Study: Drug benefits already exceed new federal standards

Healthcare plans already provide drug coverage that’s far more generous than new federal minimums established under the healthcare reform law, according to an analysis from Avalere Health.

The healthcare law lays out 10 categories of “essential health benefits” that every insurance plan will have to cover beginning in 2014. The law left it to the Health and Human Services Department to define the specifics of essential benefits, and HHS in turn passed that job on to the states.

The approach has sparked concern that people in some states will only be entitled to a skimpy benefits package.

But Avalere’s analysis says that in the area of prescription drugs, plans are already offering much more coverage than the minimums established in HHS’s essential-benefits policy.

Under HHS’s approach, states will choose an existing healthcare plan, and that policy’s benefits will become the “benchmark” for what’s considered an essential benefit in the state. Avalere analyzed existing plans that could be used as benchmarks and found that their drug coverage is usually rather generous.

Policies offered to small businesses typically cover about 70 percent of the drugs available for a particular condition, according to Avalere. Large plans offered to federal employees, which can also be used as a benchmark, cover every drug approved by the Food and Drug Administration.

HHS’s standards only require benchmark plans to cover one drug in a particular class.

The findings show that plans will still have plenty of flexibility to change their drug benefits without running afoul of federal law, Avalere said. That’s been a key concern for the insurance industry, which has said overly prescriptive rules on essential benefits would make it difficult to offer lower-cost policies.

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