California Health Advocates Reviews Legislation Affecting Medicare Beneficiaries

California Health Advocates closely watches state legislative activity and actively supports those bills benefiting California’s Medicare and Medi-Cal populations. This article briefly reviews many pieces of legislation that California Health Advocates has supported this year as well as discusses recent legislative action addressing California residents’ access to affordable prescription drugs. It also summarizes several pieces of legislation recently signed or vetoed by the Governor.

Summary of California Health Advocates Supported Legislation

AB 132 (Emergency Drug Benefit/Medi-Cal Presciption Drug Benefit)

Assembly member Nunez introduced his bill that passed the state senate and assembly on January 17, 2006. It created what is now the Emergency Drug Benefit for people with Medicare and Medi-Cal. This bill ensured that those dual eligibles who were unable to receive their needed prescriptions through Medicare Part D could, as a last resort, receive their drugs through Medi-Cal. This bill was originally written to last 15 days, and was continued with SB 1233. SB 1233 continued the program through February 15th and allowed the Governor to grant 30 day extensions on the EDB there after until May 15, 2006.

AB 813 (New Emergency Drug Benefit)

Introduced by Assembly member Nunez, the state legislature passed AB 813 in May. It established a new Emergency Drug Benefit (EDB) for individuals dually eligible for Medicare and Medi-Cal. This coverage, which will last only another four months through January 31, 2007, incorporates major changes to the old program (AB 132), including a requirement that pharmacies submit a paper treatment authorization request (TAR) to Medi-Cal with an explanation of actions the pharmacy has taken in an attempt to receive payment through Medicare Part D.

SB 503 (Payment for dual-eligibles’ Part D copays)

Introduced by Senator Figueroa, this bill would have allowed the State of California to pay for the Medicare Part D prescription drug co-payments for people who are dually eligible for Medicare and Medi-Cal. The payment would have started on January 1, 2007. Despite numerous advocacy efforts, the bill stalled in the Assembly and at the last minute was amended to exclude all provisions referring to the drug benefit. The bill was originally intended to address licensure and regulation of accountants and the unpopular copay subsidy provisions were removed to ensure that the Board of Accountancy requirements passed.

SB 1810 (Long term care insurance)

Introduced by Senator Dunn in February, this bill was passed in mid August 2006. SB 1810 adds a “Contingent Benefit on Lapse (CBL) that allows consumers to keep some of the benefits of a long term care policy they purchased following a large rate increase that cause them to lapse in their policy payments. The provision is a part of the National Association of Insurance Commissioners (NAIC) Model Long Term Care Act and Regulation. Some of the benefits include:

  • 100 percent of premium paid;
  • A fixed number of days of long-term care insurance, albeit fewer than under the original policy benefit;
  • The insurer may offer additional days of coverage beyond these mentioned in (b), for an additional premium, but not less than 30 days.
  • Consumer may use all care benefits covered by the policy.

This bill SB 1810 also includes the following changes:

  • Adopts the methodology of the NAIC model regulation to determine when a proposed rate increase would be considered a “substantial premium increase” which could trigger the contingent benefit upon lapse (for example, it would be triggered when a policyholder age 65 receives a rate increase of 50 percent or more over the initial premium).
  • Requires the insurer to notify policy and certificate holders of the contingent benefit mentioned above upon implementation of a rate increase, if required by the Insurance Commissioner (IC).
  • Authorizes the IC to require an insurer who files for a rate increase to provide the affected long-term care insurance policy or certificate holders the option to reduce coverage to avoid a premium increase.
  • Eliminates the January 1, 2008 sunset of the requirement that for any premium rate increase request exceeding 15 percent, the IC shall pool all of the insurer’s individual long-term care policies to project future claims experience to determine whether the rate increase request satisfies statutory requirements, as specified.

SB 1405 (Medi-Cal interpreter services)

Although this bill introduced by Senator Soto passed both the Senate and Assembly floor, it was ultimately held back and will not move forward to the Governor’s desk. The bill would have created a Task Force on Reimbursement for Language Access Services to explore funding options for providing language services to Medi-Cal fee-for-services patients, including interpretation and translation of documents. Federal law currently allows states to offset the costs of language services for Medicaid and State Children’s Health Insurance Program (SCHIP) enrollees by providing federal matching funding. Even in being the most diverse state in the country and having an estimated 6-7 million limited English proficient (LEP) residents, California has not yet taken advantage of these federal matching funds.

Advocates are now in negotiation with administration officials on how the administration can implement the Task Force’s objectives internally.

SB 192 (Annuities – Seniors)

Introduced in February 2006 by Senator Scott, this bill would state the intent of the Legislature to set forth standards and procedures relating to recommendations to older adult consumers that result in transactions involving annuity products. The final hearing date has yet to be set.

