Current law requires pharmacy benefit managers to agree in their contracts to
make certain disclosures regarding prescription drug reimbursement, including
updating maximum allowable cost pricing information for prescribed drugs or
devices at least every seven business days, reimbursing pharmacies or pharmacists
subject to the updated maximum allowable cost pricing, and modifying information
in the maximum allowable cost information in a timely fashion. Pharmacy benefit
managers currently must also include in each contract with a pharmacy a process
to appeal, investigate, and resolve pricing disputes in accordance with the specifics
in current law. These current law requirements are unchanged by the bill.
Under the bill, a health insurance policy or a governmental self-insured health
plan may not, and a policy or plan must ensure that a pharmacy benefit manager
does not, restrict a pharmacy from or penalize a pharmacy for informing an enrollee
under the policy or plan of any differential between the out-of-pocket cost of a drug
to the enrollee under the policy or plan and the cost an individual would pay for the
drug without using insurance. Health insurance policies are referred to in the bill
as disability insurance policies. The bill prohibits a policy, plan, or pharmacy benefit
manager from requiring an enrollee under the policy or plan to pay more for a covered
drug than either the cost-sharing amount for the prescription drug under the policy
or plan or the amount the enrollee would pay for the drug without using insurance,
whichever amount is lower.
The bill requires pharmacies to post a sign describing the pharmacist's ability
to substitute a less expensive drug product equivalent or interchangeable biological
product for the prescribed drug or biological product unless the consumer or the
prescribing practitioner indicates otherwise. Under current law, a pharmacist is
required to dispense either the prescribed drug or biological product or, if lower in
price, a drug product equivalent or interchangeable biological product. The
pharmacist is currently required to inform the consumer of the options available in
dispensing the prescription. The bill requires each pharmacy to have available for
the public a listing of the retail price, updated monthly or more often, of the 100 most
commonly prescribed prescription drugs available for purchase at the pharmacy.
The bill also requires pharmacies to make available for the public information on
how to access a list, created by the Pharmacy Examining Board, of the 100 most
commonly prescribed generic drugs with the corresponding brand name, and the
federal Food and Drug Administration's list of currently approved interchangeable
biological products, to which the Pharmacy Examining Board currently has to
provide a link on its website.
The bill requires a health insurance policy, governmental self-insured health
plan, or pharmacy benefit manager to provide advanced written notice to an enrollee
of a formulary change that either removes a prescription drug from the formulary or
reassigns a prescription drug to a higher benefit tier. A higher benefit tier is a tier
with a higher deductible, copayment, or coinsurance than the tier the prescription
drug had been assigned. The advanced notice required by the bill must be provided
no fewer than 30 days before the expected formulary change, must include
information on the procedure for the enrollee to request an exception to the
formulary change, and need only be provided to those enrollees who are using the
drug at the time the notification must be sent. A policy, plan, or pharmacy benefit
manager is not required to provide advanced written notice if the prescription drug
is no longer approved by the federal Food and Drug Administration; is the subject
of a notice, guidance, warning, announcement, or other statement from the FDA
relating to concerns about the safety of the drug; or is approved by the FDA for use
without a prescription. A policy, plan, or pharmacy benefit manager is also not
required to provide advanced written notice for the removal or reassignment of a
prescription drug if the policy, plan, or pharmacy benefit manager adds to the
formulary at the same or a lower benefit tier a generic prescription drug that is
approved by the FDA for use as an alternative to the prescription drug or a
prescription drug in the same pharmacologic class or with the same mechanism of
action. A lower benefit tier has a lower deductible, copayment, or coinsurance than
the prescription drug's current benefit tier.
The bill requires a pharmacist or pharmacy to notify an enrollee in a policy or
plan if a prescription drug for which an enrollee is filling or refilling a prescription
is removed from the formulary and the policy or plan or a pharmacy benefit manager
acting on behalf of a policy or plan adds to the formulary at the same or a lower
cost-sharing tier a generic prescription drug or a prescription drug in the same
pharmacologic class or with the same mechanism of action. If an enrollee has had
an adverse reaction to the prescription drug that is being substituted for an
originally prescribed drug, the bill allows the pharmacist or pharmacy to extend the
prescription order for the originally prescribed drug to fill one 30-day supply of the
originally prescribed drug for the cost-sharing amount that applies to the
prescription drug at the time of the substitution.
