S.7075 A.3516 Rx Explanation Of Benefits

This legislation, S.7075/A.3516, requires insurers to provide insureds or subscribers with an explanation of benefits (EOB) on prescriptions including the cost of the medication. While well intentioned, the New York Health Plan Association opposes this proposal because it significantly adds to the volume of administrative paperwork, increasing the overall cost of coverage, but does nothing to address the ongoing problem of the rising cost of prescription medications and the exorbitant prices charged by drug manufacturers.

Health plans support efforts to provide consumers with meaningful information about their health care, including providing details the cost of care. Plans regularly send members EOBs that offer detailed information on the medical services they received.  This includes: the cost of the services, what the plan paid and the amount not covered; any saving realized by accessing care or medical products from within the plan’s network of providers; portion of the out-of-pocket medical expenses applied to an annual deductible (depending on plan type); and where members can go to access additional information or assistance from the plan to address questions. While plans believe consumers should have access to information about the cost of pharmaceuticals, that information is generally determined by the manufacturer and housed with the pharmacy benefit manager (PBM). Requiring plans to generate an EOB on every pharmaceutical claim would result in a significant increase in the volume of EOBs sent to members, increasing health plans’ administrative costs and adding to the cost of coverage.

We appreciate the intended goals of the legislation and are prepared to work with sponsors on solutions that will ensure consumers have important information about the cost of prescriptions drugs. However, this proposal is the wrong approach. At a time when New Yorkers are grappling with the high cost of health care, imposing added administrative expenses exacerbates this challenge and does nothing to address the spiraling underlying costs of prescription drugs.  For all these reasons, we urge you to reject S.7075/A.3516.