Brown signs bill to stop unexpected cost-sharing hikes

California Gov. Jerry Brown’s on Thursday signed a bill prohibiting health insurers from changing members’ cost-sharing requirements mid-year, effectively prohibiting unexpected hikes for co-pays and deductibles.

The law builds on state consumer protections already in place that prevent insurers from increasing premiums within a “rate year,” ensuring that consumers are able to accurately predict their yearly health care costs.

Health care advocates cheered the bill’s passage.

“It’s essential for consumers that they can plan and budget for their annual out-of-pocket expenses for medical services and prescription drugs, and not be blindsided but an unexpected increase in the middle of a plan year,” said Anthony Wright, executive director of Health Access California, the statewide health care consumer advocacy coalition and sponsor of the legislation. “This new law will give families peace of mind in the predictability of their health care costs.”

The text of a bill analysis cites an October 2015 story in the Los Angeles Times, in which a major health plan was reported to have settled an $8.3 million lawsuit brought against the company because it altered deductible requirements for members mid-year.

As part the settlement, the plan assumed no wrongdoing and argued the practice was legal under state law.

The price hikes affected 50,000 consumers, who felt “their plan was changing the rules of the game in the middle of the game,” the text reads.

The bill, sponsored by Senator Ed Hernandez, takes effect January 1, 2017.