By Lisa Zamosky
People with pre-existing health conditions understandably have a lot of questions about how their insurance coverage will be impacted by the Affordable Care Act. And, prescription drug coverage often tops the list of people’s biggest concerns.
I talked with Joel Owerbach, Pharm.D., vice president of health policy and strategy at the consulting firm, Alliance Life Sciences, about what consumers who buy coverage on their own can expect.
Here are 5 things you should know about pharmacy benefits sold through the state-based health insurance Marketplaces.
#1 Pharmacy is guaranteed. Pharmacy benefits are one of ten required categories of care that must be included in the benefits package of every health plan sold both to individuals and small businesses under the Affordable Care Act. Not all insurance policies sold on the private insurance market today cover prescription drugs, so for some people this will offer new protection.
#2 All classes must be covered. The law requires that all plans sold through the health insurance Marketplaces cover at least one drug in every drug category and class or the same number of drugs in each category as the state’s benchmark plan. A benchmark plan is that provided by a typical employer in the state. Including at least one drug in every class may sound like a big boost in coverage, but according to Owerbach, most plans offering prescription drugs were doing that and more anyhow. “It’s not unfamiliar territory for plans,” he says.
#3 Access depends on where you live. The fact that health plans’ benefit packages must mirror the state’s benchmark plan means insurance formularies (the list of drugs an insurer covers) will look different from one state to another.
According to Owerbach, for some people the new requirements may mean access to a wider choice of medications, while others could see fewer options. For example, Owerbach says, in California, the state’s benchmark plan is Kaiser Permanente, an HMO that has kept tight control over its formularies and the variation of drugs it makes available to patients. “In California, plans may be able to constrict their formulary because of Kaiser,” he says. In an effort to have their benefits match the state’s benchmark plan, insurers could begin to offer fewer medications than they had prior to the law taking effect. Owerbach adds, however, that health plans will also need to calculate how they can best keep costs down (translation: limit the number of drugs they cover) while at the same time making sure they’re offering enough drug coverage to make their plans attractive to consumers.
#4 Expect tighter controls. For some time health plans have been using a host of strategies to limit the use of expensive medications. Owerbach says consumers buying health plans through the Marketplaces can expect more of the same. “If [plans] have to add branded drugs on the formulary, they’re going to make it harder to access those drugs,” he says.
Some of the cost control schemes you can expect include placing drugs on different tiers (some tiers cost the consumer more than others), requiring prior authorization and the use of mail order to obtain prescriptions. Step therapy, which requires you to first try a generic medication to see if it works before getting the go-ahead for a pricier brand-name drug, is also a common practice.
#5 Greater protections. In the end, Owerbach is optimistic about the benefits being made available under the Affordable Care Act. One of the most important protections he cites is the limit the law places on out of pocket costs. Individuals will spend no more than $6,350 and a family no more than $12,700 in a year for all healthcare service – medical and pharmaceutical combined. Today out of pocket limits are often separate for medical and pharmacy, leaving consumers much more exposed to high costs. “That becomes pretty critical for consumers,” especially when expensive medications are needed to treat serious illnesses, such as cancer. Once consumers hit those out of pocket limits, insurers must pick up 100% of costs.
What questions do you have about specific benefits under the Affordable Care Act?