Step Therapy, Prior Authorization, and What California’s Budget Means for People With Chronic Pain
Co-author: Victoria Killian, BCPA, PCM, CDME
Living with chronic pain is already a full-time job. Fighting for care shouldn’t be another one.
If you’ve lived with pain for any length of time, then you’ve probably had to fight tooth and nail to get the care you need. You know what it’s like when your doctor prescribes something that works—but your insurance tells you, “Not yet.”
They call it step therapy—we call it “fail first.”
And then there’s prior authorization, the paper-pushing delay game that can leave you waiting days or weeks while your condition gets worse.
Now, California is making changes that could help—or hurt. And folks like us, who live with chronic pain every day, need to know what’s coming. The headlines discuss cost savings and budget gaps, but behind every policy decision is a person trying to get out of bed, go to the doctor, or simply get through the day without breaking.
Insulin Carve-Out: A Win That Could Set a Precedent
Under SB 40, starting January 1, 2026, insurance companies won’t be allowed to force people to try and fail other meds before getting the insulin their doctor prescribed. It also caps insulin costs at $35 for a 30-day supply.
That’s a win.
And it should raise a bigger question:
If we all agree that people with diabetes shouldn’t be forced to “fail first,” why is that still the rule for those of us with chronic pain?
AB 116: Quiet Changes with Big Impacts
Buried in the Health Omnibus bill (AB 116) are updates that expand how step therapy and prior authorization work in Medi-Cal, California’s Medicaid program. They say it’s to manage costs. What it means is more hurdles between you and your treatment.
But there’s another important piece:
California has always required pharmacy benefit managers (PBMs) to be licensed, but this bill now forces them to disclose information they’ve never shared before. That includes drug pricing data, the fees they’re paid, the payments and rebates exchanged with manufacturers and insurers, as well as prescription counts and member counts.
In plain language, the state will finally see behind the curtain of how PBMs move money around. Here’s some of what they’ll now have to report:
- Drug codes, names, categories, and manufacturers
- Wholesale acquisition costs and average wholesale prices
- National average drug acquisition cost
- All fees paid to PBMs by manufacturers, health plans, insurers, employers, and pharmacies
- Prescription and member counts
- Payment amounts collected and paid
- Discounts and rebates collected and paid
This kind of data has never been in the hands of regulators before. On paper, it’s a win for transparency. But in practice, it doesn’t automatically protect people with chronic pain from step therapy or prior authorization delays. What it might do is set the stage for better accountability—and give us new leverage to argue for policies that put patients before profit.
The Bigger Picture: California’s Budget Crisis
The state is struggling to cover the rising cost of care. Prescription drug costs are through the roof. Medi-Cal spending is exceeding estimates—especially for pharmacy coverage and services in underserved communities.
To fill the gap, California borrowed over $3 billion and redirected more than $3.6 billion from the MCO tax. To save money, the state is turning to what it calls utilization management—things like step therapy and prior authorization.
That’s how they plan to save $200 million next year.
But for people with chronic conditions, it’s not just a budget item—it’s access to care.
What This Means If You Live with Chronic Pain
This isn’t abstract. These policies hit us where we live.
If you’re like me, you’ve already been through a list of treatments that didn’t work. You know your body. You know what helps and what doesn’t. When a health plan forces you to start over to save money, that’s not healthcare—that’s cruelty dressed as cost control.
More step therapy means you might have to go back to drugs that failed you.
More prior authorization means you might go days—or weeks—without relief.
And when they tie it all to a budget, the decisions aren’t made by your doctor—a spreadsheet makes them.
Now, I’m not saying all the news is bad. There were some wins:
- They kept protections for people receiving in-home supportive services (IHSS).
- They stopped planned asset limit cuts that would’ve pushed older adults and people with disabilities out of Medi-Cal.
- And they’re finally requiring PBMs to open their books and disclose the kind of financial details regulators have never had before.
But these wins don’t guarantee access to pain meds. They don’t stop the insurance games. And they don’t stop the suffering that comes with delay, denial, and despair.
Quick Snapshot: What’s Changing and Why It Matters
SB 40 (Starts Jan 2026)
✅ No more step therapy for insulin
✅ Monthly cap of $35
➡️ Good first step. Let’s push for the same rules for chronic pain meds.
AB 116 (2025–26 Budget Year)
✅ Expands step therapy and prior authorization in Medi-Cal
✅ Requires PBMs to disclose detailed pricing, fees, rebates, prescription counts, and payments they’ve never had to report before
➡️ On paper, a big win for transparency. In practice, it may still mean more denials and delays for proven pain treatments.
California Budget Fixes
✅ $3.44B borrowed, $3.6B MCO tax redirected
✅ Cuts through “utilization management”
➡️ When the numbers don’t add up, patients pay the price in pain.
Advocacy Wins
✅ Protected IHSS overtime
✅ Restored asset protections
✅ Forced PBMs to provide financial and pricing data to the state
➡️ Important victories—but they don’t guarantee access to the medications and procedures people in pain rely on.
What We Can Do
- Speak up. Your story matters. When lawmakers hear from real people, it gets harder to ignore the consequences of their decisions.
- Push for equity. If insulin gets protected, so should pain meds, seizure meds, and other treatments people rely on to function.
- Support transparency. We deserve to know how long PAs take, how often step therapy fails, and who is hurt by delays.
- Back the advocates. The folks at U.S. Pain Foundation, California Chronic Care Coalition, and ACPA are in this fight. Let’s stand with them.
Final Thoughts
No one should have to fail before they’re allowed to feel better.
I’ve lived with chronic pain for decades. I’ve jumped through the hoops. I’ve seen good doctors blocked by bad policies. I’ve watched people give up because the system wore them down.
If this sounds familiar, you’re not alone.
California’s budget shouldn’t be balanced on the backs of people in pain. Cost savings are fine—but not at the cost of dignity, stability, and access. These decisions have consequences, and they show up in real lives, not just on budget lines.
Let’s keep showing up. Let’s keep speaking out. Let’s continue to fight for care that heals, rather than harms.
Disclaimer
The views, positions, and recommendations expressed in this article are based on my personal experiences and independent research. They are solely my own and do not necessarily reflect the views, policies, or positions of the American Chronic Pain Association (ACPA).
With assistance from ChatGPT.