States, private Medicaid plans address rising drug costs

As health insurers increasingly shift more costs onto consumers, a number of states have taken steps to help protect people from high cost-sharing for pharmaceuticals, particularly from expensive specialty-tier drugs.

At least seven states have passed legislation to lower the burden of high-price prescription drugs, both inside and outside the health insurance marketplaces, according to a report by The Commonwealth Fund. And seven state-based marketplaces now require insurers to offer standardized benefit designs that also place limits on pharmaceutical cost-sharing, according to the report.

States have taken different approaches to try to control rising consumer drug costs. Four states--California, Delaware, Louisiana and Maryland--have placed a limit on how much individual and group-market policyholders must pay to purchase a month's supply of drugs. Except in California where the law caps payment on all covered drugs, the other states cap costs only in the specialty tier of the plan's drug formulary. Two states--Maine and Vermont--have placed an annual cap on out-of-pocket drug costs for individuals and group market policyholders. Additionally, New York prohibits insurers from including specialty tiers at all for individual and group-market plans.

Seven states that run their own insurance marketplace are also limiting how much health insurers can shift the cost of drugs to consumers by requiring that they offer plans with standardized benefit designs, according to the report. Those states include California, Connecticut, Massachusetts, New York, Oregon, Vermont and the District of Columbia. As FierceHealthPayer previously reported, insurers are adopting more cost-sharing measures, especially coinsurance, to shift the costs of expensive specialty drugs onto consumers who purchase plans sold on health insurance exchanges.

Private Medicaid plans are also working to get a handle on prescription drug prices and are lobbying for changes in how the government program pays for medications, according to a report on STATnews. The Medicaid Health Plans of America, the trade group and lobby that represents Medicaid plans, is developing proposals for policymakers it hopes to make public by the middle of next year, the group's president and CEO Jeff Myers told STAT.

With more Americans than ever receiving benefits from a private Medicaid health plan -- some 70 percent of all Medicaid beneficiaries -- the private plans want to change how Medicaid covers drugs as the current law places restrictions on how much they can negotiate with drug companies, STATnews said.

The growing concern over the high cost of prescription drugs has prompted the federal government to hold a public forum this Friday to hear from a broad range of stakeholders on the issue.

To learn more:
- read the Commonwealth Fund report
- check out the STATnews report