Administration Must Act to Protect Consumers from Exploitation of ACA Loophole

 As we look ahead to a pivotal presidential election this November, one of the main healthcare issues on the ballot is the future of the Affordable Care Act (ACA). Due to significant investments and subsidies implemented by the Biden administration, more Americans are enrolled in health insurance than ever before. 10 years since its enactment, the ACA has become intertwined with the very fabric of healthcare in the US. However, complexities within the law require federal agencies to regularly revisit the statutes to ensure it is fulfilling its original intent to provide affordable care to consumers.

As the current administration prepares to release rulemaking on core provisions of the ACA, they should address a loophole in the essential health benefits (EHB) provision of the ACA that lets insurance companies increase their bottom line – and leave patients behind in the process.

Essential health benefits are a central pillar of the ACA and provide important protections to Americans. The EHB consists of a set of 10 healthcare services that ACA compliant health plans must cover, including prescription drugs. The ACA sets a maximum amount for out-of-pocket costs, and if a patient pays out-of-pocket for their prescription (an essential health benefit), that amount counts towards their out-of-pocket maximum. Once they hit that maximum, insurance kicks in and covers the remainder of their out-of-pocket costs.

However, insurers and pharmacy benefit managers (PBMs) have found a way to exploit a loophole in the EHB provision to maximize their own profits. By designating some specialty drugs to be “non-essential” – even if they are necessary for a patient to manage their health or stay alive – the payer will not count any cost-sharing toward the patient’s out-of-pocket maximum.

In this scenario, a patient may spend money on lifesaving medications that doesn’t count toward their out-of-pocket maximum. All year, a patient could pay out-of-pocket for prescriptions but never reach their maximum and see their insurance kick in - inevitably helping to line the pockets of insurers and PBMs and creating massive financial burdens for patients who would otherwise be protected under the ACA. The EHB loophole forces patients to pay more out of pocket, a situation that circumvents the original intent of the law — which is to keep drug costs affordable for consumers.

Both of the frontrunners of the 2024 presidential election have signaled their intent to find solutions that lower prescription drug costs for Americans, either by a strengthening of the ACA and an extension of the major Biden-era subsidies that have lowered premiums for beneficiaries or through reforming some of the major statutes. While voters weigh their options, three federal agencies – the Department of Treasury, Department of Labor, and Department of Health and Human Services – can act now. In the next few months, regulators should finalize rulemaking to clarify that any service covered by a health plan is defined as an EHB so that patient out-of-pocket payments for prescription medications are always counted appropriately towards their deductible.

While the country anticipates the ripple effects of a new administration come 2025, regulators have a responsibility to close the EHB loophole to stop profit-motivated insurer practices and protect consumer access to treatments.

Sally Greenberg is the Executive Director of the National Consumers League (NCL), a private, nonprofit advocacy organization that aims to promote social and economic justice for consumers and workers in the United States and abroad.

https://www.realclearhealth.com/articles/2024/09/26/administration_must_act_to_protect_consumers_from_exploitation_of_aca_loophole_1061143.html