Fiduciary duty of pharmacy benefit managers
The bill imposes fiduciary and disclosure requirements on pharmacy benefit
managers. Specifically, the bill provides that a pharmacy benefit manager owes a
fiduciary duty to a plan sponsor and requires that a pharmacy benefit manager
annually disclose all of the following information to the plan sponsor:
1. The indirect profit received by the pharmacy benefit manager from owning
a pharmacy or service provider.
2. Any payments made to a consultant or broker who works on behalf of the plan
sponsor.
3. From the amounts received from drug manufacturers, the amounts retained
by the pharmacy benefit manager that are related to the plan sponsor's claims or
bona fide service fees.
4. The amounts received from network pharmacies and the amount retained
by the pharmacy benefit manager.
Application of manufacturer discounts
Health insurance policies and plans often apply deductibles and out-of-pocket
maximum amounts to the benefits covered by the policy. A deductible is an amount
that enrollees in the policy must pay out of pocket before attaining the full benefits
of the plan. An out-of-pocket maximum amount is a limit specified by the policy or
plan on the amount that enrollees have paid themselves, and once this limit is
reached, the policy or plan covers the benefit entirely. The bill requires health
insurance policies that offer prescription drug benefits and self-insured health plans
to apply the amount of discounts that a manufacturer of a brand name drug provides
to reduce the amount of cost-sharing that is charged to any enrollee for those brand
name drugs to this out-of-pocket maximum amount and deductible for the enrollee.
This requirement applies for brand name drugs that have no generic equivalent and
for brand name drugs that have a generic equivalent but that the enrollee has prior
authorization or physician approval to obtain. Health insurance policies are referred
to in the bill as disability insurance policies.
Reimbursement to federal drug pricing program participants
The bill prohibits any person from reimbursing certain entities that participate
in the federal drug pricing program, known as the 340B program, for a drug subject
to an agreement under the program at a rate lower than that paid for the same drug
to pharmacies that are similar in prescription volume. The bill also prohibits a
person from imposing any fee, charge back, or other adjustment on the basis of the
entity's participation in the 340B program. The entities covered by the prohibitions
under the bill are federally qualified health centers, critical access hospitals, and
grantees under the federal Ryan White HIV/AIDS program, as well as these entities'
pharmacies and any pharmacy with which any of the entities have contracted to
dispense drugs through the 340B program.
Drug margin data reporting by hospitals in the 340B program
The bill requires each hospital participating in the 340B program to report to
OCI the per unit margin for each drug covered under the 340B program dispensed
in the previous year, the total margin, and how the margin revenue was used. OCI
is required under the bill to publicly post the information submitted and publish a
report analyzing the data. The 340B program limits the pricing of prescription drugs
paid by entities that are covered by the program due to agreements between
prescription drug manufacturers and the federal government.
Prescription drug affordability review board
The bill creates a prescription drug affordability review board, whose purpose
is to protect Wisconsin residents and other stakeholders from the high costs of
prescription drugs. The board consists of the commissioner of insurance and the
following members, all of whom are appointed by the governor for four-year terms:
1. Two members who represent the pharmaceutical drug industry, at least one
of whom is a licensed pharmacist.
2. Two members who represent the health insurance industry.
3. Two members who represent the health care industry, at least one of whom
is a licensed practitioner.
4. Two members who represent the interests of the public.
The bill requires the board to meet in open session at least four times per year
to review prescription drug pricing information. The board must provide at least two
weeks' public notice of its meetings, make the meeting's materials publicly available
at least one week prior to meeting, and provide the opportunity for public comment.
The bill imposes conflict of interest requirements for the board relating to recusal
and public disclosure of certain conflicts. The bill directs the board to access and
assess drug pricing information, to the extent practicable, by accessing and assessing
information from other states, by assessing spending for the drug in Wisconsin, and
by accessing other available pricing information.
