Coverage Requirements For Health-care Products

Beginning in 2023, the act requires each health insurance carrier (carrier) that offers an individual or small group health benefit plan in this state to offer at least 25% of its health benefit plans on the Colorado health benefit exchange (exchange) and at least 25% of its plans not on the exchange in each bronze, silver, gold, and platinum benefit level in each service area as copayment-only payment structures for all prescription drug cost tiers.

Starting in 2024, a carrier or, if a carrier uses a pharmacy benefit manager (PBM) for claims processing services or other prescription drug or device services under a health benefit plan offered by the carrier in the individual market, the PBM, or a representative of the carrier or the PBM, is prohibited from modifying or applying a modification to the current prescription drug formulary during the current plan year.

The act repeals and reenacts the current requirements for step therapy and requires a carrier to use clinical review criteria to establish the step-therapy protocol.

For each health benefit plan issued or renewed on or after January 1, 2024, the bill requires each carrier or PBM to demonstrate to the division of insurance that:

• 100% of the estimated rebates received or to be received in connection with dispensing or administering prescription drugs included in the carrier's prescription drug formulary are used to reduce costs;
• For small group and large employer health benefit plans, all rebates are used to reduce employer or individual employee costs; and
• For individual health benefit plans, all rebates are used to reduce consumers' premiums and out-of-pocket costs for prescription drugs and that health insurers will maximize the use of rebates to reduce consumer costs.

The act requires the division of insurance to conduct and complete a study to evaluate how rebates my be applied in the individual market to reduce consumers' costs.

The act requires health insurers to annually report:

• Data demonstrating that discounts and rebates received are used to reduce costs for policyholders; and
• An actuarial certification attesting that the health insurer and PBM are compliant with the law and that the data submitted to the division is accurate.

The act requires the commissioner of insurance (commissioner) to promulgate rules to implement the rebate requirements in the act.

Beginning in 2023, the act requires the department of health care policy and financing, in collaboration with the administrator of the all-payer claims database, to conduct an annual analysis of the prescription drug rebates received in the previous calendar year, by carrier and prescription drug tier, and make the analysis available to the public.

For the 2022-23 state fiscal year, $252,667 is appropriated from the division of insurance cash fund to the department of regulatory agencies for use by the division of insurance to implement the act.

(Note: This summary applies to this bill as enacted.)