The Departments of Health and Human Services (HHS), Labor, and Treasury must issue a promised regulation expanding cost-sharing safeguards to all health plan enrollees so patients can access and afford life-saving prescription medications in 2025.
Act Today
The Problem
Essential health benefits (EHBs) are a set of 10 categories of services that health insurance plans must cover under federal law. One of these categories is prescription drugs. However, health insurers and pharmacy benefit managers (PBMs) have found a loophole in federal law that allows them to redesignate some prescription drugs – often specialty drugs – as “non-essential.” These “non-essential” drugs are then exempted from cost-sharing requirements and patient affordability protections that are baked into federal law. As a result, cost-sharing for “non-essential” drugs is not counted towards a beneficiaries’ deductible or out-of-pocket maximum.
The Impact
PBMs and insurers are using the EHB loophole to maximize the amount of cost-sharing they can collect for themselves, while patients are left to bear the burden of high out-of-pocket costs for specialty drugs, which rarely have a generic alternative. The ramifications of the EHB loophole are massive:
- PBMs and insurers get to cash-in by manipulating federal law intended to protect patients, and
- Vulnerable patients lose accessibility and affordability protections in federal law.
The Solution
In April 2024, HHS and Treasury took the first steps to issue the Notice of Benefit and Payment Parameters for 2025 (2025 NBPP) final rule that protects patients with individual or small group health plans from the EHB loophole.
However, the 2025 NBPP does not automatically protect patients with large group or self-insured health plans – meaning that patients across the country are still at risk.
The National Psoriasis Foundation (NPF) urges HHS, Labor, and Treasury to issue rulemaking to clarify that essential prescription drug services covered by a non-grandfathered health plan are defined as an EHB. This will ensure that patient out-of-pocket payments for prescription medications are protected appropriately by federal law.
What Others Are Saying:
“We strongly support that HHS will further address the EHB loophole in a forthcoming rule with Labor and Treasury Departments that will ensure this rule applies to all non-grandfathered health insurance plans.” – All Copays Count Coalition
“What does this look like in practice? A patient may spend money on lifesaving medications that don’t count toward their out-of-pocket maximum. All year, a patient could pay out-of-pocket for prescriptions but never reach their maximum and see their insurance kick in. This saves a few bucks for insurers and PBMs but imposes massive financial burdens for patients who would otherwise be protected under the ACA. The EHB loophole forces patients to pay more out-of-pocket, a situation that circumvents the original intent of the law — which, as a reminder, is to keep drug costs affordable for consumers.” – Sally Greenberg, Executive Director, National Consumers League (NCL)