Montana Review: Specialty Tier Drugs

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1 Montana Review: Specialty Tier Drugs November 7, 2014 Northwest Health Law Advocate Christina Goe, General Counsel Montana Office of the Commissioner of Securities and Insurance 1 The Problem Our office received complaints that prescription drug plans sold in 2014 were discriminatory. o Pre-deductible co-payments for lower drug tiers, but coinsurance for the specialty tier. o Some plans had specialty drug tier co-insurance of 50% to 90 %. The complainants pursued this complaint with CMS, but no results as of this date. Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 1

2 Legal Objection Montana requires prior approval of policy/health form plans. Our office objected that certain plans were discriminatory based on state discrimination law. Cost-sharing for all drug tiers should be reasonably graduated. Insurers changed their health plans in response to our objection to their policy form. Legal Objection: Discrimination Same Risk or Hazard Individuals who can only be treated with specialty-tier drugs may reach their out-of-pocket maximum in just one or two pharmacy visits. There are many individuals with high-cost medical conditions, but their cost-sharing is spread throughout the year in the form of monthly payments to doctors and hospitals. The structure of the cost-sharing for specialty tier drugs makes the treatment unaffordable. Loss of access to treatment amounts to discrimination. Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 2

3 Unfair Trade Practice Act Mont. Code Ann (2): No person shall make or permit any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees or rates charged for any policy or contract of disability insurance or in the benefits payable thereunder or in any of the terms or conditions of such contract or in any other manner whatever. Substance of the Form Objection This prescription drug plan design appears to discriminate on the basis same risk or hazard ( ) Individuals with certain diseases (such as MS) require drugs that are available only in the specialty drug tier there are no brand name or generic options. Other individuals with equally serious illnesses, with similar expected claim amounts (same hazard) may obtain their prescriptions with a generic or brand name drug option and encounter fewer obstacles when obtaining necessary treatment. Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 3

4 Substance of the Form Objection Continued Patients who have generic or preferred brand name drugs available to treat their illness are provided with affordable access to the necessary prescriptions. Those that must utilize specialty tier drugs can be denied access to prescription drugs because the structure of the costsharing component (immediate payment of thousands of dollars) makes the treatment unaffordable. Legal Objection: Unfair Competition Some insurers offered some drug plans that had a reasonably graduated flat dollar pre-deductible copayment for all drug tiers. Patients requiring specialty tier drugs will shift to the insurer offering reasonable cost sharing, resulting in unfair competition from other insurers who were discriminating against individuals who need specialty tier drugs. Discrimination against individuals requiring specialty tier drugs results in unfair competition which disrupts the level playing field. Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 4

5 Unfair Competition Mont. Code Ann (1): No person shall engage in this state in any trade practice which is defined in this chapter as or determined pursuant to this chapter to be an unfair method of competition or an unfair or deceptive or practice in the business of insurance. Substance of the Form Objection This Rx plan also appears to violate Mont. Code Ann , in that it amounts to unfair competition. Other insurers are offering Rx plans that have a reasonably graduated flat dollar copayment amounts for each drug tier, including specialty drugs. It is likely that patients with illnesses requiring specialty tier drugs will shift to the competing plan, resulting in unfair competition. Discrimination against individuals requiring specialty tier drugs results in unfair competition, which also disrupts the level playing field requirement of the ACA. Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 5

6 Our Market Not all plan designs are the same. o Not all plans have pre-deductible co-pays. Silver and above plans: o All have at least one product design with pre-deductible copays for all drug tiers. o Specialty tier co-pays max out around $250, many are less. Bronze plans: o None have pre-deductible co-pays. o Bronze Plans have a 60% actuarial value. Moving Forward Focus on making sure consumers find the product that s the right fit for them. Consumer education o Health literacy outreach, with special attention to costsharing and drug tiers. o Compare plans on Assister education o Train navigators and assisters and insurance agents about high-cost drug needs and plan design. Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 6

7 Questions? Commissioner Monica J. Lindeen Christina Goe, General Counsel, Executive Office, Commissioner of Securities & Insurance Montana 7