PharmExec Blog

The Bare Essentials: One Way of Looking at HHS's Latest Pitch

Last Tuesday, HHS proposed regulations that, most notably, shed light on one of ACA’s centerpieces: gutting the insurance industry’s ability to limit coverage based on pre-existing conditions, and establishing new criteria for evaluating eligibility.

The newly proposed regulations also help to fill in the blanks around which essential health benefits (EHBs) will be covered by insurance providers, and more specifically, that insurers will need to cover not ‘just one’ but ‘at least one drug’ per therapeutic class, as the language of the law dictates. Taken directly from the proposed legislation:

The law directs that EHB be equal in scope to the benefits covered by a typical employer plan and cover at least the following 10 general categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

In a previous bulletin, HHS planned to require that only one drug in each therapeutic class be covered by the essential health benefits. But the rule now is that insurers must cover at least one, or the same number of drugs in each category and class that the specific state benchmark plan indicates. Tom Norton, principal at NHD Smart Communications, says of this proposed rule: “You’re going to see anywhere from 140-150 million Americans that are going to be utilizing this one-drug therapy concept.” This, Norton explains, is due to the influx of citizens coming under the ACA’s expanded umbrella of Medicaid, an assumption that relies on many private companies directing employees into state exchanges in an effort to ratchet down healthcare costs, in addition to an expected growth in the Medicare-eligible population, resulting from the arrival of millions of retiring Boomers into the program.

An issue that precedes such projections is how states will determine their strategic course in navigating such recommendations. Norton adds, “A lot of states will likely use this one-drug per class rule as a solution for drug costs because of the fact that they’re facing an enormous influx of people demanding service. If they can play it safe with this regiment, they will hang their star on HHS.”

While comments on the previous ‘just one’ plan suggested that it was too ‘one size fits all’ in its approach and that some conditions would prove the idea of one drug per area as inadequate, it also stands to reason that other factors may very well render the ‘at least one’ clause irrelevant. Such tentative articulation of the Affordable Care Act has as much an impact on the pharmaceutical industry as its individual state interpretation and employers’ overall reactions to it.

HHS asks that comments be made on these more recently proposed rules by December 26th.

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