In the past year, legislators, employers, the media and healthcare consumers have focused on a variety of topics related to prescription drug coverage and use. The opioid epidemic sweeping the country, changes in access to contraceptives and the rising prices of prescription drugs have all contributed to a renewed interest in how insurance plans cover prescription drugs and how health care consumers use them.
The opioid epidemic has devastated communities across the United States, particularly poverty-stricken and rural areas. Strikingly, many people who become addicted to opioids first have contact with these drugs through legal prescriptions prescribed for legitimate reasons, such as automobile accidents or workplace injuries. In 2014, doctors wrote over 245 million prescriptions for opioids in the United States, and the trend of overprescription fueled an epidemic of abuse and a rising number of overdose-related deaths.
Widespread alarm about opioid abuse and addiction pushed the White House Office of National Drug Control Policy to propose a plan to prevent and treat opioid addiction on a national scale. The plan includes the establishment of a Mental Health and Substance Use Disorder Parity Task Force to examine whether insurance plans are conforming to the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, which requires that mental health and substance abuse benefits be covered at the same level as other medical benefits. In light of the focus on addiction treatment, plan sponsors should take the opportunity to evaluate whether MHPAEA applies to current plans and, if so, whether those plans are MHPAEA-compliant.
Meanwhile, contraceptive coverage has been the focus of both new state laws and Supreme Court Cases. On March 23, 2016, the Supreme Court heard oral arguments for Zubik v. Burwell, a challenge to the Affordable Care Act contraceptive coverage mandate. A week later, the Court issued an unusual response: an order instructing all parties involved in the case to re-evaluate whether an exemption process could be developed that is acceptable to both the U.S. Department of Health and Human Services (HHS) and to religious nonprofits and closely held companies. Plan sponsors that currently have a contraceptive coverage exemption should follow this case closely; its outcome may change the exemption process significantly.
Meanwhile, some state legislatures are making contraceptives more widely accessible. This spring, California joined Oregon and Washington in allowing women to obtain hormonal contraceptives directly from a pharmacist without an office visit to a family doctor or OB/GYN. Some experts speculate that law might lead to lower expenses for insurance plans, as only the prescription itself must be covered, not the cost of an office visit. The law may also lead to lower expenses for patients, as many forms of birth control are covered without cost-sharing, and patients would save on the cost of an office visit copay.
Only a few drugs must be covered without cost-sharing, however, and in general, prescription drug prices are trending upward. New drugs with exorbitant price tags, and sharp price hikes for existing drugs, have come under intense scrutiny in the wake of a pharmaceutical company’s controversial acquisition and re-introduction of Daraprim, a 60-year-old drug, at a 5,500 percent increase in price, from $13.50 to $750 per pill. Price increases are driving up health care spending overall. In 2015, U.S. spending on prescription drugs exceeded $425 billion, a 12 percent increase from 2014. More than half of that increase is attributable to name brand and specialty drugs approved by the Food and Drug Administration (FDA) within the past two years, rather than older, cheaper generic drugs.
Healthcare payers are exploring strategies to keep prescription drug costs from spiraling out of control while improving patient health. In March, Centers for Medicare & Medicaid Services (CMS) proposed that Medicare pay providers to prescribe the most effective drug—not the most costly drug—and reward providers with bonuses for good patient outcomes. As more private insurance plans base payment models on Medicare pricing, Medicare’s payment innovations could spread throughout the health insurance industry. However, in the United States, prescription drug pricing is usually opaque and difficult for both patients and providers to understand.
As the insurance landscape evolves in response to health care trends, plan sponsors should keep in mind that national trends touch individual employees in ways that affect the plan. Do plan participants live in an area with high rates of opioid overprescribing? Is the plan subject to MHPAEA, and if so, how does the plan cover mental health and substance abuse services? Does the plan comply with Affordable Care Act contraceptive coverage requirements? How are pricey prescription drugs driving plan spending, and how can plan participants be empowered to choose drugs that offer the best value and most efficacy? Engaged plan sponsors and educated plan participants are key to a healthy plan. If you have questions about prescription drug coverage and spending, contact The Boon Group today.