Health care coverage: mental health or substance use disorders.

Plain English Breakdown

The bill's full effects on health care plans are unclear until it becomes law in 2027.

Health Care Coverage: Mental Health and Substance Use Disorders

AB-1970 prohibits health care plans from requiring step therapy before covering prescription drugs for mental health or substance use disorders, starting in 2027.

What This Bill Does

• Prohibits health care service plan contracts and insurance policies from using step therapy as a requirement to cover prescription drugs for the treatment of serious mental illness or substance use disorder after January 1, 2027.
• Specifies that this prohibition does not apply if FDA labeling indicates prior medication must be taken first.
• Makes it a crime for health care service plans to violate this rule.

Who It Names or Affects

• People with serious mental illness or substance use disorders who need prescription drugs.
• Health care service plans and insurance companies that cover these conditions.
• The Department of Managed Health Care and the Department of Insurance.

Terms To Know

Step therapy

A process where a patient must try one or more less expensive drugs before getting a prescribed drug.

Serious mental illness

A severe mental disorder that significantly affects daily life and functioning.

Limits and Unknowns

• Does not apply to FDA-labeled medications where prior treatment is required.
• The bill's full effects on health care plans are unclear until it becomes law in 2027.

Official Summary Text

AB 1970, as amended, Harabedian.
Health care coverage: mental health or substance use disorders.
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 authorizes health care service plans and health insurers that cover prescription drugs to utilize reasonable medical management practices, including prior authorization and step therapy, consistent with applicable law.
This bill would prohibit a health care service plan contract or a health insurance policy that is issued, amended, or renewed on or after January 1, 2027, from imposing step therapy as a prerequisite to authorizing coverage of any prescription drug used for the treatment of
mental health or substance use disorders, as defined.
a serious mental illness or substance use disorder, as those terms are defined.
The bill would specify that the prohibition on step therapy does not apply when the United States Food and Drug Administration-labeled indications and usage of a drug indicate that some prior medication must be taken. Because a willful violation of this provision by a health care service plan would be 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.

Current Bill Text

Download Bill PDF