Under the bill, the board must conduct drug cost affordability reviews. The first
step in such reviews is for the board to identify prescription drugs whose increase in
wholesale acquisition cost exceeds specified thresholds and other prescription drugs
that may create affordability challenges for the health care system in Wisconsin. For
each identified prescription drug, the board must determine whether to conduct an
affordability review by seeking stakeholder input and considering the average
patient cost share for the drug. During an affordability review, the board must
determine whether use of the prescription drug that is fully consistent with the
labeling approved by the federal Food and Drug Administration or standard medical
practice has led or will lead to an affordability challenge for the health care system
in Wisconsin. In making this determination, the bill requires the board to consider
a variety of factors, which include the following:
1. The drug's wholesale acquisition cost.
2. The average monetary price concession, discount, or rebate the
manufacturer provides, or is expected to provide, for the drug to health plans.
3. The total amount of price concessions, discounts, and rebates the
manufacturer provides to each pharmacy benefit manager for the drug.
4. The price at which therapeutic alternatives have been sold and the average
monetary concession, discount, or rebate the manufacturer provides, or is expected
to provide, to health plan payors and pharmacy benefit managers for therapeutic
alternatives.
5. The costs to health plans based on patient access consistent with federal
labeled indications and recognized standard medical practice.
6. The impact on patient access resulting from the drug's cost relative to
insurance benefit design.
7. The current or expected dollar value of drug–specific patient access
programs that are supported by the manufacturer.
8. The relative financial impacts to health, medical, or social services costs that
can be quantified and compared to baseline effects of existing therapeutic
alternatives.
9. The average patient copay or other cost-sharing for the drug.
If the board determines that a prescription drug will lead to an affordability
challenge, the bill directs the board to establish an upper payment limit for that drug
that applies to all purchases and payor reimbursements of the drug dispensed or
administered to individuals in Wisconsin. In establishing the upper payment limit,
the board must consider the cost of administering the drug, the cost of delivering it
to consumers, and other relevant administrative costs. For certain drugs, the board
must solicit information from the manufacturer regarding the price increase and, if
the board determines that the price increase is not a result of the need for increased
manufacturing capacity or other effort to improve patient access during a public
health emergency, the board must establish an upper payment limit equal to the
drug's cost prior to the price increase.
Moneys from pharmacy benefit manager regulation used for general
program operations
The bill credits to the appropriation account for OCI's general program
operations all moneys received from the regulation of pharmacy benefit managers,
pharmacy benefit management brokers, pharmacy benefit management
consultants, pharmacy services administration organizations, and pharmaceutical
sales representatives.
Drug cost reporting
The bill generally requires certain prescription drug cost reporting by drug
manufacturers, pharmacy benefit managers, insurers, and pharmacy services
administrative organizations.
Under the bill, each insurer that offers a health insurance policy that covers
prescription drugs must submit to OCI an annual report that identifies the 25
prescription drugs that are the highest cost to the insurer and the 25 prescription
drugs that have the highest cost increases over the 12 months before the submission
of the report. Health insurance policies are referred to in the bill as disability
insurance policies.
The bill requires a drug manufacturer to notify OCI if it increases the wholesale
acquisition cost of a brand-name or generic drug on the market in Wisconsin by more
than an amount specified in the bill, or if it intends to introduce to market a
brand-name or generic drug that has an annual wholesale acquisition cost of more
than a specified amount. The manufacturer must include with the notice
justification for and documentation regarding the price increase. The bill requires
each manufacturer to provide OCI an annual description of each
manufacturer-sponsored patient assistance program in effect during the previous
year. Each manufacturer must also report to OCI the value of price concessions
provided to each pharmacy benefit manager for each drug sold.
The bill requires pharmacy benefit managers to report to OCI the amount
received from manufacturers as drug rebates and the value of price concessions
provided by manufacturers for each drug. OCI is required under the bill to publicly
post information submitted, analyze data collected, publish a report on emerging
trends in prescription prices and price increases, and annually conduct a public
hearing based on that analysis. OCI must also conduct a statistically valid survey
of pharmacies regarding whether the pharmacy agreed to not disclose that customer
drug benefit cost-sharing exceeds the cost of the dispensed drug.
