Health care coverage: insulin.

The bill text was reformatted from a printed chaptered document (Chapter 737 with page numbers and centered headers) into a web page layout for the California Legislature website, adding site navigation, search fields, version history list, and publication date metadata. No changes to any statutory language were made.

In both Section 1367.51(d)(3) of the Health and Safety Code and Section 10176.61(d)(3) of the Insurance Code, the high deductible health plan provision was rewritten to remove garbled double-exception language and the 'Notwithstanding paragraphs (1) and (2)' prefix. The provision now clearly states that HDHPs shall not impose cost sharing on insulin exceeding $35 for a 30-day supply, unless applying that limitation would conflict with federal requirements for high deductible health plans.

Simplified the tier requirement for individual and small group plans: removed the conditional language that tied the $35 cap's applicability to whether at least two insulins of each drug type were on a preferred tier. Now the $35 cap always applies only to Tier 1 and Tier 2 insulin, and separately requires at least one insulin per drug type (in all forms and concentrations) to be placed on Tier 1 or Tier 2.

Corrected 'health care service plan' to 'health insurer' in Insurance Code section 10176.61(e)(2), fixing a cross-reference error where the wrong regulated entity was named.

Removed the word 'generally' from the bill summary, making the prohibition statement more definitive.

Fixed garbled amendment markup in the definitions subsection (subdivision 5), which previously read 'For purposes of this subdivision, insulin subdivision:' and now correctly reads 'For purposes of this subdivision: subdivision and subdivision (e):' to properly scope the defined terms.

Section 5 corrected a typographical reference from 'Article XIIIB' to 'Article XIII B' (added a space). No substantive effect.

The $35 insulin copay cap now explicitly applies to contracts or policies offered in the individual or small group market on or after January 1, 2027, adding a new effective date and market segment beyond the existing January 1, 2026 date for issued, amended, delivered, or renewed contracts.

In Section 10176.61 of the Insurance Code, references to 'disability health insurance policy' are changed to 'health insurance policy,' broadening which policies under that code section are subject to the insulin cost-sharing and step therapy requirements.

A new exception to the step therapy prohibition is added: plans are not required to cover all types of insulin without step therapy, as long as at least one insulin in each defined drug type (rapid acting, rapid acting inhaled, regular or short acting, intermediate acting, long acting, ultra-long acting, and premixed) is covered without step therapy.

The separate prohibition on imposing a deductible, coinsurance, or other cost sharing on insulin prescription drugs (beyond the $35 cap) is removed. Plans may now apply deductibles or coinsurance to insulin as long as total cost sharing does not exceed $35 for a 30-day supply.

The definition of step therapy in Section 1367.51 is changed from a standalone 'step therapy protocol' definition to a cross-reference to the definition in paragraph (2) of subdivision (i) of Section 10123.201, with clarification that the prohibition applies to both self-administered and physician-administered drugs.

Senator Wahab is added as a co-introducer and Senator Weber Pierson is added as a principal coauthor alongside Senator Rubio.

The cost-sharing rule for insulin is restructured: instead of capping copayments at $35 while separately prohibiting all deductibles and coinsurance, the amended bill now caps the total of all cost sharing (copayment, coinsurance, deductible, or other) at $35 for a 30-day supply. This allows plans to use any combination of cost-sharing mechanisms as long as the combined amount does not exceed $35.

Section 1367.51(j) is changed from allowing a health care service plan to 'reduce or eliminate coverage as a result of the requirements of this section' to prohibiting it: 'shall not reduce or eliminate coverage as a result of this section.' The same change is made in Section 10176.61(j) for insurers. This prevents plans from cutting other benefits to offset the cost of the new insulin mandates.

References to 'disability insurance policy' and 'disability insurer' are changed to 'disability health insurance policy' and 'disability health insurer' throughout Section 10176.61, narrowing the bill's applicability to disability health insurance specifically rather than all forms of disability insurance.

Section 10176.61(k) changes the language from 'Nothing in this section may be construed as imposing a new benefit mandate' to the more direct 'This section does not impose a new benefit mandate' for accident-only, specified disease, and hospital indemnity insurance.

Section 10176.61(e) adds a cross-reference defining 'step therapy' by incorporating the definition from Section 10123.201(i)(2), and explicitly states that step therapy is prohibited for both self-administered drugs and physician-administered drugs, clarifying the scope of the prohibition.

The bill's authorship is updated to add Senator Wahab as a co-introducer and Senators Weber and Pierson as coauthors alongside the original authors.

The $35 insulin cost-sharing cap is now explicitly split: large group plans must comply by January 1, 2026, while individual and small group plans have until January 1, 2027. Previously the language applied more broadly without this clear large-group vs. individual/small-group distinction in the operative text.

The step therapy prohibition is broadened to explicitly cover 'an insulin prescription drug described in subdivision (d),' extending the ban beyond just 'insulin' generally to all insulin prescription drugs subject to the cost-sharing rules.

A new formulary requirement mandates that at least one insulin for a given drug type in all forms and concentrations must be on the prescription drug formulary, applicable to both large group and individual/small group plans.

For individual and small group plans with tiered formularies, the $35 cap now applies only to Tier 1 and Tier 2 insulins. However, if no Tier 1 or Tier 2 insulin is clinically appropriate for an enrollee, the plan must still limit cost sharing on a higher tier drug to no more than $35 for a 30-day supply.

The definition of 'drug type' was changed from an exhaustive list ('means') to a non-exhaustive one ('includes, but is not limited to'), allowing for future drug types beyond rapid acting, regular/short acting, intermediate acting, long acting, ultra-long acting, and premixed.

A new severability clause (Section 4) was added, providing that if any provision or its application is held invalid, the remaining provisions continue in effect. The no-reimbursement section was renumbered from Section 4 to Section 5.

New paragraph (d)(2) in both Health and Safety Code Section 1367.51 and Insurance Code Section 10176.61: if a plan or policy uses a tiered drug formulary and has at least two insulins of each drug type in all forms and concentrations on a preferred tier, the $35 cost-sharing cap applies only to insulins in Tier 1 and Tier 2. If only one insulin exists for a given drug type, placing that single insulin on Tier 1 or Tier 2 satisfies the requirement.

The definition of 'step therapy protocol' in Section 1367.51 was shortened from a longer formulation referencing 'a protocol or program that establishes the specific sequence...medically appropriate for a particular enrollee and are covered under a health care service plan contract' to a simpler 'a process that specifies the sequence in which different prescription drugs for a given medical condition and medically appropriate for a particular patient are prescribed.'

Removed duplicated drafting language ('insulin, except as provided') that appeared twice in the step therapy prohibition sections of both code sections.