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States Requiring Broader Choice Of Drugs Than Skimpy Federal Limit

When the Obama administration set initial rules last December to determine what minimum benefits insurers must offer in plans sold to individuals and small groups starting in 2014, one provision stood out: Insurers selling small group and individual policies would have to provide at least one drug per class of drug. In other words, insurers could cover just one drug for cholesterol, one for high blood pressure or one drug for attention deficit disorder.

Photo by Erin DeMay/For KHN

Some patient groups, the pharmaceutical industry and two dozen House Democrats argued that limit was too skimpy and should be expanded to at least two drugs per class as required under the Medicare prescription drug plan.

But such concerns have declined as states choose benchmark health plans that will determine their minimum health insurance benefits. So far, the benchmark plans cover about 62 percent of the drugs available in different drug classes, Avalere Health found in analyzing eight plans. Coverage of drugs in the classes studied ranges from a low of 26 percent in California’s benchmark plan to a high of 93 percent in Mississippi’s likely benchmark.

“The eight state benchmark plans display a wide range of coverage of brand and generic drugs in the classes we examined,” said Bonnie Washington, senior vice president of Avalere Health.

The one-drug-per-class minimum was one way the Obama administration gave flexibility to insurers trying to hold down costs, said Caroline Pearson, a director at Avalere. “They set the bar so low that most commercial health plans will exceed the one drug per class to be attractive to consumers,” she said. About 20 states chose their benchmark plans by the Oct. 1 target date set by the U.S. Department of Health and Human Services and more than a dozen are still choosing.

Prescription drugs is one of 10 benefit categories of coverage required by the Affordable Care Act. The others include hospitalization, emergency services, maternity and mental health.