The bill requires pharmacy services administrative organizations to annually
report to OCI the negotiated reimbursement rates of the 25 prescription drugs with
the highest reimbursement rates, the 25 prescription drugs with the largest
year-to-year change in reimbursement rate, and the schedule of fees charged to
pharmacies.
Licensure of pharmaceutical representatives
The bill requires a pharmaceutical representative to be licensed by OCI and to
display his or her license during each visit with a health care professional. The bill
defines “pharmaceutical representative” to mean an individual who markets or
promotes pharmaceuticals to health care professionals on behalf of a pharmaceutical
manufacturer for compensation.
Under the bill, the license must be annually renewed. The application to obtain
or renew a license must include the applicant's contact information, a description of
the type of work in which he or she will engage, an attestation that the professional
education requirements are met, the license fee, proof that any penalties and other
fees are paid, and any other information required by OCI. Under the bill, the license
fee is set by the commissioner. The bill requires the pharmaceutical representative
to report, within four business days, any change to the information provided on the
application or any material change to his or her business operations or other
information required to be reported under the bill.
The bill requires that a pharmaceutical representative complete a professional
education course prior to becoming licensed and to annually complete at least five
hours of continuing professional education. The coursework must include, at a
minimum, training in ethical standards, whistleblower protections, and the laws
and rules applicable to pharmaceutical marketing. The bill directs the commissioner
to regularly publish a list of courses that fulfill the education requirements. Under
the bill, a course provider must disclose any conflict of interest and the courses may
not be provided by an employer of a pharmaceutical representative or be funded by
the pharmaceutical industry or a third party funded by the industry.
The bill requires that, no later than June 1 of each year, a pharmaceutical
representative report to OCI his or her total number of contacts with health care
professionals in Wisconsin, the specialties of those health care professionals, the
location and duration of each contact, the pharmaceuticals discussed, and the value
of any item provided to a health care professional. The bill directs the commissioner
to publish the information on OCI's website, without identifying individual health
care professionals.
The bill requires that a pharmaceutical representative, during each contact
with a health care professional, disclose the wholesale acquisition cost of any
pharmaceuticals discussed and the names of at least three generic prescription
drugs from the same therapeutic class.
The bill directs the commissioner to promulgate ethical standards for
pharmaceutical representatives. Additionally, the bill prohibits a pharmaceutical
representative from engaging in deceptive or misleading marketing of a
pharmaceutical product; using a title or designation that could reasonably lead a
licensed health care professional, or an employee or representative of such a
professional, to believe that he or she is licensed to practice in a health occupation
unless he or she holds a license to practice; or attending an examination without the
patient's consent.
Under the bill, an individual violating any of these provisions is subject to a fine
and his or her license may be suspended or revoked. An individual whose license is
revoked must wait at least two years before applying for a new license.
Pharmacy benefit management broker and consultant licensing
The bill requires a person who is acting as a pharmacy benefit management
broker or consultant or any other person who procures the services of a pharmacy
benefit manager on behalf of a client to obtain a license. The bill allows OCI to
establish criteria, procedures, and fees for licensure by rule. Pharmacy benefit
managers, as defined under current law, are entities that contract to administer or
manage prescription drug benefits on behalf of an insurer or other entity that
provides prescription drug benefits.
Pharmacy services administrative organizations
The bill requires that pharmacy services administrative organizations
(PSAOs) be licensed by OCI. Under the bill, a PSAO is an entity operating in
Wisconsin that does all of the following:
1. Contracts with an independent pharmacy to conduct business on the
pharmacy's behalf with a third-party payer.
2. Provides at least one administrative service to an independent pharmacy
and negotiates and enters into a contract with a third-party payer or pharmacy
benefit manager on the pharmacy's behalf.
The bill defines “independent pharmacy" to mean a licensed pharmacy
operating in Wisconsin that is under common ownership with no more than two other
pharmacies. “Administrative service” is defined to mean assisting with claims or
audits, providing centralized payment, performing certification in a specialized care
program, providing compliance support, setting flat fees for generic drugs, assisting
with store layout, managing inventory, providing marketing support, providing
management and analysis of payment and drug dispensing data, or providing
resources for retail cash cards. The bill defines “third-party payer” to mean an entity
operating in Wisconsin that pays or insures health, medical, or prescription drug
expenses on behalf of beneficiaries.
