What SB 1199 does
An act to add Section 1399.852 to the Health and Safety Code, and to add Section 10112.283 to the Insurance Code, relating to health care coverage.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law, except as provided and under certain circumstances, prohibits a person who manufactures a prescription drug from offering a discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses associated with their health insurance or health care service plan. Existing law generally imposes specified cost sharing limits on covered prescription drugs.
This bill would require a health care service plan or health insurer, when calculating an enrollee’s or insured’s overall contribution to an out-of-pocket maximum or cost sharing requirement under the plan contract or insurance policy, to count any amount paid by the enrollee or insured or on behalf of the enrollee or insured for a covered drug toward the enrollee’s or insured’s cost sharing, except as provided. The bill would prescribe an administrative penalty for each violation by a health insurer that is enforceable by the Insurance Commissioner after appropriate notice and opportunity for hearing. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Summary from the Legislative Counsel's Digest of the amended assembly text, July 2, 2026. Read the full text on leginfo.
How it got here
Senator Weber Pierson introduced SB 1199 on February 19, 2026. The text was amended 2 times, 1 in the Assembly and 1 in the Senate, and heard in 6 committee hearings before its final floor votes.
- Senate Floor, May 22, 2026: 26 ayes, 0 noes.
Committee votes along the way:
- Senate Health, April 22, 2026: Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations], 9-0.
- Senate Appropriations, May 4, 2026: Placed on suspense file, 7-0.
- Senate Appropriations, May 14, 2026: Do pass, 5-0.
- Assembly Health, June 30, 2026: Do pass as amended and be re-referred to the Committee on [Appropriations], 13-0.
Who supports and opposes SB 1199
The Assembly Health analysis dated June 26, 2026 lists 25 organizations in support and 5 in opposition. When Senate Health first listed positions on April 20, 2026, the count was 37 in support and 4 opposed. By the Assembly Health analysis of June 26, 2026 it was 25 to 5.
In support: Insurance Commissioner Ricardo Lara (sponsor); Aids Healthcare Foundation; Association for Clinical Oncology; Association of Northern California Oncologists; Bleeding Disorders Council of California; California Academy of Family Physicians; California Chapter American College of Cardiology; California Chronic Care Coalition; and 17 more.
Opposed: America's Health Insurance Plans; Association of California Life & Health Insurance Companies; California Agents and Health Insurance Professionals; California Association of Health Plans; California Association of Joint Powers Authorities.
Read the Assembly Health analysis.
What happens next
It is in Assembly Appropriations. The last recorded action was on August 13, 2026.
The Governor can sign the bill, veto it, or let it become law without a signature. Until the decision, sign and veto request letters are the remaining channel, and the Department of Finance's enrolled bill report carries weight on anything with a fiscal effect. If signed, most provisions take effect January 1, and implementation moves to the agencies named in the bill.
What it means for pharmaceutical organizations
This is the stage where language still changes. Amendments taken in committee are the ones that reach the Governor, so an organization with a stake in the drafting has a reason to be in that conversation now rather than after the vote.
The pharma group at Capitol Axis handles that for pharmaceutical clients.
Questions about SB 1199
What does SB 1199 do?
This bill would require a health care service plan or health insurer, when calculating an enrollee’s or insured’s overall contribution to an out-of-pocket maximum or cost sharing requirement under the plan contract or insurance policy, to count any amount paid by the enrollee or insured or on behalf of the enrollee or insured for a covered drug toward the enrollee’s or insured’s cost sharing, except as provided. The bill would prescribe an administrative penalty for each violation by a health insurer that is enforceable by the Insurance Commissioner after appropriate notice and opportunity for
Has SB 1199 passed the California Legislature?
It is in Assembly Appropriations. The last recorded action was on August 13, 2026.
Who supports and opposes SB 1199?
The Assembly Health analysis dated June 26, 2026 lists 25 organizations in support and 5 in opposition. Supporters include Insurance Commissioner Ricardo Lara (sponsor); Aids Healthcare Foundation; Association for Clinical Oncology. Opponents include America's Health Insurance Plans; Association of California Life & Health Insurance Companies; California Agents and Health Insurance Professionals.
What happens next with SB 1199?
It still has committee and floor votes ahead of it. Amendments taken now are the ones that reach the Governor, so this is the stage where language changes are still possible.