The Business Council of New York State opposes this bill which would prohibit health insurers from requiring the use of a mail order pharmacy as a condition of their pharmaceutical benefit coverage.
While this bill seeks to preserve “consumer choice” by allowing insureds to fill a prescription at the pharmacy of his/her choosing, the bill preserves that choice with an added cost. While the cost may not be readily apparent, in fact it will be built into health insurance premiums impacting all who derive coverage in the commercial market. This state-imposed coverage mandate will increase overall costs to the health care system, limiting one very real opportunity and option to bend the cost curve in health care without any decrease in access or quality to care.
The bill memo indicates there are no fiscal implications to enactment of this bill. While the bill language stipulates that co-pays for drugs must be the same whether a mail order pharmacy or a pharmacy of the insured’s choosing is used, the discounted savings derived from negotiations with a mail order pharmacy for these maintenance drugs will be lost. The illusion is customer choice at no cost, but the reality is that pharmaceutical benefits and pharmaceutical riders to health insurance policies are premium based. If negotiated discounts from using a mail order pharmacy cannot be realized because of these state-imposed mandates, then the overall premium will need to be increased to make up that difference.
Equally problematic, the bill does not require that the non-mail order pharmacy accept the negotiated discounted mail order pharmacy rate for a particular drug. Rather it says the cost must be “comparable;” no definition of comparable is provided within the bill language. Comparable does not mean equal to, and this particular aspect of the bill presents not just cost problems, but with the implementation of federal health care reform, presents likely added administrative burdens to employers who are required under federal law to maintain internal appeals procedures when claims are denied. Thus it will be left to an employer to “manage” the state-imposed mandate internally, by dealing with employees whose drug purchases may not be comparable under the terms and conditions of the policy.
Pharmacy networks and mail order pharmacies are tools used by employers and insurance carriers to provide pharmaceutical coverage with ensuring access to the drugs in a cost effective manner. Typically mail order pharmacies are an option to employees, not a mandate, and the option usually is accompanied by passing along the savings to the insured in terms of lower out-of-pocket co-pays. If an insured prefers to use a non-mail order pharmacy, it is the informed choice of that consumer to fill the prescription knowing that the co-pay will be higher. Consumer choice exists within the current system; employers and carriers are doing what they can to identify options to consumers to preserve the benefits while offering lower cost options.
For these reasons, The Business Council opposes A. 5502-B/S. 3510-B.