Health Insurance Marketplace Launches Come with Challenges

San Diego—The challenges that come with the launch of the new health insurance marketplaces as 2014 rapidly approaches were topic for discussion in a Contemporary Issues session at the AMCP meeting titled Fostering Healthy Markets: Opportunities and Challenges with Launching Health Insurance Marketplaces. The presenters were Heather Bonome, PharmD, senior clinical account executive, Express Scripts; H. Eric Cannon, PharmD, FAMCP, chief of pharmacy, SelectHealth, Intermountain Healthcare; David Smith, healthcare economist, Leavitt Partners, LLC; and Deb Sternaman, PharmD, director, formulary services, Catamaran.

One of the biggest challenges, according to the presenters, is the lack of clear-cut answers from the Centers for Medicare & Medicaid Services (CMS) and/or the U.S. Department of Health & Human Services (HHS) on many of the issues. Answers appear to change, or to be vague and then slowly gain more structure.

Provision of Essential Health Benefits

Only 2% of health plans currently meet the requirements for essential health benefits, or EHB (see box), as required by the Patient Protection and Affordable Care Act, according to Dr. Sternaman. Intended to reflect a standard employer plan, insurance providers both in and outside of the health insurance exchanges must be prepared to offer EHBs, which means that next year, millions of Americans will gain coverage they did not have previously.

New Marketplace Models

The new marketplace models consist of state-based exchanges, state partnership exchanges, and a federally facilitated exchange. In the state-based exchange, the state operates all exchange activities, but may elect to have the federal government provide services for certain activities (premium tax credit and cost sharing reduction determinations). The state operates activities for plan management and consumer assistance in the state partnership exchange, but may choose to have the federal government perform certain activities such as the reinsurance program, and Medicaid and Children’s Health Insurance Program (CHIP) eligibility determinations. HHS will operate the federally facilitated exchange, but the state may elect to perform certain activities such as the reinsurance program, certain plan management functions, and Medicaid and CHIP eligibility determinations.

Formulary Requirements

Prescription drug benefits must cover the greater of either 1 clinically distinct drug in every United States Pharmacopeia category/class; or the same number of clinically distinct drugs in each category and class as the EHB benchmark. Plans must also have procedures in place that will allow access to uncovered clinically appropriate drugs, Dr. Cannon said. In these cases, CMS is encouraging plans to (1) have an internal review and provide a decision no later than 72 hours after the request was made (24 hours for serious health conditions), and (2) utilize an independent review entity to make a decision within the same timeframes.

In addition, plans must administer a combined medical/pharmacy out-of-pocket maximum of $6350. There are no mandates to add new drugs for the first 2 years and no restrictions on the use of utilization management programs.

Designing a Pharmacy Benefit

Planning a strategy for an exchange pharmacy benefit requires answers to the following key questions, according to Dr. Bonome:

1) Where are you offering an exchange benefit?

The answer to this question lies in the type of exchange (state, state/federal, federally facilitated). Benchmark plans differ greatly by state.

2) What kind of patients do you expect to enroll?

Market research conducted by CMS categorized the uninsured into segments: healthy and young; sick, active, and worried; and passive and unengaged.

3) What experience do you already have with potential exchange populations?

These populations include small group employers, private exchanges, the individual market, and the high-risk pool.

HHS has proposed a benchmark approach in the provision of pharmacy benefits, giving states the flexibility to select a benchmark plan that reflects the scope of services offered by a typical employer plan in the state. HHS suggested a default benchmark for states that did not choose one. Benchmarks will be in place for the 2014 and 2015 plan years. Coverage within a benchmark category can be modified by states as long as they do not reduce the value of coverage. A particular challenge associated with this, Dr. Sternaman said in conclusion, is that the files used to create the benchmark numbers were not up to date, and did not include some of the newer agents in the last year.