Skip to content

ACA Improved Rx Drug Access, But Some Still Face Barriers to Finding Best Coverage

The Affordable Care Act guarantees that 10 “essential health benefits” — including coverage of prescription drugs — will be included in every plan sold through the law’s insurance exchanges.

But there’s a catch.

Health plans offered through the ACA’s exchanges are required to cover prescription drugs, but insurers get to decide their own drug formularies, and those can vary significantly from plan to plan. And while insurers — both on and off the exchange — are required to publicly post details of their drug coverage policies, the formularies often are “incomplete, inaccurate or difficult to navigate due to lack of standardization and confusing or inaccessible consumer cost information,” according to a California-based study released this month by the California HealthCare Foundation. CHCF publishes California Healthline.

These issues can lead to consumers signing up for plans and then being surprised to find that their necessary or preferred medications are not covered in the same way as in their previous health plans. But for many consumers, the problems are even more basic than that: some aren’t able to find the formularies in the first place, or understand the drug coverage once they have.

Consumers Face Problems Finding, Understanding Formularies

Consumers in the California study were unfamiliar “with many of the terms used routinely in prescription benefit information” — including the words “formulary,” “co-insurance” and “prescription drug tiers.”

Further, researchers found that while “many consumers had not thought about checking whether their medications would be covered prior to selecting a health plan, those who did look for the information had difficulty locating it.” In fact, consumers reported that finding drug information was “frustrating and time-consuming,” with some noting that the process “lasted several weeks.” In addition, the CHCF study found that “[n]either agents nor counselors reported routinely helping clients conduct such drug benefit searches.”

Further, the study found that formularies “frequently are not available in languages other than English.” The researchers wrote that enrollment counselors “stressed the need for a wider array of language translations of both formularies and other health plan information,” noting that translated language currently used in drug coverage information often is “either too technical or translations are not standardized across terms and definitions.”

Differing Formulary Tiers Could Cause Confusion

Even if consumers can find and understand prescription drug coverage information, differing formularies among providers in the same state-run exchange could result in additional confusion.

According to a brief by the Robert Wood Johnson Foundation, “In today’s commercial health coverage market … it is generally understood that tier 1 is for generics, tier 2 is for preferred brands, tier 3 is for non-preferred brands and tier 4 is for specialty drugs,” with each tier having “progressively higher consumer cost sharing and perhaps different rules” about deductibles. However, the researchers found “a great deal of variation among plans and markets as to whether generics are always located on tier 1.” The brief added, “A formulary design or practice with which consumers might be less familiar is placing some generics on higher cost formulary tiers — either as a second level of generic coverage (non-preferred generics) or on a tier with preferred brands.”

For example, exchange plans in Arizona, California, Colorado, Maryland, New York and Texas most often put generics into tier 1 of their drug formularies. Meanwhile, the practice of putting generics into tier 2 was common in Texas and Colorado. Half of the 14 state-run exchanges under the ACA did not offer any silver level plans this year that “specify a non-preferred generic tier,” according to the RWJF brief. For example, just two of the eight insurers offering plans through the Colorado exchange specified a non-preferred generic tier in their drug formularies. However, the researchers noted that plans could offer the equivalent without specifying the tier as such.

The brief found “several important implications of having generics on more than one formulary tier,” including that the practice might be unclear to consumers.

Addressing the Issues

While these problems existed before the ACA went into effect and persist market-wide, experts say the shift to more comprehensive coverage under the law likely will at least partially address the problem.

Wayne Turner, a staff attorney at the National Health Law Program, told California Healthline, “The drive to have comprehensive formularies that meet the needs of health care consumers will likely lead to less variation among plans, but will ultimately result in more consumer choice” in the future. “With all plans covering a broad array of medications, plans will likely differ in other areas, such as cost [sharing], prior authorization, quantity limits or other restrictions,” he said.

Further, Turner said, “Having a standardized tiering structure will go a long way in helping consumers understand and compare prescription drug benefits.”

But Allyson Funk, director of communications for the Pharmaceutical Research and Manufacturers of America, cautioned that “a single formulary is not the answer.” Funk told California Healthline that “a single formulary would limit access to the newest and most innovative treatments and may not offer patients the best treatment options for them.”

Meanwhile, the CHCF study recommended the development of “interactive online formulary search tool[s]” in order to “improve consumer access to and understanding of prescription drug information.”

For example, Colorado also has developed a searchable formulary tool that enables consumers to search for plans that cover their medications, according to Funk.

Funk said “all exchanges need similar tools to help patients pick coverage,” adding, “Consumers need the best information available to ensure their coverage is actually helping them access the health care services and treatments they need.”

Turner added that such tools are “particularly important for persons with serious or chronic medical conditions for whom prescription drug coverage is the most important aspect of health care access.”

Meanwhile, the CHCF study also suggests improving outreach to educate consumers and enrollment counselors on prescription drug benefits and terminology. For example, PhRMA has created a website that provides a glossary of prescription drug benefit terms and how they are commonly used by insurers.

Turner said, “Health plans and state authorities have the primary responsibility to ensure that health care consumers have meaningful access to information to make informed choices when selecting plans and utilizing health services. This means providing upfront explanations of tiering structures, cost sharing and utilization controls.”

Around the Nation

Fast-tracking a repeal. A top Republican has hinted that Senate Republicans might not use fast-track budget procedures to try to repeal the Affordable Care Act this year.

Saying ‘no’ to change. Arizona Gov. Doug Ducey’s (R) proposed changes to Arizona’s Medicaid program were met with widespread opposition last week at the first of five public meetings to be held on the proposal.

Strong enough to survive? A lawsuit challenging the Obama administration’s power to make changes to the Affordable Care Act could advance, despite questions about the strength of its arguments.

Related Topics

Insurance Road to Reform The Health Law