2020 Hero State%20Legislative%20Trends 2.10.20 Health Care Cost

What’s up in the states?

With state legislatures around the country beginning new sessions, here’s a look at the key health care issues that dominated in state capitals in 2019 and promise to be a continued focus in 2020.

Pharmacy Benefit Manager Regulation

Prescription drug costs continue to be a major concern. Special emphasis in 2019 was on regulation of Pharmacy Benefit Managers (PBMs), which are companies that partner with health insurers to utilize tools that encourage patients and their physicians to select the safest and most effective drugs at the lowest possible price.

Legislatures in 27 states enacted over 30 new laws – two of which were vetoed – aimed at regulating and licensing PBMs. Legislation ranged from requiring PBMs to report pricing, maximum allowable cost (MAC) and rebate information, to mandated licensing of PBMs as well as prohibiting certain business practices, such as mid-year formulary changes and drug substitutions. Some measures were aimed at more clearly defining the relationship between PMBs and pharmacies, including establishing appeals processes and setting state requirements outlining how PBMs should reimburse pharmacies.

In 2020, states are expected to continue to address the high cost of prescription drugs, and BCBSA has developed several recommendations for states to ensure consumers have access to safe, affordable prescriptions, including:

  • Maintain reasonable oversight of the drug supply chain
  • Protect access to quality prescription drugs for consumers
  • Protect the ability of health plans and PBMs to address prescription drug affordability

Surprise Billing

Nearly half of states introduced legislation in 2019 aimed at protecting consumers from surprise medical bills—unexpected charges for services performed by an out-of-network practitioner who delivers patient care in a hospital that’s within a patient’s health plan network. Most sought to ban the practice of balance billing, that is, seeking additional payment from the patient beyond what the insurer already has paid, while implementing a standard payment mechanism for reimbursing out of network clinicians. Five states – Colorado, Nevada, New Mexico, Texas and Washington – ultimately enacted comprehensive surprise billing legislation.

Blue Cross and Blue Shield companies believe that when patients have done all they can to stay within their medical network, they deserve protection from unanticipated or surprise medical bills, and balance-billing should be banned. Setting a benchmark reimbursement rate, based on private-market network rates, is the best way to reimburse clinicians without instituting arbitration, which increases costs for everyone.

See how to separate the myths from the facts about surprise medical bills.

Affordable Care Act Contingency Planning

A recent ruling by the Fifth Circuit Court of Appeals in the highly anticipated Texas v. United States case, which challenges the constitutionality of the Affordable Care Act (ACA), declared the 2010 health reform law’s individual mandate was unconstitutional, but did not immediately invalidate the law. Should the courts decide that all or significant portions of the ACA cannot stand on their own without the individual mandate, the far-reaching consequences will impact more than just the individual market. For this reason, state legislatures turned their attention in 2019 to contingency planning should the federal courts ultimately invalidate the ACA.

Twenty states introduced – and 14 enacted – legislation to codify parts of the ACA by guaranteeing coverage will be offered to those with pre-existing conditions, requiring coverage of essential health benefits that are enumerated in the ACA and prohibiting the use of annual or lifetime limits on a patient’s coverage. Language in all of the enacted bills specify that the laws go into effect only if the ACA is invalidated. Also during the 2019 legislative session, California and Rhode Island joined New Jersey, Vermont and the District of Columbia in enacting an individual mandate requiring residents to obtain health insurance. As states look to be prepared for the outcome of Texas v. United States, more are expected to enact similar legislation during the 2020 legislative session.

State-based Health Insurance Reforms

With the 2020 presidential campaign well underway, debate over far-reaching health care reform that would fundamentally alter the U.S. health care system has raised the profile of a range of proposals to increase government involvement in health care. Several states considered their own health care reform proposals in 2019, including legislation to allow people to buy in to the Medicaid program or establish a statewide single-payer, government-run plan. Ultimately, none of these single-payer proposals were adopted, though two states – Washington and Colorado – did enact legislation to create or study a public “option.”

Washington, which runs its own state-based exchange, is the first state to create a state-sponsored public option with Medicare reimbursement rates for participating clinicians.

Meanwhile, Colorado enacted two bills that direct state agencies to study and develop a state-sponsored insurance plan to compete with private insurers on the state-based exchange. The legislation also authorizes direct negotiation in specified counties between health care cooperatives-- which represent employers, employees and individuals – and practitioners on a collective basis. The negotiated rates will then be available to private insurers for use when negotiating with health care cooperative plans.


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