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History
- Referred to insurance
- Referred to insurance
Full text
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Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to health insurance policies and prescription drug coverage
Purpose or general idea of bill
Discourages the practice by health insurers of creating co-payment and co-insurance structures that effectively reduce coverage and raise costs for policy-holders. It limits the ability of health insurers to push patients toward generic drugs where the generic drugs are not the equivalent of the brand name drug prescribed. Prevents a change in an insurer's formulary from discontinuing use of a prescribed drug by an existing policyholder whose doctor determines the drug to be medically necessary. Further, it prohibits insurers from imposing an additional dispensing fee or co-pay to purchase prescription drugs from a local pharmacy as opposed to a mail order business.
Summary of specific provisions
Section 1: Amends Insurance Law section 3221 to add a new subsection (s) Which regulates small group insurance policies.
Read the full memo (911 words)
* Maximum co-payment and co-insurance amounts be limited so they shall not exceed ten times the dollar value of the lowest co-payment and co-insurance amount whose cost is above zero dollars.
* When an insurer has required that a member take a generic alternative to a brand-name patented drug prescribed by their doctor, and the alternative is not deemed as having an equivalent impact on the member by the member's prescribing physician and is not deemed an A-rated generically and therapeutically equivalent product as determined by the FDA, the insurer shall pay for and make available the brand-name patented drug originally prescribed by the member's doctor.
* In cases where step therapy is required prior to a patient accessing a brand name patented prescription drug, the patient can receive the brand name patented prescription drug prescribed by their doctor if the patient tries one alternative medication and the patient's doctor determines that the single source therapy remains medically necessary.
* A patient receiving coverage for a drug on an insurer's existing formulary shall not be denied coverage upon a change in the formulary if his or her physician determines that drug to be medically necessary.
* No insurer shall impose an additional fee or co-pay on an insured who elects to purchase prescription drugs from a local pharmacy as opposed to a mail order pharmacy business.
Section 2: Amends Insurance Law section 4303 to add a new subsection (hh) to add similar provisions to the insurance law as are added in bill section 1 above.
Justification
Access to prescription drugs that best treat a particular illness or condition are essential to the health and well-being of New Yorkers, particularly the state's senior population. Decisions about the most appropriate prescription drug treatments made by doctors and patients can be inappropriately compromised by financial considerations.
This issue is most evident in relation to access to single-source drugs. Single-source drugs are unique in their formulation, dosage, and delivery-they have no generic equivalent because of current patent laws and are often times more expensive. The higher prices of single-source drugs cause insurance companies to create policies and formularies that steer the insured toward prescription drugs that are cheaper, rather than those that the doctor and patient may decide are the best course of treatment. Insurance companies put restrictions in place ranging from higher co-payments and coinsurance to bureaucratic approval requirements like pre-authorization and step therapy that hinder patient's access to brand name drugs that-their doctor has determined is the most suitable drug to treat their condition.
A 2008 study by my office showed that the most commonly prescribed single-source prescription drugs, and those most frequently used to treat ailments disproportionally impacting minorities like heart disease, were the most likely to have restrictions on their use imposed by the insurance companies. The findings included:
* All 15 health insurance companies surveyed imposed restrictions on use of the twenty most prescribed single-source drugs.
* More than a third of health insurance companies surveyed imposed restrictions on the use of the most commonly prescribed single-source drugs treating mental health conditions.
* More than a third of health insurance companies surveyed imposed restrictions on the use of the most commonly prescribed single-source drugs treating high cholesterol and blood pressure.
A 2009 report by my office further examining this issue resulted in additional conclusions, including:
* Single-source drugs treating HIV/AIDS routinely had the highest co-payments, despite findings that costly co-payments on HIV/AIDS drugs results in treatment interruption that can cause the virus to become resistant to the prescribed drug and make treatment of the patient more difficult.
* Insurance companies surveyed frequently require doctors to acquire pre-authorization to prescribe single-source drugs treating cancer for their patients.
* Single-source drugs treating chronic pain and cardiovascular ailments are extensively restricted through prior authorization. expensive co-payments and quantity limitations. In several instances. multiple limitations on use will be placed on one single-source drug.
This bill also gives freedom to patients to patronize their local pharmacy instead being forced to obtain their prescription drugs from mail order businesses.
Legislative history
This bill is a combination of Senate Bills 1843, 2938, and 5510 of 2010 that were all sponsored by senator Klein that address the issue of single source drugs and access to pharmaceuticals at local pharmacies.
Fiscal implications
None.
Effective date
This act shall take effect on January 1st in the year succeeding when it was signed into law and apply to all insurance policies or contracts issued or renewed after that date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.