SummaryThe number of drugs health plans are required to cover in the individual and small group markets will vary dramatically by state in 2014.
A November 2012 CMS final rule on essential health benefits (EHB) included minimum drug coverage requirements for plans offered through exchanges and non-exchange plans serving individuals and small groups. These plans must cover at least the same number of prescription drugs in each category and class as the state-selected EHB benchmark plan; or one drug per class, whichever is greater.
An Avalere study of formulary generosity in EHB benchmark plans suggests patient access to prescription drugs will vary based on their state of residence; benchmark plan formularies cover anywhere from under 600 drugs in some states to 1,023 drugs in others.
While this rule sets minimum standards for the breadth of pharmaceutical coverage in any given area, it will not define the full spectrum of pharmacy benefit management decisions that will impact government, health plans, pharmaceutical manufacturers, and patients. Plans have the option to cover more than their state’s benchmark, and may apply utilization management and tiered cost sharing to covered drugs. Additionally, states may set standards beyond the federal minimums, though no states have adopted drug coverage requirements for 2014.
Taking into account applicable state and federal laws, health plans will seek to balance patient access, affordability, and commercial success through benefit design elements such as utilization management, copays, tiering, and preferred provider networks. Pharmaceutical manufacturers must prepare for coverage expansion by understanding how state-level differences in requirements will affect coverage of each product in their portfolio. Patient advocates must also examine benchmark coverage to identify geographic areas where patient access may be at risk.
Avalere is helping stakeholders understand EHB requirements and state benchmark coverage through therapeutic class analyses. This information enables patient advocates and manufacturers to better predict coverage for specific products or classes, thus informing their advocacy and contracting strategies.