States limit copay amounts for specialty drugs

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Insurers increasingly are facing potential legislation that could prevent them from shifting larger portions of prescription drug costs onto their members. At least 20 states have introduced bills to limit insurers charging higher copays for specialty drugs for chronic illnesses.

Medications that treat cancer, heart disease, multiple sclerosis and other illnesses only make up 1 percent of total drug use but represent 17 percent of insurers' prescription drug spending. These specialty drug costs are rising at a disproportionate rate than other drugs; they increased 17.4 percent in 2010 while other drugs rose only 1.1 percent, reported The New York Times.

Such high costs have led insurers to alter their benefit structures to shift specialty drug costs onto their chronically ill members, causing patients to pay an extra 30 percent to 50 percent for medications, FierceHealthPayer previously reported.

Insurers shift the costs by using three drug tiers, in which generics fall into the lowest tier while expensive brand-name drugs are in the highest tier. But recently, some insurers have added new tiers just for specialty drugs that require patients to pay a larger percentage of the cost. A Kaiser Family Foundation 2011 found that about 14 percent of insured employees' health plans have four or more tiers, up from 7 percent in 2008, the Times noted.

Meanwhile, state lawmakers have been introducing legislation to combat insurers' attempt to transfer drug costs. New York was the first state to pass such a law, essentially prohibiting insurers from creating a fourth tier. Vermont has a one-year moratorium on copays that's in effect until July 1. Maine limits insurers from charging more than $3,500 a year for fourth-tier drug copays. Louisiana and Texas bar insurers from raising out-of-pocket drug costs in the middle of a contract year. And Connecticut, Rhode Island and Delaware are considering similar bills.

To learn more:
- read the New York Times article

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