Dec. 05--North Carolinians projected for enrollment in a health-insurance exchange in 2014 could have the nation's lowest level of covered pharmaceutical drugs, according to a report by Avalere Health LLC.
About 700,000 North Carolinians with limited or no insurance would be eligible to buy coverage through the exchange, according to studies. The health-insurance exchanges are required by the national Affordable Care Act.
The state's health-insurance exchange must be finalized and operational by Oct. 1, 2013, so that residents can begin signing up on that date, for coverage to begin Jan. 1, 2014.
The health analysis group estimated Tuesday that a N.C. health exchange could cover just 485 of 1,070 basic prescription drugs approved by the Food and Drug Administration.
By comparison, Virginia and West Virginia are projected to be among the 12 states whose exchange covers more than 99 percent of these drugs.
Avalere said North Carolina consumers still will have access to essential medications, but some may not have as much choice involving generics and brand names.
Avalere based its projections on data released Nov. 20 by the Centers of Medicaid and Medicare Services on state-selected benchmark formulary plans.
The default benchmark formulary for North Carolina currently would be the Blue Option PPO (preferred physician organization) plan offered by Blue Cross Blue Shield of N.C. The insurer holds a 76 percent market share statewide for PPO products.
According to Caroline Pearson, a director with Avalere, North Carolina has until Dec. 26 to decide upon a benchmark formulary. There are 165 pharmaceutical categories listed in Blue Options PPO, according to Medicare data.
The health exchanges would affect North Carolinians in the individual and small-group insurance categories. States can set the maximum number of employees considered to be in a small group. Although analysts expect the average maximum will be 50, they said it could be as high as 100.
North Carolina lawmakers did not establish the framework for a state-run insurance exchange in time for the initial launching in late 2013. Another option is to let the federal government run the exchange, which at least 18 states have taken.
Gov. Bev Perdue said Nov. 15 that North Carolina and the federal government will jointly run the state's health insurance exchange. Perdue, a Democrat, said she consulted with Gov.-elect Pat McCrory, a Republican, on the partnership.
"This decision allows him (McCrory) the opportunity to then, in his own good time, make a decision that will be permanent for the state," Perdue said.
McCrory said in a statement that Perdue's decision leaves flexibility for the future. The hybrid system can be changed later to an all-state or all-federal management.
"There is no specificity about which pharmaceutical drugs would be covered, but it is likely that there would be more generics than brand names," Pearson said.
"The exchange plans would have the flexibility to offer more than 485 drugs, but not below that amount."
Adam Linker, a health-policy analyst at the left-leaning N.C. Justice Center, said that the state has reached a potential point of having a default pharmaceutical formulary "because no one had taken responsibility for the exchange."
"The default plan is not bad, but we would have liked to have had more input into what the benchmark looked like," Linker said.
Although Linker said the federal government still is taking public comment about the exchanges, the clock is ticking toward Oct. 1, 2013 -- the date open enrollment begins for 2014 coverage.
"Some of the exchange plans could use the default to offer the bare minimum drug coverage, while offering an enriched selection for a higher cost," Linker said.
The exchanges have remained a hot-button political issue even after the U.S. Supreme Court ruled in July that the Affordable Care Act is constitutional since Congress can levy taxes, and the annual opt-out penalty of $695 can be construed as a tax.
The law creates health exchanges that could cover more than 30 million uninsured Americans. Most uninsured people would get a subsidy to help with the cost of premiums.
N.C. Sen. Peter Brunstetter, R-Forsyth, said legislators have asked fiscal staff to analyze the costs versus benefits of a state-based exchange.
"They have been frustrated about the relatively little information forthcoming from the federal government about the requirements of a state-based exchange," Brunstetter said. "Some of that info has only started trickling out in recent weeks.
"We have to understand the requirements, costs and benefits of a state-based exchange before we can make an informed decision."
Steve Graybill, a principal in Mercer'sCharlotte office, said he does not expect most N.C. employers to stop providing health insurance to employees when the health exchanges begin in 2014.
Employers with 50 or more workers that don't offer coverage will be required to pay $2,000 for each full-time employee in its full-time work force.
About 12 percent of the N.C. respondents to a recent Mercer study said they are very likely or likely to terminate their medical plans, compared with 19 percent in the 2012 study.
(c)2012 Winston-Salem Journal (Winston Salem, N.C.)
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