Council of State Governments Policy Academy Series Policy Issues for State Legislators November 21, 2014
What is it all about? 2
What did patient protections and affordable care look like in the 2014 EHB Plans? Many plans have high deductibles &high cost sharing for drugs (and combined deductibles) Silver plans with a large combined deductible and high cost sharing for drugs (common plan design) effectively cover just 54% of Rx costs (but 70% of overall health costs) Milliman A significant proportion of silver plans put all Rx drugs in certain therapeutic areas on the highest cost-sharing tier Subsidies typically are used to lower costs other than drug costs 3
What did patient protections and affordable care look like in the 2014 EHB Plans? Formularies generally exclude between 10%-50% of single-source brand medicines In 7 classes, more than 20% of plans require coinsurance of 40 % or more for all medicines in the class Over 60% of plans place all covered medicines in the class for treating multiple sclerosis on the formulary tier with the highest cost sharing Over 60% of the plans place all covered medicines in certain classes for treating cancer on the formulary tier with the highest cost sharing Almost all plans (86%) place all medicines in at least one class on the highest cost-sharing tier Avalere study, http://www.phrma.org/affordable-care-act/coverage-without-access-an-analysis-of-exchange-plan-benefits-for-certainmedicines#sthash.blpyt5zg.dpuf 4
How were the three major categories of EHB benefits covered? Analysis: Impact of Silver Plans with Combined Deductibles Plan Cost Sharing / Actuarial Value by Service Category 2014 Silver Plan Combined Deductible Employer Plan No Rx Deductible Hospital 72.4% 77.3% Professional & other 71.2% 75.5% Pharmacy 53.8% 80.0% Total Plan AV 68.5% 77.1% Source: Milliman, Impact of the Health Insurance Marketplace on Participant Cost Sharing for Pharmacy Benefits May 2014. 5
What policies should be considered? Affordability, Parity, and Comparability Patients should not face high costs simply because their condition is treated with a medicine Nondiscrimination and Patient Protections Plans should not use formularies to discourage sicker patients from enrolling Choice and Transparency Patients can make informed plan choices from a range of options 6
What options exist to address the policy concerns? Affordability, Parity, and Comparability Deductibles Protect OOP Limit Cost Sharing Subsidies for Low Income Actuarial Value Calculator Changes Nondiscrimination and Patient Protections Exceptions and Appeals Coverage of New Medicines Process for Counting and Formulary Review Tools/Rules to Prevent Discrimination Choice and Transparency Searchable formularies Summary of Benefits Websites Data on Exceptions, Performance, & Quality 7
Affordability, Parity, and Comparability Ensuring balanced coverage across all ten categories of EHB Defend Federal out of pocket cap limit Consider: Rx prescribed/administered by out-of-network providers Rx covered through exceptions process Brand Rx when there is a generic in class 8
Discrimination Prohibitions Federal EHB reqs - not met if a plan s benefit design (or implementation) discriminates based on age, present or predicted life expectancy, medical dependency, quality of life, or health conditions Issuers providing EHBs must not : discriminate based on race, color, national origin, disability, age, sex, gender identity or sexual orientation Consider: State processes to ensure that EHB packages do not discriminate against certain patients Concerning practices include placement on specialty tiers, brand-only deductibles, and outliers in cost-sharing 9
Transparency QHPs - provide accurate/standardized consumer information, including a summary of coverage and benefits, cost-sharing information, public website listing, provider directory, quality improvement information Consider: Requiring state websites to include links to sources that will help consumers make educated decisions and to make certain information publicly available for use in comparing and purchasing plans, including: Formulary information Provider network information Co-payment and co-insurance information Description of how deductible applies to drugs Exclusions from coverage / restrictions on use or quantity Process for appealing denial of coverage 10
Network Adequacy Initially, CMS will rely on state reviews of network adequacy standards and accreditation to ensure adequate networks States vary in the strength of their network adequacy requirements Consider: Developing clear network adequacy requirements for QHPs at state level that guarantee access to a wide range of providers 11
Are there other forces at play? The Issue: Whether the IRS has the authority to administer subsidies in FFE when the statute specifically authorizes subsides only in state Exchanges King, the Fourth Circuit decided unanimously that the statutory language is ambiguous and upheld the subsidies in states with federally-facilitated exchanges. Supreme Court granted cert. Halbig, the D.C. Circuit concluded that the ACA unambiguously restricts the... subsidy to insurance purchased on Exchanges established by the state. State of Oklahoma v. Burwell, Eastern District of Oklahoma held the IRS rule unlawful but the order in that court has been stayed and is pending appeal. State of Indiana v. IRS, pending in the U.S. District Court for the Southern District of Indiana. 12
Are there other forces at play? The Potential Impact: 34 States with Federally Facilitated Exchanges (FFE) - including large states like TX and FL A majority of the lowest income enrollees receive cost-sharing subsidies to lower their co-payments, deductibles and co-insurance Many of the individuals enrolled in FFEs would not be able to afford coverage without subsidies without subsidies they may be without coverage 24 of the FFE 34 states have no plans to expand Medicaid though that number is changing If the Supreme Court rules against federal exchange subsidies, there will be downward pressure on the states to expand Medicaid 13
Why is access to Rx drugs so important to the future of health care reform? Medicines Are Transforming the Treatment of Many Difficult Diseases HIV/AIDS In the last two decades, advances in treatment have contributed to a more than 80% decline in death rates and transformed the disease from an acute, fatal illness to a chronic condition. Multiple Sclerosis Oral and biologic treatments approved over the past 15 years have dramatically improved outcomes for MS patients, slowing disability progression and offering fewer relapses. Cancer New therapies have contributed to a 20% decline in cancer deaths since the 1990s. Today, 2 out of 3 people diagnosed with cancer survive at least 5 years. Rheumatoid Arthritis Therapeutic advances have transformed the RA treatment paradigm over the last 20 years, from focusing on symptom management to now aiming for slowed disease progression and even disease remission. 14
And Finally. QUESTIONS? 15