To obtain the license required by the bill, a person must apply to OCI and
provide the contact information for the applicant and a contact person, evidence of
financial responsibility of at least $1,000,000, and any other information required by
the commissioner. Under the bill, the license fee is set by the commissioner and the
term of a license is two years.
The bill also requires that a PSAO disclose to OCI the extent of any ownership
or control by an entity that provides pharmacy services; provides prescription drug
or device services; or manufactures, sells, or distributes prescription drugs,
biologicals, or medical devices. The PSAO must notify OCI within five days of any
material change in its ownership or control related to such an entity.
Cost-sharing cap on insulin
The bill prohibits every health insurance policy and governmental self-insured
health plan that covers insulin and imposes cost-sharing on prescription drugs from
imposing cost-sharing on insulin in an amount that exceeds $50 for a one-month
supply. Current law requires every health insurance policy that provides coverage
of expenses incurred for treatment of diabetes to provide coverage for specified
expenses and items, including insulin. The required coverage under current law for
certain diabetes treatments other than insulin infusion pumps is subject to the same
exclusions, limitations, deductibles, and coinsurance provisions of the policy as other
covered expenses. The bill's cost-sharing limitation on insulin supersedes the
specification that the exclusions, limitations, deductibles, and coinsurance are the
same as for other coverage.
Value-based diabetes medication pilot project
The bill directs OCI to develop a pilot project under which a pharmacy benefit
manager and pharmaceutical manufacturer are directed to create a value-based,
sole-source arrangement to reduce the costs of prescription diabetes medication.
The bill allows OCI to promulgate rules to implement the pilot project.
Insulin safety net programs
The bill requires insulin manufacturers to establish a program under which
qualifying Wisconsin residents who are in urgent need of insulin and are uninsured
or have limited insurance coverage can be dispensed insulin at a pharmacy. Under
the program, if a qualifying individual in urgent need of insulin provides a pharmacy
with a form attesting that the individual meets the program's eligibility
requirements, specified proof of residency, and a valid insulin prescription, the
pharmacy must dispense a 30-day supply of insulin to the individual and may charge
the individual a copayment of no more than $35. The pharmacy may submit an
electronic payment claim for the insulin's acquisition cost to the manufacturer or
agree to receive a replacement of the same insulin in the amount dispensed.
The bill also requires that insulin manufacturers establish a patient assistance
program to make insulin available to any qualifying Wisconsin resident who is
uninsured or has limited insurance coverage and whose income does not exceed 400
percent of the federal poverty guidelines. Under the bill, an individual must apply
to participate in a manufacturer's program. If the manufacturer determines that the
individual meets the program's eligibility requirements, the manufacturer issues
the individual a statement of eligibility, which is valid for 12 months and may be
renewed. Under the bill, if an individual with a statement of eligibility and valid
insulin prescription requests insulin from a pharmacy, the pharmacy must submit
an order to the manufacturer, who must then provide a 90-day supply of insulin at
no charge to the individual or pharmacy. The pharmacy may charge the individual
a copayment of no more than $50. Under the bill, a manufacturer is not required to
issue a statement of eligibility if the individual has prescription drug coverage
through an individual or group health plan and the manufacturer determines that
the individual's insulin needs are better addressed through the manufacturer's
copayment assistance program. In such case, the manufacturer must provide the
individual with the necessary drug coupons, and the individual may not be required
to pay more than a $50 copayment for a 90-day supply of insulin.
Under the bill, if the manufacturer determines that an individual is not eligible
for the patient assistance program, the individual may file an appeal with OCI. The
bill directs OCI to establish procedures for deciding appeals. Under the bill, OCI
must issue a decision within 10 days, and that decision is final.
The bill requires that insulin manufacturers annually report to OCI
information about the number of patients served and amount of insulin dispensed
under the programs and that OCI annually report to the legislature on the programs.
