States Take the Lead with Policies to Protect Residents with Chronic Conditions from High Out-of-Pocket Drug Costs


This blog post originally appeared on the Center on Health Insurance Reforms blog.

While there were many campaign promises to lower prescription drug costs, to date there’s been little federal action to reduce prescription drug prices or lower patients’ costs. States, however, are taking the lead with policies designed to protect consumers from the high out-of-pocket costs associated with expensive specialty drugs, many of which lack low-cost generic alternatives.

A new research brief from Georgetown researchers details the findings from a 50-state survey of action on such policies. The brief was supported by the Robert Wood Johnson Foundation’s Policies for Action (P4A) program, and was done in partnership with the Urban Institute.

Researchers found that eight states have leveraged their authority over health plan benefit design to protect their consumers from high out-of-pocket costs for specialty medication. These states–California, Colorado, Delaware, Louisiana, Maryland, Montana, New York, and Vermont–either place limits on out-of-pocket spending or require certain plan designs that reduce out-of-pocket costs.

The researchers also conducted supplementary stakeholder interviews with state marketplace officials, state regulators, insurance company representatives, and consumer advocates in four of these states (California, Colorado, Louisiana, and Montana) to assess the goals, impact, and results of their policies, and observed the following:

  • State policymakers believe the new standards are meeting their goals of reducing financial barriers to expensive medication and prohibiting discriminatory benefit design against high-cost enrollees;
  • Both patient advocacy groups and drug manufacturers promoted and shaped their state policies;
  • The effect of these policies on patients’ use of specialty drugs and on insurance premiums is unclear because of a lack of data.

Ultimately, these states took action to help relieve financial strain on their residents with chronic conditions, and to make it easier for them to obtain life-saving prescription drugs. Until federal policies to reduce the prices of prescription drugs are adopted, other states may seek to leverage their authority over health benefit design to protect their vulnerable consumers from high out-of-pocket costs related to their prescription drugs.