State law doesn’t allow generic-only drug benefit
A health insurance plan covering 45,000 people in Washington is being discontinued, after state regulators objected to its limited prescription drug benefit.
Washington Insurance Commissioner Mike Kreidler ruled that health insurers in the state can no longer offer plans that cover only generic drugs. The ruling served to enforce state law.
In response, Premera Blue Cross sought permission to strip prescription drug coverage from some of its plans altogether as the expense of having to add brand-name drugs to medication coverage would have made plan costs soar.
Kreidler this week rejected that request, which will force the insurer with a large customer base in Eastern Washington to develop other coverage plan strategies and cost controls.
Generic-only coverage has been a popular feature that helped Lifewise, a Premera affiliate, enroll 45,000 people into a catastrophic coverage plan popular with people buying individual policies.
By forcing Lifewise to offer name-brand drugs and not just generics, the insurance company has decided to cancel that plan within 90 days. Insurance brokers and customers are being notified.
“We’re disappointed in the commissioner’s ruling,” Lifewise spokesman Eric Earling said. He said it will force people off of a plan they like and into coverage that doesn’t include a drug benefit or into a much more expensive plan that includes the full drug coverage. Or, they may drop insurance altogether.
Kreidler said the exclusion of brand-name prescriptions from drug coverage was unfair.
He specifically mentioned several diseases for which there are no generic drug treatments, including certain types of cancers, mental illnesses, multiple sclerosis, rheumatoid arthritis and AIDS.
“It’s the kind of plan where you had better not get sick,” even with coverage, said Kreidler spokeswoman Stephanie Marquis.
The scenario underscores what Kreidler calls “a perfect example of how dysfunctional and broken the health care system is today without health reform.”
If the U.S. Supreme Court upholds the Affordable Care Act, prescription drug coverage will be required of all health insurance plans in 2014.
Premera and Lifewise had been the only insurance companies in the state to offer plans that included generic-only coverage.
Kreidler noted that the company has socked $1 billion into a reserve fund while complaining about offering better drug coverage. Premera responded that linking to the reserve fund is unfair and that coverage plans need to be financially sustainable.
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