Relates to eliminating cost-sharing, deductibles and co-payments for certain prescription drugs

7 Co-sponsors

• Martin Malavé Dilan
• Pedro Espada Jr.
• Liz Krueger
• Velmanette Montgomery
• Bill Perkins
• Antoine M. Thompson
• David J. Valesky

BILL NUMBER:S5000B

Title of bill

An act to amend the public health law and the insurance law, in relation to cost-sharing, deductible or co-insurance for tier IV prescription drugs; and to amend the executive law, in relation to unlawful discrimi- natory practice in relation to tier IV prescription drugs

Purpose

This bill would prohibit commercial health insurance plans from creating specialty tiers within their prescription drug formularies.

Summary of provisions

Section 1: Legislative findings.

Section 2: Amends Section 4406-c of the public health law to prohibit the creation of specialty tiers.

Sections 3, 4, and 5: Conforming amendments to insurance law to prohibit the creation of specialty tiers.

Section 6: Amends executive law to provide that creation of specialty tiers is unlawful discriminatory practice.

Section 7: Severability clause.

Section 8: Provides for effective dates of 30 days after enactment.

Justification

As the cost of prescription drugs continues to climb, states like Cali- fornia, Minnesota, Maryland, and Alabama have seen commercial health insurance plans create new "specialty tiers" to dramatically increase the co-payments that consumers pay.

Instead of a three-tiered drug formulary structure used by most plans (where Tier 1 is for generics, Tier 2 is for brand-name preferred drugs, and Tier 3 is for brand-name non-preferred drugs), some plans have begun to add fourth and even fifth tiers for the most expensive medications. These additional tiers assign a percentage cost of the medication as co-insurance, as opposed to a set dollar amount used in the other three tiers. An example of this might be a $10 co-pay for Tier 1 generics, a $25 co-pay for Tier 2 brand-name preferred drugs, and a $50 co-pay for Tier 3 brand-name non-preferred drugs.

In the states where this is happening, medications placed in these specialty tiers are typically assigned a co-insurance between 20-35% of the actual cost of the medication. If someone is living with multiple

sclerosis, for example, that individual's monthly co-payment could reach $775.

People living with chronic illnesses like multiple sclerosis, rheumatoid arthritis, and hemophilia, or people with a life-threatening condition like HIV, breast or colorectal cancers, leukemia and non-Hodgkins lymphoma (to name a few examples), are the populations that are most affected.

Paying hundreds or even thousands of dollars each month for prescription drugs would be a strain for anyone, but for people with chronic illnesses and life-threatening conditions, this unfortunate social poli- cy has the potential to destroy a family's financial solvency or even end their ability to take a necessary medication.

Specialty tiering is contrary to the original purpose of insurance, the spreading of costs; instead it creates a structure where those who are most sick pay more, and the healthy pay less.

Legislative history

None.

Fiscal implications

None.

Effective date

This act shall take effect on the thirtieth day after it shall have become law.