States Grapple With Making Prescription Drugs Accessible
Providing prescription drugs for those with limited means is an issue that states are responding to in different ways, legislators were told recently.
Diverse solutions among 29 states include subsidies in 23 of them, as well as discounts, bulk purchasing, and a price control pilot program.
In the 23 states that now provide subsidies to residents, there are often requirements for participation, a panelist explained to state legislators at the summer meeting of the National Conference of Insurance Legislators, Albany, N.Y.
Requirements for participation in the programs often include income eligibility guidelines, attendees were told. In 13 states, participants need to be at least 65, said Richard Cauchi, programs manager-health with the National Conference of State Legislatures in Denver, and nine states offer coverage to those with adult disabilities.
Ten states offer discounts for prescription drugs, he added.
Cauchi noted that there is a lot of experimentation underway in program design.
It is a sound goal to make prescription drugs more attainable, he said, but “legislators do have to keep a tricky balance between fiscal cost to the state and [benefits offered].”
People interviewed by National Underwriter echoed the view of the Health Insurance Association of America in Washington–that providing prescription drugs to those who need them is a national issue that federal lawmakers will have to address.
Maryland is one state that is experimenting with ways to make prescription drugs accessible to its residents.
A new program was officially rolled out this month and has already filled 12,500 of a total of 30,000 available spots, according to John Folkemer, acting deputy secretary of Health Care Financing with the Maryland Department of Health and Mental Hygiene in Baltimore.
It replaces the Rural RX program that was enacted by Maryland’s General Assembly in 2000. That program offered prescription drug coverage to seniors and disabled citizens who had lost coverage when Medicare HMOs pulled out of the state, Folkemer explains.
The Rural RX program charged $40 per month in premiums and had a $50 deductible and a $15,000 cap on benefits. It was designed to run for two years, but because of poor participation, it was replaced by the new program, Folkemer adds.
It offered a three-tier co-pay: $10 for generic, $25 for formulary brand name and $35 for formulary non-brand.
However, according to Folkemer, because of the cost, only 1,200 state residents signed on.
“There was too much premium for too little benefit,” says James Day, a spokesman for CareFirst BlueCross BlueShield, Owings Mills, Md., an administrator for the new program.
The program is “designed to be nothing more than a stop-gap measure to help as many as we can until the federal government puts something in place,” he adds.
Ultimately, Day continues, a program will have to be developed by the federal government because of the expense involved.
The success of the new program, he says, is due not only to lower costs but also to an organized publicity campaign to make residents aware of its existence.
The new program, the Senior Short-term RX plan, has a $10 premium and the same co-pay structure as the previous plan, according to Day.
It is being funded, Day says, by three insurance plans serving the state. The plans– CareFirst BlueCross BlueShield; Mid-Atlantic Medical Services, Rockville, Md.; and Aetna U.S. Healthcare, Blue Bell, Pa.–gave back a piece of a hospital rate discount the state had granted them in return for offering broad health coverage in Maryland.
CareFirst gave up 1.5% of the 4% discount it received for offering guaranteed open enrollment, Day says. Total costs are just over $20 million, including a $3 million to $4 million contribution made by the other two providers, he adds.
But, Day adds, at least some of the cost will be passed on to policyholders in the form of premium adjustments. “We are a not-for-profit but we still have the obligation to remain competitive.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 27, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.