States take charge of defining essential benefits

TWO STATES SO FAR have taken advantage of the federal government’s decision to give them more leeway in defining the essential health benefits that individual and small-group insurers must offer consumers. Those states—Alabama and Illinois—took different paths.

In April, the CMS finalized a rule that would allow states to determine the minimum essential health benefits that individual and small business health plans operating in each state are required to cover, beginning in 2020. While the agency said the extra flexibility would let insurers create plans more tailored to members’ needs, policy experts warned the rule also could lead to skimpier coverage.

Alabama took that route by proposing a significant reduction in the number of prescription drugs that health insurers must cover, in the hopes that will cut costs and help address the opioid epidemic. On the flip side, Illinois this month said it wants to require insurers to cover alternative chronic pain treatments and expand access to mental health services through telemedicine, among other services.

Alabama’s and Illinois’ distinct approaches offer the first look at how states are interpreting their new flexibility around defining essential health benefits. It’s also another example of the growing disparities in individual insurance coverage between states, as some state lawmakers and regulators seek to bolster their ACA markets and others attempt to weaken them.

The Alabama Department of Insurance wants to cut the number of drugs insurers must cover by

32% to 731 drugs total. The proposed cuts are not limited to opioid drugs and span the gamut, including antidepressants, anti-inflammatory drugs and dermatology medications.

Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms, explained that insurers are not required under state benchmark plans to cover specific drugs. They are, however, required to cover a set number of drugs per category and class so consumers have a minimum level of coverage and insurers and pharmacy benefit managers have room to negotiate prices with drugmakers.

Alabama is “recommending a cut that’s over

30%, which suggests that there will be an impact of reducing patient access to specific drugs,” she said. The change would be especially troublesome for patients with conditions such as multiple sclerosis or fibromyalgia because patients may respond to only one drug, she said.

It’s also unclear if Alabama will accomplish its stated goal of addressing the opioid epidemic through these changes. Alabama proposed reducing the number of long-acting and short-acting opioids covered and adding one drug to the anti-addiction and substance abuse treatment category.

But the proposal would also eliminate one of the two opioid-dependence treatments now covered under the state’s benchmark plan. Experts agree that overprescribing is one cause of the opioid crisis. But insurance barriers also make it difficult for addicted patients to get necessary treatment.

A spokeswoman for Alabama’s Insurance Department confirmed the

Alabama’s proposal would eliminate one of the two opioid dependence treatments currently covered under the state’s benchmark plan.

proposed change is a response to the CMS’ April rule, but she said no one was available to answer further questions. Alabama is accepting comments on the changes to prescription drug coverage through Aug. 3.

Illinois, meanwhile, seems to be taking a different route to address the opioid epidemic through changing its essential health benefit benchmark plan. In a news release, the state said it wants to require insurers to cover alternative therapies for chronic pain, issue short-term prescriptions for chronic pain, and remove barriers to prescribing buprenorphine, which is used in medication-assisted treatment for opioid use disorders. Illinois also would require insurers to cover prescriptions for at least one intranasal spray opioid-reversal agent in certain cases, and expand access to mental health and substance use disorder treatment through telepsychiatry, according to a news release.

A spokeswoman for the Illinois Insurance Department did not respond to requests for more detail. Illinois accepted comments on the proposal during the spring and submitted its proposal to the CMS ahead of the July 2 deadline to change the 2020 state benchmark plan. Alabama appeared to have missed that deadline, and a spokeswoman for the state’s insurance regulators did not say whether it received an extension from the CMS. ●