Covered California Board Protects Consumers Against Skyrocketing Specialty Drug Costs To Ensure Access To Vital Medications

SACRAMENTO, Calif. — Covered California made history on Thursday when it became the first health exchange in the nation to adopt benefit design changes to improve access to high-cost specialty drugs. The Covered California Board approved the last in a series of changes, which will take effect in 2016, at its meeting on Thursday. The improvements come after months of meetings between exchange leadership and consumer organizations, stakeholders, carriers and regulators to determine what is in the best interest of all Covered California consumers. 

“This is the first time that an exchange has ensured that all of its consumers have access to the medications they need,” said Covered California Executive Director Peter V. Lee. “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.”

The vast majority of Covered California consumers will see their specialty drugs capped at $250 per month, per prescription. Overall, the caps will range from $150 to $500, and, because of Covered California’s standard benefit design, they must be offered by every health plan in the individual market as well as by all plans offered by the exchange.

“We are putting California consumers first, and we believe this is the right role for Covered California,” Lee said. “While Covered California is doing its part to protect consumers against these rising costs, a broader solution is needed to curtail the explosion in specialty drug costs so that consumers get the care they need without driving up insurance costs so much that consumers can no longer afford coverage.”

The cap will reduce the monthly out-of-pocket costs for consumers so that enrollees pay less each month. Before the changes, consumers who needed these medications were forced to spend their entire maximum out-of-pocket costs — sometimes thousands of dollars — in their first few months of coverage.

This is the final step in a package of consumer-focused changes made to the benefit design to make sure consumers who use high-cost specialty drugs have multiple affordable options beginning in 2016. Changes adopted by the board in April and May moved certain drugs within categories, or “tiers,” of drug coverage to make them most accessible to consumers. Specifically:

Lee said the changes came after Covered California conducted analysis and worked with a broad range of consumer groups and stakeholders for six months to find a balance between specialty drug prices and the impact on premiums for all Covered California enrollees.

Covered California has also made it easier for consumers to access the health care services they need by adding a specialist visit, without being subject to a deductible, for those in the Bronze plan and by removing the application of a deductible for other needed services, such as lab tests, rehabilitation and others. Covered California’s Silver plan will also be simplified by combining copay and coinsurance into a single product. Every doctor visit, lab test and prescription will not be subject to a deductible in this single product.

These policies are important because they will allow Covered California consumers to get access to doctors and get the right care at the right time, while minimizing out-of-pocket costs.

Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. Covered California helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.