What's happening
This bill limits prescription drug copayments, prohibiting them from exceeding the price paid to the pharmacy after deductibles are met.
Why it matters
Reduces out-of-pocket expenses for patients. By capping copayments at or below what the pharmacy is actually paid for a prescription, patients are protected from paying more than the drug truly costs after their deductible is met.
Prevents hidden “clawback” practices. The bill addresses a controversial practice where insurance companies or pharmacy benefit managers (PBMs) require patients to pay copays that exceed the pharmacy’s reimbursement, sometimes resulting in the insurer or PBM pocketing the difference.
Increases price transparency. By linking the copayment directly to the true transaction price between the insurer and the pharmacy, the legislation makes the real cost of prescription drugs clearer to consumers, potentially helping them make more informed choices.
Aligns cost-sharing with actual insurance coverage. The bill ensures that after patients have met their deductible, their cost-sharing more accurately reflects the negotiated price, reinforcing the intent of insurance to cover excess costs rather than generate extra revenue from copays.
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Who cares
Insured prescription drug users
The bill would cap their copayments at the total price paid to the pharmacy once they meet their annual deductible.
Insurers providing prescription drug coverage
They would be barred from requiring or contracting for copayments above the total price paid to the pharmacy after the insured meets the annual deductible.
Pharmacies
The bill would add an Education Law limit tying prescription copayments to the total price paid to the pharmacy, except when the insured has not met the annual deductible.
Headline styles
Limit Drug Copayments
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit Prescription Copayments
In Assembly Committee · Insurance · Sponsor Linda Rosenthal
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6254
2017-2018 Regular Sessions
IN SENATE
May 11, 2017
Introduced by Sen. HANNON -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law and the education law, in relation to copayments for prescription drugs
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (h) of section 4325 of the insurance law, as added by chapter 487 of the laws of 2010, is amended to read as follows:
(h) No corporation or insurer organized or licensed under this chapter which provides coverage for prescription drugs shall require, or enter into a contract which permits, a copayment which exceeds the usual and customary cost of such prescribed drug or which exceeds the total price paid to the pharmacy for such prescribed drug after the insured has met the annual deductible requirement.
§ 2. Section 6826-a of the education law is amended by adding a new subdivision 3 to read as follows:
3. The copayment amount shall not exceed the total price paid to the pharmacy for the prescribed drug, except in cases where the insured has not met the annual deductible requirement.
§ 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10881-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law and the education law, in relation to copayments for prescription drugs
Purpose
This bill relates to copayments for prescription drugs.
Summary of provisions
Section one amends subsection (h) of section 4325 of the insurance law by prohibiting a copayment for a prescription drug that exceeds the customary cost of the drug or the total price paid to a pharmacy for a prescribed drug after an insured customer has met the annual deductible requirement.
Section 2 amends section 6826-a of the education law by adding a new subdivision stating that a copayment for a prescribed drug cannot exceed the total price paid to a pharmacy except in cases when an insured customer has not yet met his or her annual deductible requirement.
Section 3 sets forth the effective date.
Justification
Some Pharmacy Benefit Managers (PBMs) set higher copays for prescription drugs for insured customers. As a result, pharmacies are required to charge customers a copay, which can be as much as $50 for a drug that may only cost $11.65. The PBM then collects the excess $38.35 from the pharmacies. This is a roundabout way for PBMs to collect extra payment. In some instances, customers would actually pay less for prescriptions if they did not have insurance.
There are currently class-action lawsuits pending against some PBMs for this unscrupulous practice. Passing this bill, however, will proactively protect customers by preventing insurance companies and PBMs from overcharging customers.
Legislative history
New.
Fiscal implications
None to the State
Effective date
Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.