars ($250), except as provided in paragraphs (2) and (3).(2) With respect to products with actuarial value at, or equivalent to, the bronze level, cost sharing for a covered outpatient prescription drug for an individual prescription for a supply of up to 30 days shall not exceed five hundred dollars ($500), except as provided in paragraph (3).
(3) For a health care service plan contract that is a “high deductible health plan” under the definition set forth in Section 223(c)(2) of Title 26 of the United States Code, paragraphs (1) and (2) of this subdivision shall apply only once an enrollee’s deductible has been satisfied for the year.
(4) For a nongrandfathered individual or small group health care service plan contract, the annual deductible for outpatient drugs, if any, shall not exceed twice the amount specified in paragraph (1) or (2), respectively.
(5) For purposes of paragraphs (1) and (2), “any other form of cost sharing” shall not include a deductible.
(6) A copayment or percentage coinsurance
shall not exceed 50 percent of the cost to the plan, as described in Section 1300.67.24 of Title 28 of the California Code of Regulations.
(7) If there is a generic equivalent to a brand name drug, a plan shall ensure that the enrollee is subject to the lowest cost sharing that would be applied, whether or not both the generic equivalent and the brand name drug are on the formulary. This paragraph shall not be construed to require both the generic equivalent and the brand name drug to be on the formulary.
(b) (1) If a health care service plan contract for a nongrandfathered individual or small group product maintains a drug formulary grouped into tiers that includes a fourth tier, a health care service plan contract shall use the following definitions for
each tier of the drug formulary:
(A) Tier one shall consist of most generic drugs and low-cost preferred brand name drugs.
(B) Tier two shall consist of nonpreferred generic drugs, preferred brand name drugs, and any other drugs recommended by the health care service plan’s pharmacy and therapeutics committee based on safety, efficacy, and cost.
(C) Tier three shall consist of nonpreferred brand name drugs or drugs that are recommended by the health care service plan’s pharmacy and therapeutics committee based on safety, efficacy, and cost, or that generally have a preferred and often less costly therapeutic alternative at a lower tier.
(D) Tier four shall
consist of drugs that the Food and Drug Administration of the United States Department of Health and Human Services or the manufacturer requires to be distributed through a specialty pharmacy, drugs that require the enrollee to have special training or clinical monitoring for self-administration, or drugs that cost the health plan more than six hundred dollars ($600) net of rebates for a one-month supply.
(2) In placing specific drugs on specific tiers, or choosing to place a drug on the formulary, the health care service plan shall comply with the other provisions of this section and this chapter.
(3) A health care service plan contract may maintain a drug formulary with fewer than four tiers. A health care service plan contract shall not maintain a drug formulary with more
than four tiers.
(4) This section shall not be construed to limit a health care service plan from placing any drug in a lower tier.
(c) This section does not apply to a health care service plan contract with the State Department of Health Care Services.
SEC. 2.
Section 10123.1932 of the Insurance Code is amended to read:10123.1932.
(a) (1) With respect to an individual or group policy of health insurance subject to Section 10112.28, the copayment, coinsurance, or any other form of cost sharing for a covered outpatient prescription drug for an individual prescription for a supply of up to 30 days shall not exceed two hundred fifty dollars ($250), except as provided in paragraphs (2) and (3).(2) With respect to products with actuarial value at or equivalent to the bronze level, cost sharing for a covered outpatient prescription drug for an individual prescription for a supply of up to 30 days shall not exceed five hundred dollars ($500), except as provided in paragraph (3).
(3) For a policy of health insurance that is a “high deductible health plan” under the definition set forth in Section 223(c)(2) of Title 26 of the United States Code, paragraphs (1) and (2) of this subdivision shall apply only once an insured’s deductible has been satisfied for the year.
(4) For a nongrandfathered individual or small group policy of health insurance, the annual deductible for outpatient drugs, if any, shall not exceed twice the amount specified in paragraph (1) or (2), respectively.
(5) For purposes of paragraphs (1) and (2), “any other form of cost sharing” shall not include a deductible.
(6) A copayment or percentage coinsurance shall not
exceed 50 percent of the cost to the insurer, as described in Section 1300.67.24 of Title 28 of the California Code of Regulations.
(7) If there is a generic equivalent to a brand name drug, an insurer shall ensure that the insured is subject to the lowest cost sharing that would be applied, whether or not both the generic equivalent and the brand name drug are on the formulary. This paragraph shall not be construed to require both the generic equivalent and the brand name drug to be on the formulary.
(b) (1) If a policy of health insurance offered, sold, or renewed in the nongrandfathered individual or small group market maintains a drug formulary grouped into tiers that includes a fourth tier, a policy of health insurance shall use the following definitions for each
tier of the drug formulary:
(A) Tier one shall consist of most generic drugs and low-cost preferred brand name drugs.
(B) Tier two shall consist of nonpreferred generic drugs, preferred brand name drugs, and any other drugs recommended by the health insurer’s pharmacy and therapeutics committee based on safety, efficacy, and cost.
(C) Tier three shall consist of nonpreferred brand name drugs or drugs that are recommended by the health insurer’s pharmacy and therapeutics committee based on safety, efficacy, and cost, or that generally have a preferred and often less costly therapeutic alternative at a lower tier.
(D) Tier four shall consist of drugs that the
Food and Drug Administration of the United States Department of Health and Human Services or the manufacturer requires to be distributed through a specialty pharmacy, drugs that require the insured to have special training or clinical monitoring for self-administration, or drugs that cost the health insurer more than six hundred dollars ($600) net of rebates for a one-month supply.
(2) In placing specific drugs on specific tiers, or choosing to place a drug on the formulary, the insurer shall comply with the other provisions of this section and this part.
(3) A policy of health insurance may maintain a
drug formulary with fewer than four tiers. A policy of health insurance shall not maintain a drug formulary with more than four tiers.
(4) This section shall not be construed to limit a health insurer from placing any drug in a lower tier.
