Health Plan Enrollment May be Open, but Drug Coverage Is Still a Black Box for Many People

By Jennifer Graff, PharmD, Vice President of Policy Research, NPC

Each fall the leaves change, the weather cools, and I spend time with my father-in-law, helping him select his health plan coverage for the following year. Open enrollment provides many people with a once-a-year opportunity to review and purchase health insurance through Medicare, their state exchange marketplace, or their employer. Comparison shopping is a big part of the selection and enrollment process.

But what if the information needed to compare plans only compares the cost of the health plan and lacks information on the quality of the care and medications covered? Just like with any other important purchase, people tend to compare the prices and reviews of products or services before buying something essential or expensive. That's how consumers make informed buying decisions — they review the information to choose what's right for them.

To put it simply, people want to know what they're paying for. Each year we compare nearly 50 Medicare plans available in Florida using online tools and navigators. Within this myriad of plans, monthly health premiums vary from $0 to $300 a month. Once we factor in the costs for primary and specialist visits, the deductible —an amount that must be paid before the plan pays for care— and estimated drug and visit copays and co-insurance fees, the differences in out-of-pocket costs can nearly triple.

Most people choose coverage based mainly on the price – the health care premiums and deductibles. But a narrow focus on health care costs overlooks the overall quality of the health plan. That's why consumers need to look past the plan's sticker price and focus on what care is covered and how accessible this care will be. As part of the selection process, we ensure my father-in-law's physicians are in-network and the health plan covers the medications he currently takes.

When evaluating and comparing plans, it can be challenging to understand what health care services or treatments a patient will be eligible to receive from their doctor and what criteria must be met to receive these treatments.

Patients encounter a wide variation in medication access for their treatment. Research shows patient access to specialty medications is largely dependent upon the health plan they select. Only one in six drugs were covered with similar access by health plans.

Consumers — especially people who have chronic conditions and rely on specific treatments — need to access the right information to understand the quality of the health plan they choose. Drug benefits are often a black box because this information is not always easy to find or even available. Even an informed consumer may have a hard time navigating the drug benefits offered by the plan.

Understanding which drugs are covered requires consumers to know more than just the medications they are currently taking. They also have to understand the different tiers for formulary access, whether they will pay a copay — a flat fee — or co-insurance, typically a percentage of drug costs. They need to decipher many different acronyms such as QL (quantity limits), PA (prior authorization), and ST (step therapy).

For my father-in-law with long-standing cardiovascular conditions and mobility issues, it is not uncommon for there to be restrictions for at least one of his eight medications. Some medications can only be prescribed by specific physicians. Other policies require that he try certain medicines before newer treatments are reimbursed.

To help people understand the quality of the plans they select, it would help to have a system that could rate the quality of the formulary access and medication requirements. People need to know how much their health plan costs and how accessible their care and medications will be.

The Centers for Medicare and Medicaid Services (CMS) established a Five-Star Rating system to allow consumers to distinguish health plan quality and improve care. But these ratings are based on broad measures, such as whether members receive preventative services, how well chronic care conditions are managed, the ability to get appointments, member satisfaction and experience with customer service call centers. Few measures address the ability to access medication.

Knowing how restrictive medication coverage is could help patients rate the breadth and depth of the drug benefits. Because health care needs may vary from year to year or health conditions may require more intensive treatment, the care a patient needs in November may not be the same care required in twelve months. A restrictiveness rating could help patients understand how restrictive one plan is vs. another and make better trade-offs based on their personal needs.

In 2020, CMS noted it was beginning to develop a measure related to prior authorization for potential inclusion in its Star Rating system. Everyone needs to understand the quality of their health plan, the possible restrictions they face, and how quickly they can get needed care. In 2020, NPC recommended expanding these criteria to include step therapy.

People also need assurance that the underlying coverage is based on a rigorous evaluation of the scientific evidence. According to researchers, however, coverage is often based on inconsistent, incomplete and limited evidence. To fix this problem, health plans should be more transparent about which evidence underpins medication coverage decisions. Third-party groups could evaluate whether drug coverage decisions are based on high-quality evidence and whether good practices were used to make these decisions.

Consumers like my father-in-law need to know the quality of the health coverage and whether they will be likely to access needed care before selecting their health insurance for the following year. Open enrollment needs to be truly open and not a black box.

Better information — especially on the ability to access needed medications — can help people understand a health plan's quality and be better positioned to select and purchase a plan right for their specific clinical conditions and care needs.