Bill Description: House Bill 713 would require health insurance companies to apply third-party payments (such as assistance from pharmaceutical companies) toward a policyholder’s copay, deductible, and out-of-pocket maximum.
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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 713 would create Section 41-352, Idaho Code, to require that health insurers include any third-party payments when calculating an enrollee's contribution to any applicable cost-sharing requirement for a health care service.
An exception would be created for prescription drugs only if there is a medically appropriate generic equivalent, and the patient's doctor has indicated that the medically appropriate generic equivalent is appropriate for the patient.
The bill is part of a national push by pharmaceutical companies to ban or restrict copay accumulator programs (and similar practices) used by insurers and pharmacy benefit managers to recoup costs for expensive name-brand pharmaceuticals.
Pharmaceutical companies have started offering payment assistance to patients to boost branded drug use and sales, where the company covers much (or even all) of the patient’s out-of-pocket maximum for expensive drugs, leaving the insurance company to pay the rest of the bill.
The pharmaceutical companies’ business model is clever — market drugs directly to consumers (“Ask your doctor about…”); treat doctors to vacation-style conferences; offer payment assistance to make branded drugs effectively “free” to the patient, and collect tens or hundreds of thousands of dollars annually from health insurance companies for each patient.
House Bill 713 would remove one of the few remaining obstacles to this model, copay accumulator programs, under which the drug-company assistance payments are applied to base cost of the drug rather than to the policyholder’s portion, which means the policyholder still has some responsibility for a small piece of the overall cost of the drugs they receive.
In a free market, insurers, employers, pharmacy benefit managers, and policyholders should be free to negotiate contract terms, including how cost-sharing is calculated. House Bill 713 would impose a government rule requiring insurers to treat third-party payments as if they were paid by the policyholder, even if the contract specifies otherwise.
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