HB 457 is a government-mandated price increase on health premiums and prescription drugs.
Kentucky Association of Health Plans (KAHP), the trade association representing all carriers offering health coverage in Kentucky is warning of extreme side effects in the health insurance market if the General Assembly passes HB 457, government-mandated price increase legislation for prescription drugs and health coverage through pharmacy contract mandates.
An analysis conducted by the Kentucky Department of Insurance for the Legislative Research Commission shows HB 457 will increase premium cost of up to $3.48 per member per month or $41.76 a year or around $167 per year for a family of 4.
An analysis by the Pharmaceutical Care Management Association found HB 457 would have sweeping impacts for all companies who offer healthcare coverage in Kentucky including fully and self-insured plans as well as for individuals who direct purchase on the market, with a price tag of $213M in excess drug spending next year and $2.6B over the next decade.
“I think it’s fair to say that if this government-mandated prescription drug price hike bill is passed, the General Assembly will be directly responsible for pricing many Kentuckians out of the market,” said Tom Stephens. “This big government bill interjects state government into private contracting, removing critical cost containment measures that keep health coverage and prescriptions affordable. This is another great example of how mandates increase costs for everyone. It’s a solution in search of a problem because Kentucky is in the top five in the nation when it comes to concentration of independent pharmacies.”
Kentucky Association of Manufacturers, America’s Health Insurance Plans, and Kentuckian Association of Health Underwriters testified against the bill. A coalition of businesses of all sizes is also opposing the bill.
Components include ending pay-for-performance contracting that companies and coverage providers use to keep drugs and health insurance affordable. This will prevent employers and health plans from choosing pharmacy vendors they deem best. Under this payment scheme, high-cost, independent pharmacists would receive a guaranteed payday and business pipeline regardless of the quality of their work.
HB 457 removes another important tool known as alternate sourcing whereby companies or health coverage providers ship specialty drugs directly to hospitals or physicians’ offices. This reduces markup costs and improves patient safety and outcomes because highly complex medications come from well-accredited specialty pharmacies.
