Capping costs and banning junk plans in California

On August 31, California wrapped up its 2018 legislative session, which included a robust health care agenda. The Golden State is known across the country as a catalyst when it comes to health care policy; this session was no different. While many states are only in session mere weeks or for a few months, California’s lawmakers flocked to Sacramento and hunkered down for nine months of activities. 
 
This year’s top priorities included tackling rising out-of-pocket costs for patients, creating more transparency for drug prices, and banning the sale of short-term limited-duration plans, also known as “junk plans,” in the marketplace. 
 
Out-of-pocket costs hit our community hard 
 
A 2017 study of data collected from NPF surveys found that although roughly 89 percent of patients with psoriasis or psoriatic arthritis were covered by insurance, a little over half spend more than $2,400 per year in out-of-pocket costs for their treatments. 
 
Volunteer advocate Jennifer Pellegrin describes the fear many of our patients face when paying for their treatments. “I shouldn’t have to worry if I will have food on my table or be able to pay my bills to survive the next month,” she says. “When I was first given my prescription for psoriatic disease, I was told that my co-pay could be upwards of $500 for a 30-day supply. That’s $6,000 a year for a medication. That is 20 percent of my income as a full-time student and full-time employee.” 
 
When facing high out-of-pocket costs, patients do not always use their medications appropriately. Many skip doses to save money or abandon treatment altogether. According to several studies, prescription abandonment rates increase significantly when cost-sharing exceeds $100 per month. 
 
NPF helped lead the effort in California to implement caps on monthly out-of-pocket costs for prescription drugs in 2015. However, that legislation was set to expire 2020. NPF advocacy staff and patient advocates headed to the Capitol to urge the extension of these caps.
 
The result was Senate Bill 1021, with the following provisions:
  • Extends current law to help alleviate the high out-of-pocket costs associated with chronic diseases. 
  • Caps copays on a monthly supply of any prescription drug. For a 30-day supply, the cap will be $250 for group or individual health plans or $500 for bronze level plans. 
  • Creates standard definitions of formulary tiers, including what types of medications should be placed in which tier. 
  • Requires greater transparency on formularies when it comes to coverage, so patients have the ability to search plans for their specific drug. 
  • Prevents health plans from placing drugs on more expensive tiers in response to high manufacturer list prices, making sure that cost is not the reason for drugs placement. 
Pellegrin explains, “With this cap patients will be able to budget monthly and help alleviate some of the stress when making ends meet.” These provisions will be in effect until 2024.
 
Buried in the fine print
 
Until Assembly Bill 2863 passed, pharmacists could be prohibited from disclosing to patients their cheapest option at the counter. (The California state legislature is made up of a Senate and an Assembly.) Health carriers and pharmacy benefit managers would put “gag clauses” in contracts, restricting or penalizing pharmacists for disclosing the cost of the prescription and the availability of alternatives or less costly medications. This bill allows an enrollee to be informed of all available treatment options and corresponding costs. 
 
This issue has swept the country, with 15 states passing similar legislation this year. The federal government also acted this year, banning gag clauses in group health plans and in Medicare prescription drug plans
 
Ensuring adequate coverage for chronic disease treatment
 
In August, the Trump administration expanded short-term limited duration (STLD) plans, which initially were meant to be gap coverage (for example, when someone is in-between jobs), not long-term coverage. The new rules allow these plans to provide coverage for 364 days and be renewable for 36 months. This decision helped expand coverage options, but was a red flag for many patient groups given what these plans cover – or rather, what they do not cover.
 
Short-term plans do not have to cover Affordable Care Act protections like pre-existing conditions, annual caps and pharmaceutical and other essential health benefits. Without these protections, many individuals in our community could face discrimination by their own health coverage, including not having their treatments covered at all. 
 
STLD plans are now being marketed alongside comprehensive health plans, creating confusion during open enrollment. Patients may select these plans for the low monthly premiums without understanding the limited coverage provided. This can lead to a heavy financial burden when patients utilize services not covered by these plans. 
 
California banned the sale of these plans in their state to ensure that patients would not be subjected to discrimination based on their health care history and to maintain a level of coverage for all insurance plans in their state. Californians will not have the option to purchase these plans as a means of year-round coverage. 
 
What’s next? 
 
California and many states are looking to the upcoming elections to see the shape of their legislatures. Moving into 2019, we will continue to see health care issues front and center in policy debates in all 50 states. 
 
NPF will continue to elevate the patient voice and move the needle for better access to care. If you want to stay up-to-date on our advocacy work, follow us on Twitter via @NPF and #NPFAdvocacy. Please visit our webpage for more information or contact Brittany Duffy-Goche at [email protected] or 503-546-8364 to discuss the many different ways you can get involved. 
 

Driving discovery, creating community

For more than 50 years, we’ve been driving efforts to cure psoriatic disease and improve the lives of those affected. But there’s still plenty to do! Learn how you can help our advocacy team shape the laws and policies that affect people with psoriasis and psoriatic arthritis – in your state and across the country. Help us raise funds to support research by joining Team NPF, where you can walk, run, cycle, play bingo or create your own fundraising event. If you or someone you love needs free, personalized support for living a healthier life with psoriatic disease, contact our Patient Navigation Center. And keep the National Psoriasis Foundation going strong by making a donation today. Together, we will find a cure.

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