Pharmacy Benefits in Health Exchanges

San Diego—Currently, health plans are designing pharmacy benefits to be used in conjunction with the medical benefits for the state health exchanges. Successful health plans will engage pharmacists to improve the design and management of the individual and small group benefits. A panel of health plan pharmacists discussed the key features of pharmacy benefits related to health exchanges during a Contemporary Issues session at the AMCP meeting titled Essential Pharmacy Benefits for Individual and Small Group Insurance.

Created as part of the Patient Protection and Affordable Care Act (ACA), state-based health exchanges are places where individuals and small businesses can shop for health insurance. The exchanges, a key component of the ACA, will begin in January 2014.

Shawn Barger, PharmD, pharmacy director at AvMed Health Plans, provided an overview on the progress of states intending to establish an exchange. As of January 4, 2013, only 18 states and the District of Columbia had submitted applications to run their own exchanges and received conditional approval from U.S. Department of Health & Human Services (HHS). Another 7 states are planning to pursue a state/federal partnership where they run the consumer assistance and/or plan management function of the exchange.

The ACA also identified 10 categories of services and items included in essential health benefits (EHBs). Dr. Barger said the categories include ambulatory patient services, emergency services, hospitalization, and prescription drugs. He said EHB selections were submitted to HHS by 25 states and the District of Columbia by December 10, 2012. The other 25 states did not make a selection; this allowed HHS to assign “largest small-group plan” as the benchmark for those states.

While pharmacy is considered an essential benefit and accepted standard, it is anticipated that the level of coverage will vary. Stephen George, PharmD, MS, senior consultant at Milliman, Inc., described the 4 levels of coverage, which varies depending on how much the insurer pays. Levels of coverage include:

     (1) Bronze: Benefits equivalent to 60% of the full actuarial value of plan benefits.

     (2) Silver: Benefits actuarially equivalent to 70% of full value.

     (3) Gold: Benefits actuarially equivalent to 80% full value.

     (4) Platinum: Benefits actuarially equivalent to 90% of full value.

Nancy Stalker, PharmD, vice president, pharmacy management at Blue Shield of California, rounded out the discussion with a presentation on the California state-run exchange. It is estimated that 5.3 million Californians will be eligible for coverage under the ACA, and 2.6 million Californians will be eligible for subsidies through the exchange. California has adopted an active purchaser approach, which allows it to negotiate with insurers, decide which insurers can offer health plans through the exchange, and set criteria for participating plans. Dr. Stalker said 33 health plans are interested in participating under this model.

In February, California became the first state to set benefit standards for health plans offered through its exchange. Dr. Stalker said that standardized plan benefits apply across the 4 metal tiers plus catastrophic plan. Furthermore, the standardized plan covers all EHBs. She further explained what standardized benefits in California mean: Every qualified health plan offers the same type of benefits for “apples to apples” market shopping for consumers. EHB coverage and member cost-share are the same. There is also an exceptions process to allow an enrollee to request clinically appropriate drugs not covered by the health plan.

Under the standards, platinum and gold plans will have no annual deductible. Silver plans will have $2000 in annual deductibles and Bronze plans will have $5000 in annual deductibles. Under the pharmacy benefit, the copay is less expensive in the platinum plan, with $5 for generics and $15 for preferred brands. Silver and bronze plans are the most expensive. Individuals with those plans will pay $25 for generics and $50 for preferred brands, according to Dr. Stalker.

“Once implemented, we will have the opportunity to provide health benefits to previously uninsured or underinsured people in our communities,” concluded Dr. Stalker.