The bill also directs OCI to conduct public outreach and develop an information sheet
about the programs, conduct satisfaction surveys of individuals and pharmacies who
participate in the programs, and report to the legislature on the surveys by July 1,
2024. Additionally, the bill requires that OCI develop a training program for health
care navigators to assist individuals in accessing appropriate long-term insulin
options and maintain a list of trained navigators.
The bill provides that a manufacturer that fails to comply with the bill's
provisions may be assessed a penalty of up to $200,000 per month of noncompliance,
which increases to $400,000 if the manufacturer continues to be in noncompliance
after six months and to $600,000 if the manufacturer continues to be in
noncompliance after one year. The bill's requirements do not apply to manufacturers
with annual insulin sales revenue in Wisconsin of no more than $2,000,000 or to
insulin that costs less than a specified dollar amount.
Patient pharmacy benefits tool
The bill directs OCI to award grants in an amount of up to $500,000 in each
fiscal year to health care providers to develop and implement a tool that would allow
prescribers to disclose the cost of prescription drugs for patients. The tool must be
usable by physicians and other prescribers to determine the cost of prescription
drugs for their patients. Any health care provider that receives a grant to develop
and implement a patient pharmacy benefits tool is required to contribute matching
funds equal to at least 50 percent of the total grant awarded.
Prescription drug importation program
The bill requires the commissioner of insurance, in consultation with persons
interested in the sale and pricing of prescription drugs and federal officials and
agencies, to design and implement a prescription drug importation program for the
benefit of and that generates savings for Wisconsin residents. The bill establishes
requirements for the program, including all of the following: the commissioner must
designate a state agency to become or contract with a licensed wholesale distributor
and seek federal certification and approval to import prescription drugs; the
importation program must comply with certain federal regulations and import from
Canadian suppliers only prescription drugs that are not brand-name drugs, have
fewer than four competitor drugs in this country, and for which importation creates
substantial savings; the commissioner must ensure that prescription drugs
imported under the program are not distributed, dispensed, or sold outside of
Wisconsin; and the importation program must have an audit procedure to ensure the
program complies with certain requirements specified in the bill. Before submitting
the proposed implementation program to the federal government for certification,
the commissioner must submit the proposed importation program to JCF for its
approval.
State prescription drug purchasing entity
The bill requires OCI to conduct a study on the viability of creating or
implementing a state prescription drug purchasing entity.
Health insurance premium assistance program
The bill directs OCI to develop a program to provide premium assistance to
individuals who purchase a silver level plan on the health insurance exchange
created under the federal Affordable Care Act and whose household income is
between 138 and 250 percent of the federal poverty line. The bill requires that the
assistance be provided no later than plan year 2024 and that OCI include a cost
estimate for the program with the agency's 2023-24 biennial budget submission.
Under the bill, the assistance amount is the difference between the lowest-cost silver
level plan and lowest-cost bronze level plan in the county in which the individual
resides. The bill defines silver and bronze level plans with reference to federal law.
Under federal law, a silver level plan must provide coverage that is designed to
provide benefits that are actuarially equivalent to 70 percent of the full actuarial
value of the benefits provided under the plan, with the percentage reduced to 60
percent for a bronze level plan. Also under federal law, individuals who purchase a
silver level plan and whose household income does not exceed 250 percent of the
federal poverty line may be eligible for federal cost-sharing subsidies.
State-based exchange
The bill directs OCI to establish and operate a state-based health insurance
exchange. Under current law, the federal Affordable Care Act (ACA) requires that
an exchange be established in each state to facilitate the purchase of qualified health
insurance coverage by individuals and small employers. Under the ACA, a state
must operate its own state-based exchange, use the federally facilitated exchange
operated by the U.S. Department of Health and Human Services, or adopt a hybrid
approach under which the state operates a state-based exchange but uses the
federal platform, known as HealthCare.gov, to handle eligibility and enrollment
functions. Wisconsin currently uses the federally facilitated exchange. The bill
directs OCI to establish and operate a state-based exchange, first by using the
federal platform and then transitioning to a fully state-run exchange. The bill
authorizes OCI to enter into any agreement with the federal government necessary
to implement these provisions. The bill also requires that OCI impose a user fee on
insurers offering plans through the state-based exchange. Under current law, the
ACA imposes user fees on insurers offering plans through federally facilitated
exchanges and state-based exchanges using the federal platform, which are
currently 3 percent and 2.5 percent of total monthly premiums, respectively. The bill
authorizes OCI to impose a user fee at the following rates:
1. For any plan year that OCI operates the state-based exchange using the
federal platform, the rate is 0.5 percent.
