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Health Insurance Reimbursement Legislation

August 18, 2000

A national problem with health insurance is illustrated by a California bill to prevent companies from raising drug deductibles and co-payments during the course of a patient's illness. This bill, AB 1722, has passed the California Assembly and been sent to the Senate. Recently it has turned out that the bill might not be needed in California -- yet it illustrates a national issue.

On August 17 we talked with a consultant in the office of the bill's sponsor, Assembly Member Gallegos. Their office just met with the new California Department of Managed Care, which has taken a fresh look at existing law, and interpreted it in a way more favorable to patients than the Department of Corporations, which had jurisdiction in the past. Since the new interpretation should be better than AB 1722 would have been, Gallegos might not "move" the bill in the Senate.

But the issue is a national one, so to explain it we quote from an action alert, which was sent by the Lambda Letters Project:

"AIDS care is expensive. And many insurance companies are doing all they can to get out of those costs. In past years they used to drop coverage of expensive medications, leaving patients without life saving medicines. So the state legislature passed a bill to prohibit this practice.

"Now, instead of dropping coverage of these medications, many insurers are drastically increasing the co-payment owed by the patient. This often means again that the patient is left without vital medications because he or she cannot afford the co-payment. AB 1722 addresses this problem by saying that insurers cannot increase the co-payment or other deductible for the medication during the course of treatment of a disease for which the medication has been prescribed."

A copy of A.B. 1722 is available here.


We are hearing about this problem elsewhere; it is likely that federal or other state legislation will be necessary. Also, health insurance and managed care companies are using unworkable "caps" when they can no longer discriminate directly against patients with expensive illnesses.

AB 1722 itself should not be a national model, because it excludes off-label use of medications (prescription for an FDA-approved medicine, but for a purpose different from that for which it was approved). Off-label prescription is often a necessary part of the standard of care (especially in cancer, for example, where many drugs officially approved for treating one kind of tumor, or several kinds, may in fact be standard treatment for other cancers as well). Insurance companies should not be able to use this excuse to nullify their medication coverage for persons who are seriously ill.

ISSN # 1052-4207

Copyright 2000 by John S. James. Permission granted for noncommercial reproduction, provided that our address and phone number are included if more than short quotations are used.

Back to the AIDS Treatment News August 18, 2000 contents page.

This article was provided by AIDS Treatment News. It is a part of the publication AIDS Treatment News.
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