The Business Council opposes this legislation would prohibit commercial health insurers from creating specialty tiers within drug plans which impose higher cost-sharing, deductibles, or co-insurance obligations beyond the deductibles within that plan for non-preferred drugs.
The increasing cost of prescription drugs is a very real component of the increasing cost of health insurance premiums overall. In New York State it is estimated that 15 cents of every premium dollar is spent on retail pharmaceutical costs. As prescription drug coverage is a rider to a health insurance policy, mandates which artificially cap the share of employee co-pays on specialty drugs through limiting the ability of a health care plan to establish specialty tiers will make the coverage that much more expensive and likely force employer to drop the rider. This insurance mandate impact will be felt most by small and medium sized businesses, those businesses typically accessing health insurance policies in the commercial market. This insurance mandate does not “bending the cost curve” in the right direction for New York's businesses and will result in increased premiums for the very individuals the bill purports to relieve of these specialty drug co-pays.
The NYS Insurance Department currently has the authority – and exercises that authority -- to approve the structure of prescription drug policies. At a time when national health care reform changes will be causing changes to all health plans -- and driving up costs to provide for that enhanced coverage -- now is not the time for additional insurance mandates on New York employers. While the bill limits the ability of a health insurer to develop specialty tiers, the ultimate outcome of this bill will be increased premiums to absorb the mandated coverage called for in this bill.
Additionally, this legislation makes it a discriminatory practice for any employer, including self-insured employers, to use a Tier IV in their drug formularies. As self-insured employers are regulated by provisions within the federal ERISA, this provision to preempt federal law is likely unconstitutional.
For these reasons, the Business Council opposes this bill and urges legislators to refrain from enacting any health insurance mandate legislation which will increase premiums and force employers to drop or reduce coverage to their employees..