2. For the first two plan years that OCI operates the fully state-run exchange,
the rate is 3 percent. For later plan years, the rate is set by OCI by rule.
The bill also creates an annual appropriation in state general purpose revenue
for OCI's general program operations. Under the bill, OCI may spend up to $900,000
in fiscal year 2021-22 for the development of a public option health insurance plan.
Coverage of individuals with preexisting conditions and other insurance
market regulations
The bill requires certain health plans to guarantee access to coverage; prohibits
plans from imposing preexisting condition exclusions; prohibits plans from setting
premiums or cost-sharing amounts based on health status-related factors; prohibits
plans from setting lifetime or annual limits on benefits; requires plans to cover
certain essential health benefits; requires coverage of certain preventive services by
plans without a cost-sharing contribution by an enrollee; sets a maximum annual
amount of cost sharing for enrollees; and designates risk pool, medical loss ratio, and
actuarial value requirements.
The bill requires every individual health insurance policy, known in the bill as
a health benefit plan, to accept every individual who, and every group health
insurance policy to accept every employer that, applies for coverage, regardless of
sexual orientation, gender identity, or whether an employee or individual has a
preexisting condition. The bill allows health benefit plans to restrict enrollment in
coverage to open or special enrollment periods and requires the commissioner of
insurance to establish a statewide open enrollment period of no shorter than 30 days
for every individual health benefit plan. The bill prohibits a group health insurance
policy, including a self-insured governmental health plan, from imposing a
preexisting condition exclusion. The bill also prohibits an individual health
insurance policy from reducing or denying a claim or loss incurred or disability
commencing under the policy on the ground that a disease or physical condition
existed prior to the effective date of coverage.
A health benefit plan offered on the individual or small employer market or a
self-insured governmental health plan may not vary premium rates for a specific
plan except on the basis of whether the plan covers an individual or family, area in
the state, age, and tobacco use as specified in the bill. An individual health benefit
plan or self-insured health plan is prohibited under the bill from establishing rules
for the eligibility of any individual to enroll based on health-status related factors,
which are specified in the bill. A self-insured health plan or an insurer offering an
individual health benefit plan is also prohibited from requiring an enrollee to pay a
greater premium, contribution, deductible, copayment, or coinsurance amount than
is required of a similarly situated enrollee based on a health-status related factor.
Current state law prohibits group health benefit plans from establishing rules of
eligibility or requiring greater premium or contribution amounts based on a
health-status related factor. The bill adds to these current law requirements for
group health benefit plans that the plan may not require a greater deductible,
copayment, or coinsurance amount based on a health-status related factor.
Under the bill, an individual or group health benefit plan or a self-insured
governmental health plan may not establish lifetime or annual limits on the dollar
value of benefits for an enrollee or a dependent of an enrollee under the plan. The
bill specifies a maximum amount of cost-sharing that a plan may impose as the
amount calculated under the federal Patient Protection and Affordable Care Act
(ACA).
The bill requires individual and small employer plans to have either a single
statewide risk pool for the individual market and a single pool for the small employer
market or a single statewide risk pool for a combination of the individual and small
employer markets. The bill requires individual and small employer plans to have a
medical loss ratio of at least 80 percent and larger group plans to have a medical loss
ratio of at least 85 percent. The medical loss ratio is the proportion of premium
revenues that the plan spends on clinical services and quality improvement. The bill
also requires individual and small employer plans to provide a level of coverage that
is designed to provide benefits that are actuarially equivalent to at least 60 percent
of the full actuarial value of the benefits provided under the plan. An actuarial value
of 60 percent corresponds to a bronze tier plan under the ACA.
