ACA minimum coverage rule raises drug benefits and objections
■ The proposed higher standard raises new questions about drug access to patients. Insurers say the basic benefits package could increase costs for beneficiaries.
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Washington A long-awaited proposed rule on the Affordable Care Act’s minimum coverage requirements for health plans seeks to establish more generous drug benefits, but key questions remain about what types of drugs will be available to patients, some health industry observers say.
The rule sets policies for states on these coverage requirements, known as essential health benefits, and establishes actuarial values for covered plan benefits and accreditation standards for qualified plans on health insurance exchanges. The Dept. of Health and Human Services issued the rule Nov. 20 as part of a trio of proposed health system reform law regulations that also included rules on preexisting condition coverage and employer wellness programs. Federal officials will finalize the rules after reviewing comments on the proposals.
Starting in 2014, qualified plans on state health insurance exchanges — marketplaces for coverage — and some plans outside of the exchanges will be required to cover minimum benefits packages composed of 10 broad categories of services. Codifying federal guidance issued in 2011, the proposed rule outlined four plan types from which states could choose to serve as the “benchmark” plan for their essential health benefits packages. These include small-group, federal employee, state employee and commercial HMO options from some of the largest health plans in the state’s jurisdiction.
For the most part, the proposed rule formalizes what was in the earlier bulletin and other previous materials HHS issued on the essential health benefits, said Sonya Schwartz, program director at the National Academy for State Health Policy.
However, there was at least one substantive change. In an analysis of the rule, Washington consultant Avalere Health LLC said HHS essentially stepped up the responsibility of plans to provide more generous pharmaceutical benefits. Instead of just covering a minimum of one drug per therapeutic class, exchange plans would need to cover the same number of drugs as a state’s benchmark plan. In the event the benchmark doesn’t cover any drugs in a particular class, exchange plans would be required to cover at least one drug in that class.
“In other words, if the benchmark plan covers 12 products in Class X and zero products in Class Y, then all [essential health benefits] plans in the state will have to cover 12 drugs in Class X and one drug in Class Y,” said Caroline Pearson, a director at Avalere.
Many states already have selected small-group plans for their benchmarks on the basis of their popularity and cost-effectiveness. The proposed HHS rule cited Avalere research that found that most small-group plans cover more than one drug per class.
Schwartz said the proposed higher standard could increase the number of drug options available to patients. “Let’s imagine that you have arthritis and there are numerous drugs for treating pain. Some of them are anti-inflammatory drugs, and there’s a whole host of them. You may need to try many drugs in a class before you find one that works for you. If there’s only one [covered] drug per class, that might be difficult.”
The proposed rule also outlines a process that would allow people to request coverage for needed drugs if they were not offered, although this wouldn’t necessarily guarantee access to these drugs, Schwartz said.
The regulation is an improvement over what was suggested in the initial federal bulletin, said Stephen Finan, senior policy director of the American Cancer Society Cancer Action Network. “Although we do not have complete information, what we know about the benchmark plan options suggest that most have a relatively robust formulary.”
One major source of concern is that insurers may switch the particular drugs that are offered, compared with the initial benchmark plan, Finan said. “Many cancer patients require multiple drugs even within the same drug class, and drugs within the same class are often not interchangeable for a particular form of cancer. Our priority is to make sure that, regardless of the number of drugs offered in the benchmark plan, that cancer patients have access to all evidence-based treatments.”
Some uncertainty remains about what types of drugs may be offered under this approach, said Ian Spatz, a senior adviser in the national health care practice of Manatt, Phelps & Phillips LLP and Manatt Health Solutions. “What you may be hearing from some of the [patient] advocates is there could be three generic drugs or three brand-name drugs. It could be the latest cancer therapy, or it could be a cancer drug that’s been used for many, many years in a category or class.”
From the health plans’ standpoint, a benchmark plan may have five to seven drugs in a category, but that doesn’t necessarily mean a robust drug benefit actually needs that many. “It might be fine to have two or three, if it’s the right drugs,” Spatz said. He said these decisions probably would not create many problems for physicians who are used to navigating plan drug formularies.
In a Nov. 20 teleconference, HHS Secretary Kathleen Sebelius said the new minimum coverage provisions would make it easier for people to access basic, essential benefits that are typical of what employers provide today. This is good for both physicians and patients, and also will “presumably make insurers better stewards of our health care dollars,” said Jeffrey Cain, MD, president of the American Academy of Family Physicians.
But according to insurance trade group America’s Health Insurance Plans, the requirements that HHS is proposing for exchange plans actually are much broader than what many employer and individual plans face now. This means enrollees may end up with more costly options, said Karen Ignagni, AHIP’s president and CEO. Some additional flexibility in the essential health benefits rule is a positive step, but “for health insurance exchanges and new insurance market rules to work, coverage needs to be affordable, and there needs to be broad participation in the system,” Ignagni said in a statement.