THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY VEREB, SAYLOR, GINGRICH, CALTAGIRONE, BRENNAN, DALEY, FABRIZIO, GEORGE, HELM, JOSEPHS, MILLARD, PICKETT, VULAKOVICH AND WAGNER, JUNE 6, 2011

REFERRED TO COMMITTEE ON INSURANCE, JUNE 6, 2011  

AN ACT

Providing requirements for insurers relating to prescription

drug coverage.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Legislative findings and intent.

(a)  Findings.--The General Assembly finds as follows:

(1)  As prescription drug prices continue to escalate,

other states have experienced the creation by insurers of a

new cost-sharing mechanism known as prescription drug

specialty tiers.

(2)  Many insurers use a three-tiered drug formulary

structure that provides fixed cost prescription drug benefits

to insureds, based on generic, brand-name preferred and

brand-name nonpreferred designations.

(3)  Specialty tiers include the costly prescription

drugs to which some insurers are instituting percentage cost

prescription drug benefits that are causing some insureds to

pay more than $3,000 for one month's supply of medication.

(4)  Such drugs are typically new, infusible biologics or

plasma-derived therapies produced in lesser quantities than

other drugs and not available as less costly brand name or

generic prescription drugs.

(5)  The cost-sharing, deductible and coinsurance

obligations for certain drugs have become cost prohibitive

for insureds trying to overcome serious disease such as

cancer, hemophilia, multiple sclerosis, myositis, neuropathy,

primary immunodeficiency disease and rheumatoid arthritis.

(6)  Insurers are also increasing prescription drug

copays to amounts beyond the reach of most insureds and if an

insurer utilizes the three-tiered drug formulary, the amounts

charged for brand-name nonpreferred and specialty drug copays

should not have the effect of unfairly denying access to

prescription drugs covered by the health benefit plan and

should not cost more than is necessary to provide a

reasonable incentive for insureds to use brand-name preferred

prescription drugs.

(7)  Paying hundreds or even thousands of dollars each

month for prescription drugs would be a strain for any

person, but for people with chronic illnesses and life-

threatening conditions, this unfortunate social policy has

the potential to destroy a family's financial solvency or end

the ability to take a necessary medication. Specialty tiers

are contrary to the original purpose of insurance, which was

the spreading of costs. Specialty tiers create a structure

where those who are sickest pay more, and those who are

healthy pay less, thus, the creation of specialty tiers is a

discriminatory practice.

(b)  Intent.--It is the intent of the General Assembly that

every insured have access to reasonable prescription drug

benefits and that the creation of specialty tiers will prevent

the achievement of that intent.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Health benefits plan."  An arrangement for the delivery of

health care, on an individual or group basis, in which a health

carrier undertakes to provide, arrange for, pay for or reimburse

any of the costs of health care services for a covered person

that is offered or governed under this act or the following:

(1)  The act of December 29, 1972 (P.L.1701, No.364),

known as the Health Maintenance Organization Act.

(2)  The act of May 18, 1976 (P.L.123, No.54), known as

the Individual Accident and Sickness Insurance Minimum

Standards Act.

(3)  40 Pa.C.S. Ch. 61 (relating to hospital plan

corporations) or 63 (relating to professional health services

plan corporations).

"Insurer."  An insurer delivering, issuing for delivery or

renewing in this Commonwealth a health benefit plan that

provides prescription drug coverage.

Section 3.  Prohibitions.

(a)  Payment restrictions.--An insurer shall not create

specialty tiers that require payment of a percentage cost of

prescription drugs.

(b)  Copay restrictions.--An insurer shall not establish

tiers of prescription drug copays in which the maximum

prescription drug copay exceeds by more than 500% the lowest

prescription drug copay charged under the health benefit plan.

(c)  Out-of-pocket expense.--If an insurer's health benefit

plan provides a limit for out-of-pocket expenses for benefits

other than prescription drugs, the insurer shall include one of

the following provisions in the plan that would result in the

lowest out-of-pocket prescription drug cost to the insured:

(1)  out-of-pocket expenses for prescription drugs shall

be included under the plan's total limit for out-of-pocket

expenses for all benefits provided under the plan; or

(2)  out-of-pocket expenses for prescription drugs per

contract year shall not exceed $1,000 per insured or $2,000

per insured family, adjusted for inflation.

Section 4.  Applicability.

This act shall apply to all health benefit plans delivered or

issued for delivery or renewed on or after January 1, 2012.

Section 5.  Regulations.

Except as provided in section 6, the Insurance Department

shall enforce this act. The department shall promulgate rules

and regulations to carry out the purposes of this act.

Section 6.  Additional costs.

The Insurance Department shall cease enforcement of this act

if it determines that the requirements of this act will result

in the assumption by the Commonwealth of additional costs

pursuant to section 10104(e) of Title X of the Patient

Protection and Affordable Care Act (Public Law 111-148).

Section 7.  Effective date.

This act shall take effect in 60 days.