Under President Obama’s health reform law, each state must either set up its own health insurance exchange or have the federal government create one for it by 2014. Obamacare requires plans on the exchanges to include “essential benefits” that clear benchmarks across 10 categories, including mental health and prescription drug coverage.
But in an attempt to give states flexibility in constructing their exchanges, the Obama Administration sketched out relatively lax prescription drug benchmarks, requiring insurers to provide just one drug per drug class to individual and small-group plans — i.e., one cholesterol drug, one anxiety drug, etc. According to Kaiser Health News, this means that under Obamacare mandates, consumers with more extensive prescription drug needs would be forced to pay for medication out-of-pocket. States, sensitive to the potential coverage hole and consumer needs, are choosing exchange benchmark plans that exceed Obamacare requirements:
So far, the benchmark plans cover about 62 percent of the drugs available in different drug classes, Avalere Health found in analyzing eight plans. Coverage of drugs in the classes studied ranges from a low of 26 percent in California’s benchmark plan to a high of 93 percent in Mississippi’s likely benchmark.
“The eight state benchmark plans display a wide range of coverage of brand and generic drugs in the classes we examined,” said Bonnie Washington, senior vice president of Avalere Health.
The one-drug-per-class minimum was one way the Obama administration gave flexibility to insurers trying to hold down costs, said Caroline Pearson, a director at Avalere. “They set the bar so low that most commercial health plans will exceed the one drug per class to be attractive to consumers,” she said.
State efforts to improve the quality of prescription drug coverage under insurance exchange plans highlights the potential consumer benefits of allowing states to experiment with their health models under Obamacare — but the wide discrepancies in coverage serve as a reminder that not every state is equally invested in doing right by its consumers.