Prescription drug cost sharing.

Plain English Breakdown

The candidate explanation included claims about penalties and criminal actions that were not fully detailed or confirmed in the provided official summary text. The bill's exact penalties for violations are mentioned but without specifying criminal charges beyond willful violations by health care service plans.

Prescription Drug Cost Sharing

The bill requires health care service plans and insurers to include patient payments and permitted drug manufacturer support in calculating out-of-pocket maximums, with penalties for violations.

What This Bill Does

• Requires health care service plans and insurance companies to count all payments made by patients or on behalf of patients towards the out-of-pocket maximum when calculating cost sharing requirements.
• Allows drug manufacturers to offer permitted forms of support that can be counted toward a patient's total out-of-pocket spending.
• Imposes administrative penalties for violations by health insurers, enforceable by the Insurance Commissioner after notice and hearing.

Who It Names or Affects

• Health care service plans
• Insurance companies
• Patients who buy prescription drugs

Terms To Know

Out-of-pocket maximum

The most a patient has to pay for covered services in a plan year.

Cost sharing

How much patients and insurers each pay towards the cost of health care services.

Limits and Unknowns

• Does not specify how drug manufacturers can offer support to count toward out-of-pocket costs.
• The bill does not require state reimbursement for local agencies or school districts.

Official Summary Text

SB 1199, as introduced, Weber Pierson.
Prescription drug cost sharing.
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, except as provided and under certain circumstances, prohibits a person who manufactures a prescription drug from offering a discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses associated with their health insurance or health care service plan. Existing law generally imposes specified cost sharing limits on covered prescription drugs.
This bill would require a health care service plan or health insurer, when calculating an enrollee’s or insured’s overall contribution
to an out-of-pocket maximum or cost sharing requirement under the plan contract or insurance policy, to count any amount paid by the enrollee or insured or on behalf of the enrollee or insured toward the enrollee’s or insured’s cost sharing, including any form of direct support offered by drug manufacturers that is permitted. The bill would prescribe an administrative penalty for each violation by a health insurer that is enforceable by the Insurance Commissioner after appropriate notice and opportunity for hearing. Because a willful violation of these provisions 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