Insurance Exchanges: Update for Managed Care Pharmacy

San Francisco—Provisions in the Patient Protection and Affordable Care Act (ACA) call for the establishment of insurance exchanges. These exchanges are intended to provide a competitive marketplace for individuals and employees of small businesses to purchase health insurance, and will provide a vehicle for consumers to compare available private health insurance options on the basis of price and quality as well as other factors.

In a Contemporary Issues session at the AMCP meeting, attendees were given the highlights of the final ruling on exchanges and how the ruling will affect managed care pharmacy. The session, Essentials Benefits and Exchanges Update for Managed Care Pharmacy, was presented by Paul Fronstin, PhD, director, health research and education program, Employees Benefit Research Institute in Washington, DC.

Dr. Fronstin began his presentation by providing projections for the insurance market in 2019; assuming no ACA, an estimated 161 million people will have employer-sponsored health coverage, 32 million will be enrolled in Medicaid/Children’s Health Insurance Plan (CHIP), 30 million will have nongroup coverage, and 57 million will be uninsured. He then presented 2 possible scenarios for 2019 assuming the ACA does remain in effect: (1) 156 million with employer-sponsored coverage, 48 million in Medicaid/CHIP, 27 million with nongroup coverage, and 23 million in insurance exchanges, and (2) 141 million with employer-sponsored coverage, 50 million in Medicaid/CHIP, 29 million with nongroup coverage, and 31 million in exchanges.

The timeline for implementation of the exchange provisions of the ACA call for the expected decision from the Supreme Court on the constitutionality of the law in June 2012. “At that point, if the exchange provision remains law, states that have not established an exchange will have few legislative options,” Dr. Fronstin said. Failing a state exchange, a federally facilitated exchange will be established.

By January 2013, the US Department of Health and Human Services (HHS) will certify exchanges as fully or conditionally operational. Open enrollment will begin in 2013 and the exchanges must be fully operational by January 2014. It is expected that by January 2015, the exchanges will be financially self-sustaining. As of now, 14 states have established an exchange, 3 plan to do so in the near future, 20 are studying their options, 12 have not made any significant efforts toward establishing an exchange, and 2 have made a decision not to create an exchange.

Dr. Fronstin continued his presentation by outlining the reporting requirements in the final rule on exchanges. States will need to provide HHS information on distribution of prescription drugs, pharmacy benefit management activities, collection of rebates and other monies in conducting these activities, and the costs incurred to provide the drugs. In addition, the exchanges would be required to report the percentage of prescriptions that were provided via retail and mail order, the percentage of prescriptions for which a generic drug is available and dispenses compared with all drugs dispenses, and the aggregate amount of rebates, discounts, or price concessions that are passed through to the plan sponsor.

All exchanges are required to cover the “essential health benefits,” defined in ACA Section 1302: Categories of Care. These benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and management of chronic diseases, and pediatric services, including oral and vision care. Dr. Fronstin noted that states have flexibility in defining essential health benefits; however, if a state selects a state-regulated plan, all state-mandated benefits are by default part of the essential health benefits.

He concluded the session with a series of graphs illustrating changes in average deductibles for employee-only preferred provider organization coverage from 2005 to 2011, average copayments for prescription drugs from 2000 to 2011, and average coinsurance for prescription drugs from 2000 to 2011.