Covered California Approves Specialty Rx Price Caps for 2016

Last week, Covered California's board of directors unanimously voted to impose a cap on out-of-pocket costs for specialty prescription drugs for consumers who purchase 2016 health plans through the exchange, KQED/NPR's "Shots" reports (Dembosky, "Shots," KQED/NPR, 5/22).

Background

According to a recent report from the California HealthCare Foundation, Covered California health plans in 2014 varied significantly in their coverage of prescription drugs, particularly among those for chronic conditions. Such variations affected consumers' out-of-pocket costs (CHCF report, May 2015). CHCF publishes California Healthline.

In April, Covered California recommended that consumers pay no more than $500 per prescription monthly for specialty drugs in 2016.

However, the exchange's board of directors delayed a vote on the price cap, noting that it would seek more feedback after advocates had urged the exchange to adopt a lower cap of $200 per month (California Healthline, 4/17).

Details of Price Cap

Under the new price cap, Californians with silver and platinum plans will pay no more than $150 to $250 per month for specialty drugs, while out-of-pocket specialty drug costs for consumers with bronze plans will be capped at $500 per month.

The exchange's policy applies only to consumers who purchase health plans through the individual insurance market and not to those with employer-based coverage ("Shots," KQED/NPR, 5/22).

According to The Hill, California is the first state to impose such a cap on out-of-pocket specialty drug costs (Sullivan, The Hill, 5/22).

Covered California Executive Director Peter Lee said, "These new policies strike a balance between ensuring Covered California consumers can afford the medication they need to treat chronic and life-threatening conditions while keeping premiums affordable for all."

Reaction

Consumer groups largely supported the exchange's decision but noted that more could be done to keep costs down.

Liz Helms, CEO of California Chronic Care Coalition, said, "As it stands now, the bronze plan will not meet the needs of Californians with chronic conditions."

Insurance Commissioner Dave Jones (D) also criticized Covered California's price cap for bronze plans.

Jones, who had called for a $300 monthly price cap for Bronze plans, said that the exchange's new policy "makes prescription drug coverage unaffordable to Californians who buy bronze plans, one of the most popular health insurance levels of coverage" (Terhune, Los Angeles Times, 5/22).

Meanwhile, Betsy Imholz, special projects director at Consumers Union, said the exchange's new price cap is "better than most, but not the absolute top of the heap" ("Shots," KQED/NPR, 5/22).