Bill Description: House Bill 353 imposes new regulations on the cost-sharing requirements health insurance companies have for patients. It also imposes new requirements on drug manufacturers and the financial assistance programs they offer to patients.
This legislation is a revised version of H219 (-1). It adds regulations on drug manufacturers and how rebates, coupons, and programs may participate in the market.
Rating: -3
Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?
House Bill 219 creates new regulations for how insurance companies allow enrollees to pay their share of health care costs — known as “cost-sharing requirements.” Specifically, this legislation requires insurance companies to count any payments made directly by the enrollee or by third parties on their behalf toward this requirement. It also mandates they include spending on certain prescription drugs in this tally.
The problem with health insurance as currently practiced is that it removes the connection between the consumer and the payer. This causes consumers to be less sensitive to prices and less judicious about their use of services. The point of a cost-sharing requirement is to artificially impose market incentives on enrollees to reduce insurance companies costs. This is done through imposing co-pays, deductibles, or other requirements.
Dictating how insurance companies count enrollees’ contributions to their cost-sharing requirement — particularly by mandating third parties, as this legislation seeks to do — would remove important market incentives. Mandating the injection of yet another payer into an already complicated health care market naturally raises the cost of doing business.
(-1)
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
House Bill 353 places onerous restrictions on drug manufacturers’ contributions to cost-sharing requirements. These kinds of contributions can be best understood as coupons, vouchers, rebates, or discounts — collectively “assistance” — from drug manufacturers to patients. The bill says that a drug manufacturer “may not discontinue a coupon during the calendar year,” or adjust its benefits based on whether an insurance company removes cost-sharing requirements for third parties. The bill also requires a drug manufacturer to provide advance notice before it eliminates assistance. Finally, it specifies that manufacturers may not provide different benefits for insured enrollees versus uninsured individuals enrolled in their assistance programs.
These provisions prevent drug manufacturers from introducing new programs to help patients pay for drugs. These regulations, taken together, slow the market and direct how manufacturers may offer discounts. Ironically, overregulation of this sort could drive assistance arrangements out of the market altogether and make drugs more expensive for everyone.
(-1)
Finally, another provision in this legislation requires drug manufacturers to report to the Department of Insurance all the assistance they offer.These companies would have to report the number of patients in the state who received assistance, the total value of the assistance, and the terms and conditions of that assistance. They also would be required to disclose their total sales of that drug in the state. This reporting serves as the basis for additional regulation and government direction over these products.
(-1)
