State of the States: Spring 2021

Six new states enact prohibitions against copay accumulator adjusters

Bills preventing health plans from pocketing the cost-sharing assistance provided by manufacturers or non-profits (and refusing to apply it to a consumer's deductible or out-of-pocket maximum) were signed into law this session in six additional states.

The victories in Arkansas (H.B. 1569), Connecticut (S.B. 1003), Kentucky (S.B. 45), Louisiana (S.B. 94), Oklahoma (H.B.2678), and Tennessee (H.B. 619) build upon the five states (and Puerto Rico) that had previously prohibited or restricted the use of "copay accumulator adjusters" by state-regulated plans. Similar legislation remains pending in Michigan, North Carolina, Ohio, Pennsylvania, and Wisconsin.

The 11 states now restricting accumulators follow two different models. Seven (Connecticut, Illinois, Louisiana, Oklahoma, Tennessee, Virginia, and West Virginia) as well as Puerto Rico now ban any use of copay accumulator adjusters. However, four (Arizona, Arkansas, Georgia, and Kentucky) prohibit accumulators under the prescription drug benefit only when no generic drug alternative is available (which is the case for most biologic drugs including blood clotting factor products).

Support for banning copay accumulators continues to be overwhelmingly bipartisan with measures passing basically unanimously in Arkansas, Louisiana, and Oklahoma. However, intraparty disagreements among Democratic leaders resulted in last-minute defeats in states like New Mexico, New York, and Oregon, which plan to reintroduce similar versions next session. California, Florida, and Utah are among the dozen states also expected to pursue accumulator prohibitions in 2022.

Because states can only regulate about 20 percent of the plans that cover their commercially-insured population, HFA and other patient advocates remain committed to pursuing new federal laws or regulations that would likewise prohibit or restrict copay accumulator adjusters among large-group and/or self-funded health plans.

Three states enact consumer protections from step therapy

Arizona (S.B. 1270), Nebraska (L.B. 337), and Oregon (S.B. 2517) enacted new laws this quarter to protect consumers from the use of step therapy or "fail first" protocols by state-regulated health plans, joining Arkansas which enacted protections earlier this year).

Step therapy is an increasingly common cost-containment tactic used by insurers that require a patient to fail on a lower-cost drug therapy before gaining access to the higher-cost therapy prescribed by their physician. It is exceptionally inappropriate for persons with bleeding disorders for whom a treatment failure can be life-threatening or result in permanent joint damage.

The new laws in Arizona and Oregon largely follow the "model" language used by most states (though Arizona is not effective until 2023), which require insurers to respond to subscriber requests for an exception to step therapy protocols within 72 hours (or 24 hours in an urgent case). The Nebraska law creates longer timeframes. However, for all three states the request is deemed to be approved if the insurer fails to respond within the designated period.

Step therapy bills are still under consideration in several states including California, Massachusetts, New Jersey, New York, and Pennsylvania. In all, more than 30 states have now put in place some form of step therapy protections, although only about 18 are considered "comprehensive". Federal legislation that would provide comparable protections for large-group and self-funded plans (S. 464) was recently reintroduced in Congress.

Three states create Rare Disease Advisory Councils

Legislation was enacted last quarter to create Rare Disease Advisory Councils (RDACs) in three new states. The victories in Florida (S.B. 272), Louisiana (H.B. 460), and South Carolina (through the state budget) brings to 20 the number of states that established RDACs since North Carolina became the first in 2015.

RDACs are advisory bodies composed of legislators, regulators, providers, patients and patient advocacy organizations, and industry representatives that help ensure the concerns of the rare disease community are heard and addressed by state policymakers.

Record numbers sign-up for coverage during COVID special enrollment period

New figures released this month by CMS show that a record 2.1 million Americans have signed up for coverage since the agency re-opened the Affordable Care Act (ACA) Marketplaces in February.

The 2.1 million total is more than three times the enrollment during typical SEPs. Florida, which traditionally leads the nation in overall Marketplace enrollment, signed up more than 413,000 consumers during the SEP, which is 27 percent of the nationwide total. Three-quarters of all new Marketplace enrollees are from the 13 states that have refused to participate in the Medicaid expansion under the ACA (including Florida, North Carolina, and Texas).

According to CMS, enhanced premium subsidies under the American Rescue Plan (ARP) passed by Congress last March has made average Marketplace premiums 25 percent less costly. As a result, 34 percent of SEP consumers enrolled in coverage that costs them $10 or less per month. Data from ACA Signups show that consumers in non-expansion states have benefited the most from this dramatic increase in plan affordability.

The Special Enrollment Period (SEP) created in response to COVID-19 runs through August 15th for the 36 states participating in the federally-facilitated Marketplace. The 14 states operating their own Marketplaces can have differing deadlines, including New Jersey (which runs until November 30th), California and New York (through December 31st), or the District of Columbia (which expires at the formal end of the public health emergency).