AARP Disappointed in Veto of Bill to Stop Mid-Year Rx Out-of-Pocket Cost Hikes

Posted on 12/24/19

Patient & Physician Groups Joined AARP in Urging Price Protections for Health Plan Enrollees

Prescription pills with money

ALBANY, N.Y. – AARP New York today expressed disappointment in Governor Andrew Cuomo’s veto of state legislation supported by at least three dozen patient, consumer and doctor organizations to protect health plan members from out-of-pocket prescription drug cost increases in the middle of a contract year.

The result: while consumers are locked into their plan for the contract year, the insurance companies aren’t. How is that fair?

The bill (S2849A/A2969A), which passed the state legislature with bipartisan support, would have prohibited health care plans from making changes to prescription drug formularies that raise enrollees’ out-of-pocket costs during a contract year and would have required notification of changes to formularies in the upcoming contract year.

California, Illinois, Louisiana, Maine and Nevada put similar laws on the books without increases in health care costs.

“Prescription drug costs are through the roof, and AARP is disappointed in this veto of a bill that would have provided badly-needed price protection for consumers,” said AARP New York State Director Beth Finkel.

Opponents argued the bill would raise drug prices, but the legislation allows health care plans to move a drug to a formulary “tier” with higher out-of-pocket costs if they add a less expensive generic equivalent or biosimilar at the same time. “Patients may need to choose between paying more out of pocket and switching to a different, and possibly less effective, drug,” the letter said. Such switches “can have adverse health outcomes, including less effective treatment and negative side effects.”

Many consumers choose their health plan based on prescription drug coverage and costs, particularly patients with multiple chronic conditions. But while consumers are locked into their plan for the contract year, the insurance company isn’t; it can under current law switch drugs into a tier with a higher co-pay, coinsurance or deductible – resulting in a higher out-of-pocket cost to the consumer.

The bill sponsored by Senate Insurance Committee Chair Neil Breslin and Assembly Majority Leader Crystal Peoples-Stokes would have ensured that patients can stick to their budget and their care plans while still allowing for innovations in the prescription drug market.

The bill’s provision to allow new medications, generics and biosimilars to be added to drug formularies would allow patients to switch to new medications in consultation with their doctors - and allow lower cost generic drugs to replace brand name drugs when they enter the market.

“While we’re disappointed in the Governor’s veto, we applaud him for his leadership in proposing a comprehensive package aimed at curtailing our highest-in-the-world drug prices,” Finkel added. “We look forward to working with the Governor and state legislators in 2020 to revisit the mid-year formulary issue as part of this promising comprehensive agenda.”

Follow us on Twitter: @AARPNY and Facebook: AARP New York

AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age. With nearly 38 million members and offices in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP works to strengthen communities and advocate for what matters most to families with a focus on health security, financial stability and personal fulfillment. AARP also works for individuals in the marketplace by sparking new solutions and allowing carefully chosen, high-quality products and services to carry the AARP name. As a trusted source for news and information, AARP produces the world’s largest circulation publications, AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org or follow @AARP and @AARPadvocates on social media.

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