NJ Assembly passes bill to prevent prescription gaps

The measure passed with 76 votes despite objections from the New Jersey health insurance industry over potential Medicaid costs. Legislative analysts expect no increase in Medicaid spending.

New Jersey public employees and Medicaid recipients who rely on medication for chronic conditions could gain new protections against losing prescription coverage when their health plan or pharmacy benefits manager changes.

The state Assembly passed a bill Oct. 29 that would prevent certain health insurance plans from dropping coverage for medications patients were already taking to manage chronic conditions.

Bill A434 would affect the State Health Benefits Program (SHBP), School Employees’ Health Benefits Program (SEHBP) and NJ FamilyCare, the state’s Medicaid program.

The protections would apply only if a patient was taking the medication before the change in health plans or pharmacy benefits managers and the new plan covered the same class of drugs. The medication must also have been prescribed by a physician for a chronic condition.

That means the bill would not guarantee continued coverage for every prescription. Patients would have to meet both requirements to qualify for protection when their insurance arrangements change.

Pharmacy benefits managers are companies that administer prescription drug benefits for health insurance plans.

When patients lose coverage for a prescription, they can lose access to medication or be forced to pay large amounts out of pocket. Reporting from ProPublica showed how insurers sometimes drop coverage for patients with chronic conditions as a cost-saving measure.

The bill, sponsored by Assembly members Michael Venezia, Verlina Reynolds-Jackson and Heather Simmons, advanced unanimously through the Assembly Appropriations Committee on Oct. 22 before passing the full Assembly a week later.

Alex Arnold, a lobbyist for the New Jersey Association of Health Plans (NJAHP), a trade association that represents public and private health insurers, spoke in opposition to the bill at the committee hearing.

“We appreciate the intent behind the bill, and we share a goal of ensuring continuity of care for individuals with chronic conditions,” Arnold said. “However, we respectfully oppose the bill as currently drafted as it applies to Medicaid given its potential costs and impact on responsible pharmacy benefit management.”

The Office of Legislative Services analyzed the bill and found that Medicaid costs would not increase because existing contracts already provide protections for patients taking medications for chronic conditions.

Under those contracts, Medicaid patients whose prescription medications are removed or changed on their health plan’s list of covered drugs can continue receiving them if both the patient and prescriber request it, as long as the patient remains enrolled in the plan.

Arnold said the NJAHP disagreed with the Office of Legislative Services’ analysis that Medicaid costs would not change.

The Office of Legislative Services estimated that the bill would increase annual spending for the state, participating local governments and school districts through changes to SHBP and SEHBP, but could not determine the amount.

The costs would depend on how many people taking medication for chronic conditions would otherwise lose coverage because of a change in health plans or pharmacy benefits managers. Legislative analysts said they could not determine how many people would be affected or what medications future plans would cover.

The fiscal analysis also found that local governments participating in SHBP and school districts participating in SEHBP could face additional costs. The estimate did not specify how much those costs could be or how they would be divided among the state and participating employers.

A Senate version of the bill, S3712, sponsored by Sens. Raj Mukherji and Vin Gopal, was introduced March 2 and referred to the Senate Health, Human Services and Senior Citizens Committee. It has not advanced since its introduction.

If the bill becomes law, the protections would take effect on the first day of the seventh month following enactment and apply to health insurance contracts issued or renewed on or after that date.