Healthcare Reform 2010: Federal and State Updates

Federal Updates

Many questions remain unanswered about the healthcare reform recently enacted into law. While the law will not provide healthcare for every U.S. citizen, the number of citizens eligible for healthcare will increase by approximately 32 million. However, how the law will affect citizens requiring special healthcare needs is uncertain. For instance, it is still unclear whether it will improve access to care for those who have chronic illnesses, rare diseases and genetic disorders — who also rely on plasma-derived therapies and their analogues, vaccines and other biologics. All we can be sure of now is the bill’s key provisions.

Private Insurance Reform

• Bans discrimination against children with pre-existing conditions within six months of the law’s passage (effective for adults no later than 2014).
• Bans recisions effective within six months (health plans are banned from dropping people from coverage if they get sick).
• Bans lifetime caps on coverage within six months.
• Regulates annual limits on coverage within six months, and restricts new plans’ use of annual limits to ensure access to needed care (beginning in 2014, the use of any annual limits would be prohibited for all plans).
• Requires free preventive care under new plans (no copays and deductibles) effective within six months.
• Creates a new independent internal and external appeals process for new plans effective within six months.

Uninsured Reform

• Establishes an interim high-risk pool for the uninsured with pre-existing conditions (effective 90 days until state exchanges are up and running by 2014).
• Extends coverage for young adults up to their 26th birthday through their parents’ insurance policy (effective within six months).

Medicare Reform

• Begins to close the Medicare Part D doughnut hole by providing a $250 rebate to Medicare beneficiaries who hit the doughnut hole in 2010 (beginning in 2011, the law institutes a 50 percent discount on brand-name drugs in the doughnut hole, and by 2020, it completely closes the doughnut hole).
• Eliminates copayments for preventive services, and exempts preventive services from deductibles under the Medicare program (effective Jan. 1, 2011).
• Creates a temporary reinsurance program (until the state exchanges are available) to help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55 to 64 (effective 90 days after enactment).

Other Reform

• Increases funding for community health centers to allow for nearly doubling the number of patients served during the next five years (effective 2010).
• Provides new investment in training programs to increase the number of primary care doctors, nurses and public health professionals (effective 2010).
• Provides aid to states to establish offices of health insurance consumer assistance to help file complaints and appeals (effective 2010).
• Creates a long-term insurance program financed by voluntary payroll deductions to provide benefits to adults who become functionally disabled (effective Jan. 1, 2011).
• Establishes a regulatory pathway for FDA approval of biosimilar versions of previously licensed biological products

State Updates

While Congress was busy debating healthcare reform, the states were busy introducing bills sponsored by patient organizations to ensure that those with chronic illnesses and rare diseases have continuity of care and access to medications prescribed by their physicians (rather than their insurance companies), as well as to ban the practice of specialty tiers and cap the out-of pocket costs for prescriptions. The number of states introducing legislation this year has increased. They include California, Florida, Hawaii, Maryland, Minnesota, Missouri, Nebraska, New York and Ohio, among others. It is expected that the attention the bills receive in these states this year will result in reforms in 2011.

While the National Multiple Sclerosis Society has been one of the most active and organized of the patient organizations calling for legislation, other organizations also have taken part, including the Hemophilia Federation of America and the Alliance for Plasma Therapies, whose membership includes the American Partnership for Eosinophilic Disorders, the A-T Children’s Project, the Foundation for Peripheral Neuropathies, the International Pemphigus & Pemphigoid Foundation, The Myositis Association, the Neuropathy Action Foundation, The Neuropathy Association and the Platelet Disorder Support Association. These organizations are working together to analyze all bills and to utilize the grass-roots strength of chapters and support groups to make next year the “The Year of the Patient.”

Currently, the state bills include:

• California — AB 2170: Prescription DrugCoverage under Formularies. Prohibits a healthcare service plan or a health insurer that covers prescription drug benefits and uses a formulary from changing the applicable copayments, deductibles or coinsurances for prescription drug benefits for the length of the contract or policy.
• Florida — HB 275 and SB 516: Prescription Drugs Insurance Coverage. Prevents health insurance plans from prohibiting, limiting, switching, reducing or denying prescription drug coverage during the plan year, and provides for continuity of care for Florida’s consumers.
• Hawaii — HB 2461: Continuity of Care Legislation. Requires health insurers and like entities to offer at least the same drug coverage to the insured that they had under their previous policy with a different insurer or like entity.
• Maryland — HB 478 and SB 663: CostSharing Obligations Legislation. Prohibits specified insurers, nonprofit health service plans and health maintenance organizations from imposing a cost-sharing obligation for a prescription drug that exceeds the dollar amount of the cost-sharing obligation; also prohibits allowing unfair discrimination between individuals for the amount of the cost-sharing obligation for a prescription drug.
• Minnesota — SF 2816: Limitation on Enrollee Cost-Sharing for Biologic Prescription Drugs. Ensures that enrollees who are prescribed FDA-approved biologic products are charged a copayment, coinsurance or deductible that does not exceed their health plans’ lowest-cost, nonpreferred, brand-name FDA-approved medication in the prescription plan formulary.
• Nebraska — LB 1017: Ban on Specialty Tiers and Coinsurance for Prescription Medications. Eliminates specialty tiers and coinsurance, and caps out-of-pocket expenses for prescription medications at $1,000 for an individual policy and $2,000 for a group policy.
• Nebraska — LB 1088: Physician and Patient Prescription Protection Act. Requires written communication to the physician and patient when the patient’s medication prescribed by that physician is to be changed (written communication must include any information about risks associated with the recommended medication change and an explanation of any financial incentives driving the switch in medication).
• New York — A 6298 and S 191: Bans on Specialty Tiers and Cost-Sharing for Prescription Medication. Instructs the superintendent of insurance to deny policies that impose drug tiers based on expense or disease category and that charge a cost-sharing percentage for prescription medication.
• Ohio — HB 453: Continuity of Care Legislation. Prohibits healthcare insurers from removing a prescription drug from its formulary, moving a covered prescription drug to a higher copay tier, and making certain changes with respect to prescription drug coverage without providing written notice to the healthcare providers, pharmacies, pharmacists and persons with healthcare coverage who will be affected by the changes.