Attorney General Targets Private Insurers, Eases Hepatitis C Drug Restrictions
A New York state panel recently approved new guidelines allowing patients greater access to hepatitis C medication under the Medicaid fee-for-service (FFS) plan. These changes came after New York State Attorney General, Eric Schneiderman, threatened insurers with lawsuits over disease criteria excluding many patients from having their hepatitis C drugs covered. Some insurers required patients to exhibit severe symptoms indicative of advanced liver disease to have prescription coverage; some denied coverage if the patient had a history of alcohol or drug use; and some only let specialists prescribe hepatitis C medications. Most of the insurers in question had at least 1 or 2 of these criteria in place, while 1 insurer had all 3. These actions prompted state officials to consider the hepatitis C drug coverage under Medicaid, and led the panel to add 5 new hepatitis drugs to the Medicaid FFS preferred drug list. The new drugs added to the list are: AbbVie’s Technivie, Gilead’s Sovaldi and Harvoni, Merck’s Zepatier, and Bristol-Meyers Squibb’s Daklinza. These changes also add New York to a growing list of states taking on the tight access to Hepatitis C drugs in Medicaid, after the Centers for Medicare and Medicaid Services issued a warning to states that restrictions on the drugs were too strict. Recently, Delaware, Florida, and Washington were all forced, or chose, to make similar alterations to Medicaid policy.
Future Tax Reform Legislation Could Threaten Employer-Sponsored Plans
The group insurance market may be jeopardized by increasing congressional efforts to decrease or eliminate tax breaks for employer-sponsored health insurance plans. Tax breaks to employers offering health insurance claim the largest federal tax break for employers, making those tax exemptions an easy and obvious target for reform. It seems unlikely any new tax reform will become law this year. However, recent bills have been introduced that would ultimately affect the tax exclusion given to employer-sponsored health plans. These bills will make the provision of health insurance to employees more costly. In May, Republican legislators introduced H.R. 5284, aka “The World’s Greatest Healthcare Plan Act of 2016.” Though it does not seek to repeal the Affordable Care Act, it does aim to limit the tax exclusion to $2,500 a year per individual, plus $1,500 a year for dependents. Under this plan, employers could remain in the present system and keep their tax exclusion, but they would be required to pay a 40% excise tax (or the “Cadillac Tax”) on group premiums exceeding $10,200 for singles and $27,500 for families. The Cadillac Tax is a concern for employers, as it would be a considerable financial burden. Decreasing the tax exclusion will render health insurance costlier for employers and their workers, and no one knows yet whether both parties can afford to absorb these expenses. Reducing or abolishing the tax exclusion may also lead reduce the number participants in employer-sponsored plans, pushing more people toward the public marketplace or other options.
California Regulator Asks Federal Government to Stop Anthem-Cigna Merger
California’s top insurance regulator has asked the US Justice Department to halt the $53 billion merger of Anthem and Cigna, citing price and quality concerns. Dave Jones, California’s insurance commissioner, has voiced his misgivings regarding the merger because both companies have not provided details on how they plan to achieve the $2 million in savings they are projecting. These companies also will not definitively guarantee these savings will be passed on to consumers and businesses. Together, Anthem and Cigna control 61% of the self-insured employer market in California, and if the merger occurs, there will be little competition remaining in that market. Company CEOs have given vague replies when asked if these savings will be passed downward to consumers, arguing that premium totals are beyond their control due to “underlying medical costs.” Anthem recently defended the merger, noting California’s Department of Managed Health Care is overseeing the process, and it believes Jones is not including positive implications of the merger in his assessment.