Access to Affordable Prescription Drugs

Governor Schwarzenegger signed AB 2911 by Assembly member Nunez to provide low-cost medications to an estimated five million Californians. The program works with pharmaceutical companies to offer discounts of up to 40 percent on brand name drugs and up to 60 percent on generic drugs. This California Discount Prescription Drug Initiative is available to:

  • Uninsured Californians with incomes below 300 percent of the federal poverty level ($60,000 for a family of four);
  • Californians with significant un-reimbursed medical expenses and incomes below the state median family income ($68,310 for a family of four);
  • Medicare beneficiaries without drug coverage in the Part D ‘donut hole.’ [Note: it is not yet clear whether drugs purchased through this discount program will count towards a beneficiary’s true out-of-pocket expenses (TrOOP).]

Enrollment into the program will entail filling out a simplified application form either over the phone, on a web site, or at a doctor’s office, pharmacy or clinic. Enrollees will pay only $10 annually to participate.

To ensure that drug manufacturers provide adequate discounts on their drugs, the program will consider three different benchmarks for fair discount prices: the Medicaid Best Price, the lowest price offered to private payers, and the average manufacturers’ price minus 15 percent. Companies have three years within which to negotiate their discounts. Those that don’t adequately negotiate may be limited from participating in the Medi-Cal program, as long as the limitation does not disrupt the care of Medi-Cal enrollees. For example, Medi-Cal recipients needing drugs from companies with limited Medi-Cal participation could still receive those drugs after filling out some additional paperwork and gaining approval.

Those advocates who were against the bill AB 2911 are concerned that hindering companies’ access to the Medi-Cal market by requiring more paperwork and approval to prescribe certain drugs within Medi-Cal could make doctors and pharmacists more likely to give patients cheaper and potentially less effective medications on the state’s approved drug list, reducing quality of care. They say that this initiative also puts one group of poor residents — those on Medi-Cal — against poor residents who don’t qualify for Medi-Cal.

Supporters of the initiative, however, see little risk to Medi-Cal recipients and focus on the initiative’s potential for reducing drug costs for millions of California’s working poor. They feel there are adequate safeguards to ensure that Medi-Cal recipients with chronic medical conditions, such as heart disease or diabetes, will continue to receive their drugs even if the manufacturer is removed from the state’s approved prescription list.

For more information on this new initiative see the recent press release announcing the Governor’s signing of AB 2911.

Additional legislation…

AB 2877 (California Prescription Drug Discount Program web site)

Schwarzenegger signed this bill Assembly member Dario Frommer (D-Glendale) which will establish the California Rx Prescription Drug Web Site Program. Under this web site program, the Department of Health Services (DHS) will be charged with developing a web site to provide links to federal, state and pharmaceutical firms’ prescription drug programs. The law also permits the state to include information about international pharmacies.

AB 774 (Hospitals: fair pricing policies)

The Governor signed this bill by Assembly member Chan, which will restrict some hospital billing practices and limit charges for hospital procedures for uninsured and underinsured patients whose incomes do not exceed 350% of the federal poverty level.

AB 2283 (Physicians and surgeons: cultural background and foreign language proficiency)

Under this bill, signed by the Governor and introduced by Assembly Member Oropeza, the Medical Board of California will be required to publish on its web site information about physicians’ foreign language skills. The information is intended to help the state assess whether some areas are underserved by physicians with needed foreign language-skills and cultural competencies.

AB 1755 (Medi-Cal: Adult Day Health Services)

igned by the Governor and introduced by Senator Wes Chesbro, this bill will permit six months of authorization for Medi-Cal coverage of adult day health care services, provided that the adult day health care center initiates the request.

AB 2968 (Medi-Cal: community living support benefit)

Signed by the Governor and introduced by Assembly member Mark Leno, this bill will require DHS to develop a program to offer community-living support benefits to eligible Medi-Cal beneficiaries.

AB 2373 (Automated drug delivery system)

Introduced by Assembly member Greg Aghazarian, Schwarzenegger signed this bill which will expand existing law to apply a requirement to use automated drug delivery systems to nursing facilities.

SB 1312 (Health care facilities)

Introduced by Aliqist, Governor Schwarzenegger signed this bill which will require DHS to develop standards for safe staffing and operation of long-term care facilities and will amend licensing procedures for such facilities.

AB 2170 (Gallegos-Rosenthal Patient Advocate Program)

Introduced by Assembly member Chan, Schwarzenegger vetoed this bill which would have required the state HMO report card to include information on the quality of care and access offered by Medicare prescription drug plans and stand-alone plans under the Medicare drug benefit.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.