Covered California policy changes for carriers, navigators

Covered California policy changes are ahead for carriers, navigators, and certified enrollment counselors. At today’s board meeting, the board voted or postponed voting on several major issues such as benefit design, specialty prescription drugs, tiered networks, as well as enrollment counseling and navigators.

Resolutions up for a vote in May

Specialty drugs cost caps

More controversial and complex are plans for capping costs of specialty prescription drugs in formularies, particularly tier IV drugs. This tier is reserved for chronic disease, and expensive medications. Lowering out-of-pocket costs for this tier will mean affordability for consumers at drawback of increasing shared costs, most likely through premiums. Proposed Covered California policy would set out-of-pocket caps at $500 per script on bronze-tiered plans. However, consumer advocacy groups argued that many families do not have liquid assets enough to cover that cost.

Covered California board member Paul E. Fearer dug to the heart of the matter:

I’m not adverse to pharmaceuticals making a stable, health profit — but this is so beyond that. Whether we’re talking about consumers paying $100 or $500, it won’t have an impact on a script for $100,000 per year.

Fearer went on to suggest careful analysis, public reporting of the findings, and carriers collectively pressuring pharmaceuticals may be the way to lower costs. In short, he made it clear that if the beneficiary doesn’t pay out-of-pocket, it’ll still impact carrier through cost-sharing.

That’s unusually righteous indignation. Whether such joint carrier pressure would meet anti-trust compliance is another matter, but it’s a component of the national conversation from the growing all-payer rate setting movement.

Tiered networks

In 2016, Covered California plans may offer two-tiers of networks: tier I (which complies with cost-sharing requirements in the standard benefit design) and tier II (which has higher costs but may be deemed in best interest to the consumer). Those separate deductibles and maximum out-of-pocket costs, as well as off-contract rates, are where confusion and potential pain points enter. If only for the lack of clarity and broad language, these changes are particularly controversial.

You can read more about the above at the California Health Benefit Exchange’s website.

Resolutions passed

Changes to compensated and uncompensated enrollment assistance are ahead. Two resolutions passed unanimously, one regarding up to $10 million worth of block grants for navigators; And, an administrative resolution to bring California enrollment counselors contracts in harmony with federal language. Here’s where it gets confusing:

  • Uncompensated:
    • Certified Enrollment Counselors (CECs; to be called Certified Application Counselors in new contracts)
    • Certified Enrollment Entities (to be called Certified Application Entities in new contracts)
  • Compensated:
    • Navigators

Block grants will be awarded to the latter community outreach groups, instead of relying heavily on new enrollment figures. This move prompted positive feedback during public comment. Betty Williams (One Solution Entity) and Kate Burch (Health Access) concurred that new enrollment driven compensation created divisions among organizations outreaching to Black, Latino, and LGBTQ populations. Such compensation was later criticized for not rewarding the post-enrollment education and troubleshooting these organizations also provide. The block grant model is likely to award grants of $50,000 to $500,000 with total funding pending final budget approval in June.