Did you know health insurance exchange plans are allowed to drop coverage of medications from their formularies midyear? Early evidence indicates that some health insurance exchange or marketplace plans are taking advantage of this flexibility and significantly reducing access to needed medications. This means when individuals select a plan during open enrollment based on whether a plan covers their medicines, the plan they enroll in may change or drop coverage of those medicines over the course of the benefit year. Meanwhile, individuals are locked into their plan selection for the entire year, with limited exceptions.
A recent study by Avalere Health examined the 2014 formularies of 81 marketplace plans across all 50 states and Washington, D.C. The analysis looked at plans at two points in time: October 2013 (during open enrollment) and September 2014. At the September 2014 data collection, half of plans posted revised formularies that were different from the October 2013 formularies. The other 40 plans either did not modify their formularies or did not post updated formulary files on their websites.
For the 41 plans with updated formularies, the analysis looked at 4 classes of medications to determine how often plans reduce coverage for drugs in these classes. The 4 classes are molecular target inhibitors (cancer medications), antidiabetic agents, multiple sclerosis agents, and sympathomimetic bronchodilators (asthma medications). These classes included a total of 171 medicines at the time of the 2013 data collection.
Among the 41 plans with updated formularies, 33 plans reduced drug coverage over the course of the year. Most of these plans (27) did not make large-scale reductions in coverage and eliminated coverage for 7 or fewer medications across the 4 classes. However, 6 plans (1 plan in Hawaii, Kansas, Massachusetts, Michigan, Oklahoma, and Washington, D.C.) made significant changes to their formularies --removing between 15 and 57 products and thereby reducing formulary coverage by 6 percent to 63 percent over the course of the year. One plan removed 57 drugs in the 4 medication classes from coverage, with the percent of medications covered in the four classes dropping from 60 percent to 22 percent between October 2013 and September 2014.
For 5 of the 6 plans found to have made significant changes to their formularies, coverage in at least one class of medications dropped by more than 15 percentage points between the two data collection periods. This reduction in coverage occurred for all four classes for one plan, two classes for one plan, and a single class of medications for three plans.
When patients purchase coverage in a marketplace plan, they typically enroll for an entire calendar year. In fact, unless they qualify for a special enrollment period, consumers are not allowed to make midyear changes to their marketplace plan enrollment. Patients expect if their medications are on the plan formulary when they select their plan, their plan will continue to cover these same medications throughout the policy year. When a plan reduces coverage midyear as substantially as some of the marketplace plans in this study did, patients have a good chance of losing coverage for much needed medications and would need to rely on a lengthy exceptions process to regain access.
Based on this analysis, Avalere did not find evidence that midyear negative formulary changes were widespread in the first year of marketplace plans. Instead, it reveals a minority of plans may have taken advantage of broad regulatory flexibility to make changes, ultimately leaving patients in a lurch.
Two actions by federal or state regulators could limit the extent to which plans reduce formulary coverage midyear and give patients confidence that the medicines they need will continue to be covered by their health plan.
- First, marketplace plans should explicitly be allowed to expand drug coverage by adding drugs to their formularies, reducing copayments or coinsurance by placing a drug on a lower cost-sharing tier, or deleting utilization management requirements at any time during the year.
- Second, whenever a marketplace plan cuts a drug from its formulary, the plan should be required to cover the drug at the same cost-sharing level available prior to the midyear formulary change for the remainder of the year for every patient who was taking the drug at the time of the change. The only exceptions to this policy should be when changes are made to replace a brand with its generic equivalent or because of new information about a medicine’s safety or effectiveness becomes available.