New Bill Prevents High Private Insurance Costs in California

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Assemblywoman Fiona Ma. Photo by Natalie Schrik

As part of the growing effort toward affordable health care, Assemblywoman Fiona Ma announced legislation last week that would eliminate specialty tier pricing for medication, place a cap on patient co-pays, and limit the annual out-of-pocket expenditures for California patients.

The bill, AB 310, was announced at the Multiple Sclerosis Center at the UCSF Medical Center to an audience of health-care advocates, patients and doctors on Feb. 10.

“Insurance companies should put patients before profits,” said Ma, a Chinese American who is also living with chronic hepatitis B.

Rather than paying a flat rate for medication, Californians with medications on specialty tiers – which include the most expensive medications can pay coinsurance of up to 35% of the total cost of the medication. For a patient with a chronic condition, the added financial burden of specialty tiers can be hundreds or thousands of dollars per month.

“Outlook is best when patients are treated early,” said Dr. Douglas Goodin a neurologist, and director of the Multiple Sclerosis Center. “But the majority of our patients are not wealthy, support themselves, and have a high co-pay.”

Drugs included in special-tier categories often treat long-term conditions such as autoimmune diseases, cancer, and hemophilia. When prices of specialty medications fluctuate without warning, patients are stuck making the difficult choice between stopping their treatment which worsens the condition, or going into debt.

Melanie Rowen, a 33-year old attorney with multiple sclerosis, recalled a recent time when she arrived at the pharmacy to pick up and pay for her medication. Her prescription costs had soared, and without warning, she was left with a bill for $880. Last month her bill was $650.

“I took out a credit card to pay for my medication, and I cried,” said Rowen.

The rising costs of health care are recent. A recent survey of the Kaiser Family Foundation Employer Health Benefits reported a dramatic increase in specialty tiers. In 2010, 13 percent were in a plan with four or more tiers of coverage, from 4 percent in 2004.

“The original purpose of health insurance was to spread and share health care costs. Special tiers undermine that,” said Michelle Vogel, Executive Director of the Alliance for Plasma Therapies, a sponsor of the bill.

Dr. Ellen Chang, research scientist and epidemiologist for the Asian Liver Center, said Assemblywoman Ma’s bill could be especially important to the APA community by controlling the costs of treating chronic hepatitis B. Hepatitis B affects 1 in 10 Asian and Pacific Islanders, compared to 1 in 1,000 in the general population.

“Although hepatitis B infection can be prevented with a vaccine, once the infection is established, it may require anti-viral treatment that can be expensive and last for years,“ said Chang.

Last year, New York became the first state to pass a similar bill, with wide bi-partisan support, prohibiting private insurers from creating specialty tiers. Hawaii, Arizona and Nebraska currently have similar legislation to address out-of-control health care costs.

AB 310 is expected to be heard in the Assembly Health Committee in March or April of this year.

About the Author

Natalie Schrik is a Filipino Dutch American living in San Francisco